>> you know about the typical stereotype of a politician. this was strange. she and her family, they're actually real people. this is a surprising concept. my wife has become jaded in politics. they are normal people. they are real people. beyond normal people they live in the governor's mansion and governor nikki haley fights the good fight and she wins. it is my pleasure to introduce her. [applause] >> thank you. it is a pleasure to be here. it feels like home. the reason it feels like home is you always go back to the people you were with in the very

beginning. what i loved ones right after i had announced, we had the same explosion and everything fell apart. i was already an underdog. i was a house member running against a congressman and an attorney general all who had been well established in the state. they had more money than i could even think about. we just didn't have a lot going for our campaign. erik erikson invited us to land the. we had nothing at that point. so i went and spoke to the people at redstake and i will never forget that i truly felt home. they felt like me. these were people who saw where i wanted the country to go. these were people who had the energy that i knew felt would move the country and they would help us do it. so i told all of you my story.

i told you what i wanted. i told you it wasn't about being republican. it was about being conservative. we were no longer about republicans and democrats. we were about conservatives and we're going to fight for liberty every step of the way. [applause] i told them that i wanted every state in the country to show what d.c. should look like and we were going to start with south carolina and it would be the best state in the country and you are in the best state in the country. [applause] more than anything what i said is i want people to understand the power of their voice. i want them to understand elected officials work for them and not the other way around. the only way to do that was to get loud, get transparent and be accountable. what i love about all of you and

about redstate is it is not about who could win. it is about who should win. and you carried me the whole step of the way. when the press said i didn't have a chance you said i should win and when they started throwing blitz you fought back for me. with the you were from south carolina or not you send me $50 donations that when i couldn't even get $1,000 to get there, 46 states donated. we brought in $60,000 all within 40 hours. [applause] i will tell you a love that you were in south carolina. i love that you are here. this is a state that is conservative. this is a state that is getting more conservative by the day. we want redat state to be here every year. let me tell you where i think we are. i could talk about the state of south carolina and what we're

doing and let you know that some of the legislators were saying it is unconstitutional to know how they vote. we were able to push through any way and every single legislator is required to put their vote on the record on every piece of legislation and wait for it, every section of the budget. [applause] we now hold elected officials accountable. we are transparent and we can see their spending habits and that is the key at the end of the day. icy someone in the room to recognize. he was a fighter with the on the record voting and is running for congress. wave your hand. tad buyer. a good conservative, strong fighter. someone you should pay attention to. we have one of the best federal delegation in the country and this will make a great addition

to that. iowa also tell you that we got legislative votes on the record. we also passed port reform and told people this was a simple decision. it is either lawyers or businesses. we also got medicaid reform. the biggest surprise for me as governor was how much the federal government would not let me do my job. they got involved every step of the day. we are dealing with health care. people stopped talking about obamacare but it has not gone away. we will show that it is absolutely unconstitutional for them to tell us how to take care of ourselves. [applause] but this is a bigger decision. what we are talking about with healthcare's people divorce themselves from the cost of health care. they go to the doctor and they get what the doctor tells them to do just because.

30% of the services we get we don't even need. we have a president who is a i know better how to take care of you and massachusetts are like people in texas and people in texas are like those in california but that is not it. what we need is when you get your car fixed what do they do? they show you the charges before you pay for it. that is what i want in south carolina and around the country. [applause] we need to let people get involved in their decisions and not just on what the services are but the costs. guess what happens when we do that? we pay more attention to our health and start to pay more attention to the cost of health care. we drive cost out of the system because i don't need that fluoride at the dentist. i got it at home. you are paying attention and the goal we have in south carolina that i challenge every state in the country is we will make it

transparent from the patient to the doctor and the doctor and the insurance company and focus on health, not cost. that is when we will have healthy people paying less money and have to make sure our insurance companies can cross state lines and let us choose the insurance policy we want. [applause] it is amazing that we have a president who is trying to mandate cost and services when all we need to do is make our own decisions, have options and make those decisions for ourselves. when medicaid is a huge part of every state budget instead of this president understanding taking costs out of the system he is mandating more cost into the system. it is taking us in the wrong direction. another problem was illegal immigration. we had a lot in place. we wanted to be able to enforce it and he told my state we

couldn't. we had two dozen immigration inspectors not allowed to do their job. labor license and regulations director went to janet napolitano and said we just need one piece of paper. we need to be able to see that eatverify and they said you can't do it and they wouldn't answer rests and the called and they didn't call me back. i called and they didn't call me back. you know what happened? i did a press conference and i said did you know this is going on? we have two dozen immigration inspectors i am going to have to lay off because the president and janet napolitano won't call me back. she called me back. [applause] within a week we had what we needed and we are enforcing illegal immigration in south carolina. [applause]

and then the unbelievable happened. the president and the national labor review board went and did a suit against the great american company called boeing. let me give you the back story for those who don't know. south carolina was saved when boeing decided to expand or put operations in south carolina. they created a thousand new jobs in charleston. it was the highlight that we needed. we were so excited. it with a shot in the arm that let us know we were going in the right direction. when they created 1,000 jobs in south carolina they expanded their operations in washington state by 2,000 jobs. not one person was hurt and the nlrb sued boeing and said they had no right to do that. that is the most americans think

i have ever heard of and we cannot have that. [applause] when you allow a company to come in and say we want to create jobs in this country and tell them you can't do it you are incentivizing companies to go overseas. when i am trying to bring jobs to south carolina and everyone is looking at south carolina the company's overseas now see our dollar week which is great from the standpoint they're talking about coming here and the first thing they ask is what is going to happen to boeing? that is keeping us from having jobs. on top of all this i am talking about this is the ridiculous part of unions. there were the time we needed them. we don't need them anymore. they're trying to be relevant and they are not. [applause] so what happened?

the union sued me. they support talking too much about them. as that if they quit giving the reason i would quit talking about it. the truth is the unions are not relevant and this was their way of trying to say we will make ourselves known in south carolina and there's nothing you can do about it. this governor is going to do something about it. [applause] we thought it every step of the way and god bless the judge. he dismissed the case and said she is exercising her freedom of speech. [applause] that is why conservative judges matter. that is what judges need to understand the constitution and unions are trying to mandate and boule through our states, our liberties and rights means something. that judge stood up for me and i

am out of talking site now. they haven't heard anything. so i will tell you i got sued. boeing got sued. this great american company could sell but they're not going to because they understand and i have told them that they are fighting the fight for every company in this country. i am fighting the fight for every governor in this country and boeing and i are committed. i don't want any governor to go through this fight. we are going to fight and win and this will never happen again. [applause] good stuff. [applause] thank you. and we are going to win because we are right. the sad part is boeing will

spend a lot of money and time that they could be hiring people with but they won't stop. their six months ahead of schedule. we have the magnetic lanes ready to go. we will keep hiring people and fight our fight for the company to make sure we can do what we need to in america but this comes to the fact that when we have a president who doesn't understand what we need in this country we have got a group in d.c. that doesn't understand our spending situation and when you look at spending in every state, every governor has had to prioritize and figure out how to live within our means. every governor has had to tell their people what the value of the dollar is and how we are going to understand that government was intended to secure the rights and freedoms of the people. was never intended to be all things to all people. [applause] in south carolina we cut our

budget and fought against the art commission and educational television and all kinds of things. we started with an $800 million shortfall and ended up with a surplus. i am trying to tell the legislators and the people whenever you have money, whenever money falls you don't go and spend it. you pay down debt or give it back to the taxpayers. those are your only option is. [applause] so now we have a washington who decided they were going to do this fabulous that deal and the president came together with the people in washington and created a lot of drama and everyone was looking at us and what did they do? they celebrated and said we got a resolution. where was it? they said it wasn't enough to make the credit ratings not fall. this deal that they did they

didn't reduce the debt. they didn't freeze spending more balance the budget. almost every state in the country is balancing their budget. when is d.c. going to learn they have to balance the budget and cut spending and debt is not an option anymore? [applause] they will understand it when we get lout and when we show them the power of our police. one governor will say we did this in south carolina and you can do this in d.c.. i will also say what happened with this supercommittee is nothing but a waste of time. you can't tell me if we confined waste in south carolina which is a pretty conservative state we could have a field day in washington d.c.. [applause] my daughter is a freight and my son is in fourth grade and they could find somebody pretty

quick. i was with a couple governors not long ago and said you put as in a room and we will take care of it and come out with a serious thing and this is what i will tell you. the spending issue is our number one priority. we have to make sure the people we send to washington and this isn't about the tea party ruining what is happening in washington. this is about the tea party bringing caution to a group of republicans that need it and stop the democrats from running our economy into the ground. [applause] that leads us to the presidential. what a great policy debate this is going to be. doesn't matter what their personality is like. we want them to be a fighter but we want them to wonder stand all they have to do is talk on policy. talk about health care. talk about illegal immigration. talk about securing our borders.

talk about energy independence and how the cost of gas is ridiculous. if we take care of it ourselves we wouldn't need other countries in this. [applause] talk about the value of a dollar and it is our money and not their money and the way they spend it matters. these are great things and our credit rating, america's credit rating fell. what is that doing to all of our businesses? what is that doing to my children? so it is up to the governors in every state to talk about our problems in our state like what has happened in south carolina and give these presidential candidates every ounce of ammunition they need. i will continue to be loud but we need you to be loud. this presidential election is the most important we have ever had but we will hold everybody's

feet to the fire. we will get ten people involved that have not been involved in elections. the presidential will matter and i will tell you i have great faith in the people in this country. when i say it is no longer about who could win, it is about who should win. we get it. make sure when you leave today and you have a superstock coming in today. let's have fun with it because we have a president who doesn't want to talk about policy. he will get back on the bus and start campaigning but what is going to happen? he is asking for a redo. he messed it up once. we don't need you to mess it up again. let's give somebody a chance. we just have to decide who that person is going to be. [applause]

somebody told me the other day i am not excited about republican candidate. i am excited about the issues we have to discuss. we have great issues. we have great candidate. the combination is magical because the president has failed this country. we wish him well but it is time for him to leave. [applause] do what i know you can do. get out there. god bless you, you save me at the end of the day. let's get involved with these candidates and make sure you get involved in the grassroots efforts. we just started how big we are going to be in 2012. our love you and appreciate you and keep fighting for you every day and my number one goal is to make you proud. god bless south carolina. thank you very much.

[applause] >> you can tell a speaker has been a regular when she serves time for questions. we are having to transition, i may have to point you out and repeat the question on the other side of the room. let's go right here. where is she on nullification? >> i want us to focus on the valor -- the value of the dollar and liberties and being strong. nullification is something we

talked about when we are not sure -- we are frustrated. we talk about nullification when we are frustrated. i want to talk about how we can be strong. and support keeping our core beliefs and going back to what we believe in. and want to focus on the value of the dollar and making elected officials accountable and what to do about that. went comes to states rights what we are talking about is states rights from everything. the tenth amendment from sen everything. [applause] part of the way we show that is understand for every federal dollar we take we spend more money down the road trying to match the federal government where the state's focus on their money and their time and freedom and the federal government can't sneak in. states rights will always be an issue. is always something of a will fight for and everyone in this

room should fight for. >> question? yes, man? [inaudible] >> the best thing to do to help boeing is that every presidential candidate to talk about it. every single presidential candidate should talk about what they would do if they were president because president obama has said it is an independent agency. i can control what they do. i am a governor. i have agencies and appointees. if they do something wrong arbuckle them and speak against that agency. he has been unbelievably stalin. i would rather him stand up and say i believe in what they're doing and be silent. leadership is not silence. leadership is fighting and say in where you stand and he has not done that. let's get every presidential candidate say they are not afraid to say where they stand. [applause]

>> next question. right here. [inaudible] >> the amazing thing, we got the passion and that is what i want. we have done enough of the establishment thing. we have done enough for people groomed themselves to worry whether it is politically correct or not. look at the rock stars in this country. look at the chris christies and rick scotts and all these people. one thing they have in common is true passion. we believe it and we know the people of the country believe it so anybody who uses the teleprompter let's ask what they believe. [applause] >> the president and are the only two yankees here. >> welcome to south carolina.

[inaudible] >> great one. >> how did we bring you and redstate into pennsylvania? we have grass roots and tea party that are fantastic. we need a little bit of juice. >> tell us when and where to be there and we will be there. you have to spread the word around. even in a heavily democratic state we have great grassroots and conservatives. don't look at the majority or where people stand. make your voice and known. in the days of the internet and facebook, get your voice out there. i will continue to speak as loud as i can against unions and health care and the federal government and for states rights. the more of us that's a it the more people feel it.

look what happened in washington. that debate never would have happened a few years ago. you know who did that? conservatives did that. the tea party did that. imagine what we could do two years from now. we are just getting started. we will take care of it. >> round of applause for governor nikki haley. [applause] >> a couple live events to to about. admiral gary roughhead will talk about the future of unmanned vehicle systems known as drones on c-span2 at 8:30 eastern. un c-span we will be live from the national press club with republican presidential candidate gary johnson. the former governor of new

mexico. that is at 1:00 p.m. eastern. next the brookings institution forum on prospects for the joint deficit reduction committee. we will show you as much of this as we can until the hour live event at 8:3 eastern. >> turn the mike on. my name is ronald haskins. i have been in washington for 25 years. are surge in the legislative branch and the executive branch and the think tank. all this experience led me to think that there's nothing new i could see in washington and i have to confess in the last year i have been surprise on several occasions not least in the past

month or so and that is what we're here to talk about. the biggest surprise to me a long time is this committee and the way we dealt with our debt ceiling in the most recent iteration. i will give a brief description of the agreement which i will leave a lot out because it will take a long time to do the whole thing with all kinds of stuff that makes it difficult. i specialize in simplicity and that is what you going to get. after i described the deal we will turn to sarah binder, the expert on congress and legislative politics and she will talk about the history of supercommittees. it is said that there have been others like this one. whenever congress cannot make a decision or force itself to do the right thing they appoint a committee or a commissioner and sarah binder will talk about

this committee and how it will operate. then we will turn to william gale who is an expert on tax policy along with folks at the urban institute. he is the author of several versions of the deficit and ten year projections with interesting baselines. bill can produce baselines' faster than congress can pass legislation. he has this thing out about a minute and a half after they reached an agreement. he is going to talk about baselines and it turns out they are a very big deal. and completely and resolve the as far as i can tell. that we will turn to henry aaron. he will say we have at all wrong. the president has it wrong and congress has it wrong and we're doing the wrong thing and he will tell us what she -- we should be doing instead. then we turn to my good friend

william eldridge frenzel. for those under age 60 you might not be as familiar with william eldridge frenzel as those of us over age 60. he was in congress 20 years on the ways and means committee and ranking member of the budget committee for several terms. he knows as much about the budget as anyone i have encountered in washington. he is going to talk about what i think almost anybody in town--the politics. let me say a few things. i think it is helpful that the agreement has three distinct parts. it raises the debt ceiling which is the point of the whole thing. mostly that is all these agreements did was raise the debt ceiling. this time we did two other things. second we reduced the deficit which is the most complicated and we agreed to have a vote in the house and senate on balanced budget amendment to the

constitution. that will take place in the fall. the first -- second part of the deal -- first part of the deal is raising the debt ceiling. that is approximately $900 billion and there will be a subsequent step between $1.2 billion at $1.5 billion. whatever it turns out to be precisely it will get us through the 2012 election which is one of the goals of the administration all along. the president at least got that. the second and most complicated part is reducing the deficit and that comes in stages. the first is there is an immediate agreement to $900 billion over ten years. there are a lot of numbers floating around. you can look at different baselines and you can look at budget authority. budget authority is $935 billion. there are other baselines. that is the first one and it

includes interest. this is an important point about the budget. the more we cut the more we save beyond cuts in programs because interest is getting to be a huge part of our budget deficit. we are headed -- bill knows about this -- we could be paying $1 trillion in interest costs. that is an important part of the savings. this is achieved by putting caps on discretionary spending. the first step is discretionary spending caps, on discretionary spending both defense and nondefense. there is a fire wall between security and non security. that only last two years so there could be lots of interesting things that happen after 2013, these cats and

appropriations are named. there is a part everyone is talking about which is this new device leaders came up with which is the supercommittee, joint select committee. it must be really important. that will result in one way or another if we live up to the agreement between 1.2, at two$.3 trillion in additional conover ten years. the committee's 12 members. six republicans and six democrats, in the house and senate. a crucial point we will talk about they can choose whatever baseline they want that turned out to be an important issue. they can make changes. any changes in spending or taxes there was some dispute about that but the agreement makes clear they could cut whatever

they want to including medicare and medicaid. they have carte blanche to do whatever they want and it is a majority vote in the committee. not like the president's deficit panel. if you get a majority you can pass whatever you want to. they have to report decisions by november 23rd and congress must vote by dec. 20 third. they must vote without amendment and it cannot be filibustered in the senate. these are the best rules you could possibly have to pass something through the congress of the united states. it looks like it could be a good deal. if they don't reach an agreement or congress votes it down there is an automatic sequestration which is more than the 1980s. there be additional cuts would be $1.2 trillion.

discretionary and entitlement. there are complex rules about what cannot be cut. medicare can be cut to providers. they have a strong record of delivering when we decided to cut provider payments that we would do it again. and a 2% limit to medicare cuts. and a bunch of low income programs like food stamps and other programs protected from the sequestration completely. there is an overview of the deal. we will turn to history of special committees and a few words about the process of this committee. sarah binder. >> i thought i would start with three points about commercial -- congressional commission is in general and this committee and the implications of the membership of the joint committee. the first point. specially appointed commissions typically fail.

i want us to understand why these committees tend not to work. the supercommittee has differed from previous incarnations of congressional committees. it is important to understand why it differs and why those differences might be consequential. the membership has a number of implications for what is likely or not likely to happen this fall. i want to think about how the leaders made their selections and how we can infer from the make up. why do committees typically fail? what can we learn from what we know about the panel? it is not unusual for congress to kick the can down the road when it is unable to solve tough problems. there are plenty of examples. the medicare commission in 1993 and entitlement commission in 1997 and the simpson bulls commission in 2010. none succeeded in producing a

plan that the house and senate would consider. when we do see episodes of success we point to the 1983 social security commission but when you look under the hood the agreement was reached by people outside the committee by the work of tip o'neill, the speaker with president reagan. when commissions are successful like a military base closing commission it turns out the mandate is very narrow. we will come back to why it may have succeeded. why don't these solutions tend to work? political and institutional reasons and the context in which these commissions are created. it is typically the deadlock over major issues of the day that encourages congress to kick the can down the road in the first place mostly to avoid blame for failing to reach a decision. commissions and committees tend

to inherit the stalemate that created them in the first place. in today's context we think of the stalemate we have in mind increasing partisan polarization. increasing policy differences between the parties and simple partisan team play that gives strategic reasons to disagree with one another. parties see the problems differently and when they can agree on solutions they still disagree just because it is the other party. political incentives for legislators create these conditions in the first place and find it hard to overcome politics that created them at the beginning. second as a set of institutional reasons why these commissions tend not to work they are not always but typically created by executive order. there is a statutory basis written into the law and when presidents set up these

commissions through executive orders they are given a supermajority requirement in order to officially report. their provisions are rarely if ever protected procedurally. they are subject to filibuster and party control on the house floor. the most successful commission is the one that approves the rules. the closing commission had a statutory basis protected procedurally from being amended on the floor. decisions of the commission went into effect and the president voted to disapprove or reject the recommendations. commissions created by executive order, right off the bat most of them are hampered by the way they were created. in contextual reasons why things tend not to succeed here these episodes are rarely created in periods of crisis and even if there was crisis typically it might be unnecessary to get an agreement but rarely sufficient

to tell the party to sit down. how is this supercommittee different from what we have seen historically? primarily in terms of institutional factors. it has a statutory basis and majority vote to report. no amendments on the floor and filibusters on the right and left and the house rules committee can't hold the deal off of the floor and there are triggers written into the law as well. congress has kicked the can down the road but read it that the can explode if they fail to reach an agreement. why is that important? it affects the consequences of failing to agree. the consequences of stalemate, some parties welcomed the stalemate because they benefit alecto relief from -- this time the cost of stalemate is much higher or we think it is much higher. it makes the committee not to

deadlock. with all these procedural advantages the political factors that lead to failure are essentially still in place. finally what are the implications of the make of this committee? two observations. this committee not surprisingly inherited the polarization we see. if you line up the house and senate members left to right we will see a cluster on the left and the right but nobody in the center. closest you get is max baucus, democrat from montana but he is a loan to the extent he is a centrist. that makes their charge card if delivered bipartisan coalition. it is important to keep in mind party leaders left little to chance in selecting -- all four party contingents of her third tier party leaders. they are for tax committee

chairs in holland you may wonder where is paul ryan? back to him in a moment. and the democratic side representation of key democratic factions essentially through john kerry, the defense contingency. why is this important? this committee will operate in continual consultation with party leaders and informal vetos from party leaders. the deal is important to party's representation and electoral brand-name. it is not a road committee. this is not simpson bowls. it is not up gang of 6 effort. the parties on the outcome of this committee, it means that the committee -- if there will be revolution the key question is do the parties see compromise in 2012? finally keep in mind what paul

ryan said yesterday after a huge refuse to be on the committee. he said, quote, we should not have a system where 12 politicians coming agreement in the back room to restructure the designs of government in three months time. this is a decision that should be brought to the american people. these are issues for the campaign trail. not the committee. if you add that up where does it leave us? just like t.a.r.p. and the august deficit deal this will likely be another last-minute deal. don't put the turkey in the oven too early for thanksgiving. if there is a deal it will be leadership endorsed and probably look like the other deals putting the end against the middle. finally the committee does not operate in a vacuum. there are many other deadlines this fall over the next year that congress could really write the law. the committee is not the last

bite. >> i recommend this audience by their christmas presents early. william gale. >> talking about baselines' can be on the tedious side. let me justify it with two points. first of all the committee needs to cut $1.5 trillion or the automatic sequester will kick in. the debate about the baseline is $4.5 trillion. it is much larger than the cuts the committee has to make. they have a $4 trillion question to begin with and after that they have a $1 trillion question. if you win the baseline argument you may be willing to see who cares about the 1.five trillion. i want to give a simple example

of what i am going to talk about. a baseline issue is if you need to cut $1.5 trillion the question is compared to what? if you compared to a baseline where the government has no revenue and spends 50% of gdp it is easy to come up with $1.5 trillion but you need a baseline to compare it to. the budget deal has all sorts of punctuation but leftist $4 trillion question completely undefined. there is no guidance in the budget deal about what baseline people actually use. in terms of an example, suppose you have been eating badly the last ten years and you have been gaining weight and you want to lose 15 pounds. we won't go with 1.5 trillion

pounds. you want to lose 15 pounds. the question is compared to what? the way we usually think of it is compared to where i am right now i want to lose 15 pounds. there's another way to think about it which is i have been eating badly for ten years. if i continue to meet badly i will gain 45 more pounds so i will lose 15 pounds relative to that increase of 45 pounds over the next decade. nobody serious about losing weight builds in a 45 pound weight increase and says i will lose 15 pounds relative to that. but using one of the base lines would be the equivalent of increasing the deficit by $4.5 trillion and a double cut it by $1.5 trillion. that is essentially what is at stake. that ends the non tedious portion of the talk. standard base line is current

law. it is not literally current law but close enough, assumes that all tax cuts that are supposed to expire actually do expire and assumes the alternative minimum tax will grow rapidly over time and take over the tax system and assumes congress will make the medicare cuts it is supposed to by law but never does. it assumes other things about military spending, discretionary spending after adjusting for inflation. the current base line is basically the answer to the question what would happen if congress literally did nothing the next ten years? no legislation but appropriated the same discretionary spending each year. that is not a very realistic base line to use if you want to see where we are headed.

but it is a good baseline if you want congress to recognize the cost of any changes to tax laws or spending items. is the equivalent of saying here's my weight now. i want to lose 15 pounds relative to my weight now which means relative to the baseline. if congress does anything it needs to start there is and cut relative to that. using the current law baseline would be the equivalent of saying when you find yourself in a hole the first thing you'd do stopped digging. there's an alternative baseline that has been used a lot and i feel some responsibility for this. i have been putting out alternative baselines for long time. we have been doing this for over a decade back to the surplus in 2001. current policy baseline which is the answer to what happens if

congress acts in the next ten years the way it has in the past, business as usual baseline has shown a large decrease in deficits over time. current policy baseline assumes tax cuts get extended and we don't let the alternative minimum tax take over the system. assumes we don't spend as much in iraq and afghanistan over the next ten years as we do now. assumes congress is incapable of making medicare cuts that it has shown it is incapable of. the business as usual baseline is a good measure if you want to see what have we are on if we don't change our ways. is a 45 pound gained over the next decade if we continue to eat badly. so the point over the last decade is we are headed in this

bad way and here is the current policy baseline. you don't want to use that as a baseline if you are trying to reduce the budget deficit. once you reduce the budget deficit. the what you want to reduce the budget deficit that is the equivalent of saying i need to go on a diet and i am not going to build in $4 trillion of increased budget deficit before i start cutting the deficit. the current policy baseline has always been a good guide to where we are headed if we don't fix things but not an excuse to not fix things. all the committees, balsams and included, the obama administration use the current policy baseline because it builds in these nice things like extension of bush tax cuts but

it is not a serious approach to solving the budget deficit. we will cut taxes first by four trillion dollars. that we are going to start balancing the budget. why don't we just not cut taxes by $4 trillion would be the obvious rejoinder to that. we are talking two baselines that are three times as large as the $1.5 trillion congress has to cut. to make it more complicated it turns out the republicans want to use the current law baseline even though the bush tax cuts have to be paid for if they are extended. the democrats want to use the current policy baseline even though that is giving away financing the bush tax cuts. we can talk about the politics of that if you want but let me sum up with three bottom lines about the budget deal and the

baseline. the baseline is where the action is. if you can get the $4.5 trillion change you can care less about the $1.5 trillion in suppose it cuts. they should use current law as a baseline. none of this news that they can or can't reach an agreement depending on the issues that sarah mentioned. keep an eye on the numbers. when people talk about including tax increases, doing it from the current policy baseline, that involves less revenue than sticking with the current law baseline and having no taxes in the deal. it gets very complicated and very tedious but keep the weight loss example in the back of your mind. >> you can all wake up now.

what did we do wrong? >> bill use the weight-loss story. i will use a medical story to start my comments. not one for which i can claim originality but it is apt. you are a physician and encounter a person lying on the street in the process of leaving out all over the place. when you bend over you tell this person to stop smoking and eat better so they will have a better chance for long and healthy life. the reason i am using this example is i think it is symptomatic of a kind of policy the arrangement -- they range --derangement in this city. i will ask where you think these

facts lead you. the first is the nation is in the midst of the deepest and most protracted recession we have experienced in the last 70 years. fact 2, economic forecasters agree there is no realistic prospect for significant economic expansion any time in the near future. that leads me to fact 3 which is this bad news is occurring in the face of not quite but almost all out efforts by the monetary authorities to be supportive of economic expansion. fact 4 is over the past couple years fiscal policy nationally, that includes not just federal fiscal policy but state and local fiscal policy has become

significantly more contractio contractiona contractionary, working against economic expansion during that period of time. the center and budget priority produce a nice chart available in a handout outside the room showing 37 of 50 states including all the large states but one have seen reductions in spending compared to levels that prevailed in 2008 before the onset of the reception -- recession. texas will join this group because they have budget cuts coming that will make them contractionary physical force as well.

nearly half of the unemployed and a slightly growing fraction have been out of work six months or more. that proportion is at 70 year highs. fact 6 is standard and poor's not withstanding, there is little or no indication in financial markets that investors are seriously concerned that the united states will default on its debt. the current yield on tax index bonds with a maturity of seven years, the yield on those bonds is negative. people are actually paying to invest in them rather than requiring a positive rate of return. i say all of this along with the fact that we face extremely

serious long-term fiscal problems with that bill. many others have been pointing out for many years -- right now we face an immediate problem which is a dangerously slack economy. for us to be focusing now on dealing with the longer-term problem through measures that promise to aggravate the near-term problem is in my opinion truly weird and it is important as we consider how of this committee is going to function and how the budget process is going to play out that we not forget the weirdness of the priorities expressed in that policy. in this circumstance it would be truly perverse for congress not to agree to president obama's

recommendation to extend unemployment insurance benefits yet again and extend the payroll tax holiday that was enacted earlier this year yet again as well. in my view the current policy is right now would be a combination of short-term stimulus including investments in public works that we can finance at historically low interest rates together with long term deficit reduction enacted now but to take effect only when the recovery is well established and unemployment has fallen to certain target levels. that happens to be exactly the policy that most of us at brookings have been urging for longtime. it is a policy christine laguard

raised. she said, quote, we needed will focus on medium-term consolidation and short-term support for growth and jobs. it is identical to positions taken by reputable economist with widely varying political positions as paul krugman and martin feldstein. for purely fiscal reasons one should view with deep concern the path that is laid before the supercommittee to cut $1 trillion from federal deficits over the next decade in addition to the $935 billion agreed to in august. additional and equally important reason for concern is if the committee does not agree to cut

$1.2 trillion through explicit measures then some or all will be cut through an automatic sequester. those implied cuts would reduce discretionary spending and national defense spending to levels that would threaten basic economic interests in the nation. i have a couple handout attached to the one i should mention earlier that available outside that show the magnitude of the cuts that would occur. i am going to conclude with one assertion about tax policy which bill will come back to. the best possible outcome in the debate whether to extend the bush tax cuts would be

deadlocked so that they all expire and we could begin to talk about how to curb tax expenditures and loopholes and use the revenue generated from them to lower rates by some amount. one brief comment on possible outcomes based on what sarah described. the very likely outcome is the supercommittee will agree to modest cuts but not the $2 trillion necessary to avoid sequestration. there would be automatic cuts evenly divided between defense and non defense. they might be so large and

unacceptable that the agreement just reached in august might be one to which congress returns and reconsiders. >> william eldridge frenzel. >> thank you very much. as advertised by and for a recovering congressman. ..

>> and under reagan and bush, and wonderful time under president clinton when we actually had some surpluses. times of compromise between the parties. but in recent history, both parties have been pretty bigger spenders -- vigorous spenders. now we have the parties locked in his vigorous struggle over who is, over what is going to be cut, if anything. and republicans have been scrapping with obama and the democrats on a continuing resolution for 2011. we'll have another scrap on 12 after labor day. we're talking today about the debt ceiling deal and the budget and special committee that's been put together.

meantime, the democrats are fighting back. haven't passed any budgets, and obama has put forth a framework without any meat on it. the problem is that the economy is down, deficit presses, debt ratio is climbing. while the parties have been arguing over domestic discretionary spending, essentially. supercommittee isn't going to change that situation very much. the republicans have painted themselves into their little corner, no tax increases. and the democrats have painted themselves into their little corner, defending social security and medicare as written. although they seem to be the main drivers of our long-term debt problem. polarization of the parties and of the voters accelerate. the resulting stalemate causes

they can to be kicked down the road in that overused metaphor. parties obviously prefer to wait until after the election so that they have another year to pander to their core constituents. they are not interested in immediate solution, and that's politicians of both parties. so they have created this budget control act of august 1, which iran described to you as being business seen in nature, and which sarah described some of the predecessor committees workings as well. as far as the constitution of the committee politically, i don't think it makes any difference. one of the panelists suggested they're going to represent the leadership, and that's my

judgment, too. nobody on that committee's going to a profile encouragement by stepping out and voting with the wrong team. they're all going to stick together. that means they will play around again, extensively with domestic discretionary, adding this time some defense spending. but those players may as well be john and nancy and harry and mitch because that's the way they're going to vote. its target of a trillion and a half won't stabilize the debt, depending on which bill will tell you which baseline to use, but it will continue to increase. they will wait for an election. the election is likely to bring us a continuation of divided government, and for the political stalemate while they jockey until the next election. in the meantime, our economic

condition continues to worsen. in my judgment the right kind of solution is a supercommittee or the congress itself has to negotiate something like the bowles-simpson or rather than domenici plan, forcing triggers to stabilize the debt in a dozen years and reduce it thereafter. i think our economy needs a certain day. and if as henry's just need a backlog that of it, that's all right with me. the democrats have, are going to have to sacrifice some entitlement. don't have to stand for stabilization of social security and some cuts in medicare that they really don't want to happen. in meantime, the republicans are going to have to sacrifice some tax reforms and throw some additional revenue in as well. at the moment neither party seems willing to make such

concessions. and as a result i believe that the supercommittee will achieve its $1.5 trillion goal. as somebody said, the trigger mechanism is a little frightening i think of both parties. but it will achieve it in the old ways on domestic discretionary and tinkering with a few entitlements that are least harmful to the rest of the world. so my political prediction is, is business as usual. we have spent nearly -- we will have spent at the end of the year almost the whole year arguing about 15% of the united states budget, and we will be prepared to spend another year, next year, doing the same thing. thank you. >> now we'll spend the rest of our time together on questions, and then i will give people an

audience an opportunity for question. is the first obvious question. can anybody on the panel imagine any circumstances under which republicans would relent on taxes and democrats on changes in medicare? >> henry aaron is going to tell us how. [laughter] >> financial catastrophe. i agree. i think it takes a crisis. american government has usually been pretty good in the crisis and pretty lousy at all other times. and so perhaps that would do it. >> ron, channel our colleague alice rivlin here is by nature extremely optimist -- optimistic and who said that her son are roughly speaking is that the new ingredient is the public

repulsion about what happened the last few weeks what didn't happen the last few weeks, public concern about downgrading, about the crisis in the financial markets and the weakening economy, and that could then be the spark that causes a bigger agreement to take place. and just to add to that, the most optimistic scenario, i don't know, you know, don't ask me the likelihood of this because it's not large, that it is that day, there is a grand bargain, indeed, it involves not only three and half, 4 trillion like their talk about a few months ago, but also the stimulus measures that henry mentioned, they're aiming for three and half, 4 trillion on the grand bargain. they have a lot of room to provide stimulus now on still get the 1.5 ceiling. i don't how likely it is to

happen. i'm not the right person to assess the political likelihood of it, but conceptually one can see how that could work. >> i was looking for to her answer to this question. you said in your comments, you mentioned a line that almost everybody does which is partisanship is -- and from your perspective, expert on congress and know a lot about the history of congress, is this really unusual historically? has the been a time when the pardon -- partisanship was so high and is there a chance it can be reduced to reach a reason will agreement? >> no, no, yes, no. [laughter] this is not historically abnormal. if you look historically with the late 1800s, very high level of polarization coming after the civil war. dips by mid-20 centric him low in the '40s and '50s. we get conservative democrats, rural and moderate republicans

that breeds this political center. political center starts to disappear by the time we get back to today. historically we look a lot, with all due respect to the great -- we look like the late 19th century. polarization is not new. it took a while to dissipate. it takes a while to reproduce a political center. that's not likely to happen in the short term. so what else are you left with? external shock that henry pointed to and bill pointed to, a sort of financial crisis like we saw in the t.a.r.p. episode. the drop in the dow focuses the mind, even members of congress. some even external shock matters a lot, short of that it's hard to see, right, why the parties would want to give up the key issue that defines the differences before an election. the scary part to me is of course this all fell in early through 2011. we are far away from an

election. it maybe even coming to an odd year that these electoral incentives still keep the parties -- they want to burnish their brand names. >> i want to add one thing. we keep talking about how a crisis might further them to get serious about fiscal policy. but imagine if we went back to 2007 and we said supposed the housing market totally collapsed and the stock market totally collapsed and the fed let out all the stops and interest rates went to zero, and still the economy collapsed, where the worst downturns since the 1930s. and europe was going to hell at the same time and it was a worldwide fiscal crisis, you know, kind of emerging. wouldn't that be enough to get congress to be serious about this? [laughter] and if you'd said that in 2007 i think would say yes, of course.

you know, that's a ridiculous question. half of that would've been enough. and yet here we are and they're still bickering about the stuff in a way they are. so i think it points to a set was saying. these are really strong issued, embedded in politics. it's going to be hard to get movement. >> i think it's worth, i want to come back and say i think these answers confirm the derangement of the current debate. what you have of your i think it's general agreements crossing the party lines just among the panel. but what is needed a short-term steamers and long-term deficit reduction. and yet the political process is unable in the face of many things not quite as bad as it were two or three years ago but still pretty lousy, is still unable to strike that deal.

>> by the way audience, if you haven't figured this out, the politics on this pan is represented by the order of see. [laughter] there's honor in the, those other two guys on the left. okay, so let's say they get to do. they have to get a deal, right? let's say they get 1.2. i think that's somewhat plausible. so that brings us to 2.1. made it halfway, third of the way to where most people think we need to go and it still would not stabilize the debt as percentage of gdp. so then what happens? what's next? >> next comes an election. >> yeah, but then after the election we still have the problem i just laid out. so what does congress do then? all of a sudden they are all buddies and they will cut a deal?

>> no. what's different though is if you go back even to a year ago, people were talking, people would say i don't like your deficit plan, i like the way things are now better. in terms of they don't want cuts, they don't want tax increases. what has changed, the kind of big thing that is positive that has changed if people are not talking about your deficit plan versus my deficit plan. all right? and hopefully come in 2008 the two candidates ran on who had the bigger tax cut. and that was a ridiculous debate to be having at the time, and some of the said so, but the political system was ready to have that conversation. i think in 2012 the election is going to be to a large extent about how to fix this. and, therefore, whoever gets elected will be able to claim they have a mandate on how to fix this. maybe we have divided them and have to come together and be adults and compromise. that's another set of issues.

the thing that is different is it seems likely to me at least as a nonexpert political scientist at the upcoming election is going to be about these issues so that whoever wins actually could do something about them after the election. >> the american people say don't tax you, don't tax me, tax that guy behind the tree, don't cut my benefit. suddenly they'll get gumption, tell a candidate here's what you should do to solve the deficit? it's not plausible. >> okay. [laughter] >> i have feeling as ron does, i have never noticed that campaigns are place with a candidate promised pain and suffering and sacrifice. and i suspect that the 12 election will be similar to the other ones, and the candidates will try and talk about other things. there is the possibility as bill

suggests the electorate will want to hear about the deficit reduction plan. i hope and pray that takes place, but i wouldn't that the rent money on a. >> you right at the 2012 election is about tax cuts and more spending than ron, you're right, that nothing will happen after the 2012 election. >> i hate to be right about that though. so here's an interesting question. as far as i can tell, this vote on debt ceiling, after all everything focuses on the debt ceiling, which in the past there's been some gains here and there but nothing like we just saw. what is the effect of this episode on future debt ceiling votes? we will probably have a debt ceiling vote after the presidential election within a few months. and then often after that, are we going to go through this every single time that the will be an attempt to really do something important substantively about the deficit on debt ceiling votes?

>> there's a wide spread perception, right or wrong i don't know, that president obama was convinced that if the debt ceiling were not increased, the situation would be utterly catastrophic. and as president he could not count and allow that to happen during that -- during his watch. he would do whatever was necessary in order to avoid it. is that -- if that interpretation is correct, whether or not it's correct, but if the next person who faces this choice has the same view that is attributed to president obama, then the party that is willing to allow the debt ceiling to expire has essentially complete power over the agenda. that is one interpretation of how this whole process played

out. and it is for that reason that i think it's very important, for whoever is sitting in the white house should this occur again, to take one of two hardline positions. one is extreme and improbable given our tradition which is there should be no debt ceiling. congress in effect votes the debt when it votes taxes and expenditures. we are done with it. that would be the right outcome. but if that is not to be the outcome, if we were to retain a debt ceiling, then it is vitally important that the next time this happens, the president is willing to stand up to those who ask for concessions that he or she regards as unacceptable step which is saying the president has to be saying to go off the cliff hand-in-hand with those dastardly republicans, right speak what you said it, i didn't expect it for one brief shining moment, there was a time and

house of representatives when the budget vote was also a vote on the debt ceiling. and there was not a separate vote. and those were very peaceful, wonderful years. i think, however, because, because people who have a very strong feeling and have seen what a powerful vehicle the debt ceiling is, that we're going to see if subjected to many more of these kinds of things. i remember we got gramm-rudman on the debt ceiling, and so we're probably going to see more and more of this in the future before it slows down. and maybe when sarah takes us into another cycle of kind and gentle times in the congress -- anacondas will get over. in the meantime i've got to

henry's theory, when he described that default is not a great thing for the republican, should be avoided at all cost. >> i'm going to act, i don't want to equate the debt ceiling, the shutdown of the faa but i will. we did see what happens when you take something hostage in congress goes on vacation. and i think part of the returning, putting a fix on that for another month was a part of the public sort of scorn that congress could throw people out of work and go off. so i think it may at the outer limits -- >> some of the people in the audience might have missed that. say that -- >> this is a general question what happens when you take your agencies are debt ceiling's with the federal budget hostage in order to leverage your includes over the final policy outcome. and for the fe -- at the adsl which have had temporary authorizations, the last one

expired in the middle of july and essential congress was out of town after the deficit deal instead there some reason a partisan issue that i went up in and they said we're not going to pass a temporary reauthorization to keep the faa workers and other construction projects and so forth. >> i think there's another lesson here, see if you agree with this. this is essentially a fight between micah and somebody on the finance committee, anyway -- rockefeller, yes, thank you. and they couldn't reach agreement and so as congress often does, i've seen various assessment but it's 100 some thousand will lose their jobs, mainly construction workers who work on airport stuff. so, who cares about that? welcome internet with the recession and everything a lot of people did care and there was a lot of pressure, letters and all kinds of stuff on congress. and even out of session they still figured out, they reversed themselves when they're out of session. so they reached an agreement

because of public pressure. that's what we don't have in this situation is the public saying to a certain thing but don't cut my benefits, right? >> frame the. it's not that it tempered the parties to take things hostage. but it may temper the desire to jump off the bridge. >> i'd like to reach agreement on something, because scholars almost never agree on stuff. we have a nice political diversity of beer before you. i was going to say -- you may be recovering a kind of time to time you still have a lot of political instinct. can you imagine the power that this weapon, the vote on the debt ceiling revealed in this episode, that this is like having a huge bazooka, but the politicians are just going to leave it lying on the table the next time around and the time after that? this will be a prominent feature of our particle system. does anyone disagree with that? >> not a bazooka. its nuclear.

[laughter] >> i agree with that, ron, but remember that's going to be true for both sides. you know, the discussion about whether the president could simply raise the debt limit by, was it the 14th amendment, that will play out, or the notion that there are things that the treasury can do to extend the debt limit, you know. you can be certain they will be more aggressive in planning those options and operationalizing them if they need to. yeah, i agree. it has totally changed it, but it doesn't come it's not definitive about what actually happened. [talking over each other] >> both democrats and republicans could use this weapon. >> think of the delicious irony of the republicans finally electing a president and then having the democrats lyndon johnson bill on the debt ceiling.

>> audience, it's your turn. raise your hand but i will call on you. someone will give you a microphone, tell us her name and then ask a question. the whole thing should require less than a minute. right behind you. >> john nicholson. to really good questions, kind of technical and procedural. ah before ms. binder for the most part. one, don't they have to find a staff director for the supercommittee, and how much does that, how much will the ease of that signify how well this committee will get along? and there's an aspect of this bill, the debt ceiling could be conditioned upon the archives of the united states of a balanced budget a minute. i was wondering if there's any constitutional concerns with that in the way that was with a balanced budget, i'm sorry, with the line-item veto of the 1990s, executive and

legislative powers being intertwined? >> weekend specific. >> -- week and specific. >> democratic and republican co-chair and chat to come up with an agreement. the shifting eyes on the committee to let this become a stumbling block. this is well underway. i don't know quite what's going on with it but i assume it will be interesting to see what they can come up with. i'm not sure i quite follow the balanced budget question. >> just that one of the ways the debt ceiling can be increased as if the archivist of the united states sent to the states ratification a pass balanced budget amendment, which would seem to be a legislative executive branch kind of intertwining along the lines of what was at issue with the line-item veto.

>> all, i think we need a constitutional procedural expert -- this may be, i suspect they follow the precedent on how constitutional amendments get sent to the state. that's not something i'm sure of. >> up here in the front. >> my name is douglas hopkins. could someone illuminate for me why people think that caps and triggers will have any impact upon the budget operation? if as has been pointed out here, the medicare cuts for 10 years have gone along with caps and triggers and have no effect whatsoever. >> the most cynical among us should answer this question. [laughter] henry. [laughter] >> i would defer. [laughter] >> i wish is going to say i don't know of any effective caps

and triggers that have been applied to medicare. and it is true that when congress votes a cap or any financial provision. it cannot by future congresses which might wake up some morning and say that was a really stupid idea. and he'll pass another law sank notwithstanding any existing provision of law we will do x, y and z. so i think they can be got around. however,, and i suppose the doc fix is a good example. but i think in this case the promises are getting a little harder to get around. and particularly with respect to this supercommittee. i believe that it will not be possible for it to avoid finding at least 1.2 trillion from one

of bill gale's baselines or another. and submitting it to the congress. i do not think that the congress will renege on its promise to itself. but i may be underestimate congress. >> let me add one thing to do and see what the panel thinks. in addition to that, there are people in the house now and some in the senate that are extremely serious about the deal that was cut, and don't want to see it changed and the would object, they would fight -- i can imagine republican caucus going to the same kind of stuff that just happened because they are driven by tea party kind republicans, people are serious about deficit. i think that's a new element, do you agree? >> i was going to answer the question from the floor. >> is a. it is big you are disagreeing with it. >> my response the question on

the floor is the purpose is to make a detailed problematic decisions that need to be faced if one is realistically to confront the various problems we have. you can vote for caps. it appears you have done something. and whether or not they are allowed to take effect in the future, you can go to the next election having telling the electorate job done something hard and fast. i find myself more cynical, to my surprise, even bill frenzel. i think the prospects of getting a full 1.2 trillion agree to buy the supercommittee are not good. there are going to be i believe a smaller list of cuts of some kind that would be agreed to, and that when one gets to trying to do the full menu, the committee will hang up and split on partisan lines. so we might end up with three or 400 billion in cuts, but sa,

which which is voted on and approved within precipitate a sequester for 1.2 trillion minus the amount of the agreed cuts and at that point is the question that plays out over a period of years in my opening remarks, i made the comment to which i am returning to that i think it's quite likely that congress that cannot bind future congresses. might well, as suggested by by the limits on fees for positions on your medicare, find that come 2015, or whatever the year might be, the prospect of these cuts was just too unattractive and they decide been to reverse the decision. ..

>> sand in the gears, some being more, more uncomfortable and awkward to change than others. the medicare spending, the medicare cuts that never happened, let me give you a political economy sort of campaign story, a campaign contribution story about why the medicare cuts might not happen, but the caps might work, and this is just hypothetical. the medicare cuts, every year there's these sustainable growth rates that are supposed to be

implemented, and every year they get overrid p by congress. there's a very direct lobbying effort enacted every year by the doctors who get paid under medicare to make sure that the sgr thing gets overridden. with the discretionary spending cap, there's no particular group that has to suffer, so there's a much more diffuse lobbying effort to get those caps raised. ask so it may be -- and so it may be, that is, the argument might be that, well, we need more, we -- lobbying group x -- need more of the existing cap, but we're not asking you to raise the cap. you can think of one specific group at one end of the spectrum, the caps would be kind of in the middle as kind of a middle likely to happen. what would be most likely to happen is an aggregate spending cap coupled with the notion that

if spending went higher, it had to be financed with increases. the most sand in the gears. not that it's airtight because they could vote for tax increase and raise spending, but it would make it more difficult to change. so i would give you a little bit -- >> you can see the rest of this discussion on our web site at c-span.org. this morning the association for unmanned vehicle systems is continuing its conference here in washington. up next, remarks from the chief of naval operations and the defense department secretary for research and engineering. they are speaking this morning on the future of unmanned vehicle systems given the current budget environment. live coverage from the washington convention center here on c-span2. >> i also want to thank the men and women in uniform globally that protect the freedoms of this world, and that is what's right and just. and lastly, i also want to thank everybody, everybody should take a big thank you for the staff of auvsi.

they're wearing blue shirts today, so as you walk around and you see them, give them a thank you. they've worked very, very hard to make this best symposium we've ever had. so without further ado, i'm going to turn it over to our chairman, mr. john lattman. and in order to pull off an event like this, something of large statue and a lot of detail, john also has that skill set in his family with 12 kids. so he's used to having large organizations. so without further ado, let me turn it over to john lattman. [applause] >> thanks, mike, for that promotion to chairman. i'm just the conference chair. well, i'd like to welcome you all today for the unmanned systems north america 2011. yesterday we had a rousing speech by peter providing a

passionate perspective of the future and the unbridled potential for unmanned systems and robotics to serve mankind. i hope many of you got to hear that because it was an inspirational speech. besides the full schedule yesterday, we heard in the panel discussions from the navy and the air force leadership about the future of unmanned systems in this these two services. we heard a status outbrief and about another frontier, the issues facing driverless cars. in the hot topics area, we covered issues like protecting our gps, deep sea recovery, the unmanned air systems providing homeland security and the british perspective for unmanned air system, air space integration. i'd like to echo mike's comments, congratulating northrop grumman on last night's social affair. it truly was memorable, and and another note, we will have c-span taping, basically, and

projecting today's general session. so even though it's the last day of the conference, we aren't slowing down. today is uniform day, as mike mentioned, where we extend an open door to any military or first responder in uniform to come and explore our unmanned and robotic world. so we welcome these great heros to our conference and thank them to their selfless service to our communities and our nation. panel discussions today will focus on the barriers to bringing unmanned systems to first responder applications, space, the fourth unmanned system domain, emerging aus market -- uas market trends and unmanned system sustainment, trust and resilience. check your programs for all the events of today. let me introduce our first general session speaker for this last day of the conference, a very distinguished guest. add marijuana gary roughhead is a 1973 graduate of the naval

academy including command of two aegis ships, uss barry and the uss port royal. as a flag officer, he has commanded destroyer group two, and the u.s. second fleet nato striking fleet atlantic and naval force's north fleet east. ashore, he served as navy's chief of legislative affairs and as deputy commander u.s. pacific command. he has commanded both the pacific and atlantic fleets. admiral roughead's awards include the distinguished service medal, navy distinguished service medal, defense superior service medal, legion of merit, meritorious service medal, navy achievement medal and various other unit and service awards. admiral roughhead became the 29th chief of naval operations on september 29, 2007. please join me in welcoming the chief of naval operations,

admiral gary roughead. [applause] >> well, thanks, john, for the introduction, and i'm also here to reclaim our national honor. as many of you know who may follow world cup soccer, our women fought valiantly but lost to the women's team of japan, our great friend and allies. but the navy-sponsored robo soccer team defeated japan yesterday, so i think we're even in that regard. [applause] but it really is good to be here. i was so pleased to see the response that the symposium generated and the number of people who have signed up for the week. i think it's indicative of the interest, the passion and the promise that unmanned systems of

all varieties portend for the future. the last time i was with you i talked about how i believed unmanned systems would continue to move into the spotlight, and today i'd like to spend a little bit of time on addressing our view and the approach that we have taken and the expectations that we, um, have on our plate. there's no question those of you who follow national security issues, defense issues that war fighting and fiscal realities, i believe, are going to drive us more rapidly and in a much more focused way beyond our traditional mat forms and -- platforms and to the inclusion of unmanned systems. i think that, clearly, in the navy's case without the work and the commitment that our office

of naval research has done over the years kind of kept the pot stirred, if you will, we would not be in the position where we are today. but clearly, it was that sustainment of onr and then in the last couple of years in the case of the navy where we've reorganized ourself os, we've relooked at how we wanted to come at unmanned systems, how we've moved many of those programs into our n26 or director for information dominance. i don't believe that we would have been able to achieve the things that we have done. but it's also important to acknowledge the contributions, the interest and the competence of the technical community, of academia and how they have been able to bring the intellectual power to bear in the world of unmanneds. and there is no question that industry deserves great credit

for continuing to pursue many of the initiatives that we see operating in the battle space today. but i'd like to touch a little bit on how we see unmanned systems operating and what i have been referring to during my time as the chief of naval operations. operating in that way that we can provide the nation with the best offshore options that are available to the commander in chief. and those offshore options are very active today, they're very busy today, and i would submit they're very pivotal today. a few months ago i was giving some remarks, and be someone asked me -- and someone asked me about the marry time strategy that we had issued about four years ago. was it still relevant, did it still matter in the world in which we lived today. that was on the eve of our operations into libya. i knew we were going into libya, it was not in the public domain.

but as i tried to form you late the answer, i just had this vision of our navy at that moment in time. as some of you may know, when we laid out our mary time strategy, we said that we would be a force that was forward. we would be a deterrent force. we would project power. we would control the sea in the areas where we needed at that moment in time. we would conduct marry thyme security operations, and we would provide humanitarian assistance and disaster response. and on that particular evening our ballistic missile submarines were on patrol as the nation's most survivable deterrent force. two aircraft carriers were in the middle east as changes were sweeping through that area. not a bad conventional deterrent force. we were forward in every ocean of the world and on every continent. so those two capabilities were

checked. we were moving ships and submarines in position to make the initial attacks into libya that took down the air defense system with our ships ships andh our submarines. those were also providing sea control in the area off of libya. if you went farther east, you were able to see the united states navy working with friends and arter ins in the somali basin -- partners in the somali basin attacking pirates in that area, maritime security. and then the ronald reagan on its way to a combat deployment in the middle east within 24 hours shifted over and was providing humanitarian assistance to the people of japan in the wake of the tsunami there. so my answer to the gentleman that asked me the question was, yes, it is relevant, it is active, it is viable, and it does provide those offshore options that the nation will need in the years ahead, and

it's able to be done without any footprint ashore. and i'm often complimented for our navy because of how fast we're able to respond. and we are able to respond quickly because of the great skill and competence and initiative of our sailors who are deployed today. about 65,000 of them. but the key to that speed of response is also the fact that we are always there. we are present in the every ocean of the world, we are standing by in those areas where conflict or disorder is likely to occur, and it's that presence that gives the nation the speed that will become increasingly important. but in all of those things that i just talked about, i think it's important to recognize that in all of the operations that we

conducted our communications were not challenged, the command and control of our forces were not challenged, and there was no real threat to our ability to access those areas. and so we, in a way, were never challenged in how we wanted to operate and what we wanted to do in those particular circumstances. those days are not always going to be the case. there will be challenge, there will be systems that will be arrayed against military forces that want to be able to come into an area that will challenge the command and control, that will challenge our ability to gain access. and for that reason i believe unmanned systems will play an even larger, more critical and more crucial role in the years

ahead, particularly in those contested environments. that's not to say that what we're doing with our unmanned systems today is not important, is not relevant and is not having an impact. i cite our band's aircraft, demonstrator, that we sent to the middle east a couple of years ago just to see how it would work. it has yet to come home. it's not broken, it's just that no one wants to let it go because of the value that it provides in sensing the battle space there. with our fire scout unmanned helicopter, we deployed that two years ahead of it initial operating capability date. i think that is a significant step, and it's an important step that i'll talk about later. and, in fact, although that system for the navy was procured to operate off of our ships, it

is operating ashore in a afghanistan, and there's an additional demand for more fire scouts to support operations there. and without those initial deployments, those early deployments we wouldn't have been able to get those systems in the hands of our operators and the hands of our sailors so that we could learn operationally how to use unmanned systems. we've made good use of shallow l-water mine hunting systems in the vicinity of iraq and the waterways there as we participated with our iraqi friends in opening up the waterways and the harbors that are absolutely critical the their economic viability. and we've also used them extensively in underwater searches, for example, in a helicopter off the case of san diego. and i also had the great pleasure of going to wood's hole ocean graphic institute and seeing the work that they're

doing there and how they use leading edge technology to find the flight data recorders from the air france flight that disappeared in mid ocean without any specific locating information. we were able to use those systems in that regard. and then, of course, our oceanographic community is using gliders this very extensive ways that are increasing our awareness of the underwater battle space. but even with all of that i think it's true to say, and i won't sugar coat anything, that many of our unmanned systems still operate on the periphery of naval operations. indeed, i would say many of all the unmanned systems operate on the periphery of all the operations in which we conduct. they clearly are not optimally integrated into our ships, into our squadrons and into our concepts of operation. but i think that the pace of

development, the culture that we tend to have within the military, indeed, within any large organization and the need to this point are why we have not seen that optical integration. those are the three things that in my time as doing this i've seen as the impediments. but i do believe as i alluded to earlier that the growing antiaccess area denial capabilities that we see coming on, the importance of the activity in the undersea domain will cause us to have to focus and to put more energy and more purpose into bringing these systems to bear. because, quite frankly, we don't have the time to let things languish along and find their way into our operations at a comfortable pace. and we also can't allow the work that we do, the experimentation that we do, the research that we do with unmanned systems to be viewed solely as an unmanned problem.

that was one of the reasons, the main reason, indeed, why we pushed the early deployments of some of our systems. because while we can go ahead and look at the technological needs that we need and look at how well does the system it work, it is so important, it's so important to me that we get these systems in the hands of the operators so that they can blend them into the operations and into the environments and be learn from that. because there's an operational level of learning that has to go on in addition to the technical level of learning. and i also believe that we don't have time to treat how we think about and how we move information around as an afterthought to the system. that has to be part of the architecture in which we envision and that we reimagine how these systems are going to play into the battle space. and from be the outset that i

have always believed that it's not a question of unmanned systems and manned systems and how do we program for and by and develop and research in those two individual lanes. for me it's been an issue of looking at the battle space in which we will operate and then looking at the optimal blend of manned and unmanned and how does each complement the other and not take away from the other. those are the things that we have to think about. and so our approach has been one that has looked at unmanned systems that allows us to move forward with systems and concepts and ideas that have a great deal of commonality but then that we can take some of that and tailor it off and perform a certain mission. and whether that's in the large diameter uuv, the persistence system and some of the propulse

work that we're doing, i think that allows us to take some of those systems with broad commonality, but then we can also parse them down into the needs that the operators may have. i also would say that we have pressed quite hard on bringing the x-47b into our thinking in the theaf. my staff know -- in the navy. my staff knows that on the first flight of the x-47b i was like an expectant father. as in all case when systems like that are fielded, you may get ready to fly, then there'll be a little glitch that you'll prudently and wisely and appropriately want to check out that may delay the flight a few hours, it may delay it a day. i was on pins and needles, and i have no idea why it was that particular event in my tour as the chief of naval operation that caused me to be so focused,

so excited and so enthusiastic. probably because in my mind it truly does portend a significant change in the advantages and the power and the versatility of naval carrier aviation. because if we can blend the unmanned on an aircraft carrier and the manned on an aircraft carrier, we've changed the dimension of carrier naval aviation in a way that has not happened in decades. but i would also say that as an organization, and i alluded to this earlier, that culturally we are often slow to adapt. we, we tend not to want to pull these innovative solutions into the way that we do things. we struggle to answer needs in new ways even though we know there's a compelling argument to get these systems out there.

and that's why i believe the approach that we've taken, the reorganization and the great young leaders -- some of whom you see here in the audience today -- are the ones that will carry us forward. i would also say that we get wrapped up a lot in our defense procurement process, that if an industry doesn't bring new ideas to us because we don't ask for them, i think that that reveals an acquisitions system that doesn't accept failure and is not eager to learn from it mistakes. which i think is a huge shortcoming of our system. failure is not bad. not learning from the failure is bad. but failure is not bad. resistance in getting to what i call speed to fleet, how quickly can we get systems out there. and the time that it takes us collectively to get an idea into

a system, get it out into the fleet, i think, represents, again, a risk-averse culture and an old set of processes that aren't geared to the age in which we live. and i believe it's also worthy to note that even though we have had the fire scout deployed from a ship, the fire scout deployed ashore in afghanistan to the rave reviews of the troops there that are using it, that the item of note was that a fire scout was shot down in combat, a negative. all of the positives tend to be glossed over. all of the lessons that we were able to learn by deploying two years early to shape our thinking for the future, that seems to be minimized. and i believe that that is indicative of thinking and processes that are not helpful

to our future. i also believe that we have a belabored operational test and evaluation regime that from time to time more often tends not to be able to deliver the integrated and the interoperable systems that we're going to need. again, kind of a stove pipe look at how we're bringing systems into play and not being able early on to determine the interoperability issues and solutions and the integration challenges that we know we will face. we have to think differently about how we do that. because if we fail, what happens is those systems get put on the backs of our sailors. and they are the ones that have to struggle through the process. they are the ones that have to fight through the inability for systems to work together.

i think that more of us in uniform and those of us who are in the department can do a better job of articulating requirements, stating those requirements and working closely with the research community and with industry to make sure that we get those systems delivered quickly and can work our way through rapid fielding. because is so important be -- it's so important at this time because i really do believe at few times in history have we been presented with technological opportunity in the way that we are today. particularly in the area of unmanned systems. and where we haven't shifted our operational thinking and our operational construct. and we have to get our heads around that and make sure that we're addressing that in the right way.

i think that, um, to just close with a couple of point that remain of great importance to me. you all were there last year when i cast the net widely to continue the pursuit of high-density underwater power. that, clearly, is something that will be a game changer for us, and i encourage and i thank all of those who have been part of bringing options to the navy so that we can look at what the best way ahead is. and just in the short time that we have been advocating for increased power we have seen the times rise markedly, and we need to continue to do that. i think that there should be increased attention paid on the use of open architecture and how we can take advantage of that, again, to increase the rapid fielding of these systems. and as i have always said from

the very beginning, there is no such thing as an unmanned system, that there will always be people in the loop, in the process in some numbers and some way. and the environment in which we are going to be in whether it's the risk environment, the nature of antiaccess strategies or the fiscal environment that we're going to be in, we cannot afford to simply take an operator out of a vehicle, declare victory when we put 50 additional people in the back room. the cost of people in the future will only continue to rise, and we have to make sure that the systems that we're putting together, the integration, the interoperability takes advantage of how do you bring down the number of people associated with operating the systems in which