was looked after. do you think andy coulson had something to do with it? >> i have no idea. i very much doubt it because he left on the day of saturday. >> back to the meeting with james murdoch, just a couple of things i want to clarify particularly with regards to the evidence james murdoch subsequent to his appearance. he says in that evidence that either mr. myler or mr. crone told me wrongdoing extended beyond mr. goodman or mr. mulcaire and there was nothing in the meeting that lead me to believe that further investigation was necessary. is that an accurate reflection on that meeting? >> yes. >> so that seems to be slightly contradictory to what you said before to my colleague, mr. watson and to the chairman

where there was an indication from what you told mr. murdoch in that meeting he must have been aware that wrongdoing extended beyond simply clive goodman in terms of personalities as well but you're now saying that wasn't the case? >> perhaps i misunderstood what you said before. i thought you were asking whether -- during mr. murdoch's meeting it was made known to him that wrongdoing went wrong clive goodman. >> and glenn mulcaire. >> but glenn mulcaire didn't work -- >> and was it -- >> he was made aware of it. he was made aware, as i've said, of the document. >> but this is quite important but he was saying that he wasn't made aware the wrongdoing extended beyond clive goodman, is that right. >> that's what i understood what he's saying, yes. >> is that your recollection of what you said to him. is he right in making that statement? >> well, my recollection which i have said quite a few times already today is that i told him about the document and the

document clearly is that it goes beyond clive goodman. >> that i think i understand and there's an important connection here in that meeting did you make clear to him what the full significance of that document was not in terms of the taylor case but what it meant for the -- >> well, the document clearly suggests that there is "news of the world" -- >> i know the document suggests. what did you tell him? >> i can't remember the phrases i used. i'm sorry. because it's 3.5, over three years ago. >> i find this difficult, i'm afraid. you seem to have ambiguity in something that should have been incredibly clear. >> mr. watson -- i can't answer the exact phrases that we used, but i am certain that i explained to him that the case had been running on this basis up to the production of that document, this document meant that it was clear that "news of the world" had a wide involvement. and, therefore, we had to get out of it. >> but you can't be sure that

you did explain to james murdoch that wrongdoing is said to be on clive goodman. >> sorry. in fairness, with respect i think i just answered that question. >> with respect to mr. crone, when i first put the question to you on mr. murdoch you said his recollection was collect. >> well, in this case i misunderstood what you just said. i'm sorry. >> you did tell him -- on his part, there should have been no ambiguity as to whether this evidence, the settlement on the taylor case meant that wrongdoing extended beyond clive goodman? >> well, i can't toll you whether on his part there was ambiguity. i can only tell you that i explained that this document meant there was a wider "news of the world" involvement. >> mr. myler, what was your recollection of the conversation? >> as i said, i think there's no ambiguity in the significance of the document that the police have provided to mr. taylor's legal team. outside senior counsel, outside junior counsel, our outside

lawyers, mr. crone all agreed that the significance of this document meant there were essentially two choices. either settle the case or fight the case. and fighting the case would have meant going to a trial. and so in that respect, i don't believe there was any ambiguity. the significance of the document being produced was, i think, quite clear. >> there's no ambiguity on the document. you call agree on that>> -- >> yes. >> was it made clear to him that the document was to settle this case but the document was in effect proof that there were more journalists at the "news of the world" who had been involved in phone hacking than purely clive goodman? >> i think there was evidence to show that clearly at least one potential journalist may have been implicated but at the time when mr. crone talked to him

there was. >> to be clear he wasn't shown any document in the meeting. he relied on your explanation, explanation to mr. crone and mr. myler that this document existed at all and what it meant and was it absolutely clear to him as a result of your discussions in that meeting, not only did the case have to be settled, as we point to that in some detail that there was some evidence that wrongdoing extended beyond clive goodman? >> i think based on the fact that -- as i said outside senior counsel, outside junior counsel, external lawyers -- >> we're going at this thing -- >> no, no. with respect to, mr. collins, there's importance you don't rush into these things. you take time by getting outside advice as well as external/internal advice as it were. so with respect to it's significant that that was the advice that they gave. >> of course, it was in terms of settling the case. >> yes. >> an understanding of the

broader issues and what this actually meant. >> yes. >> this is absolutely crucial. >> yes. >> and james murdoch has been very clear in his written evidence to us and if that is wrong, that's a very serious matter. and your recollection of this meeting he's very, very important on this crucial second part, was he clear that this meant there was further wrongdoing within the "news of the world" as a result of the existence of this document? >> well, it seemed to be clear to other people that were -- >> i'm not asking about other people. i'm asking about him. >> i can't speak for mr. murdoch's recollection of this. and i can't speak for mr. murdoch's few that he took away from that meeting. what i took away from that meeting was that there was an agreement to settle, and that is what happened. >> i would have thought in your position and mr. crone's position that you would have been extremely clear as to the seriousness of this and you would have made absolutely clear to him that not only do we have to settle but there's evidence here for further wrongdoing that

is of great significance for the company that has to be dealt with? and i would have thought you would have been extreme clear about that. there would have been no room for ambiguity and you wouldn't have left the room with that. you had to be sure. >> i didn't leave the room with ambiguity about what should have been taken. >> there's two issues and there's a settlement of the case and the what the settlement of the case meant for the company and it is very unclear as to whether that was ever properly communicated at all or whether you left the meeting and it was just left up in the air. and neither of you have been able to convince me that you've made it absolutely clear to him beyond the settlement that there are wider issues in the company that existed? >> with that respect, you know, mr. murdoch was the chief executive of the company. he's experienced. i'm experienced in what i do. mr. crone's experience as a legal manager. i think everybody perfectly understood the seriousness and the significance of what we were discussing. i'm not sure what you're

alluding to about what -- what he should have said, what we should have said that resulted from that meeting. >> because -- >> i can't -- i can't get inside, you know -- he was probably dealing with a lot of things as he probably were. >> the significance is very clear from mr. murdoch's own testimony where he's saying neither mr. myler or mr. crone said wrongdoing extended beyond mr. goodman or mr. mulcaire and nothing led that further investigation was necessary. he was very clear that his recollection of the meeting. >> i'm sorry. i am clear. and what options were there for the company to take. one was to settle and one was to fight the case. the decision is taken to fight the case. so i'm sorry. farce i'm concerned. there was no ambiguity. and there was no suggestion, then or now that anybody tried conceal anything. that was a document that was

produced by the police. >> i'm not talking about that. so your view would have to be there that you could not support james murdoch's recollection of that meeting. that he's -- >> that he -- >> that he's interpreting it a different way. >> the reason the clarification was put out in the first place was simply because it was alleged, wrongly, that as a result of what mr. murdoch had said, we were guilty of either concealing or covering up a sequence of events and that had to be clarified because that is not factually correct. >> but did you -- in terms of his point about further investigation, i mean, he said there was no discussion in the further investigation because this is a very serious matter. was it ever a threat or should be a full investigation with outside lawyers and they're really looking to get to the bottom of this because this is highly significant information? >> it was never suggested to me

but, again, with hindsight, we now know how devastating the evidence that the police had, that they gathered from mr. mulcaire in august 2006 was present and wasn't followed. we now know that evidence that was gathered from an email an internal investigation email that was handed over to the police, i think, in january this year that led to the re-opening of the police inquiry -- there's lots of things that have come to light, from different areas. that if we'd known then what we know now, i think things would have been massively, massively different for everybody. >> but just compare it to the company's response to the clive goodman letter, for example. there was a process. it was copied on the letter.

he was discussed with him and there was a review of the evidence that clive goodman had insisted existed and you conducted with the staff and there were emails and there was a process there. in this case you've had a highly significant meeting with james murdoch where he shall have been made aware and you think he was made aware that the settlement, the significance of the taylor settlement in the email document meant that wrongdoing existed but there isn't any kind of process following out of that at all where the company decided to have a further investigation to get to the bottom of what happened. >> well, that's as a result of what happened. but i don't think anybody understood the seriousness of the document. and nobody was underestimating the seriousness of the decision that had to be taken to settle the case. >> if i could -- if i could escape back to when you joined

"news of the world." there was evidence given in september 2009. it was said that you had come with a clear two things any previous misconduct was identified and the prospect of any future misconduct would be ruled out. on the second of those points and you've previously given evidence to the committee about the reforms you instigated when you became editor of the newspaper on the first point that any previous misconduct was identified, the evidence that was received says there never was broad investigation into wrongdoing at the "news of the world" as a result of the goodman trial and conviction. there were specific tasks that were commissioned. there was never a broad wide range review. i wonder if you could say something about that. do you think you were remiss in the brief that you were given. do you think you should have done more?

>> i will take personal responsibility for my actions. and i'm very comfortable with what i did. and i think as i've said hindsight given what has meanered both from the police evidence that they had, and they didn't act on and the internal evidence that's been provided by news international subsequently. i think if i may, you know, clarify what happened when i did commit and what i understood the situation to be. when glenn mulcaire and clive goodman were arrested and i think if you look back at my testimony you will see that i understand burton copeland were brought in to be a bridge head as well as provide any evidence that the police required, and i think that was primarily a position of transparency so that nobody could accuse news international of prohibiting or being an obstacle to what the police were requiring from them,

paperwork or anything else. i think if you look back also you will see from mr. coulson's testimony and from mr. hinton's testimony that at the time of their arrests, it was made clear that they had to try to get to the bottom of what was happening. so they were -- they pled guilty. they were tried. they were convicted. when i came in, i instigated several reforms and changed the protocols and systems within the business. the first thing i did was sent an email to the staff within a week and freelancers i believe explain the significance of their responsibility within the pcc code. >> you previously given evidence on this in some detail and i wasn't disputing any of that at all. i know that's what you did. it was on the investigation of wrongdoing because there was no investigation into wrongdoing

conducted by any external party. there were very specific type briefs that were given to external firms but there never was a big investigation -- >> well, here we are in september, 2011, so i'm going back to january, 2007, and i certainly believed that there had been more of an investigation than perhaps i was led to believe. >> are you referring to the police investigation with burton copeland there? >> burton copeland. >> yeah. >> but as far as -- the other thing to remember was that the police inquiry again as i understood it was at the time i thought was very thorough. that clearly was not the case. i think they accepted that. so, yes, clearly the police inquiry was not as thorough as i believed it to be. forgive me, but if the police

take away three bins of evidence from mr. mulcaire's house i would assure if they wanted to talk to somebody else who may have been implicated in criminal acts they would have interviewed them and they chose not to. the only member of staff who was interviewed from "news of the world" was clive goodman. now, i might be guilty of assuming too much. but i am a journalist. i'm not a detective. and i'm not a lawyer and i would have assumed that if the police and given -- i think if you look back at what mr. andy hayman said at the time, the assistant commissioner who led that inquiry, i think the phrase that he used was, no stone was left unturned. now, we might look back at that and say that clearly wasn't the case. it wasn't the case. >> by some measure. >> by some measure and i think they acknowledged that. but as i said, i did what i

thought what i had to do and i did what i did. now, yes, there things may have been necessary but at the time i generally believed because of what the police did in their inquiry, or what they didn't do, i didn't -- >> okay, he said -- he gave you a very clear remit to make sure any previous misconduct was identified. that's in his mind, and maybe there's things police had uncovered and you as the new editor coming in after andy coulson's resignation and clive goodman's -- >> well, i did. i mean, clive goodman appealed which i thought was an extraordinary experience to have to when i was first told about this, i thought well, on what possible grounds could he believe that he was unfairly dismissed? but as the new editor i was told by the human resources director

that i had to listen to his appeal and they were unsupported without any evidence whatsoever and he was asked many times do you have any evidence to support your allegations, that's when the so-called 2.5,000 emails were instigated. and i thought that was a lot and as a direct result of mr. goodman made against certain individuals, i sat down with mr. cloak and talked with him about the allegations and they denied every single one of them. now, in the absence of any evidence to put before them, now we know that potentially, i don't know, that that maybe evidence did exist. these are only allegations. there are x people who have been arrested by the police. so i don't know how this is going to result. >> if i may, if you may go into

some of that on detail and i appreciate there are other clients that want to come in. did you understand that the remit that was given was very limited and purely to the employment tritribunal in effect and wasn't a wider investigation into whether there was evidence of phone hacking? >> i had no involvement, no contact with them, whatsoever. i had no interaction with them. >> but in terms of how this was explained to you by mr. chapman and mr. clay, did they explain what they conducted, the email review was very, very narrow in its focus? >> i had very little contact with john chapman with this process. my main contact was daniel cloak. and if i may, i'd just like to clarify one point that mr. cloak crone i made no negotiation regarding any financial settlement that was made with mr. goodman, no, whatsoever.

>> if i may, one final question then. >> sure. >> going back to the meeting we've already discussed with james murdoch, subsequent to that meeting did you ever have any conversations with him or any senior executive news corporation that you might report to suggesting that there should be further investigation within the newspapers suggesting what you'd done or there should be an external investigation regarding phone hacking as a result the email as it had been discussed in the newspaper? >> at that particular time i didn't have any specific conversations with anybody relating to that. but any -- any other issues relating to this i always reported to my superiors. >> so it was never discussed again? >> but the -- >> yeah, never discussed it. >> i never discussed it again with james murdoch, i believe. >> or anyone else, or any senior level above your -- >> well -- >> but i appreciate -- >> during the course of the last 18 months, two years or so, you

know, a lot of discussions have taken place because of what's emerged. >> my final question going back -- do you think it was not slightly extraordinary that you mr. crone, and the subsequent meeting with james murdoch and the agreement was made to settle the case and from your view you've been clear about, everyone understand the significance of what james murdoch was told and it was never questioned again, the consequences of the company, you never went back to mr. murdoch and say, are we doing anything about this? you nev never volunteered that nothing should be done? don't you think that's extraordinary? >> no. i think the responsibility, if i might say regarding the corporate governance of a company goes beyond my pay grade. and, therefore, if anybody wanted to talk to me about either my performance what i was doing or what i wasn't doing,

they would have come to me pretty clear and said, i'm sorry. we don't think that you're doing the right job. you're not doing the job at all and we want to remove you. and an editor's life, you stay when you perform and you go when you don't. it's very clear. there's no gray areas. it is black and it is white. if anybody was not happy with my performance, either editorially, dealing with the staff, dealing with the budgets, dealing with any other issues, they would have told me. >> thank you, sir. >> these questions from me to mr. crone. in his notice of appeal did you feel you had full access held by the cps giving evidence of phone hacking at "news of the world" did you detail such items? >> no. that's completely wrong. he refused me access to the files. his lawyers will probably

confirm that. >> thank you for that clarification. you made in response to a question of my colleague, mr. watson at some stage you may have been in the past some specified time involved in a bit of surveillance. could you just describe to me what you mean by that? >> in civil cases, when people are suing us for libel -- we've run stories well, they're having an affair or something like that, then if you believe that they are having an affair, the obvious thing to do is keep an eye for a few days and see what happens. >> i'm sorry you feel it's a trivial question. >> no, i don't think it's a trivial question. >> but ju

>> involved in an activity in which you're suing over the suggestion that they are involved. you think it's right. and you think it's something that if they are watched for a while, then you may well get the evidence to prove their case. so it's in that context.

>> can i ask very specifically would you ask routinely the activities on -- >> i'm sorry? the activities commonly known as blogging. trying to retain information people purporting to be reporters and they're not. >> going under cover is dismiss investigative journalists do. they pretend to be someone else in order to get information which one would hope is in the public interest. that's as old as journalism, actually. so one of our probably greatest story i was involved in last year was the pakistan cricket. i can't say too much about it. but in general terms the pakistani cricket corruption story that ran last summer revealing that -- actually revealing in the course of the lord's test in pakistan that pakistani players were, through an agent, were prepared to do

things on the field knowing that people were placing money on it. now, that information was gathered in by someone pretending to be someone he was not and you like we wouldn't call it bugging. we called it undercover journalism. >> can i just ask a final question again this is so people understand kind of the practices you would perhaps think are routine. would people be allowed to under your employment be able to freelance on that basis or would they would have to have that authorized by the management? >> well, people -- i mean, freelance reporters do come to us with a journalistic package saying this is what i've been working on for the last three weeks and it's a story i've got going on undercover somewhere. now, that would come to us without us having any knowledge of what they've been doing so it wouldn't have been preauthorization. if they came to us and say, look, i'm in a position where i can get x, y and z which is a story of interest to you and i can do it by posing as, you

know, something or other, then we would look at what's being proposed to us and either give the authority to go ahead with it and not as the case would be. >> and you would at that stage the extent to which that was within the law or under the state of the law? >> absolutely. >> mr. crone, you were, i think, issued us with a challenge midway through the challenge through the session to demonstrate what you said back in 2009 was -- it might not be wholly accurate. i think mr. watson talked about question 133 the size of the pavement was great in order that the proceeding should be kept secret and both you and mr. myler said, no, absolutely not. which we now know it wasn't the case. can i put this to you, with the settlement of gordon taylor you said back in 2009 to mr. watson that you'd agreed with the

outside advice that was given? well, quite clearly that wasn't the case, was it, because the letter make it clear that the advice -- the outside advice that you were given was that the award would be around 100,000 pounds or possibly 250,000 pounds. that was the advice that was given. >> the advice we were given after the four-level document came to our attention, it was revealed to us by mr. taylor's lawyers and ultimately by the metropolitan police was that we should settle the case. and it was realized that mr. taylor was asking for a very large sum of money. as mr. watson pointed out that was correct. the outside lawyers certainly suggested we should get out of the case and settle for the best figure we could arrive of. >> they didn't suggest that you settle for 425,000. that was a decision that you took, wasn't it? >> i'm absolutely clear that they said we needed to settle

this case. and if it took a lot more than we would acknowledge to pay them, we should still get on and settle it. >> partly because of the other cases that may be waiting in the wings. >> and a further question that mr. watson posed to you back in 2009, the reason you gave was that actually if the case had gone to court it would have cost -- it would -- it could have ended up costing more than you would have settled for. that wasn't the case at all, wasn't it. you knew that wasn't the case. you knew you were settling for -- >> for two weeks it would undoubtedly have cost us more than we settled for. >> 3 million pounds? >> potentially, probably. it could be a lot longer than two weeks for that. i've had at least two cases in the last four years where the length of the case was a week and a half, two weeks and we come up -- and the damages are not particularly high, less than 1 uh,000 and we come out of it with a bill of up to 2 million. 1.5, to two. >> can i just ask a question on damien collins because i'm rather confused about your meeting with james murdoch that you both had because the bit i

struggle with is that if you are both adamant that james murdoch knew the full extent of what you were telling him about the email, the bit i struggle with is that this meeting lasted at the absolute maximum 15 minutes. it seems to me if you were telling james murdoch that we have evidence that other people at "news of the world" were involved in phone hacking, that's what we've got in our briefcase here. and that's why we'll settle this case. i can't imagine you can go through all of that and the implications of that less than 15 minutes? >> well, that's my recollection of how long the meeting would have taken. i can't speak for mr. what myler understood at the time or not. i've heard what he said since. i'm absolutely prepared to accept that he's got his recollection wrong, but i do know and i am certain that i explained to him that this document emerged saying what it was and why it meant that the

defense we had lodged in a case couldn't go any further. >> can i move on to the payments to clive goodman? .. who would have authorized that payment to pay the legal fees? >> i can't remember. the chief executive at the time i imagine he would authorize it. >> quite but -- >> perfectly proper reasons.

>> when i put that to les hinton, i said, who knew about legal fees being paid, he said if we paid their legal fees the company would know. i do not. so who authorized your decision to pay that, those legal fees. >> i don't know. sorry. >> who would you have gone to? you went to,. >> possible andy coulson could have done it. >> on what basis? >> in your last evidence in 2009 you made pains to stress on number of occasions that you were in no way an employment lawyer and therefore couldn't be expected to know about those matters. so surely, if you are deciding whether or not to pay the legal fees of an employee who was being dismissed for gross misconduct, what, shouldn't that have been discussed with either of the director of hr to see whether or not you had any legal obligation to that, or the legal managers? >> in february 2007, he

needed legal representation when he was arrested in august of 2006. the legal representation was supplied to him at a cost of newspapers in august of 2006. >> he was pleading guilty to a criminal offense which -- >> at the end of november of 2006 he pleaded guilty. >> yeah. so -- employee as a great expense no doubt he pleaded guilty to a criminal offense which came with gross misconduct and summary dismissal. why didn't you check with the either the director of hr or the legal lawyer, the employment lawyer that "news of the world" whether or not it was still a proper thing to be paying legal fees? >> i think it was generally understood his legal fees in the criminal proceedings were being paid for by us. somewhat -- >> paid by who? whenever we put this to anybody -- >> editor of the "news of the world", i think almost certainly higher up than that. if someone felt that he

would plead guilty he should have the plug, payment of his legal fees, someone would have told me that but he didn't. >> as far as you're aware. andy coulson and les hinton knew news international were paying fees up and to including the court case. >> i'm southern andy coulson. i'm fairly sure of les hinton. i can't be fairly certain. >> thank you. mr. myler, you said not too long ago, i think if i heard correctly that you disputed what mr. cloke said in the previous session when he said that the payments that were made to clive goodman subsequent to his guilty plea sentences dismissal, he made it clear that you would have, you were aware of those payments that were made. you may not have authorized them but you were aware they had been made. >> i was not aware of any financial settlement that was made between the company and mr. goodman. at any sage. -- stage.

>> you weren't aware eight payments were made not the figure? you're saying quite categorically you were not aware any payment whatsoever had been made? >> i wasn't aware of any payment. nor was i involved if any negotiation, conversation, or meeting. and let me, point out if i may, mr. chairman and mr. davies, that, as an editor, as i said before, i find quite extraordinary that i did what i did because i'm only human with, not a heem resources lawyer or expert. there were several parts to this. i was sitting there as the editor because that's what i had to do. i listened to appeal with mr. cloke. i then spoke to the executives who mr. goodman had made allegations against. the e-mail search was authorized. mr. chapman dealt with the outside firm of harbottle & lewis. and dealt with mr. chapman with the e-mails and

whatever action was taken, all i know as i said to you in my written letter to the chairman and the committee, was that mr. cloke said to me, after a period of time, good news, there's no smoking gun or silver bullet in the e-mails. i remember that quite clearly. i respect mr. cloke's recollection. but it's not something that i would have said if i didn't remember it or recall it. >> you see you're a journalist. i would have thought journalists by nature quite inquisitive characters. did you not ask why on earth clive goodman dropped his claim to and threat to go to an employment tribunal? did you say, what happened to clive goodman case? >> with respect, mr. dave vees, -- davies. mr. cloke is experienced human resources director. i'm a journalist. i played the part in this whole episode as i have explained both to the

committee in 2009 and elaborating on it today. if i have fallen short, i will take responsibility for that and you will not find me falling short in any kind of humility. >> but you didn't ask about what happened to that case? you didn't question what -- no idea any payments -- >> it was a decision, it was a case that i inherited and quite frankly, my focus at that time was trying to get the paper back on track, to sort the paper out and try to change the culture within the paper. to change the systems within the paper, to change the protocols within the paper. that's what i thought i was doing. >> could you think of any reason mr. cloke would say you did know about the payments though you didn't? >> no, i don't. because, those decisions were clearly way above, again, my pay grade. >> just one final thinking. in your evidence in 2009,

when i put it to you that it was, that the idea that it was one rogue maverick journalist appearing now to be somewhat discredited theory, i put to you in, session in 2009. your answer was, no evidence, mr. davies has been produced internally or externally by the police by any lawyers to suggest that what you have said is the truth. you've been saying today as far as you were concerned the neville e-mail was absolute category rick evidence that the one rogue maverick journalist theory was discredited. what you've said today and what you said back then, surely you can't reconcile those two -- >> as mr. crone pointed out, the existence of the neville e-mail was made known to mr. taylor's lawyers by the police. the police had this information and had this evidence. >> but i said it was a --

you said no evidence has been produced to suggest what you have said is the case. >> i made the point very clearly in my opening statement to that hearing that the neville e-mail was a significant development. >> mr. crone, finally to you, the payments to mr. mulcaire that were made, you said back in 2009 that yes, apparently some payments were made and that your understanding of this was that because he had worked for so long for the, doing work for the company, that you weren't an employment lawyer but you did think that you understood that the law meant that that person would have certain employment rights and that's why he was paid off. who gave you that advice that he had those employment rights? >> i think right at the beginning i asked harris about that. >> did you not think to ask the director of hr of news

international what was in terms of employment rights were for somebody in that position give the nature, you would think such an important matter you have to get it right. >> you seem to misunderstood, misunderstand who was doing what. i had absolutely nothing so whatever to do with mulcaire and his employment claim. except at very ing beginning it was notified to me and i passed it on. >> who dealt with his sort of bogus employment claims? >> hr dealt with it and i think john chapman dealt with it. >> but the director of hr made it abundantly clear he had -- >> john chapman dealt with it and i can imagine hr delt with i in some way. >> you question mr. chapman and mr. cloke made about -- >> -- what he did say. >> thank you. >> thank you, mr. myler. during the review, during the appeal, and the it was

suggested by mr. chapman earlier that you and your team looked to invoice payments things referred to by mr. goodman in his appeal. can you tell us more about that, please? >> i'm not sure what he is referring to, forgive me. there was a lot of allegations been spread around at the time so, i don't have that exact note at the time. i would have to be, remind of that but i, mr. chapman said specifically what they were and what the system was i can't be clear about what that was to be honest. >> so, reflecting on that it seems unusual to me when you were -- that you can not recall activities -- >> you may have more information about than i have about what the allegation was mr. good mann was making specifically invoice payments. if you could help me with that? >> sure. earlier we were, mr. goodman

made various accusations about activities and ask for, subsequently asked for a series of evidence. >> yes. >> including authorization of payments, that kind of history, invoices mobile phone records, could be pips of e-mails which led to the subsequent review which you're fully aware of and it has been suggested today in essence that the this committee, mr. myler and his team looked at those invoice payments. >> first and foremost of the contents of 2500 e-mails were never shown to me. can i explain? >> you don't need to explain. >> it has a significance about -- >> it doesn't so me. >> it has a significance, if has been published, some of those e-mails that related to criminal behavior, and mr. goodman is relating to invoices that support that

allegation, i am not aware of those invoices and that specifically was what was looked at at the time. that has to be -- >> mr. goodman took no review of injoyce -- invoices in any way? >> i, i undertook a very wide-ranging review of practices within. newspaper including, including, essentially not banning cash payments but reducing and changing the protocol and the system how cash payments would be paid and reduced that by between i think 82 and 89%. but specifically what mr. , the invois that mr. chapman is referring to, i will need a little bit more information before i can answer that. >> so, okay. so just to put aside slightly exactly what mr. chapman said, if the appeal process there was no investigation of invoices

undertaken by you or anybody who worked for you? >> i'm not saying that it didn't take place. the main thrust, the main -- >> tell me what you did do. >> that has been perfectly a matter of -- >> review of e-mails in regard to other information or interviews that you may have undertaken. >> the main thrust of mr. goodman's allegations were, of the, executives and people within the newsroom being aware of what he was, what he was doing. as a result of the e-mails search and as a result of his allegations i have sat dune with mr. cloke and spoke to the individuals that mr. goodman had named and they denied all knowledge of his allegations and that's what happened. >> okay. >> that was specifically in relation to his allegations that he made. >> so from that, i'm taking away from today, that you did not, or somebody working for you did not go and look at specific invoices -- >> i'm not saying that. that may have happened. you need to be specific. >> i'm trying to understand.

what dud do in terms of looking at financial transactions? >> i changed the whole system. >> that's not what i'm talking about. you're talking about -- >> i'm sorry if i'm missing your point. >> reveal view to the appeal undertaken put forward by mr. goodman. did you look forward to any financial transactions as a consequence of the appeal made by mr. goodman? >> i don't recall any financial transactions that were being investigated. >> that's what i want -- >> but if, if we could go back to any notes that were taken at the time or mr. chapman could elaborate or mr. cloke could elaborate but what specifically, which particular invoices mr. goodman is referring to i think we can clarify that. if that was asked of me it would have been done and if not by me personally it would have been done by the managing editor's office. >> thank you. mr. , mr. crone, i am trying

to clear up in my own mind. you're referring to the neville document you are suggesting four other people would have been sued potentially if that had been made public. have any of those people sued. >> not if that was made public. you have a class of four perhaps, four in the same circumstances, in other words they were victims of the mulcaire's e-mails. and four of them doesn't take legal action and one does. probably other four the other people didn't take legal action because there wasn't any publicity about it. suddenly it has become, they learn this person not only sued us but been given some money, it almost certainly get sued to get claims off. >> right. there were four other people suggesting that they had been hacked and -- >> a matter of record that

mayor pleaded guilty. and five separate judges. >> i want for my understanding. mr. collins and davies and others have gone back to this. what i heard mr. myler say earlier that your recollection of that meeting that james murdoch that he needed to settle or that was the recommendation and that's what he agreed. i don't recall you saying any other recollection, mr. myler, of that meeting, was what mr. collins was suggesting or referring to. you did not seem to state that you had a recollection that there was discussion that other people were involved in illegal practices? you only suggested earlier, your recollection of that meeting was that mr. murdoch had agreed to basically do the settlement. >> no, no. it was perfectly clear what the purpose of what the meeting was about. the purpose of the meeting

was to discuss --, well, to discuss the development that had been presented to mr. taylor's legal team and that development was the fact that the police handed over the so-called, neville e-mail. that was the purpose for outside counsel, external counsel, mr. crone and eventually my view, to present to the chief executive, mr. james murdoch, that they were the ground to either settle or not, and go for trial. there was no ambiguity about that. >> there is ambiguity in my mind. so i suggest that, what i'm trying to get at, there were just three of you at the meeting? >> yes. >> and the was to say, been with the e-mail and we therefore, with our external advice, believe that there is no point in trying to defend the case? >> well it -- >> but if we settle, and,

this is kind of the area which we need to settle? >> i think, it is a bit of a oversimplification with respect. i mean this was not decided in 15 minutes. conversations had been taking place for weeks between lawyers and mr. taylor's legal team. so, it, the, outside senior counsel, and mr. crone would not have come to the decision that they did and say, we're going to do that in 15 minutes. these would have been conversations taken place over a matter of days and weeks. >> understand that but 15 minutes is referring to the meeting that you had with mr. murdoch. >> yes. >> when ultimately he has to make the decision of that has been suggested. >> yes. >> that you would agree to settle? >> yes. >> what i'm confused about is that was the only recollection i thought you offered. the impression i've got from mr. crone's evidence today is that mr. murdoch was

clear that there was other aspects to the e-mail which implied wrongdoing, was more than mr. goodman and mr. mulcaire? now if that is not your recollection i've taken away today and that's what is i'm frooig to clarify in my mind and i'll look at the france script in detail. >> sure. >> was there other glenn mulcaire in that conversation with mr. james murdoch. >> the discussion was really about the for neville document. there was not as far as i remember, discussion about anybody else because there was no evidence to support anybody else being allegedly involved. >> that's very helpful. in that sense, mr. crone -- >> if i'm vague, sorry, you're at the meeting. >> sure. >> mr. crone, from what i heard earlier, my inferal from what you suggested, from what you said, is that you felt other things were discussed at that meeting.

it was not simply about the settlement and the mr. goodman and mr. mulcaire involved. have i misinterpreted -- >> it was all about settling the case on the basis of the document that had arrived which showed that "the news of the world" was implicated in the gordon taylor accessing. which was up to them. we haven't seen any evidence of. clive goodman wasn't guilty --, clive goodman was not charged with gordon taylor. he was charged with the world accessing. gordon taylor was exclusively a glenn mulcaire charge. we had no evidence that "the news of the world" or the newspapers were involved in that matter. he pleaded guilty to it but we had no evidence that now was implicated. i made on the last occasion was the for neville e-mail which reached us in spring of 2008.

that document was, the reason that we decided to settle the case and we need odd authority to do that and went to mr. murdoch and explained to him that the document emerged and what it meant and he gave us authority to settle. >> have you been involved, mr. crone with the subsequent actions with sienna miller and other people? >> i was until i say three months ago. >> and refering to the home office affairs committee investigation, back in the recent investigation from 2005 and 2006, peter clarke suggested news international did what it could to thwart the investigation. were you involved in that? >> i wouldn't say so, no. that was, that was, the role -- [inaudible] it that they were brought in for to lias with the police what the police were asking for come back to us this is what they're asking for and give us legal advice, specialized criminal legal advice what was needed. >> from your recollection

five or six years but were you directly involved with interviews with peter clarke and -- >> no, i didn't meet the police. nothing to do with it. >> thank you. >> clarify one point. you explained to james murdoch what the e-mail meant. did you, you accepted that it was a genuine e-mail? >> yes. >> from a "news of the world" reporter to glenn mulcaire. >> yes. >> you agreed it implicate ad junior reporter? >> yes. >> did you, tell, i mean you said you never talked to mr. murdoch about it in terms of neville e-mail. >> no. >> did you tell mr. murdoch had neville's name on the top? >> i can't remember. >> the fact the chief reporter of "news of the world" was neville is that something -- >> i can't remember. i got to figure i probably did but i can't -- >> you probably told him that -- >> yeah. >> our chief reporter happens to be called neville? >> [inaudible]. >> thank you.

>> just a question i happen to think of now. do i take from what you're saying the meeting implicated, it is clear it had gone beyond one reporter in the meeting you had about the for neville e-mail. how have we moved on to two rogue reporters? >> i'm sorry. >> have we moved on from one rogue reporter or two rogue reporters. clive goodman? did you suggest to mr. james murdoch evidence brought to your attention that hacking was widespread throughout "news of the world" and -- >> no. what the document showed and i what relayed in the meeting was that it, a transcript of gordon taylor voice mails had passed through our office, actually, backed by e-mail to glenn mulcaire. clive goodman had not been charged with that. >> i'm not interested in clive goodman.

i'm interested in, let me be more specific. >> that is what, i know what your question was. and that is what was relayed to mr. murdoch. that this document, the difference that this document made was it implicated "the news of the world" and gore donte lore without any doubt at all because it had passed through our office. >> indicated the paper but in terms of the widespread nature or the nature of hacking at the paper, with everybody doing it, it didn't, it proved that the paper as a corporate body had knowledge but did it prove that there were many reporters news of the world -- >> into, it had proved that it was done through the computer system of a junior reporter. >> okay. that doesn't --. >> obvious, the obvious inference can be drawn from that that others or others knew of it because junior reporter was clearly not doing of this own fact. he was just told to transcribe it.

>> -- his name was on the top of it. >> his name was on it but he didn't accept he knows anything about it. >> can you ask you about the conflict of on-duty lawyers which mr. chapman told me would be your responsibility, that they would report to you. >> yes. >> how many on-duty lawyers would there be at "news of the world" on any given day or not night? >> one each evening, except for saturdays. and, sometimes there would be someone in during the afternoon. quite often somebody douche -- >> in story came in on saturday night who would check on that legally? >> if i'm around me. >> if you're around, you. >> or at home. >> but there always be a lawyer available to check stories if there was felt some legal risk? >> yes. >> the in-house lawyers would they make reports to you on the basis, if they had received a query from the reporter or they were checking a story and there was something legally dodgy

about this and ordered to make changes to the story would they subsequently make a report to you as legal director of news corp. >> if there was something of significance. they look at stories and they have legal risk sides to them which can be eliminated saying that pair graph could get us into trouble. contempt of court or potentially libel oust allegation can't be substantiated by the evidence available. they would suggest saying in different way removing the risk or removing the paragraphs or paragraph. that is quite routine. there would be half a dozen or a dozen of those per evening. >> sure. you were the legal director of the news international on the 13th of april, 2002, were you not? >> title was legal manager. yes i was. >> you would have been legal manager. yeah. >> and that was a saturday night. so your recollection is -- >> say that again, i'm sorry? >> saturday the 13th of

april, 2002 you were, saturday night and you were legal manager in charge. there wouldn't -- >> i was on holiday but at the time i was legal manager, yes. >> there wouldn't have been nonduty lawyer because -- >> i apologize which case there would be on duty lawyer. >> unless you were on holiday and there would be a different lawyer? >> yes. >> do you have records saying you were on holiday that night. >> i doubt it. >> not going back that long, very much doubt it. >> would the employment records have when you took your vacation? >> not then, no. >> "the news of the world" wouldn't record when you went on vacation? >> they wouldn't, absolutely not. >> the reason i ask about that saturday night, the stories about the murder victim milly dowler were published that night, this of april. "wall street journal", 20th of august subsequent to the committee's last session which made very serious allegations indeed about the milly dowler story.

previously the focus had been on the story that appeared in most editions of "news of the world" were sunday, 14th of april which contained a passing reference to a voice mail left on milly dowler's phone. early editions of the paper published in scotland under one byline, sara arnold and in england under a different byline, robert call owe way, contained very different story with very detailed phone messages left on milly dowler's phone. one of them said, hello, give me a call because we have started the --. that was story goes on to discuss that the he ordered reporters to stake out the factory to discover if milly dowler was still alive and taken a job. when it was discovered after three days she hadn't, he called that off. did you have any knowledge at all that mr. thurlbeck had authorized that stakeout

of the factory? >> i can't remember that, sorry. i'm sorry, but i can't remember. it was a story, it, i'm not even sure it rings a bell now. >> the story about the steakout at the factory was never published t it was published in first editions on sunday morning, which was following the saturday night was the story that was pulled and replaced by a different story. therefore, somebody flagged up the first story as being legally dangerous and said that it ought to have been pulled. >> i don't know. . . -- additions

and three stories reported in that story and she had been offered a job and told to come in for an interview at the factory, and hey po baby and it didn't say what the words were it was an intimate voicemail but they could not understand. all these references were excised from subsequent editions of the stories and furthermore, the separate journalists to whom the same story was described, robert callaway in england and sarah arnold in scotland deny they had anything to do story or

their buy lines were ascribed to it. i'm sure you'll agree with me mr. crone, that's pretty much prima facie evidence that some lawyer at the "news of the world" to pull the first edition of the stories on legal grounds and replace it with another edition. do you have any knowledge of that, whatsoever? >> i have no recollection of giving that advice or actually of seeing this story. >> this is milly dowler. i can't believe it wouldn't be stuck in your mind. >> i can only remember to the best of my recollection. i absolutely promise you cannot remember that particular -- particular story, and i certainly have no recollection, whatsoever, of meeting with either of them. >> you will forgive me mr. crone if i put it to you that since this is the murder victim milly dowler we are talking about on which all major attention has been focused that it's literally not credible that you do not remember whether you did or you did not spike a story about voicemails on her phone on

saturday the 13th of august, 2002? >> since i can't remember, i don't think i did to be perfectly honest but i'm very well how serious this is. i'm not trying to underplay it. it's hugely serious and it's quite disgusting if what is published there came about as a result of illegal accessing. and i feel quite strongly about that. but i have no recollection of advising on that story. >> if it was not you, mr. crone, it would have been a lawyer at the "news of the world" who would advise -- >> absolutely not. >> who else might it have been? >> at first glance this story would appear to come from police sources. now, that is not unusual in a murder investigation or any other big investigation, a reporter will perhaps get some information from a police officer hopefully in a proper way incidentally or perhaps a police officer -- allow me to finish, please. this is important, please. all the police -- for their own intelligence reasons think it's important to put messages out there in pursuit of their

investigation. now, the detail of that suggests that it's a briefing of some sort only to "news of the world" or in a more general way. now, what could have happened is that the police see the first edition and they say no, i didn't mean you to identify it in that way and they would ring in and they would say, that's ridiculous. you shouldn't have done that. and then the news desk would pull it and just pull it out. >> forgive me perhaps i'm misunderstanding. the first story is not based on tip-offs or information about milly dowler but on phone messages. >> yes, yes. >> they're all phone messages so you're suggesting that the police would have intercepted these phone messages and then leaked them to the "news of the world" because the actual words that are in the first story is not a generic story. they are words that are used in the phone messages in the first story so you're suggesting to me that the police would have been listening to milly dowler's messages and passed them on word-for-word to a reporter at

the "news of the world" so they could put it in a story that the news editor would have subsequently pulled. >> taking that one at a time, i think it's almost inevitable that the police investigating a disappearance would have gone to whatever was available on her mobile phone, which presumably is with a network. i don't know that. i'm not an investigator. but i assume the police would have had that information. and they would have thought it very important. now, if that is the case, then reading that one assumes the police have released it for some reason to do with the investigation. now it isn't in the subsequent edition so one explanation for that especially as i don't remember a legal involvement in this which means it didn't happen is that the police would have seen the first edition of it and aware what's in the first edition and said, no, that's not what we intended and let's get rid of it and that contact would have been whoever the police contact would have whether it's the news desk and the news desk said get it out of the subsequent edition it shouldn't be in there because the police don't want it in there.

>> there any records of police involvement that would have been passed on to your on-duty lawyer? >> no, it wouldn't. well, it's a saturday. >> so -- >> it probably would be me but the changes later on would have taken place long after i left the building. now, if i was involved that was a phone call and i probably could remember the phone call more than most so i don't think i was involved. >> any prior circumstance where the police might leaked very detailed of the "news of the world" and it would have been pulled would it have been reported to the lead duty report. >> not necessarily. >> it would have gone directly to the lawyers? is that your experience, mr. myler. does this sound credible to you? >> it's impossible to say. >> i'm not asking you -- >> i was not in the same country at the time. i was working away. i don't know. you have to talk to the people who were on duty that evening to find out about what happened. there could be many reasons why this story was pulled.

>> i'm not asking that, mr. myler. i'm asking in your experience as an editor of the "news of the world" is the north carolina in which mr. crone just outlined a plausible one that the police might leak something word-for-word to "news of the world" and then see it in a an early edition and then ask for it to be pulled? >> i think it's credible that the police talked to crime correspondents and journalists that they know about all manner of things in investigations and as mr. crone said nobody can defend what happened in this case. it's absolutely appalling. >> i'm asking you if it's likely they leaked a specific story and say could we full. >> we're pulling it where it's getting speculative. >> fair enough. fair enough. then -- fair enough. then let them put it to you mr. crone, i don't know if i speak for others on the committee but to me it seems the evidence you've given and the reason is they start out your contradiction of mr. james murdoch's testimony whether he

was aware of the for neville email and it brought out consequences and mr. collins says his evidence he wasn't made crystal clear but i have to say, sir, your evidence has been as clear as mud on this point. you've been clear that you were discussing a settlement. but there appears to be no clarity, whatsoever, that he was made aware that there was wide involvement in the "news of the world." the meeting took 15 minutes. there was no subsequent review at the paper. no subsequent action. nobody said, hey, this is why we should carry on. if mr. james murdoch was sitting here might he be able to say i'm totally clear. they're completely muddled. meeting lasted 15 minutes. there was no subsequent action. i stand by my testimony? >> in the course of our action which we see no evidence that there was "news of the world" involvement of the gordon taylor matter. we then were given some evidence

in the form of that document. the advice was to settle the action and we went to mr. murdoch to get his authority for settling the action. it is absolutely inconceivable that it was not explained to him that this document had arisen and come to our attention which showed "news of the world" had an involvement, were implicated in gordon taylor. >> yes, sure. i would guess that. it's whether or not he understood that the guilt on the gordon matter meant there was wide hacking on "news of the world" and mr. he james murdoch knew -- >> but since -- since the description that he got about the email was -- it was prepared by a junior reporter and sent back to mulcaire then it's clear -- >> you said many things you can't remember about this meeting. you said you can't remember you remember the email that may be a pretty significant piece of information you can't remember. the other thing i note is that you have not said that james

murdoch himself commented in any way that -- you know, you've said nothing -- you've said nothing about -- >> all i'm doing is answering your questions. >> did he say -- did james murdoch at any point in the meeting clearly this has been more widespread and we must do something about it and this is clearly more widespread. did he acknowledge himself in her comments to you during the meeting that hacking had been more widespread than clive goodman? >> he was -- since he gave us the authority we're asking for in the context of what we said to him, i would take it that he understood. >> did he give you authority to settle the case. >> in the first time he realized "news of the world" was involved and that involvement involved people beyond clive goodman. and on that basis he authorized a settlement. [inaudible] >> okay. last question, last question, mr. crone. would you not admit your credibility has been somewhat damaged by the question that my colleague, tom watson, put to

you when you were clearly stated to the evidence in the committee in 2009 the confidentiality was not a factor and now you're trying to parse the words confidentiality and secrecy? come on, sir -- >> there was no hiding it. i mean, the last time the committee knew very well that there was a confidentiality clause in the agreement. they knew very well that the deal was to pay him some money, give him a degree of confidentiality. of course it was a factor. we've never hidden but it wasn't secrecy gets more money. >> it seems to be plainly contradictory. >> we have a couple more questions and then we'll be done. jim sheridan? >> mr. myler, it's been a long day and i hope my recollection of the facts is correct. in response to mr. davis, you said you didn't know anything or

wanted to get involved in any individual payments to people; is that right? >> no. i wasn't involved in any negotiation or conversations about mr. goodman's -- >> why are you making a payment at all? >> i didn't put any question. i'm just trying to put the record straight from my point of view about my lack of involvement in any negotiation or conversation regarding what payments mr. goodman received. >> still, the transaction happened as i understand it. the only question you said i posed was why you were making any payment at all and what i'm trying to say, who did you impose that question to? >> i think the question that i posed at the beginning was, i felt that it was a pretty extraordinary sequence of events that a man who had pleaded guilty and served a prison sentence then had the opportunity to appeal against his dismissal. and as i said, i'm not an

employment expert but i just found that quite extraordinary but, of course, he had every right to do that and that's why the process was followed? >> who did you make -- >> i said to daniel cloak, i mean, i think i almost said to him, are you serious? >> and what was his response? >> well, yes, he was incredibly serious because, you know, i think this was touched upon in the last hearing in 2009. employment was in human resources are now increasingly something that executives have to understand. we actually sent our executives to seminars to understand the process of complaints and everything surrounding this because it is an absolute minefield and however the decision was after he left prison the reality was it was something that we had to do. he had every right on his side to say that he felt he had been unfairly dismissed. >> just one final brief question. i'll read part from a letter i

received and the other members received from a rather senior former member of news international who says for all kinds of reasons to remain anonymous. i hope you are understand this you are dealing with highly complex matters and powerful well-connected and ruthless individuals who will do anything to keep the real truth under wraps because the truth could well blow apart the global empire. why do you think a member of this committee who's investigating on this should be sent a letter? >> i have no idea. but i think the forensics that "news of the world" has been under the past -- well, since, 2006, your own inquiries, with the select committee, i would very much indeed if anything remains under wraps. i think everything rightly will emerge and hopefully one day it

will. >> given your flippant attitude to surveillance techniques, what do you think -- >> do i what? >> with the select members of the committee who's investigating given your flippant attitude towards the surveillance tactics. >> if i came across as being flippant, i apologize. i don't know how to respond because i don't know if it's genuine. you crossed a line from it. the history of how these matters unfolded involved two sources of information one is everything. first and foremost, everything that was seized by the police. bit by bit what has emerged case by case we have found out about it when it has emerged through the civil litigant lawyers. the other source of information is the internal email system at news international which was properly investigated, it seems, quite recently, and that was

done under police supervision and they are seeing what's coming out of that. i don't know what's in there. i haven't seen it. >> thanks. >> tom? >> did you see dossiers on the private lives on claimant lawyers? >> i saw one thing in relation to two of the lawyers, yeah. >> do you know the -- >> except i don't know whether it was a dossier? it involves their private lives. >> did you feel the need to answer that question when i had a round of questions with you earlier? >> didn't you ask didn't i ordered -- whether i -- >> and now you've given me an accurate answer. do you know the origin of those dossiers? >> freelance journalists. >> employed by news international? >> freelance journalists employed by news international, yes. >> and do you know who commissioned to produce those

dossiers? >> i know who contacted the freelance lawyer. >> who was that? >> i don't think we should do that because of the police investigation. >> are you aware of any members of this committee that were subject to covert surveillance -- >> i only know that one thing that i just referred to. >> in the 2009 inquiry, you were not aware that either freelance journalists and private investigators were commissioned to follow or surveil any member? >> that is news to me. >> okay. are you aware of any civil or criminal cases that involve the use of computer hacking or trojan devices put on computers? >> no, not at all. >> are you aware of the use of tracking devices in any of the civil cases and criminal cases? >> no. >> thank you very much. >> david, you're last. >> one more last question and i appreciate to getting down to detail and it's about process. the difference between two stories that my colleague who described when i put in front of

you who is obviously -- there are quotes of messages in the earlier version and there's not any in the later version. in the process if a journalist was use either story and wish to use direct quotations from messages that was made in the voicemail given that hacking is a criminal offense it's not the kind of thing to be given to a lawyer before it's published? >> not if it comes from the authorities, no. >> so it would have been enough to -- >> in retrospect, in 2002, i wasn't aware of that phone hacking existed to be perfectly honest. so looking at that the only source that i could have seen from those messages would have been the police. >> in this case, if the journalists said it was from a police source that would have been enough. >> yes. >> if they would have been able to say that would that be appropriate to give for a lawyer -- given that it's -- >> you have to ask the question where did you get the information from, certainly?

or the desk would have to. >> it didn't seem to be rigorously asked. >> well, the desk -- the desk would ask that information. and then if it involves going and asking the lawyer, then that would happen thereafter. >> 'cause in other news organization physical there's any question that the material about to be used may have been sourced illegally, maybe necessary for the story but that would have illegal referrals. >> that's why i assume it came from the police to be perfectly honest. >> thank you. >> thank you very much.

>> tonight following the cnn tea party express republican party candidates debate we'll have live coverage of the spin room where the candidates and their campaign advisors are expected to speak to reporters. this takes place at the florida state fairgrounds in tampa which is the host city for the 2012 republican national convention. live coverage begins at 10:00 pm eastern here on c-span2 and c-span.org. >> watch more video of the candidates. see what political reporters are saying and track the latest campaign contributions with c-span's website for campaign

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the c-span networks. created by cable, provided as a public service. >> after president obama's jobs announcement today, jay carney opened the white house briefing. you'll also hear from the budget chief jacob lew. [inaudible]

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>> let me start by putting the whole package into perspective. when the president spoke to congress last week he said he was going to present the jobs and growth package. it's roughly $450 billion. and that it would be paid for. and today he's sending legislation to congress that has both the jobs package in it and the paid-fors in it. he is presenting a series of specifics which i will get to in a minute but he also said that the target for the joint committee should be raised and i know that's caused a little bit of confusion so i thought i'd start by putting the relationship between the two into perspective and then going through the details.

this is a stand-alone bill and it has the investments and growth and jobs and has some provisions to pay for it. by raising the target of the joint committee, what we're saying is congress has passed the jobs bill now with the paid-fors and when the joint committee reaches its decisions later in the fall, it can then either put in new offsets to pay for it and that would trigger the paid-fors off and it could do the original target of 1.5 and the pay-fors in the jobs bills will stand. that's the relationship between the joint committee and the bill. the bill is paid for and whichever path the joint committee takes the jobs piece is paid for. it's a question of whether or not the joint committee comes back and essentially replaces these offsets with others. the specific offsets that are in the package are a series of tax provisions. i think they'll be familiar to most of you because they're

ideas that we have been talking about for the most part for some time. first there's a limit of itemized deductions and exemptions for individuals who earn over $200,000 and farmers earning over $250,000. that limitation raising roughly $4 billion over 10 years. there is a provision that would treat carried interest, that's the interest earned by investment fund managers by ordinary income rather than taxing it at the capital gains rate and that would raise $18 billion. there are a number of oil and gas provisions which collectively raise $40 billion that would treat with the enactment of these provisions -- would treat the oil and gas industry like other industries, taking away the special preference. and finally, the corporate debt depreciation rule has changed.

right now corporate jets are depreciated over five years. commercial, over seven. it would treat commercial and corporate jets the same at five years. that raising the rates. in the aggregate these provisions actually raise $467 billion. it intentionally overachieves because these are based on our estimates internally. when the congress estimates tax provisions and we estimate tax provisions, they rarely are pinpoint accurate to the same number. sometimes they're higher and sometimes they're lower. and it builds in a cushion and so as we do the scoring done on the hill, we built in a cushion for the differences that happen. but we do believe we've overachieved which would leave a bit of excess. that's kind of the -- kind of

the package of offsets i could -- any questions. >> so when you say you've overachieved, the very first one you admitted was $4.5 billion. i seem to remember in 2009 in the president's first budget the provision was in there and saying then and your predecessor was saying that was going to pay for health care reform. and you had a democratic house and a democratic senate and it went nowhere. how are you going to get it done with republicans in the house. >> i think the merits stand on its own. as the president made clear in its speech and as he's spoken subsequently we have choices to make. in order to invest in jobs and growth, we're going to have to pay for it and we're going to have to look at quite a few things that we've looked at before and ask the question, should we do this in order to add to growth and create jobs? we think the american people will think this is the right package. it's our offer as to what the

right way to pay for it it is. we believe congress should agree. we believe congress should agree. >> but if you don't, you've got no money. >> we have policies that are very real and, again, it's a choice. do we want to leave -- the way this limitation on itemized deductions works, if you learn $200,000 in individual or 250 as a family, your itemized deductions and exemptions are worth roughly 28%. that's the tax rate. if you're higher tax bracket, it's worth 33 or 36%. all this says is that the value of tax deductions above that threshold should be the same as the value at the threshold. and we think it's a fair provision. we think that it's a kind of balanced tradeoff and let me also point out that we are pulling out of the package that

we'll present next week the pieces that self-contained are the jobs and growth package and the paid-for. we're going to have a lot more detail a week from today of who the overall deficit reduction package is. we're going to overachieve beyond the joint chiefs have said. what the president says we need to do the jobs bill and growth package now and we need to deal with the fiscal challenges and, frankly, we should do more than the target the joint committee has. this is the piece that taken alone would do the jobs and growth package in a paid-for way. >> what's the rationale for having congress vote on -- instead of paid-fors along with the jobs bill with the committee options of that package? >> well, frankly, the urgency is to act as soon as possible on the jobs and growth package. we don't think it would be the best course of action, it would be the right course of action to

defer everything to the end of the year. we wanted to pull out the provisions that we thought could move most quickly to have action action so congress can take up the bill and pass it. as far as how we reach the deficit reduction goals, which is what the mandate of the joint committee is, there's a little bit more time if they want to go back and do some fine-tuning. so if you think of it as a kind of trigger mechanism, these are in place unless the joint committee acts to trigger them off. and it really is a way to try to get action started sooner. >> is there any provision in here where whatever would decide on the paid-fors, the committee would have to make a decision if they would have to redo that package to make sure it's in equal amount? >> if the super committee and the recommendations we are put on the floor and adopted, we will have to hit the target of 1.5 plus the cost of the jobs bill.

so if they want to take these provisions and displace them under these rules they would to have equal that. obviously congress -- >> is it fair to say given these pay-fors that the wealthiest americans should pay more in order to pay for his jobs bill? >> i think that with this package we want action now on the jobs and growth package. it is a challenge to break apart a multitrillion dollar deficit reduction package so you can get a piece that stands on its own and moves quickly. this was the attempt to put together a package that could be self-contained and moved quickly. i think in terms of looking at the overall balance of shared sacrifice, when you see the package next monday, you'll see there's shared sacrifices that are substantially broader than just the wealthiest americans. i think what the president has says and what it means as we're going through the process of dealing with paying for jobs and

growth package and reducing the deficit, that, you know, the most fortunate have to be part of that. >> well, the president is about to embark on a campaign where he's going to blame republicans in congress if they don't pass this jobs bill and he's setting it up a choice. a choice for jobs for americans or tax cuts for corporate jet owners or oil and gas companies and for deductions for the wealthiest americans; is that correct? >> at its most simple level what the president said on thursday night stands and it's just profoundly true. we can't afford everything. we have to make choices. and i think if the american people were asked to make a choice between tax breaks for investment fund managers who get preferential treatment for carried interest and oil and gas industry tax breaks, to treat oil and gas more favorably than other investment and corporate jets that are treated more favorably than commercial, that is not a hard choice for most

americans. it's the choice of creating, you know, economic growth in jobs or tolerating the results of many years of inequities in the tax code. >> how many jobs will be created. >> we have not put out an official administration -- >> why? >> we just don't know official job estimates. >> do you have numbers that -- >> you know, i think we've seen the same numbers that you've seen, that private forecasters have put out and mark zandi put out friday and macroeconomic advisors put out some numbers on friday. there's a range. but it's millions of jobs. it's a very substantial amount of job growth, whichever of the numbers you look at. >> the zandi numbers are on target? >> well, i refer to two numbers that came out in different places. there's a range. i don't remember. i think zandi said 1.9. yeah, 1.9 in macroeconomic advisors are a little bit lower.

in each case, they demonstrate that there is very significant impact on gdp growth, very significant impact on job growth and very significant reduction in unemployment which is why the president's message to congress is take this bill up and pass it. >> could you sell a plan to the american people and say, listen, this jobs bill will create 2 million jobs or 1.5 million, doesn't that make it an easier sell? >> it's always a challenge with these kinds of projections because they're subject to a lot of things other than just what you're proposing in the package. i think we are very comfortable looking at the estimates that outside experts have done which very much support the importance of this package as an engine of economic growth in terms of faster gdp growth, in terms of job growth, in terms of bringing down unemployment. and, you know, i think that the

american people don't want us is to be stand here arguing over estimates but getting the job done to create jobs. >> a question about what you're going to propose next week. you say you're going to overachieve the targets. i guess you're referring to the 1.2 to the 1.5? >> correct. >> there have been a lot of calls for the grand bargain again to go big, do the $4 trillion package it's -- >> i'm not going to get ahead to what the president is going to announce a week from today but i can safely say that it will achieve beyond the targets the joint committee has, fully pay for the jobs package and stabilize the deficit and the debt. >> when you say go beyond or overachieve, you're talking about the kind of cushion you just provided for your jobs package. you're not talking about go beyond as in go all the way to 4? >> i'm not saying where we're going but it will overachieve over the joint committee target. >> if you really want a quick package of a stand-alone bill,

why no spending cuts in this pay-for package? >> i want to remind everyone in august just a few weeks ago we had an agreement that locked in very substantial spending cuts in discretionary spending we have a joint committee that is going to be working on deficit reduction. and as i have indicated on monday we're going to be coming in with a proposal that shows a balanced approach to shared sacrifice. the challenge in this jobs and growth package is to put together something that's self-contained and can move and that's what we put together here. >> i'm sure the republicans will say the sacrifice is not shared in this. >> well, if you look at the overall impact one can look at the budget control act and see a trillion dollars of savings and one could look ahead at the joint committee with the full knowledge that they're going to be calls for additional spending cuts there. the president has always said that a balanced approach

involves all of them, not just some of the areas of the budget. and this is one piece of the overall effort. >> thanks. maybe i'm not getting it. but i thought that all these things that are in the paid-fors that he's proposing now are things that were proposed before when it was a smaller amount that got added that the super committee was going to have to do. so does this mean itemized deductions, carried interest and corporate jets and oil and gas are off the table for the additional cuts that they'll have to come up with or there could be more of these? you know, these numbers plus more? i don't know how to word that in a way that makes sense? >> each of the things that saves money or raises money can only be used once and i do understand

that there's the risk that if use things in two places you don't get the result you mean. we're saying next week we will be putting out a plan which includes these provisions and others that will overachieve compared to the joint committee plan. joint committee will then look at what we've submitted to it. it will look at other things as well. they will make some choices how they want to approach deficit reduction. so this will be -- this hopefully will have passed the congress. it will be in place as something that takes effect unless they take some other action. and in that case, they couldn't use it to reach their 1.5. >> whether congress accepts the president's proposal or whether the joint committee decides to seize on these, whether they pay for 467, that 467 has got to offset 447? >> yes. >> so the standard is zero and you got to come up with completely other new ways to come up with the 125?

>> that is -- that is correct. [laughter] >> why is there a separation of the two. i understand you want to put the paid-fors with the job package but why not put the jobs reduction plan now and the committee is meeting a couple of times with the president forward? >> we're working hard on putting the final plan together and we'll put it out a week from today, which is very much in time to be part of the committee's deliberations. it's very much our purpose to have the president's specific details out there early in the process. >> that it's not complete yet? >> no, i think that the urgency of the jobs and growth package is that we have an immediate urgent need for congress to act on jobs and growth. it can't wait till thanksgiving

and it can't wait till christmas. so we can't tie dealing with jobs and growth to the schedule of the joint committee. we moved as quickly as possible to get the jobs and growth package out so literally as soon as congress came out after its break, the jobs package was the on there. thursday was the presentation of the policy and today we're send out there. >> what time is the -- when are you sending this? >> later in the day today. congress is in the afternoon, i believe. but the exact time, i don't know. >> talk about making sure wealthy corporations pay their fair share. treasury says it's not on -- [inaudible] >> and i'm just wondering the deficit reduction might be eliminating or limiting tax

breaks specifically international tax laws. >> i don't want to get ahead of what the president said last thursday and what he's going to say a week from today. there will be additional discussion of our corporate tax plan in the package next week. >> a couple more for jack and then move on. >> any job losses from raising taxes? >> first of all, the kinds of provisions we're talking about changing we don't believe will cause any kind of reduction in economic activity or job loss. so just in terms of have the substance of these policies, we're very comfortable that they're consistent with economic growth. secondly, in terms of timing, these provisions don't take effect until january 2013. so i think, you know, between the fact that they're not provisions that substantively should have that impact and they won't even be on the books until january 2013. it's very consistent in terms of

paying for a jobs package. >> thank you, jack. new glasses, i see. >> we'll get to that. [laughter] >> jack, when you talk about the figures and how many jobs created in the previous question, one has to go back of january of '09 when the stimulus package was unveiled and it was said it would bring unemployment levels down to 6.8%. and they have not gone down to that level now, how can there be confidence with any figures you offer on jobs created or what the unemployment will be based on that record? >> as you know, i was not a ebb some of the economic team then. and i have an outsider's knowledge of the deliberations that were going on at the time.

i will say that the recovery act produced a level of new jobs that was expected. what changed was that the economy was in a much deeper recession than anyone knew at the time. the hole was deeper and it was that much harder to get out. so i think there's a danger of ever predicting unemployment rates because i said in response to the earlier question, there's a lot of things that determine what the unemployment rate is and will be. so even if you create x million new jobs, if you started out farther behind in economic growth, it's going to take longer to hit a certain level of employment/unemployment. so my own view has always been in predicting unemployment rates. i do think when we look at a package like this that you know is going to have a positive impact in terms of gdp growth and you know it's going to have a positive effect on jobs with a

multiplier, that there's very much a demonstrable impact on job growth. i think the position we're in is right which is to rely on outside experts who take a range of views and it sets, i think, an objective measure that policymakers can look to, to kind of see the bandwidth of, you know, what the impact is likely to be. and as i've said all the numbers i've seen range in a pretty tight space showing substantial positive impact on both gdp growth, substantial impact on jobs growth and a substantial reduction in unemployment. >> we know more predictions, what's the figures? >> i'm not making any other predictions. >> i'm sorry, go ahead, tricia. >> given that the republicans are already quibbling what's in the package. what will you do to get a test and what elements are you willing to let go? >> well, we're going to be sending congress later today the

president's proposal. we think congress should take that proposal up to pass it but i'm not going to stand here before we've even transmitted it to congress and speculate a hypothetical. i think it's clear what we're doing would help the economy enormously. it would create jobs. everything in it is the kind of anitive either now in the past has had bipartisan support. we think there's a basis for working together and doing something that would very much help the american people and the american economy. >> your position is you're going to push for everything that's in it. >> we're transmitting to congress our proposal this afternoon. and we very much urge them to take it up. [inaudible] >> i'll have to get that for you. [laughter] >> i'll have to get that for you. before i go straight to questions i'm going to respond to a couple of things here, tricia, on yours. the president believes the

united states congress could upon receiving the jobs act should pass it. he's submitted a bill by the estimate of any economist on the outside whose ph.d. is worth the value of the paper it's printed on would say, it creates jobs and grows the economy. by incentivizing the private sector, by putting more money in americans' pockets, by putting teachers back to work, putting construction workers back to work. police, firefighters and he believes the american jobs act should be passed by congress. if i could, i think we'll see the reference that dr. romer and dr. bernstein's estimates many times in political advertisements coming forward. many times from candidates and

political committees -- i think it ought to be incumbent upon people who are journalists to at least acknowledge in their writing, if not in the phrasing in their questions which is what jack lew just talked about which is the forecast made for in early 2009 were based on the economic data available to any economist inside or outside the administration. and what we didn't know, in fact, what we only learned this summer is that in the fourth quarter of 2008, the american economy contracted at 9% before this president took office. the next month when he took office at the end of that month, by the end of that month the american economy had shed in that month alone 770,000 jobs. again, i certainly don't think that you are suggesting that president obama regardless of his forecast of his economic team is responsible for that. so i just think that we need to -- and i would go on those

770,000 jobs we talked about losing about in january of 2009, were part of a total that reached 8 million as a result of the recession that was in full bloom as we know now when he took office. at least as a reporter acknowledge that there's a separation between a talking point and the facts on the ground at the time. yes. >> raising taxes on people won't that do thursday on the jobs bill and you want to raise taxes on mortgage interest and contributions? >> we certainly do not believe that anything in this provision would do anything but -- in this american jobs act would do anything but run the economy and create jobs. it would not harm job creation. we are also talking about as the president made clear we'll have to act now to have the economy grow and have the job sector hire and make sure firefighters and teachers go back to work. you need to act now to do that. the time frame over which the

american jobs act is paid for ensures that there is no negative impact in the short term, in terms of the costs involved. so no, we very much believe and, again -- >> taxing individuals making over 200,000, that's not going to affect their buying. >> you're welcome to interview economists if you make over 200,000 a year or 250,000 as a family whether or not itemizing your deductions, it creates, you know, more tax advantage for you rather than people who are at that level or below has -- you know, what kind of effect that has on the economy. the paid-fors are spread out to ensure there aren't negative impacts from that. the need to take action to help the economy grow and create jobs is urgent and present right now. and that's why the president believes he ought to take action. julie? >> has the president spoken with boehner or mcconnell on the details of the paid-fors?

>> i don't have any phone calls or meetings to read out to you now or to announce to you. i'm sure there will be plenty of consultations going forward. as you know the president spoke with speaker boehner and senator mcconnell on thursday, prior to his -- >> talking about those paid-fors -- >> i think he spoke in general about the american jobs act and the provisions within it. but, again, julie, this conversation -- the legislation goes to congress which i believe gets back in session later today once congress gets back in session. the conversation will continue once the legislation hits the -- hits the desk up there. >> my question is, this is a lot of deja vu. we talked about corporate jet owners. we talked about oil and gas companies and the debt ceiling and they weren't able to get any republicans on board with any proposal so why would the president think republicans would agree to them now? >> well, let's be clear, that the negotiations around the debt ceiling crisis in which the speaker of the house and the

president of the united states tries to reach a grand bargain on the 3 to 4 trillion scale in terms of deficit reduction involves both spending cuts, discretionary spending cuts, entitlement reform and tax revenue. as the speaker himself ultimately did admit from the floor of the house, he had agreed to put revenues on the table. now, we already passed and have signed into law the roughly $1 trillion in cuts. this is -- when you're talking about $4 trillion. this is not another new -- if you're going for 4 now you can't make it 5 because we passed one, all right? so that's 1 trillion and it was always the case in the grand bargain at simpson bowles that these were discretionary cuts and entitlement reform, tax reform, savings from interest, et cetera, so the president is asking the congress to make

choices because as he said, we simply don't have the capacity to pay for everything, to pay for special treatment in the tax code for oil and gas companies, which are also making record profits this year. and jobs for up to 280,000 teachers. we don't have enough to pay for a special little provision in the tax code for corporate jet owners that doesn't apply to commercial jet owners and also pay for repairs that schools across the country need. i think he believes -- i know he believes 'cause i've talked to him about it that members of congress in the house and senate went back to their states over the august recess and got an earful from their constituents who by and large because they're americans are fed up with what they're witnessing in washington. the political posturing and

gamesman ship over ideological imperatives that most americans do not care about because they just want washington -- at the very least not to do harm to the economy which washington did do this summer. but more than that, they expect the people they send to washington to take positive action and that requires coming together and doing things in a sensible, balanced way which is why the president put forward the american jobs act which includes -- now you've seen it provisions that republicans either now or in the past have supported. and if they -- if they take the imperative that they need to act on the economy and act to create jobs now, they will take this legislation very seriously. >> on a separate subject, polls are showing republicans are ahead in the special election in new york in what has been a

strongly democratic district. and they're saying it's a referendum on the president and his policies particularly towards israel. can you talk about that at all? >> i don't know what the polls show in that race. obviously, special elections, small turnout, circumstances involving why the special election that have taken place will have impact on races like that. i will show the prime minister of israel made the other day about the historical level of assistance and cooperation and friendship that president barack obama has shown israel. and i think that answers the question. >> so to go back what you said a few minutes ago, are you banking on the fact that the political climate has changed, that republicans who have rejected some of these things in the past will now embrace them because the political climate has changed as they've come back from getting an earful as you pointed out? >> we're hopeful that is the case. yes, we are hopeful that as members of congress heard from their constituents and heard

that they actually didn't appreciate the willingness by some members to threaten the american and global economy and the impact that had on the economy in general, even the fact that we didn't default -- that we went to the brink affected confidence in both consumer and business. they didn't appreciate that. they certainly don't expect washington to make their lives harder. and i think that they -- as we've all seen for the various reasons that the economy has slowed, that the growth in job creation has slowed, the intense focus that the american people have on the need to address those issues has increased, as you would expect. so i don't think they told -- by and large, that they told that those who had town halls even the ones that were -- required to have payment to get in, they probably heard what the

president heard when he was in the midwest, which is washington needs to be sensible. republicans and democrats need to come together and they need to take action on jobs in the economy. while the president has come back and he agrees and put forward the american jobs act. >> on another subject on the terror threat from last week, anything more on that. did that turn out to be something that was foiled because of intelligence or was it more just useless chatter. >> i don't think it was useless chatter. i think it was a specific, credible threat that was -- because it was a specific credible threat the actions that you saw, the agencies here responsible for homeland security were taken which includes notifying local law enforcement of that specific and credible threat and i think that we continue to remain very focused as the president made clear was necessary when he met with his team over the weekend

on pulling all the threads on that threat and chasing it down and that's what we do with all specific and credible threats and we'll continue to do it. we are, obviously, relieved that the anniversary of 9/11, the 10-year anniversary went off without an incident because we knew based on information that was gathered in osama bin laden's compound that al-qaeda remained very interested in that significant day and in significant dates in general but we don't suddenly stop our vigilance the day after. the vigilance continues and on that issue in particular, the work continues. let me go to elaine. >> thanks, jay. >> i am so mad about this but i lost my glasses. [laughter] >> and i was buying my son a bike for his birthday. i know. i think when i was taking it off

the bike rack at home i had my sunglasses and the other ones and i think i put them on the bumper and then drove off. >> you're blaming your son? >> i'm blaming my son. i take full responsibility for the regrettable action that resulted in the loss of my glasses. [inaudible] >> i'm going to try to rustle the money because i need the new prescription. >> people are asking a different version of this question but so much of your strategy seems to depend on a change of heart on the republican party because they supposedly read the riot act of congress in the summer recess, have you seen any evidence, whatsoever, since they got back that is actually the case that you are dealing with a different political environment? >> we certainly have seen, as you have, some conciliatory

messaging, if you will, from some members of congress. and that's a welcomed thing and we think it reflects the fact that not to suddenly members of congress who might previously have reacted differently have suddenly decided that when this president says we need to do something they will suddenly agree where they might not have in the past because the american people, the people that elected them are now telling them that -- with great clarity and volume that they need to do something. but, yes, we have seen some indication that the message of the american people is being heard by members of congress, but we don't have any illusions about the need to keep focusing on this, the need to make clear that urgent action is necessary. that the american people expect washington to take washington to take sensible measures to grow the private sector economy and so we will keep up that conversation very aggressively. it just goes back, i think, what

i was saying to julia. it becomes a question of choices. >> we leave this briefing now but you can find it online at c-span.org in its entirety to take you live to the floor of the u.s. senate gaveling in for morning business. at 4:30 senators will resume debate on a measure to import restrictions on products from burma also known myanmar and there was a 9/11 remembrance at the steps of the capitol and you can watch that live on our companion station. this is live coverage of the senate on c-span2.

the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c., september 12, 2011. to the senate: under the provisions of rule 1, paragraph 3,

of the standing rules of the senate, i hereby appoint the honorable christopher coons, a senator frm the state of delaware to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. the presiding officer: the majority leader. mr. reid: following any leader remarks, the senate will be in morning business until 4:30 p.m. today. at that time, the senate will resume consideration of h.j. res. 66. at 5:30, there will be a cloture vote on the motion to proceed to h.j. res. 66. at 5:50, members will gather in the rotunda to proceed to the 9/11 remembrance ceremony at the east front of the capitol. mr. president, i remember tuesday, september 11, very, very clearly. 219 is where senator daschle held his tuesday morning leadership meeting which started at 9:00. i was the first senator in that

room, and john breaux of louisiana came in a short time later and he said something is going on in new york, flip on the tv, and we did. there was a tower burning. how could an airplane run into that tower? we basically didn't pay any attention to that tv. we turned it off because there was a meeting there. we assembled for our meeting. senator daschle called it to order. just a short time after the meeting was started, he got a note, somebody came in and took him out. he came back and said we have to vacate the building, there is an airplane headed toward the capitol. we all hurriedly left that 219. i remember that day so very, very clearly. senator nichols, who was the republican counterpart, senator trent lott was senator daschle's

counterpart, and the four of us were taken off the west front of the capitol to a secret location where we spent most all the day. the vice president was there and kept us informed as to what was going on. as we left that 219, mr. president, we could look out the window and see the smoke billowing out of the pentagon. it was a very difficult day for all of us. yesterday, we observed the tenth anniversary of those attacks, but the truth is i remember that day as if it were only yesterday. that day, osama bin laden and his radical followers didn't just launch an attack on planes or buildings. they launched an attack on the

american spirit. they launched an attack on our freedom and our democracy. rather than be crippled by the terrible acts of these madmen, rather than allowing the uncertainty and fear to rule us, this nation rose again stronger than ever. we really did it in one way, and that was by coming together. the darkness that day reminded us of our collective strength and power. it reminded us that there is nothing we cannot achieve together as one nation under god, indivisible, and of course with liberty and justice for all. so we pledged to bring justice to the perpetrators of those terrible acts and we followed through on that pledge with an unfaltering campaign to dismantle al qaeda and its supporters. this year, our brave navy seals and others gave osama bin laden his due. we also pledged to rebuild and i am very happy to see the proud towers of the world trade center

rising from the ashes of ground zero. that doesn't mean the memory of that day is not painful, because it is, especially to those who lost loved ones. thousands of people lost loved ones. nothing could ever make up for the loss of a mother, father, son or daughter, brother or sister, friend or spouse who was just catching a plane, going to work or at work on that horrific day. they are the reason we'll never forget, ever. so today, as yesterday, i honor the memory of the thousands of innocent people who died at the world trade center, at the pentagon, on the hijacked planes in new york, pennsylvania and virginia. i honor the memory of the firefighters who knew the danger they faced when they entered those buildings and went in anyway. i honor the police and rescue workers who rushed to the scene and combed through the debris, some of whom died that day. i know that many dedicated members of the armed forces are

the state department, united states agency for international development and the intelligence committee who have sacrificed their lives to keep us safe, to keep september 11 from ever happening again. today, at approximately 6:00, we'll gather, as i have indicated, on the east front of the capitol. in looking at the program, i see the final thing that will happen there is one of the military bands and choir will sing "god bless america." that happened on september 11. senator daschle and i had come back, we had gathered on the front of the capitol. we really were there not knowing what to do. we just wanted to be together. and as i remember, senator mikulski said in her usual -- her voice demands attention, she said let's sing "god bless america," and we did. i don't know how well we sang it, but it was a memorable event, and so i will remember

that very clearly tonight when we close our recognition ceremony out there on the east front of the capitol singing "god bless america," something that we did ten years ago. mr. president, i honor america's spirit of perseverance and commitment to freedom. may we never forget. would the chair announce the business of the day. the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will be in a period of morning business until 4:30 p.m. with senators permitted to speak for up to ten minutes each. mr. reid: i would ask the chair begin the calling of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from maine. ms. snowe: i ask unanimous consent that proceedings under the call be dispensed with. the presiding officer: without objection. ms. collins: mr. mr. president,i ask unanimous consent i permitted to proceed for 15 minutes as if in morning business. the presiding officer: without objection. ms. collins: thank you, mr. president. mr. president, last month's dire economic news is a call to urgent action to get america working again.

in august, our nation produced no net new jobs. productivity fell, home sales fell, construction spending fell, the manufacturing index declined, unemployment is stagnant at 9.1%, and consumer confidence is plummeting. businesses, our nation's job creators and the engine of any lasting economic growth, have been saying for some time that the lack of jobs is largely due to a climate of uncertainty, most notably the uncertainty and cost created by new federal regulations. mr. president, the regulatory

time-out act, which i am introducing today, with 14 of my colleagues, provides job creators with a sensible breather from these burdensome new regulations. this would give businesses time to get back on their feet, create the jobs that americans so desperately need, and enhance the global competitiveness of american workers. now, let me make clear that we also need to reform the process for issuing regulations. earlier this year, i proposed the curb act, which stands for clearing unnecessary regulatory burdens. the curb act would require agencies to examine the cost and

benefits of proposed rules, prohibit them from attempting to set rules through unofficial guidance documents, thus circumventing the public notice comment period, and provide businesses with relief from first-time paperwork violations when no harm comes from the violation. senators barrasso and roberts joined me in introducing this bill. indeed, mr. president, as i'm sure you're aware, many of our colleagues have recognized the need to reform the regulatory process and have introduced their own proposals. the homeland security and governmental affairs committee has already held three hearings on regulatory reform this year, and i expect that this issue

will be a priority for our committee this fall. but mr. president, the fact is our economy cannot wait for congress to complete an overhaul of the regulatory process. if we want to create more jobs, we must act now. we must send a clear signal to the job creators that we have heard them. that is why i believe we must have a time-out from any significant new regulation that would have an adverse impact on jobs, the economy, or our international competitiveness. under my bill, no sick cant final rule that would have --

significant final rule that would have an adverse impact could go into effect during a one-year moratorium. this time-out would cover major rules costing more than $100 million per year and other rules that have been considered as significant under executive orders going back to president clinton and followed by president george w. bush and president obama. mr. president, let me give you an example of a rule that would be covered by the one-year moratorium that i am proposing. a rule that would be covered by this definition is the e.p.a.'s boiler rule. i'm sure the presiding officer is familiar with this rule.

if this one regulation if it were fully implemented could cost maine's employers alone hundreds of millions of dollars. in fact, as "the wall street journal" recently reported, a jobs study just released those that the boil he mack along with other -- boiler mack along with other pending air regulations could cost 30 cents -- 36 pulp and paper mills around the country to actually close, putting more than 20,000 americans out of work. that's 18% of that industry's work force. that shows you the potent and terrible impact that excessive regulation can have on job preservation and job creation. and that's just for starters.

once these mills close, the businesses that supply them would also be forced to lay off workers. estimates are that nearly 90,000 americans would lose their jobs jobs, wages would drop by $4 billion, and government at all levels would see revenues decline by an -- by a staggering $1.3 billion. that's why, mr. president, along with senator ron wyden, i've introduced a boiler mack bill that 24 of hour colleagues on both sides of the aisle have already co-sponsored. our bill has been endorsed by 292 employer organizations and

individual businesses. 292 businesses and organizations representing employers. that shows you just how worried our job creators are about the impact of just this one set of rules. their letter sums up the impact of the boiler rules very plainly. it says these rules place at risk tens of thousands of high-paying manufacturing jobs that our nation cannot afford to lose. i ask unanimous consent that this endorsement letter and "the wall street journal" article highlighting the job study be printed in the record at the conclusion of my remarks. the presiding officer: without objection.

ms. collins: mr. president, the boiler regulation are exactly the kind of significant rules that my regulatory time-out act is intended to reach. the moratorium applies to rules issued by independent regulatory agencies such as the national labor relations board, as well as executive branch departments. the impact of the regulatory burden under president obama can be seen in the pages of the federal register. as my colleagues know, the federal -- the federal register is the publication for all federal regulations. last year alone, the federal register expanded by nearly 82,600 pages, a level higher

than any year under president bush. worse yet, the obama administration has 144 rules in the pipeline that would each cost the economy at least $100 million. this is nearly twice as high as the number of such rules that were in the pipeline each year of the bush administration. now, mr. president, let me clarify that the legislation i am proposing exempts those rules that are needed in emergencies, such as imminent threats to public health or safety, as well as rules that are necessary to enforce our criminal laws and with respect to military or foreign affairs. so i think it's important that i

put that on the record. it also exempts rules that would reduce the regulatory burden in order to help the private sector create jobs and boost the ability of american workers to compete. unfortunately, those rules that actually reduce regulatory burdens and promote jobs are few and far between. finally, mr. president, my bill requires that within 10 days of passage, agencies and departments must submit to congress and to the office of management and budget the list of rules that they believe are exempt from the one-year moratorium. that's important to make sure that the intent of the law would be followed and that congress

and the administration can exercise appropriate oversight. mr. president, the intent of my bill is to lift the cloud of uncertainty that is causing employers to be cautious and to refrain from creating jobs. jobs that our economy desperately needs. mr. president, during the august recess, i asked employers throughout the great state of maine what it would take to encourage them to add jobs. to a person, no matter what line of business these employers were in, no matter what the size of their work force, each one of them replied that washington needed to stop

imposing crushing new regulations, that these job creators needed stable, pro-growth economic policies, that they needed an end to the uncertainty that was hampering their decision making. i'm pleased that the regulatory time-out act has been endorsed by the nfib, our nation's largest small business advocacy group, and by the small business and entrepreneurship council. my bill has always been welcomed by the u.s. chamber of commerce, which has stated, quote, "american businesses need immediate relief. a time-out would allow both the regulators and the regulated to take a deep breath and ensure

that regulations are not destroying jobs and economic growth." mr. president, i agree completely. i i would ask that the letters from the nfib and the sbic and the statement by the chamber of commerce all be printed in the record at the conclusion of my remarks. the presiding officer: without objection. ms. collins: mr. president, i'm honored to have the following colleagues as cosponsors of this one-year regulatory moratorium: senators alexander, barrasso, blunt, bozeman, coats, coburn, cornyn, hoeven, hutchinson, isakson, kyl, moran, and thune.

mr. president, i urge all of our colleagues to support the regulatory timeout act, which is a critical step toward easing the regulatory uncertainty and costs that are keeping our job creators from getting americans back to work. thank you, mr. president. mr. president, i would suggest the absence of a quorum and yield the floor. the presiding officer: the clerk will call the roll. e prese

senator from maine. ms. collins: i ask unanimous consent that the proceedings under the call be dispensed with. the presiding officer: without objection. ms. collins: mr. president, i ask unanimous consent that i introduce the bill at this point and that it be appropriately referred. the presiding officer: the bill will be received and appropriately referred. ms. collins: thank you, mr. president. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll.

mr. coats: mr. president? the presiding officer: the senator from indiana. senator coats mr. president, i ask unanimous consent the call of the -- mr. coats: mr. president, i ask unanimous consent the call of the quorum be dispensed with. the presiding officer: without objection. mr. coats: we all heard the president speak to a joint session of congress last week about his proposal to bring forward a jobs bill that was released this morning, and the president indicated that he wanted to take his case to the people. and i'm glad he's doing so. i hope that as he travels about the country, i think he'll be hearing what many of us heard during the august recess when we were back at home as i traveled across the state of indiana and talked to people from all different categories of work

engagement, small to medium to large businesses, homeowners, other constituents. one thing came through loud and clear, and that was i needed to listen to them more than they needed to listen to me. what was on their mind i hope is what the president will be hearing as he travels across the country to talk about his jobs plan, because clearly on the minds of the american people was the jobs and the lack of jobs for many who are struggling through a very, very difficult time of unemployment. students graduated from college with no place to come. people of middle age were being laid off or terminated, unable to find new work. clearly we have a jobs crisis in this country. it has lasted now for some time. we've been in a deep recession,

hopefully pulling out of that, but the latest indicators are that things are pretty stagnant. in fact, facts that came forward in the august report is that our jobs growth is zero and our economy growth is zero, and therefore job growth is zero. and so we've got some work to do. so we need to look carefully at the proposal the president brought before us. getting back to the central point i'm trying to make, what he hear, i believe, from the american people -- at least he'll hear that if he stops in indiana -- is that there is a great cloud of uncertainty hanging over the future. and because of that people are holding back on spending, businesses are holding back on hiring. there certainly is not the confidence. we've seen that confidence indicator drop and drop and drop and drop s-rbs -- confidence that we can look forward to a brighter tomorrow because our

economy will be growing and we'll be adding more people. that uncertainty results from a number of factors. clearly we have been in the downturn and we're trying to climb out of that. but clearly also there is uncertainty about what policies will be coming out of washington that will affect the job creators, will affect consumers and will affect others as they contemplate decisions regarding how to go forward, whether it's spending or whether it's producing. one of those key indicators is the uncertainty over what the tax code will bring regarding the taxing of profits or income or revenue that comes in to america's companies. and i'd like to highlight one of those because it's important to the state of indiana, but i think it also makes the larger point. there are industries that can be

very much an essential part of our future, that can and are providing for essential employment at higher-than-average wages, at good-skill levels that, holds a lot of potential for our exporting successfully overseas as well as providing necessary product here at home. and one of those industries is centrally located in indiana. in fact, one of our top industries, particularly an industry with significant growth over the last decade or so or more, and that's the medical device industry. and yet, the medical device industry, because of its success, was targeted during the formation of the health care plan that was proposed by the president and passed by this congress in the last session. that bill imposed a tax increase on the medical device industry even though they did not have a

direct relationship to what was trying to be accomplished in the obama care medical plan. here's an industry that is a world leader, where the united states is a world leader, an industry that brings in substantial revenue, has seen significant increase in growth, and holds great potential for the future. and yet, because there was a, looking for pay-fors for the health care plan, looked at the, the administration looked at an industry and basically said we can draw some taxes and provide some revenues. their proposal was to achieve $40 billion over a period of time, all of which would go to help pay for the health care plan. now, that was reduced through an amendment, or through negotiations to $20 billion. nevertheless, it should have never been put on the plate in the first place. it was there for a revenue

raiser. it didn't have anything to do with a particular plan that was trying to provide revenues to implement the health care plan. now, in indiana, we are one of the world's leaders in the development of medical technologies. it enhances and saves the lives of hoosiers and patients around the world. we have more than 300 f.d.a. registered medical device manufacturers employing 20,000 indiana hoosiers directly and another 28,000 indirectly. there are more than 400,000 workers employed nationwide by this industry. these are jobs that pay on average 41% higher wages than the state wage rate in indiana. medical device manufacturing has been a thriving industry. it is kr*eut cal to our -- it is critical to our state economies and many state economies. states such as california, florida, illinois, minnesota,

new jersey, ohio, pennsylvania, texas, wisconsin and including my state of indiana could suffer more job losses if this tax is allowed to go into effect. in fact, a study that has come out produced by the advanced medical technology association analyzed the potential effect of the health care law's device tax on employment in the medical device industry. and i quote from that report: "under reasonable assumptions, the tax could result in job losses in excess of 43,000 workers and employment compensation losses in excess of 3.5 billion. that would be a devastating blow to the industry and of course to many, many local economies. beyond that, i have met with these device manufacturers on numerous occasions. essentially what they have said

to me is, we like working here in indiana. we like the productivity that we're getting. but if we continue to be taxed and regulated to the point where we are no longer competitive in selling our product worldwide, we're going to have to take a serious look at moving our production overseas. they said we don't want to do this, we want to stay here, but we need to be competitive because you have to understand that a lot of our revenue comes from exporting overseas, and of course this is what we want to encourage. our trade balance has always been in deficit, and the more we can export and the more we have cutting edge industries that can export enhanced products to overseas customers, the better our own economic situation will be here at home. and so at a time when 14 million americans are looking for work, at a time when our country has

suffered through 31 consecutive months of unemployment above 8%, i think we need to take a close look at the job creators in our country and determine whether or not taxation or regulation that is being imposed on them is having a dramatic impact in our ability to utilize these industries to provide more jobs and more employment or whether it's just having the opposite effect, and the people that i have talked to have said it's having the opposite effect. senator hatch has introduced a bill to repeal this tax. it was controversial when it was first brought forward, and i think the congress ought to take a look at this. if we want to provide some job-creating opportunities in america, we need to look at the taxes and regulations that are stifling this growth in this ability to hire more people. and so i'm a proud sponsor of senator hatch's legislation to repeal that excise tax. it will, as i said, benefit many

states and provide many jobs and prevent jobs from leaving. and so i encourage my colleagues in the senate to join this commonsense legislation and repeal the tax on medical devices. if we want to spur economic growth, it's time we take a closer look at the harmful impacts of the policies which are stifling growth, and this is one industry, and i hope to highlight more in the future, but one industry that clearly is being penalized for being successful, and it's hurting our economy and it's hurting our ability to provide job growth. so i wish the president well. i hope he listens intently. i hope he hears the same lesson -- the same rhetoric that i heard as i traveled around the state of indiana in other parts of the country. i believe that the conclusion is inevitable and that is taxation, regulation brings -- and policies coming out of washington bring uncertainty to

the marketplace, and uncertainty to the marketplace affects consumer confidence and affects the confidence in those job creators and employers who are frozen in time, waiting to see how all this is going to turn out. fearful of hiring more people because they don't know what the impact is going to be on their payroll and on their expenses, waiting for the next regulation to come down that might impact their business in a negative way. we need certainty coming out of washington, not uncertainty. i'm hoping, mr. president, over the next two or three months here, as congress works to come together with a sensible plan to deal with our deficit, we can -- we can enact in that plan and communicate to the american people that we have laid a good plan for the future in terms of how to deal with our deficit and that we can bring some certainty to the future and get our economy back on the right track. with that, mr. president, i will

yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

a senator: mr. president. the presiding officer: the senator from wyoming. mr. barrasso: i ask that the quorum call be vitiated. the presiding officer: without objection. mr. barrasso: i thank you, mr. president. mr. president, i rise today to express my thoughts and my concerns are an issue of the

utmost importance, and that is the israel-palestinian peace process. tomorrow, september 13, 2011, the general assembly of the united nations will commence with its 66th session in new york. every year, member nations come together to debate and to discuss the important issues facing the world at the united nations general assembly. while there will be a variety of issues on the agenda this year, i'm extremely concerned about one issue specifically. over the last several months, palestinian authority president abbas has repeatedly voiced his intention to formally request statehood recognition and full membership in the united nations. in july, the arab league endorsed this irresponsible ploy. regrettably, president abbas intends to make the former

request during this session of the united nations general assembly. i oppose the decision of the palestinian authority to seek a declaration of statehood by the united nations. the unilateral action of the palestinian authority is intended to circumvent the peace process. it is not a good-faith effort to achieve peace in the middle east but to me, rather, it is a political maneuver. the united nations should not be interfering or intervening in this complex process and should refrain from passing unilateral delegations on -- declarations on issues that are part of ongoing direct negotiations by the parties. the decision about borders and statehood should be achieved through a final agreement, an agreement between the government of israel and the palestinians. the united nations should refraib freezing rain from dictating and imposing a final

decision on stayed statehood for a territory of one of its own current member nations. to me this will only make matters worse and will make the situation worse because the consequences to the peace process are grave. the ability to move forward with an agreement is weakened and greatly diminished by these types of tactics. the best path to peace is through direct negotiations between the two parties, not through a manipulation at the united nations. the united states continues to support a two-state solution as a means to ending the conflict. it's based on the belief that it is the only way to achieve a true and lasting peace between these two countries. instead of embarking on a

time-consuming campaign to gain support in the united nations general assembly, the palestinian leadership should be working directly with israel on creating a real and sustainable peace agreement. the quest for recognition by the united nations is part of a terrible emerging trend from the palestinian authority. the palestinian authority continues to engage in troubling behavior that is contrary to peace. on may 4, the palestinian authority reached an agreement with a terrorist group, hamas, to create a unity government. it is outrageous that the palestinian authority would be willing to unite with a known terrorist group whose infamously recognized for their destructive acts of violence. since 1997, hamas has been designated by the united states department of state as a foreign

territory -- i'm sorry, as a foreign terrorist organization. hamas terrorists are responsible for the murders of american citizens. it is also important to note that the agreement between hamas and the palestinian authority does not require hamas to recognize israel's right to exist. to accept the previous israel-palestinian agreements, or to renounce terrorism. hamas continues to be fundamentally opposed to a lasting peace between israel and the palestinian authority. it is apparent that there is no path to a peaceful resolution when part of the palestinian unity government is dedicated to the destruction of israel. prime minister benjamin netanyahu made this point very clear when he addressed the joint session of congress on may 24 of this year. he stated "peace can only be

negotiated with partners committed to peace." furthermore, it is completely unacceptable for the united states assistance to go to the palestinian authority when it includes hamas. the palestinian authority received approximately $500 million in u.s. foreign assistance in fiscal year 2010. hard-earned u.s. taxpayer funds must not be funneled into the pockets of terrorists. history shows that this is not the first attempt by the palestinians to use the united nations to circumvent peace negotiations and declare statehood. the palestinians sought to change their status at the united nations through the world health organization. at that time, secretary of state james baker publicly warned that he would recommend that the united states stop

funding any international organization that changed the palestinian status as an observer organization. americans are keenly aware that a significant portion of the united nations budget is paid by the united states. as the biggest financial contributor to the united nations, the united states contributed almost $7.7 billion in fiscal year 2010 to the united nations' system. the united states should not be providing funding for an international institution that circumvents an established peace process and threatens the security of our allies. the united states and israel share a long and a deep alliance. israel is a friend and ally and a strategic partner to the united states. both israel and the united states understand the values of life, liberty, opportunity, security, and freedom.

throughout israel's history, the country has worked to build a democratic nation in the face of severe obstacles. israel is a shining example of democracy in the middle east. as israel faces real danger from its neighbors, the people of israel continue to show great strength and perseverance as they seek peace. on may 22, president obama explained no vote at the united nations would create an independent palestinian state. on may 2525, the president expressed his concern about the efforts of the palestinian authority to seek stakehood at the united nations and referred to it as a mistake. the department of state continues to reiterate that israel and the palestinian authority need to work out the difference between themselves in direct negotiations. the united states has been very clear that we will use veto

power in the united nations security council to block any attempt by the palestinians for state recognition or united nations membership. the obama administration must use all of its resources to block similar actions in the general assembly and other united nations organizations. president obama and secretary of state clinton must press the palestinian authority to abandon its erroneous decision and return to the negotiating table with israel. it is also imperative that other international leaders understand the implications of these efforts and join the united states in opposing them. nations must assistant together to decry the attempt to circumvent direct peace process negotiations. the palestinian authority must also understand that its actions will have serious implications

to the u.s.-palestinian relations and to u.s. assistance. the recent actions of the palestinian authority indicate that this senator and indicate to me that the united states has no choice but to suspend funding assistance to the palestinian authority. today, i call on congress to terminate funding assistance to the palestinian authority, and i believe congress must also -- also evaluate and significantly cut funding to the united nations if any change to the status of the palestinian authority is approved by the general assembly. thank you, mr. president. i yield the floor. and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call: sident?

the presiding officer: the senator from arizona. mr. kyl: thank you. i ask unanimous consent that proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. kyl: thank you. mr. president, president obama is about to rule out another jobs -- roll out another jobs plan. he talked about it last week. this is two and a half years after the first stimulus bill which with interest amounted to about $1.2 trillion. and his economic advisors have confirmed the fact that this stimulus concept is actually based on keynesian economic theory. and as our republican leader noted last week, unfortunately there are now 1.7 million fewer jobs in america according to the bureau of labor statistics than there were before the

president's first stimulus bill. so the kpwe obviously -- the question obviously is whether this theory is better in theory than it is in practice. i wanted to talk today a little bit about the two different basic theories of economic growth and what you do in a situation of economic downturn like we have today. how should we be looking at stimulation of job creation and economic growth? the two competing theories of course are the keynesian theory that i mentioned and what some have called supply-side economics. there's no question that the keynesian theory has been one that the president's economic advisors generally adhere to. it was used to justify the 2009 stimulus program. and other programs, for example, the one that sticks out in my mind is the so-called cash for clunkers. but there were other transfer payment government programs, temporary tax credits and others. but the theory here -- and the

cash for clunkers is a good example -- that? recessionary time if the government spends money and gives it to people so that they can spend it, that that will therefore stimulate consumption. business will respond by increasing production, and that will create jobs. and recently, for example, agriculture secretary tom vilsack said that because of a theoretical multiplier effect under this model, food stamps, government money taken from taxpayers given to people who are entitled or eligible for food stamps, that they would actually stimulate the economy by a factor of 1.84. or, in other words, that a dollar of food stamps would actually generate $1.84 in economic activity. there are a lot of problems with that theory. the first is that the multiplier

effect itself has been discredited as not something that in fact actually happens. a harvard economist by the name of robert barrow explained this and let me quote from one of the things he read. theorizing aside keynesian politics such as those geared to money transfers should come k down to empirical evidence. and there is zero evidence that a deficit -- that deficit-financed transfers raise g.d.p. and employment. not to mention evidence for a multiplier of two if secretary vilsack's claim were valid, this result would be truly miraculous. the administration found the evidence it wanted. multipliers around two, by consulting some large-scale macro eco metric models which substitute assumptions for identification. end of quote. in other words, economists can prove the multiplier in thee

rewith these -- in theory with these modeled but there's no empirical evidence it's ever occurred. it's a bit like money growing on trees. the money has to come from somewhere, and of course it comes out of the pockets of taxpayers or the government borrows it and it eventually has to be repaid with taxpayer tax dollars. the second problem is that to the extent that one assumes that the problem is that americans are too broke to spend money, the question then is: how can the government make that up for us? aren't the people the government? doesn't the government get its money from the people in the form of taxes? or if it borrows people's taxes eventually have to pay back the borrowed money? in other words, we have to pay it back later. third, people tend to change their spending habits when they know they will have greater

inconsistent income over time, like when they receive a raise at work. if you just give people a onetime payment, the evidence has shown that they either save that or they shift future consumption forward. in other words, they may buy something now that they were going to buy later. that's where the cash for clunkers program failed. but it doesn't permanently increase their work effort or their incentive to invest, which of course is exactly what's needed to jump-start economic growth. like the job creators themselves, they tend to hire when they know that they're going to have permanent tax relief or regulatory relief, not just when they receive a onetime payment for something. that's only for as good as it lasts, for as long as it lasts. but it doesn't provide the consistent long-term prospect for income, for example, that they need in order to take the step of actually hiring a person

committing to pay that person over time. fourth, keynesian theory assumes the government has the foresight to determine, whereas president obama's former national economic counsel chief larry summers said of the stimulus, to target, which spending programs would best create economic growth. but that rarely happens. the obvious problem with this assumption is that congress does not spend taxpayer money wisely. we see time and time again how a well-intentioned piece of legislation gets loaded up with special projects frequently which are costly to the public and very questionable in their value. and that was one of the things that was wrong with the stimulus package itself. there's an eye-opening new set of working papers that reveals the truth about this. our cato center scholars rhones and daniel rothschild took a look at whether congress did a good job of targeting stimulus funds of unemployed workers and

weak sectors of the economy. they surveyed firms that received stimulus money and gathered more than 1,000 voluntary anonymous response s from employees and managers to help shed light to organization that is received stimulus funds. and here's what they write -- quote -- "our survey finds no evidence of such keynesian targeting occurring, at least not successfully." end of quote. for example, one city was given $4 million to improve energy efficiency, even though a budget shortfall had just forced it to lay off 185 public workers. in another case study, a federal contractor was instructed to purchase more expensive tiles than he needed for a particular project. thaoetry was that in -- the theory was in that wait government could claim the stimulus money was getting out the door faster. this isn't the way to spur economic growth. and i think even most keynesians believe it matter what the

government spends its money on. this study also found half of those hired with stimulus funds were unemployed, about 42.1%. jobs were simply moving from one place to another. the authors of the study wrote -- and i quote -- "hiring is not the same thing as net job creation. this suggests just how hard it is for keynesian job creation to work in a modern, expertise-based economy." end of quote. in other words, while an employer might steal an employee from another employer, that's not the same thing as creating a net new job. the bottom line here is that there is a major misconception that consumption fueled by government spending actually creates jobs. it turns out that it doesn't. it just inefficiently moves borrowed money around with a bill that has to be repaid later. i think it's also important to remember that economic growth stems from combining three inputs: labor, capital and

technology. these three factors of production result in output that we can then consume. and this is the beginning of the difference between the keynesian philosophy and the supply-side philosophy which focuses on productivity and what is required for a society to be more productive? labor, capital, and technology. and properly applied, when these three aspects of an economy are well aligned, the economy can grow, jobs can be produced, people will consume, but they will be consuming things that have been produced by the businesses of the country. without labor, capital, and technology, there can be no consumption. i mean, that's obvious. focusing on policies that stimulate consumption targets the wrong side of the equation. in order to get the economy going, you need to focus on the inputs, and there's an

incidental problem here. stimulating consumption also raises prices, which is exactly what we don't need. when you stimulate input or productivity, you produce more of the quality goods that people want, and the prices of those products are down if there's tphufp productivity -- enough productivity. but when you try to stimulate consumption for a fixed number of goods, obviously the price of those goods goes up. there is a fear of inflation in our society today, and that's precisely what this kind of keynesian stimulus will produce. and this matter of focusing on inputs, as i said, is where the second philosophy of economic growth comes in. supply-side economics, which focuses on productivity. the fundamental principle of supply-side economics is that people work harder and they take more risks when there are more opportunities for economic gain and less government intrusion. translating this economic philosophy into policy means several things.

first of all, reducing government consumption by cutting spending, thus leaving resources in the private sector. when the government spends money -- mr. president, i ask unanimous consent to continue to speak for as long as the time i may consume. the presiding officer: is there objection? without objection. mr. kyl: thank you. when the government can only spend money -- i mentioned food stamps before. the government can only give money to a food stamp recipient, by taxing that money from someone else or from borrowing the money, and eventually that borrowed money needs to be paid back. how is it paid back? it's paid back by taxpayers paying money to the government which can then repay its debts. in either event, eventually the money that the government spends to stimulate the economy has to come from somewhere, and the only place it can come from is

the american taxpayer. so the bottom line is with keynesian surplus -- stimulus spending, there is no free lunch. the money doesn't just materialize out of nowhere. it's not free for the government to inject this money into the economy by giving it to favored groups or to -- to redistribute it to people within our society so that they can spend it. that's why this factor that some people talk about, that we actually get more money back than we put in is wrong in two ways. first as i pointed out before there is no empirical evidence that that ever happened, and secondly eventually the money has to be repaid, or if it was taxpayer money to begin with, that's a dollar less taxpayer money that that taxpayer has to invest or to consume, or if it's a businessperson to hire someone in the private business. the bottom line is that

government money isn't free, and so the whole premise of keynesian economics that we get a free dollar someplace and that produces benefits by people then spending it is wrong. how about leaving it in the pocket of the person who wants to spend it in the first place. chances are that person can make a more intelligent decision about what he or she needs than the united states government. and second, as i said here, we're talking about incentives in the marketplace which are based by every economic study on long-term policies, long-term tax policies, long-term regulatory policies and an individual small businessman, for example, wants to know what the law will be two and three and four years out before he decides to hire a new employee that he is going to have to pay taxes for, that he is going to have to provide a -- potentially

a health benefit for, certainly a salary, and if he doesn't think that government policy over that long term is going to enable him to continue to employ the individual, he's not going to hire him in the first place. another thing that supplyside economics means is that the worst thing can you do, especially in economic down times, is to raise taxes on anyone, but certainly not on the very employers who we count on to hire more workers. and who is it, mr. president, that are the first to hire coming out of a recession? it's small business. so the very people that we are asking to hire more americans to put them back to work are the people who would be impacted by the taxes that the president talked about the other night. he's talking about taxing -- quote -- "wealthier americans." what does that mean? that means people who make incomes of above $200,000. that happens to be the group

that represents the bulk of the small business entrepreneurs in america. 50% of all small business income is paid in those top two income tax brackets that the president would raise taxes on. so the very people we want to hire more workers, we're going to impose more taxes on, and then we are going to expect them to hire more, to reduce unemployment so that we can have greater economic growth. it simply doesn't work that way. and the final point has to do with regulations. more and more, the president seems to be acknowledging that the runaway regulation -- regulations of his administration are actually beginning to harm business and job creation. this is why he has announced his effort to try to streamline the regulations and get rid of any that don't work, why he withdrew a proposed regulation from the environmental protection agency

recently that would have had a very negative impact on business. he's beginning to recognize that his administration has a big wet blanket over businesses these days because of their burden of regulations. you cannot stimulate the economy or job growth with the government imposing more and more costly regulations on american business every day. now, the president set up a false choice in his speech the other night. he said we have got to do away with these job-killing regulations, but he said i will not do away with the regulations which protect the american people from -- and then he named a litany of things that he wants to protect the american people from. well, nobody is talking about eliminating all regulations or having unsafe food or unsafe products for little babies or the like. we're not talking about that. we're talking about the issuance of thousands and thousands of pages of new regulations every month by this administration, at

an extraordinary cost on american business, are -- with very little regard for cost benefit. in other words, how much society benefits versus the cost of these regulations imposed on business. and by the way, when i say the cost imposed on business, who pays? business are the people in the business, and the consumers end up paying the cost of the regulations, which obviously are passed on. so this is again another indirect tax on the american people, and that's why i said before, no tax, but especially at a time like this, whether direct or indirect, is a good idea because of the negative impact it has on job creation. so the bottom line of all of this, mr. president, is that there are two basic theories. the one theory basically says you can get something for nothing. the government will just get money, forget where it gets it, but when it gives it to people, they will spend it and when they spend it, then whatever they

spend it on, that producer has to produce more of those things so they will have to hire somebody to make more of them. but that's exactly backwards. it doesn't work that way. the supplyside theory says, first of all, the money didn't come to the government free, it had to be taken out of the private sector. the government either had to tax somebody so they have a dollar less to spend or it gives an i.o.u. which means that eventually the taxpayers have to pay the taxes to repay the i.o.u. in either case, that's a dollar taken out of the economy. it's a dollar not there in the private sector for an entrepreneur to hire someone with or to produce something. and so supplyside economics says let's look at the other side of the equation. rather than focusing on consumption, let's focus on productivity. where technology, labor and capital can produce more, can make a society more productive, more wealthy, where more people can have work, they can have

better-paying jobs. what they produce has greater value and people are more willing to buy it as they put more money back into the economy, and that's the cycle that produces wealth, and it's the cycle that has caused economic growth and job creation and wealth generation in this country now for over 200 years. it begins with the proposition that job growth starts in the private sector, that government doesn't create jobs, that money starts with the people, the taxpayers. they generate the income, and the government gets a piece of that in the way of tax revenue, but the money belongs to the people, not the government. and third, that there is no magic when the government somehow gets a dollar in order to redistribute it so that somebody can buy something with it. you have to remember where the dollar came from. it didn't materialize out of thin air. it started with the hard-working taxpayer that earned the dollar, then either paid it to the government in taxes or is paying

it in taxes to repay a debt that the government incurred in order to borrow money for a stimulus package. as we think about the president's proposed stimulus -- third or fourth stimulus, however you count it now, i hope we can keep these economic theories in mind. there is no free lunch. there is no free money. eventually, the taxpayers are who creates the wealth, and the job creators create the jobs. and if we keep those principles in mind, i think we will look a little more skeptically on the notion that we can just somehow target job creation with yet another stimulus bill and that that's going to get us out of our economic woes now. if my colleagues will keep these principles in mind, i think we will make wise decisions and prevent the country from going even deeper in debt and try to focus on the long-term so that businesses can actually make decisions based on long-term thinking rather than based upon the ephemeral effects of short-term stimulus.

a senator: mr. president. the presiding officer: the senator from wyoming. mr. enzi: thank you, mr. president. yesterday marked ten years since the horrendous attack of americans on american soil, but it led to a lot of patriotism and a lot of flags being displayed all over the country. over the weekend, i noticed that my 3-year-old granddaughter and my 4-year-old granddaughter, when they saw a flag hanging anywhere, said "god bless america." throughout the history of the united states, each generation has had at least one iconic moment, one moment in time that

served to galvanize the nation and call each and every american to take on a cause much greater than themselves. ultimately, the results they were able to achieve served to define who they were as a generation and what they were capable of, both as individuals and as a nation. for my father, that moment was the bombing of pearl romero-barcelo. as we watched with growing concern, a terrible evil had taken the whole world to the brink of war. now we found we no longer had a choice as to whether or not we would get involved. we were forced to take action and bring our military might to bear against an enemy that it set its sights on world domination. as soon as the call went out, brave men and women from all across the country volunteered to serve in our military and to take up arms to defend the rights and liberties we cherish as americans. they soon proved to be worthy of the task, as we once again showed that ours was the greatest fighting force the

world has ever known. thanks to them, the tyranny and oppression that threatened to overwhelm europe was halted and peace and freedom was once again restored to a war-weary world. returning home from the battlefields on which they had served with distinction, our service men and women took up another great challenge, and that was to rebuild our nation and to restore its greatness. their commitment and dedication to that great mission helped to make the united states what it is today. thanks to them, their sons and daughters received the greatest gift they could possibly receive, our american way of life. their actions made it clear that the american dream belongs to everyone, and it really can come true if we're willing to do whatever is necessary to make it happen. for me and my generation, our iconic moment came with the news that the soviet union had launched sputnik into space. in that brief moment in time, we were once again filled with that

same determination as we realized that we were in second place in the race for space and in other things. that would never be acceptable or accepted. in the days after that startling announcement, people of all ages found themselves looking to the skies, wondering if we could answer this daunting challenge. our curiosity and our ingenuity will again be put to the test as we all try to help in the effort to bring about that one giant step for mankind that wasn't to come for several more years. my friends and i in junior high banded together. although we were all very young to help, we wanted to learn all we could about rockets so we could become rocketeers or at least we tried our best to be worthy of the title. once again, we had a difficult goal to reach for, and we were proud to think of ourselves as part of that call to action.

where president john f. kennedy then issued the challenge to the nation that we would send a man to the moon and then return him safely to earth. it sounded impossible. but with america knowhow, we were able to develop and put into action a plan that made it happen. when the time came, the world watched with wonder and amazement as neil armstrong took those first steps on the moon and proved that once again whatever goals we set we always seem to find the tools and talents we need to get the job done. for my children, their generation's iconic moment came on september 11 when we were once again cruelly attacked by terrorists who had hijacked several planes and used them to destroy the world trade center and part of the pentagon. it was a moment in time that everyone will long remember for the impact that day and the events surrounding it had on our world and our lives, an impact that continues to be felt. even though it was ten years ago, for almost all of us, the images of september 11 are still

fresh in our minds. we can remember where we were when we first heard the news that our nation was under attack. we can remember how we felt as we watched the twin towers fall and the sense of loss as harsh reality of all the lives that were lost that day became all too real. there were many lessons learned as we watched our police and firemen attempt to save as many as they could from the building and then from the wreckage. it was a harsh reminder of how delicate and precious our lives are and how the gift can be taken from us at a moment's notice. yet out of all that was lost there was the birth of something even greater, something more powerful and enduring. it was the sense of community, the sense of country that bound us together as one nation, as one america. we stood side by side with our neighbors, our families, and even complete strangers looking out for one another and helping those in need.

terrorists thought we were a weak nation that would dplumbl the face of violence. those who wanted to hurt us sent a clear message yet we sent another. american flags sprung up in every yard, flew from every building and hung from our overpasses. the powerfully simple message. stars and stripes was our message -- we are america, and we stand together. like those moments before us, the morning's light the next day brought with it a firm resolve that we would once again come together as one to address that attack. political differences would no longer separate us. concern for our shared future was so strong it would unite us to face this threat to our well-being. together we resolved we would do everything we could to ensure that terrorism would never again take such a terrible toll from our nation or any other nation. i remember during that time

being at an event where ambassadors from around the world offered an outpouring of sympathy and comfort for our grieving nation. i was touched by their sympathy and care for america. i walls also please he so many countries helped to us follow the money trails which led to the arrest and prosecution of countless terrorists. in the years since that terrible day, justice has also been delivered by our brave service men and women who have once again answered the call to duty and taken up arms to rid the world of the network of terror wherever it's found. thanks to their efforts, nations had never known freedom before now dare to dream of a better tomorrow. for themselves and for their children. people who had lived in fear under the tyranny of repression will now have a say in their shared future as citizens of the world. those who had known nothing but

anguish and despair now have a reason to hope for a better life. the middle east is still in turmoil as the people reach for freedom and individual prosperity. c.s. lewis once said that god whispers to us in our pleasures, speaks in our conscience, but shouts in our pain. it's his megaphone to rouse a deaf world. i think it's clear that the pain we felt that day was sufficient to rouse us to all the action as it opened our hearts and our minds to god and to each other. in the days to come, the memories of all that we witnessed on september 11 will stay with us, and serve as a constant reminder that freedom isn't free. it often comes to us at all too great a cost. in that spirit, we will never forget those who lost their lives that day, their loved ones, or all who knew them and called them their friends.

for this generation and those to follow, their memory will continue to inspire us to be ever vigilant and constantly on guard at the gates of freedom and to ensure that this, one nation under god, indivisible, will continue continue to be the home of liberty and justice for all. for ourselves, for our children, and for many generations to come. let's remember september 11 and the feelings we had for our country and each other. may we rekindle the sense of community, country, and world that we felt then. may lasting good come out of chaos. i yield the floor and suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the majority leader. comid: i ask unanimous consent the call of the quorum be terminated. the presiding officer: without objection. comid: i have a request to meet during today's session, approved by senator mcconnell and me. i ask unanimous consent the be printed in the record. the presiding officer: without objection. mr. reid: mr. president, if we would pause just a few minutes and think about what's going on in america this year, we've had flooding on the mississippi and missouri rivers, and other rivers in the midwest, to show the power of this flood on the mississippi river alone, there's three million acres under water, farmland. we've had devastating tornadoes in the south. these tornadoes don't have

names, but they have a viciousness that's hard to comprehend. joplin, missouri, about 200 people killed. devastation. those winds, they believe, reached nearly 300 miles an hour. some say they are the highest recorded winds ever. and they just eliminated everything. in their path. wild fires in the south and the west have been extremely harsh. take texas alone. fires have been burning in texas for the last month. 2,000 homes have been destroyed and burned to the ground. the fires are still burning. i heard today that they're about 50% controlled. we then now have had hurricane irene. the wake of damage to hurricane

irene was -- hit numerous states. states that usually have no damage. all up the coast. vermont has no coastline, but they were devastated. hundreds of bridges washed out in vermont. vermont is a sparsely populated state, about 600,000 people, i understand, in the whole state, but it has been really hurt. the largest office complex in the state with some 1,700 employees, out of operation, under water. tropical storm lee followed that quickly, it has followed irene, and tropical storm lee has left damage in lots of places. we haven't been hit real hard in the metropolitan area of the district of columbia but i've been back here quite a while.

i can ever remember it raining for a week at a time. that's what we just had, rain basically all last week. the potomac river is very high but other states have been hurt worse by tropical storm lee. i don't remember the exact number of deaths because of lee but it's approximately 20. here in virginia, a 12-year-old boy in his back yard was washed away. since the first of this year, president obama has issued disaster declarations for 48 states, and the hurricane season isn't over yet. the commerce department said this year we've had 10 disasters, each with more than a billion dollars in damage, and a billion dollars is an understatement when you talk about what happened with irene. they believe that will reach $25 billion. that one storm.

that's the most we've had in decades, decades, probably the most ever. so no one should be surprised that the federal emergency management disaster relief fund is about broke. as of today, they have a few hundred million dollars left, probably in the $300 million range. in just the last two weeks fema spent almost $400 million out of the fund for hurricane irene and other disasters. that shouldn't out of that fund t should be forward-funded. so fema is danger usely close to running out of money. to make sure they will have enough money to meet the immediate needs for food, house, emergency needs of new disaste disasters, on august 28, fema stopped funding for past disasters this. means fund something on hold to

rebuild schools, hospitals, roads, public utilities in past disasters. katrina, rita, gustav, ike, the mississippi river flood of 2008, they're still doing work to renovate that area. the tennessee flood of 2010, and for neigh tows of alabama and louisiana of days past. so we have hundreds of millions of dollars that need to be spent in places like joplin, missouri. joplin, missouri, they're not spending money there, mr. president, after all they've been through. no money. the need is urgent. that's why we're seeking this house-passed revenue measure to serve as a vehicle for disaster relief. the house insists, as they should, that because of our constitutional origination clause, all appropriation measures have to originate in

the house. so we had to take a bill -- it was a house bill that we have here on the calendar. and that's why we have to move to the burma revenue measure tonight as a vehicle to allow the senate to address this disaster assistance. the burma sanction bill is a bill that the republican leader has been out front on for aifntle he's been the watchdog of this terrible work and the adverse nature that's taking place in burma and he has been out front on this issue, and i appreciate that very much. every year we pass these burma sanctions unanimously. no one opposes them. the only reason that anyone mighting holding up this bill today, this burma sanctions bill, is because may friends on the other side of the aisle, the republicans, don't want to allow the senate to vote on disaster assistance. why do we need to do that? how much more specific do i need

snob we need to help committees hit hard by acts of god. i would think twice if i were one of my republican friends. i've gone over some of the areas where these tornadoes and these fires and other natural disasters have occurred, and this is our only hope of getting help to these states. the house is indicating they're going to send us a bill, but they're playing around the edges of what repeally needs -- of what really needs to be done. we have a bill that was reported basically out of the senate appropriations committee, democrats and republicans supporting it. what is needed is about $9 billion. we, because we want to be in keeping with the budget deficit-reduction act, because

in there we're allowed $7 billion -- that's number we're going to put forward tomorrow on this bill. so it would be a real shame if we're not allowed to move to this burma sanctions bill. because everyone voting "no" on this is voting "no" on giving assistance to their states. there's no other way to do it. and we're not going to accept some small number that the house sends us. we can't do that. the house is planning on doing some of its unusual stuff -- i don't say this in a positive sense -- in sending us the continuing resolution that we must enact prior to the end of this month and they will stick in there the fema which is very, very low. we can't athrough to happen. i hope everyone will vote to allow us to move forward on this most important piece of legislation. mr. president, i would ask that there be a quorum call -- to begin. the presiding officer: without

objection, the clerk will call the roll. quorum call: the presiding officer: the majority leader. mr. reid: i ask unanimous consent that the call of the quorum be vitiated. the presiding officer: without objection. morning business is closed. under the previous order, the senate will resume consideration of the motion to proceed to h.j. res. 66, which the clerk will

report. the clerk: motion to proceed to consideration of h.r. -- h.j. res. 66, aproving the renewal of important restrictions concerning the burdensome meese freedom and democracy act of 2003. -- the burmese freedom and democracy act of 2003. mr. reid: i ask that the time be divided between the majority and minority. the presiding officer: without objection. mr. reid: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

mr. sessions: mr. president? the presiding officer: the senator from alabama. mr. sessions: i would ask that the quorum call be dispensed with. the presiding officer: without objection. mr. sessions: mr. president, our country is in a very, very serious economic crisis. we're told by mr. erskine bowles and senator alan simpson, erskine bowles was chosen by president obama to head his debt commission, and they gave a statement to the budget committee on which i'm ranking member that this nation has never faced a more predictable economic crisis. based on the size of our debt. all of us know that. the american people are angry with us. theyno