lead and settle all family business at once. we'll get them all. we'll get right to work in this state. right to work is a huge issue. the other thing that is attractive to me is one of the interviews that he was going around to different states and attracting people to come to his state because of right to work. he said, you know what, pete? you put right to work here, we don't have a sales tax. we don't have an income tax. put right to work and have a sign that says "open for business." that's just, you know, regular things 245 the average person relates to. that's what we need. he's done it. he doesn't talk about it. he did it. the other thing is i used to be self-employed, and even not self-employed, i've been audited twice. the tax system we have is gas ray gas. --

outrageous. there's the tax plan here. that's it on a postcard. just 20%, send it in, if you don't like it, you can use the old form or go the way you did. you can still do that, but that would get rid of a lot of irs job. man, would i love to give out pink slips. you have to be able to beat this guy when it goes head to head. he made comments about some of the debates and everything. i blame my republican leadership for that. they should have never agreed to 347 debates, especially with msnbc, guys like al sharpton doing commentary. it's ridiculous. they should have said no. if you're a candidate, no matter who it is, and you don't go to it, you don't look right. i think once it gets out there and you see the governor hit the trails, those of you who have been to town hall meets, answer the questions when he can have

more than 30 second sound bite to do it, you'll see a difference in it, and i think you're all going to see that in the next couple of days. he will be here for the debates. he's coming back friday. if i miss something, let me know. he'll be her saturday and sunday for the debates, and then back to south carolina, and i think that's when you see him come out. that's about all i had, but there's other facts, and i'd be glad to answer any questions i can. i'd be glad to -- i don't want to be misquoted, but anybody with any questions? of course you do, fred. >> why do you think the press do such a number on having such debates? to me, he looks like a good debate r and looks like a young reagan, and, in fact, acts a little bit like. why is the press screwing him?

>> the press is in obama's pocket. i believe it's orchestrated. you know, everything is local. you do the local races like we do, and new hampshire, the state rep, and when i got in to run for state rep, they gave us cards my first term, and it had all the republican platform issues, and everything was 17 #% tax increase, 17% tax increase, and that's why i have no idea what i have in the bank. my wife writes the checks. i'm horrible at that. it's not my thing. dave tells you we both ran on notification. i said you know what those democrats said to you four years ago? they took your right away from being able to know your daughter at 14 is having an abortion. they didn't know it. they didn't even know it. they were freaked out. i think it's the same thing with that. they know that he's the guy that

has all the -- he has all the ammo -- pardon the pun -- he has all the ammo. that's why they made it tough for him, but it doesn't seem to bother him. when you see him in a town hall debate, you'll see there's always plants, and all the other candidates, the one i was at at the vfw, he doesn't phrase l with it. they are there for a reason. they are from obama's campaign. all of those things when it gets to that point, and the 30-second sound bite on a stage with eight people, and just doesn't play right. i think you'll see him as a different guy this next time in the next debates though, too. anybody else? paul? >> a couple weeks ago, we went to see steve forbes represent rick perry and talk to us about his collaboration with him on his, you know, financial plan

going forward. very impressive, of course. a question i forgot to ask him was, you know, was he going to protect, you know, again, coming from steve forbes, would they be protecting social security going forward and what that plan was and can you speak to that at all? >> kind of what fred was saying. that's the first thing out of the debate. anybody that knew anything knew it had nothing to do with touching people's social security already in there. that's what i've been hard on the campaign from day one. i think the highlight of his campaign is when he said "ponzi scheme," and if you don't believe that, you're ignorant. that's what it is. it won't be there for probably me, i'm 52 in march. these kids, there's no way -- >> [inaudible] >> you got a lot of guts. that takes a lot of guts.

[laughter] they are not going to touch that, but that didn't play. it just came out with the ponzi scheme thing, but that's going to be there. one of the things before i forget, the really -- especially being in government, he wants to cut congress basically just, you know, gut it in half as far as the terms go. that's like music to my ears. they have the 13th largest economy in the free world in texas itself. they meet for 140 days a year every other year, and they've had a balanced budget every year he's been a governor for the last 11 years. we should start that here in new hampshire. they use the to go here every other year. no reason to be there. get your business done, go back -- that's what i love about new hampshire. we are a volunteer legislative body. you don't need career politicians. that's the prop.

i can tell you personally how people are corrupted and manipulated in the state house in new hampshire by just power. when you go to washington and combine that with money, and they have access to do insider trading and there's no penalty for it, you can't make it up. they have to go. that's the number one thing, and they don't talk about that in the media. that, to me, is a key thing. let's get rid of congress. that's all i had. anybody else? all right, thank you. [applause] >> thanks, pete. the next speaker is my honored -- well, my predecessor, then nighs hogan, and he's hear representing rick santorum.

dennis? [applause] >> i am andrew's predecessor, and andrew, you're doing a great job. we raised a lot of money as chairman, and raised a lot this time. i hope you keep watch for the next fundraiser and make sure andrew is just every bit as successful in raising money as i was. don't tell buddy roemer i said that. so glad i didn't have to follow him. [laughter] he's such a terrific speaker. i have four things i wanted to say. i want to talk about rick santorum, conservative, and leadership. i'll take them in reverse order. going back to what we were doing here in nashua for the 2010

election, i was running for county attorney, and i had to go to manchester, an important city in the county that i had not run elections in as i had in nashua, so i wanted to focus there, and the congressional campaign run there was run by mike, and he was entirely into the idea of team work. he didn't care that my little campaign for county attorney didn't bring much resources when it came to getting the election in manchester. he said come in, be a part of the team, you carry my stuff, and we'll carry your stuff, and so my pamphlets were in manchester as good as any, and that was a big thing for me. mike -- oh, and then here at the same time, those of you who know, especially the representatives here, nick pathis was in charge of the

victory office that the republican campaign set up, and nick had the same attitude. come in, do work, we don't care, you know, about anything other than you coming in here and being a part of the team. the sense of team work they both have, i dearly appreciate it, and i thought those are two quality guys who can do a great job campaigning. both of them ended up on the santorum team, and i said to myself, that takes smarts for a guy like santorum to pick these two real knowledgeable, effective campaigners, and in my mind, especially now that i'm in a leadership position, one of the most -- one of the most important things about leadership is picking the right people to do the job. you have to set the culture for that organization, of course, but having the right people doing the job well is a big part of saying the culture in getting the job done, so i knew early

on -- i won't say i knew how great he was going to do, but i knew early on that he was going to do the right things. he was going to campaign with a good organization and good results from those two. we have whitehead, and we went to the ames strong poll with mike, nick, and kristin, and we met people there, and there were people there from south carolina, and they have an organization that is going to take what we do in new hampshire, and i was there and don and randy were there to let the people in iowa know that look, if you send him as a winner e we have an organization

here in new hampshire that will happen, will take, you know, we won't drop the ball is what i'm saying, and 10 the people in south carolina had to tell us the same thing. if you get it done in new hampshire, we're ready for him in south carolina. we have a former congressman on his team there. the purpose in telling you that gets mixed up in the electability part that i wanted to tell you, but that's what i feel about his leadership quality. he's shown them in running this campaign. he's also shown them in the fact he's been the first person on a lot of things. you know, one of the important parts of leadership is knowing where you are going. he's somebody who spoke out against t.a.r.p. that we looked at now saying, gee, where did all the money go? who had the guts to say, you know, stepping over the line, may be creating a problem that's bigger later on, well, rick santorum did. that's guts because everybody was in a panic at that time. still working backwards --

hopefully no one will call -- his personal -- he's a full spectrum conservative on everything you can think of. he comes done on the conservative side of the issues, and i think it's best illustrated if you get the youtube clip where he is debating with barbara boxer, and he is just very nice, calm, and she tries to get on the record that he's getting upset, and he was not. you can see that when you see the video on it, but he is that kind of conservative to go out on a limb on an issue that may some people say, well, is that where we should go? will that cost us politically? he'll do it, politely, push the envelope, and get us there, so -- oh, then then the best, i think the best example of the full spectrum conservative is

the comment rush limbaugh made. we're not going to worry about what rick is going to come up with if he's president, if we know he's coming down on the side of things the way we like to see them. there's no will he go back to the way he was before, has he always been here with us? we know he is. people are waiting to see whether he could have that electability to support him. the fact is he is one of us, and he agrees with us. okay. his personal story. this goes, i suppose a lot to electability. he is -- he talked about it when he did his speech after the caucus, but i'll repeat it. his gran daddy came over from italy, worked in the coal mines, his father was a working man. he comes from that part of america that is just, you know, the working part of america, and

that sells very well to the electorat because they want to know it's somebody that understands them, walk the in their -- walked in their shoes or the sidewalks they walked on and seen the troubles and seen the things you do to overcome them and the fact that maybe if you're successful is because you work very hard, and not just somebody who sort of wonders about how people became successful because their dad was successful. he rose on his own merit. went to law school, private practice, and then he was elected to congress, and he's been in congress -- congress for 20 years, and then he got a chance to not be in congress for the last few years, so i think his personal story is one that very easily sold to those folks who do not concentrate on politics the way we do on this and that issue and how the issues line up, but they just look at the person and think, well, is this a good man,

someone we should put in charge, a good man or woman? someone to be in charge or not? excuse me while i get a drink. i took the wrong time to be silent. [laughter] so, his electability is last because that's the favorite part of my argument for rick santorum. it's a electoral vote, not how many people vote for you in the entire united states. it's state by state. they are state-by-state elections, and if you can start off with a state that is generally a democratic state and put it in the republican column like reagan did, you start with a huge advantage because you take, in a way, they base, so if we can take pennsylvania and put that in our column from the get-go, that's a huge advantage. the obama administration

recently talked about how they were planning on their reelection, and it depends on, you know, the states that went for, i think, john perry in twawr, and then you add more or something like, that pennsylvania right in there, you take pennsylvania in the republican column, that's going to be great, and he's gotten pennsylvania. he started off his election career by winning the congressional district that was democrat, by working hard, going door-to-door, relating to the folks, and then he went beyond that, and he got elected to the entire state of pennsylvania. knowing we're putting forward a candidate that can win an entire state, that tells you a lot. that tells you he can win, or at least hold his own in the big cities, win in the suburbs outside of philadelphia and pittsburgh and those suburbs in all of the big states, those

folks vote, you know, they'll see the same thing and see in the same way those folks in pennsylvania saw him, and that's going to give us a great advantage in winning the election come november. if you -- i'm sure i have not done a great as job as rick does himself. he speaks extremely well. i'm impressed by how he speaks in an inspirational way when he first came here talking to the community, talking about the founding fathers and we have to honor their work and go back to their intent and the freedom they gave us and we're smothering ourselves with government excess, and then he can sit with you and talk one-on-one with the budget. we all agree we have to make the federal budget smaller. it would be great on day one to have someone who knows the federal budget, what proposals will work, will sell to the

other side. he's prune that he can work -- proven that he can work well both with republicans obviously and with the democrats as well to come to a commonground. i love the way how he explains how they got the welfare reform. he was a big advocate of welfare reform back in the 1990s, but he had to do that with a democratic president, and they worked together on that. you see what's happening in washington now, and you think how come there's not people like that, what's the problem with them getting things done? i'm not sure what the answer is, but we know there's something to put up there who happen been in that situation and got things done, and that's rick santorum. if you want to see him, he'll be in saturday. he's at the lawrence barn in hollace at 2 p.m. according to the g.o.p. website, and monday, i got a card from the campaign saying he's at the rivera

college on monday. i'll be happy to answer questions if i can, but i'm sure you'd rather hear from the candidate himself, so someone from the board of education would like to ask a question. i thought the board of education knew all the answers, dave? >> no, but since you've worked with senator santorum for awhile, i know the senator is a roman catholic as i am, and let's talk about foreign policy for one. all across the nation, and here in new hampshire, catholic pastors and bishops have been speaking out from the pulpit against war. the other thing is that if you look at the rasmussen reports from last month, over 55% of likely american voters now believe that we were wrong to attack iraq, 63% believe we should not go back if they get into trouble, 67% believe that we will not be successful in our

military mission in afghanistan, and 75% of likely voters now believe that the united states should not become militarily involved unless it is to protect the security of the united states homeland. now, given both the pastoral side and also the very overwhelming evidence that the likely american voter opposes military intervention, do you feel that this will alter senator santorum's position on foreign policy moving forward? >> the way i understand his position is to have a strong stance and defense that makes anybody reluctant to cross, you know, our interests. i don't think that's contradictory to a position against war; however, obviously, sometimes, you know, if everybody knows that you're not going to go to war, you probably are going to invite trouble, so

-- >> thank you very much. >> you're welcome. >> probably time for a few more questions. anyone? if not -- >> one more. >> one in the back. >> [inaudible] >> i'm sorry, that's a specific question, and i don't know the answer to it. thanks. >> well, nobody else? >> thank you. [applause] >> okay. our next speaker is well known to all of us. senator from here in nashua speaking on behalf the mitt romney. [applause] >> thank you very much for having me here tonight, folks. i understand that ann romney was

supposed to speak to you, and i feel privileged to be able to speak to you and the fact she's not able to make it, and they asked me to come up here. look, i know most of you in the audience, and one thing being an elected official, you talk to the audience. what i'm about to say is not what i normally say to independent or democrats because i know who you are, and i know a lot of you, how you think. friends like pete silva -- >> this is live tv. >> i i know we're on live tv as well. [laughter] i'm here to convince you to vote for mitt romney, so i know everybody out in the audience is estute, know the positions, and rather than go on with blah, blah, blah, i'll get to the point. look, we now how the movie ends. mitt romney will be the nominee. for all -- forgive me and with

all do respect to my friends. out there. that's going to happen. the sooner we get it over, the more money we save because in the end, we're after president obama. we have to beat him. we've got to save the resources, conserve resources, and get to that point. mitt romney has the best -- forgive me for saying it, the best ground game and money. the polls say he'll win. there's a lot of you out there saying, hey, the polls lie. polls are good. polls are good, and the polls say mitt romney has the best chance to beat obama, and even a little guy like me, i ran a poll during my state senate campaign, came out right out on the money the way it came out in the election. good at doing polling now, and you know, i know like pete, who is a good friend of mine said last time you picked a fantasy candidate or whatever, look,

i've talked to a lot of you. i just talked to a ron paul supporter today. greg, it was not you, someone else. he even knew and believed ron paul was going to lose. i think ron paul thought he was going to lose. okay, look, i don't get it. let's -- you know, this is not about picking a favorite or someone you like or picking someone with your own beliefs and principles. this is about picking a person who can beat obama, period. you know, just to get into my main reason why i like mitt romney and why i support hymn is, you know, being a senator who won in a democratic district, first republican in 94 years, i can a appreciate a guy who can beat a democrat in a democratic state like mass, and that's the kind of guy you're going to need to get out there and convert democrats over to

vote for you and especially those independents. the independents are not this group we have in here, okay? this is -- there'll be a different group, and he appeals to the independent voter and certain democrats, and he's the man. now, so i'm going to spare all of you the blah blah and all the details, but i won't take any questions you might have -- i will take any questions you may have if i can answer them. yes, sir? >> [inaudible] >> i was hoping for a little bit more than just why everybody's going to vote for romney and the process is already decided, and i -- that's not what i think the

primary's about. i think there is a vetting process and as much as -- as important as the result is is the process for getting to the result, and i think you diminish that with your comments, and i found that offensive. >> well, sir, -- [applause] i'm sorry about that. i'd spend a half hour with you offline. >> [inaudible] >> i have a limited amount of time to pick up my son from basketball at nine o'clock. we're here, this is a republican committee meeting, and i understand, you know, sir, i apologize if i offended you or anyone else in any way, but i'll tell you this. i expect most people are paying attention to the issues and pretty much almost made up their mind and this was more or less a time to tell republicans because it's a republican committee city meeting why they should vote for

romney. >> [inaudible] >> well, former representative, thank you very much, and thank you for the senator who also is a big help. just a question to pose is a question to the senator. our economy's in trouble. our country's in trouble. we have 25 million people in this country who are unemployed. we have young people who are graduating from college and can't get jobs. we have people who are working longer than they had hoped to work because their retirement funds are gone. we have trouble. we have challenge, and i look, and i ask you if you would agree that governor romney's skills are uniquely suited to solve our economic problems at this time, at this point in time. i look at him, he is a proven problem solver whether you look at his business career, the 25

years he worked for private industry, whether you look at what he did with the olympics or whether you look at what he has done did as governor of massachusetts. that's past tense. he has gone into troubled and struggling ventures, and he has been able to turn them around. in business, he created thousands of jobs. he took companies and reorganized them and turned out thousands of jobs. at the olympics, that olympics, i read that book, and that's when i first decided to support governor mitt romney. if anybody has time between now and tuesday, i urge you to please read that book. it was an eye opener. it was a guy for me. it was an olympics filled with scandal. it was a mess. they had no sponsors set up. the thing was headed for trouble. he turned it around, successful, post-9/11, a successful olympic

game, and a $3 billion budget deficit, he worked with an 85% democratic legislature, and he cut taxes 19 times. built up a $2 billion rainy day fund. he went into troubled and struggling enterprises and turns things around. that's one skill. secondly, working with the other side, government in washington is gridlock. i think buddy spoke about that. we need someone who can work with both parties and move the country forward. we mite not get everything we want. you have to move the ball forward. governor romney has shown he can do that. finally, he can win, he can pull the up dependent vote. wouldn't you agree -- [laughter] wouldn't you agree, senator, that his skill set is uniquely suited to the economic and challenges that we face in our country? >> absolutely, and, you know, you couldn't have said it better.

[applause] >> time for a few more. >> as another romney supporter, i want to reenforce what pam said, but another chapter in the book where he talks about what he did in massachusetts, and with the health care. ..

[applause] >> you mitt romney is a man of integrity and consistency and honesty. >> absolutely. >> he doesn't change his values over time? >> no, no. people change their opinion on things i believe his core values of ice in the same. i think his record is indicative of that. >> somebody can change their position to political whims, i feel like we have had a lot of that in america and i feel like that is something that has put us where we are today. i'm very cautious about somebody who is just another one of those people, just another person who changes their opinion with the wind.

>> like i say craig i would disagree with you. he does not change on a whim. up in concord as well, we'd change our opinions on certain issues after learning more about them. that is not changing our core principles and not changing your values. >> obamacare and mitt romneycare, he would have to change in order to repeal obamacare he would have to change with the went. >> and i can give you the talking points come and as we all know we have heard them over and over again and governor romney has talked about this. what was good for massachusetts is probably, may not be good for the country. it was a state run program and i think it is unfair to compare that countrywide. he wouldn't have done a countrywide, so we know that. >> is it good for anyone? >> seems to be working in massachusetts at least. >> you might be right. it might be inevitable but also

i have a problem with, don't vote for the person you want. i do think that you know come even if romney ends up eating the eventual nominee the process is going through, going through the base and in going through these primaries will actually make a better candidate. if you vote for the candidate who votes what you care about any gets to talk about it more you never know. he might change his position to embrace it that i think there is value for us i think to vote for the candidates that we want because you get our ideas out there and it gives our ideas to the front-runner. it is a value for him as well because it makes them a better candidate if he ends up going up against obama. >> that is a good point. [applause] i have heard of for many supporters about the candidates as well. i tend to dix's agree with it. i think i'm about winning. you have got to win. the whole name of this game is to beat barack obama. that's it.

so let's do what we have got to do to get there as fast as we can. thank you very much. [applause] >> just a few final things. one, a reminder that it's time for dues, so annual dues, this is january so if you could seed maria mueller who i think is still out at the table. zero company she has left. okay then dan richards and our treasure. is he still here? he is outside. it is $10 for an individual and 15 for a couple. i don't think you can get much better than that. also, dennis mentioned fund-raisers. we will be having fund-raisers this upcoming year. we have a difficult time ahead of us with redistricting, so districts are going to be

different from what we are used to so things are going to be changing a bit on that so we need to be prepared. the democrats didn't like having us have a 75% majority in the house, so you can bet that they are going to be working overtime on this one. especially they are going to be trying to, as it appears to be we are going to be one of the swing states they are going to be targeting, there is going to be a lot of obama money coming in here. there is going to be a lot of volunteers for massachusetts where it doesn't mean much because they always go democrats so we need to be prepared. we are going to be having fund-raisers. we are going to need to be organizing carefully to make sure that we can deliver new hampshire for the republican side, whichever these wonderful nominees we have heard about is going to be the candidate. we have heard from each of the candidates and i think now,

throughout this whole process i have stayed neutral as i'm required to be and i'm still staying neutral until i get into the voting booth. but i do want to maybe share a few of my ideas as far as what i'm looking for. i consider there to be two key skill sets we are looking for. one, being able to articulate your ideas in a way that is going to be compelling to the candidates. obviously each of you who came up and spoke, you are motivated by your candidate so that is a very good assessment, so bear that in mind. the other key thing is governance. which of these candidates can govern effectively? which of them can govern in a way that is consistent with the constitution and consistent with our conservative principles? now, to contrast that we have a president right now, who while the senate was still in session,

made recess appointments to four positions, one of which is for a position in a virtually unconstitutional office that he created. he has likened himself to what was it, the fourth best president, the fourth best president and i noticed in the ones that he listed as the best president he didn't include george washington so presumably he thinks he's better than george washington. this is a man who is hubris and egotism combined with his dogmatic ideology of hard-core leftism has so made him so in apt that he doesn't even recognize his own ineptitude. [applause] this is a president whose name in the future should be like jimmy carter's as a byword for

failed presidency. they should be an easy election for us to win but it won't be. we need to be able to point out those problems with obama and we need to pick a candidate that can draw that contrast, so those are just my thoughts and when i'm making my decision, still one of you that is trying to make up their mind and as i say i am usual anyway, so just think about who can govern and who can run. and that is really the core serious ideas that all of us here in new hampshire really have to go with. so with that, -- [inaudible] >> the next meeting is february 9. and the speaker will be.

>> obed la montagne and kevin schmidt who are both running for governor. >> both great guys and we are looking forward to having them and again that is the other big target we have to worry about, taking back the governor's office and we can't guarantee having 75% majority and we certainly can't take another 42 years of who are the democrats putting up, maybe half stand and anywhere, they are awful. [laughter] [applause] we need to make sure that they are not elected. so with that, thank you all for coming. and i am sure that the surrogates are still here and would be happy to meet with you after the meeting and talk amongst themselves. [applause] thank you to our friends at c-span and all those who tuned in. thank you. [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] and if he missed any of this coverage on c-span2 we will have this again for you later on overnight in our c-span schedule. also lots of information always on our web site, c-span.org. in our road to the white house coverage tomorrow on the c-span networks we have presidential candidate john huntsman giving remarks and also taking questions at a new england college event. i laid coverage from concorde hampshire begins at 9:00 a.m. eastern right here on c-span2. former house speaker newt gingrich and a live call-in program at the dartmouth medical school in lebanon new hampshire. we get underway with added 10:20 eastern time over on c-span. president obama was at the pentagon today and unveiled his new strategic priorities for the u.s. motel or it. we will have the next on c-span2. after that we will hear from the head of the consumer financial protection bureau, richard

cordray and later wisconsin governor scott walker talking about some of the budget battles he has had with state legislators over the last year. [inaudible conversations] [inaudible conversations] >> thank you so much. >> thanks for coming. >> nice to be here. thank you. c-span's wrote to the white house coverage of politics takes you on the campaign trail with the candidates. >> great to see you. >> you too. >> how are you going to get past the stalemate? >> what c-span's coverage of the new hampshire primary on c-span television and on our web site c-span.org.

♪ >> president obama outlined a new defense strategy that includes a smaller military force and cuts some weapons programs. the new military strategy includes $487 billion in cuts over the next decade and an additional $500 billion in cutsç could be coming if congress follows through on plans for deeper reductions. the president secretary panetta our joint by joint chiefs chairman general dempsey and other pentagon officials. a.

[inaudible conversations] >> good morning, everybody. the united united states of ames the greatest force for freedom and security that the world has ever known. and in no small measure, that's because we have built the best trained, best led, best equipped military in history. and as commander-in-chief i'm going to keep it that way. indeed, all of us on the stage, every single one of us, have a profound responsibility to every soldier, sailor, airman, marine and coast guard's men who put their life on the line for america. we owe them a strategy with well-defined goals, to only send them into harm's way when it's absolutely necessary, to give them the equipment and the support that they need to get the job done, and to care for

them and their families when they come home. that is our solemn obligation. over the past three years that is what we have done. with continued to make historic investments in our military. our troops and their capabilities, our military families and our veterans. and thanks to their extraordinary service, we have ended our war in iraq. we have decimated al qaeda's leadership. we deliver justice to osama bin laden and we put that terrorist network on the path to defeat. we have made important progress in afghanistan and we have begun the transition so afghans can assume more responsibility for their own security. we have joined allies and partners to protect the libyan people as they ended the regime of moammar gadhafi. now we are turning to page on a decade of war. three years ago, we had some 180,000 troops in iraq and

afghanistan. today we have got that number in half. and as the transition in afghanistan continues, more of our troops will continue to come home. more broadly around the globe, we have strengthened alliances, forge new partnerships and served as a force for universal rights and human dignity. in short, we have succeeded in defending our nation, taking the fight to our enemies, reducing the number of americans in harm's way and we have restored america's global leadership. that makes us safer and it makes us stronger, and that's an achievement that every american, especially those americans who are proud to wear the uniform of the united states armed forces should take great pride in. this success has brought our nation once more to a moment of transition. even as our troops continue to fight in afghanistan, the tide

of war is receding. even as our forces prevail in today's missions, we have the opportunity and the responsibility to look ahead to the force that we are going to need in the future. at the same time we have to renew our economic strength here at home which is the foundation of our strength around the world, and that includes putting our fiscal house in order. to that end, the budget control act passed by congress last year with the support of republicans and democrats alike, mandates reductions in federal spending, including defense spending. i have insisted that we do that? responsibly. the security of our nation and in uniform depend on that is why iiñ?ñ? have called r this comprehensive defenseñññ?ñ? review, to clarify our strategic interest in a fast0sñ?ñ?ñ changg world and to guidehññ?ñ? our dee priorities in spending over the coming decade, because the size

and the structure of our military and defense budgets have to be driven by a strategy, not the other way around. moreover we have to remember the lessons of history. we can't afford to repeat the mistakes that have been made in the past after world war ii, after vietnam, when our military was left ill-prepared for the future. as commander-in-chief, i will not let that happen again, not on my watch. we need a start, we need a smart, strategic set of priorities. the new guidance that the defense department is releasing today does just that. i want to thanks secretary panetta and general dempsey for their extraordinary leadership during this process. i want to thank you the service secretaries and chiefs, the combatant commanders in so many defense leaders, military and civilian, active, guard and reserve, for their contributions. many of us met repeatedly asking

tough questions, challenging our own assumptions and making hard choices and we have come together today around an approach that will keep our nation safe and our military the finest that the world has ever known. this review also benefits from the contributions of leaders from across my national security team and from from the department of state, homeland security and veterans affairs as well as the intelligence community and this is critical because meeting the challenges of our time cannot be the work of our military alone or the united states alone. it requires all elements of our national power working together in concert with our allies and our partners. so i'm going to let leon and marty go into the details, but i just want to say that this effort reflects the guidance that i personally gave throughout this process. yes, the tide of war is receding but the question that this strategy answers is, what kind

of military will we need long after the wars of the last decade are over? and today, we are fortunate to be moving toward -- forward from a position of strength. we will be strengthening our presence in the asia-pacific and budget reductions will not come at the expense of that critical region. we are going to continue investing in our critical partnerships and alliances including nato, which is demonstrated time and again, most recently in libya, that it's a force multiplier. we will stay vigilant, especially in the middle east. as we look beyond the wars in our back in afghanistan and thee end of long-term nation-building with large military foot rents, we will be able to ensure our security with smaller conventional ground forces. will continue to get rid of outdated cold war era system so that we can invest in the capabilities that we need for

the future, including intelligence, surveillance and reconnaissance, counterterrorism, countering weapons of mass destruction, and the ability to operate in environments where adversaries try to deny us access. so yes our military will be lienor but the world must know the united states is going to maintain our military superiority with armed forces that are agile, flexible and ready for the full range of contingencies and threats. we are also going to keep faith with those who serve by making sure our troops have the equipment and capabilities they need to succeed and by prioritizing efforts that focus on wounded warriors, mental health, and the well-being of our military families. and as our newest veterans rejoin civilian life, will keep working to give our veterans the care, the benefits and the job opportunities that they deserve

and that they have earned. finally, although today is about our defense strategy, i want to close with a word about the defense budget that will flow from this strategy. the details will be announced in the coming weeks. some will no doubt say that the spending reductions are too big. others will say that they are too small. it will be easy to take issue with a particular change in a particular program. but i would encourage all of us remember what president eisenhower once said, that each proposal has to be weighed in the light of a broader consideration, the need to maintain balance in and among national programs. after a decade of war and as we rebuild the source of our strength at home and abroad, it's time to restore that balance. i think it's important for all americans to remember over the past 10 years, since 9/11, our

defense budget grew at an extraordinary pace. over the next 10 years, the growth and the defense budget will slow but the fact of the matter is this, it will still grow because we have glob sponsibilities that demand our leadership. in fact, the defense budget will still be larger than it was toward the end of the bush administration. and i firmly believe and i think the american people understand, that we can keep our military strong and our nation secure with a defense budget that continues to be larger than roughly the next 10 countries combined. so again i want to thanks secretary panetta, chairman dempsey, all the defense leaders who are on this stage, and some who are absent, for their leadership and their partnership throughout this process. our men and women in uniform give their very best to america every single day and in return,

they deserve the very best from america. and i thank all of you for the commitment to the goal that we all share, keeping america strong and secure ini-ñ?ñ?ñ thet century and keeping our armed forces the very best in the world. and with that i will turn this discussion over to leon and to marty, who can explain more and take your questions. so thank you very much. i understand this is the first time a president has done this. it's a pretty nice room. [laughter] thank you, guys. [inaudible conversations] take it easy, john.

[inaudible conversations] >> let me begin by thanking president obama for coming here to the pentagon this morning, and also in particular to thank him for his vision and guidance and leadership as this department went through a very intensive review that we under tech to try to develop the new strategic titans that we are releasing today. and in my experience, this has been an unprecedented process to

have the president of the united states participate in discussions involving the development of a defense strategy, and to spend time with our service chiefs and spend time with our combatant commanders to get their views. it surely unprecedented. this guidance that we are releasing today, and which has been distributed now throughout the department, it really does represent historic shift to the future. and it recognizes that this country is at a strategic training point -- turning point after a decade of war and after large increases in defense spending. as the president mentioned, the u.s. military's mission in iraq has now ended. we do have continued rug rats in

afghanistan. it's tough, and it remains challenging, but we are beginning to enable a transition to afghan security responsibility. the nato effort in libya has concluded with the fall of gadhafi. and targeted counterterrorism efforts have significantly weakened al qaeda and decimated its leadership. and now, as these events are occurring, and the congress has mandated by law that we achieve significant defense savings. so clearly, we are at a turning point. but even as our large-scale military campaigns receipt, the united states still faces complex and growing array of security challenges across the globe. and unlike past drawdowns, when

oftentimes the threats that the country was facing went away, the fact is that they remain a number of challenges that we have to confront, challenges the call for reshaping of america's defense priorities. focusing on continuing threats of violent extremism, which is still there and still to be dealt with. proliferation of lethal weapons and materials, the destabilizing behavior of nations like iran and north korea, the rise of new powers across asia and the dramatic changes that we have seen unfold in the middle east. all of this comes at a time when america current -- confronts a very serious deficit and debt trouble him here at home, a problem which is itself a national security risk that is squeezing both the defense and domestic budgets.

even as we face these considerable pressures, including the requirement of the budget control act to reduce defense spending by what we have now as the number of $487 billion over 10 years, i do not believe, and i've said this before, that we have to choose between our national security and fiscal responsibility. the department of defense will play its part in helping the nation put our fiscal house in order. the president has made clear, and i have made clear, that the savings that we have been mandated to achieve must be driven by strategy and must be driven by rigorous analysis, not by numbers alone. consequently, over the last few months, we have conducted an

intensive review to try to guide defense priorities in spending over the coming decade. all of this in light of the strategic titans that we have received in discussions with the president and the recommendations of this department, both senior military and civilian leadership. both of them provided those kinds of recommendations. this process has enabled us to assess risk, to set priorities and to make some very hard choices. let me be clear again. the department would need to make his cheesy chick -- strategic shift regardless of the nation's fiscal situation. we are at that point in history. that is the reality of the world we live in. fiscal crisis has forced us to face this strategic shift that is taking place now. as difficult as it may be to achieve the mandated defense

savings, this has given all of us in the department of defense the opportunity to reshape our defense strategy and force structure to more effectively meet the challenges of the future, to deter aggression, to shape the security and byram and, and to decisively prevail in any conflict. from the beginning, i set out to ensure that the strategy review would be inclusive. chairman dempsey and i have frequently with department leaders, including our undersecretaries, the service chiefs, the service secretaries, the combatant commanders, our senior enlisted advisers. we also discussed the strategy and its implications obviously with the president, his national security advisers, with members of congress and with outside experts. there are four overarching principles that of guided our deliberations and i said this at

the very beginning as we begin this process. one, we must maintain the world's finest military, one that supports and sustains the unique global leadership role of the united states in today's world. two, we must avoid howling out the force. a smaller, ready and well-equipped military is much more preferable to a larger, ill-prepared force that has been arbitrarily cut across the board. third, savings must be achieved in a balanced manner, with everything on the table, including politically sensitive areas that will likely provoke opposition from parts of the congress, from industry and from it the biggest -- advocacy groups. that's the nature of making hard choices. four, we must preserve the quality of the all-volunteer force and not rake faith with

the men and women in uniform or their families. with these principles in mind, i will focus on some of the significant strategic choices and shifts that are being made. the united states military, let me be very clear about this, the united states military but remain capable across the spectrum. we will continue to conduct a complex set of missions ranging from counterterrorism, ranging from countering weapons of mass destruction, to maintaining a safe, secure and effective nuclear deterrent. we will be fully prepared to protect our interests, defend our homeland and support civil authorities. our goal to achieve the u.s. force for the future involves the following significant changes.

first, the u.s. joint force will be smaller and it will be lienor. but its great strength will be that it will be more agile, more flexible, ready to deploy quickly, innovative and technologically advanced. that is the force for the future. second, as we move towards this new joint force, we are also rebalancing our global posture and presence, emphasizing the pacific and the middle east. these are the areas where we see the greatest challenges for the future. the u.s. military will increase its institutional weight and focus on enhanced presence, power projection and deterrence in asia-pacific. this region is growing in

importance to the future of the united states in terms of our economy and our national security. this means for instance, improving capabilities that maintain our military's technological adage and freedom of action. at the same time, the united states will play -- place a premium in maintaining our military presence and capabilities in the outer middle east. the united states and their partners must remain capable of deterring and defeating aggression while supporting political progress and reform. third, the united states will continue to strengthen its key alliances, to build partnerships and to develop innovative ways to sustain u.s. presence elsewhere in the world. a long history of close political and military cooperation with our european allies and partners will be

critical to addressing the challenges of the 21st century. we will invest in a the shared capabilities and responsibilities of nato, are our most effective military alliance. the u.s. military's force posture in europe will, of necessity, continue to adapt and evolve to meet new challenges and opportunities, particularly in light of security needs of the continent relative to the emerging strategic ironies that we face elsewhere. we are committed to sustaining a presence that will meet our article v commitments, deter aggression, and the u.s. military will work closely with our allies to allow for the kinds of coalition operations that nato has undertaken in libya and afghanistan. in latin america, africa, elsewhere in the world, we will

will use innovative methods to sustain u.s. presence, maintaining key military-to-military relations and pursuing new security partnerships as needed. wherever possible we will develop low cost and small foot rand approaches to achieving our security objectives, emphasizing rotational deployments, emphasizing exercises, military exercises, with these nations, and doing other innovative approaches to maintain a presence throughout the rest of the world. forth, as we shift the size and composition of our ground, air and naval forces, we must be capable of successfully confronting and defeating any aggressor and respond to the changing nature of warfare. our strategy review concluded

that the united states must have the capability to fight several conflicts at the same time. we are not confronting obviously the threats of the past. we are confronting the threats of the 21st century. and that demands greater flexibility to shift and deploy forces, to be able to fight and defeat any enemy anywhere. how we did beat the enemy may very well vary across conflicts. but make no mistake, we will have the capability to confront and defeat more than one adversary at a time. as a global force, our military will never be doing only one thing. it will be responsible for a range of missions and activities across the globe of varying

scope, duration and strategic priority. this will place a premium on flexible and adaptable forces that can respond quickly and effectively to a 480 of contingencies and potential adversaries. again, that's an h. or of the world that we are dealing with. in addition to these forces, the united united states will emphasize building the capacity of our partners and allies to more effectively defend their own territory, their own interests, through a better use of diplomacy, development and security force assistance. in accordance with this construct, and with the end of u.s. military commitments in iraq, and the drawdown that is already underway in afghanistan, the army and marine corps will no longer need to be sized to support the kind of large-scale, long-term stability operations

that it dominated military ironies and force generation over the past decade. lastly, as we reduce the overall defense budget, we will protect and in some cases increased our investments in special operations forces, in new technologies like isr and unmanned systems, in space and in particular in cyberspace capabilities, and also our capacity to quickly mobilize if necessary. these investments will help the military retain and continue to refine and institutionalize the expertise and capabilities that have been gained at such great cost over the last decade. and most importantly, we will

structure and pays the reductions in the nation's ground forces in such a way that they can search, regenerate and mobilize capabilities needed for any contingency. building in reversibility and the ability to quickly mobilize will be the key. that means re-examining the mix of elements in the active and reserve components. it means maintaining a strong national guard and reserve. it means retaining a healthy cadre of experienced ncos and midgrade officers and preserving the health and viability of the nation's defense industrial base. the strategic guidance that we are providing is the first step in this department's goal to build the joint force of 2020,

a. a4 sized and shaped differently than the military of the cold war, the post-cold war force of the 1990s, or the force that was built over the past decade to engage in large-scale ground wars. this strategy and vision will guide the more specific budget decisions that will be finalized and announced in the coming weeks as part of the president's budget. in some cases we will be reducing capabilities that we believe no longer are a top rider eddie. but in other cases, we will invest in new capabilities to maintain a decisive military adage against the growing array of threats. there is no question, there is no question that we have to make some trade-offs and that we will

be taking, as a result of that, some level of additional but acceptable risk in the budget plan that we release next month. these are not easy choices. we will continue aggressive efforts to weed out waste, reduce overhead, to reform business practices, to consolidate our tip click it if operations -- duplicative operations but budget operations will inevitably impact the size and capabilities of our military. and as i have said before, true national security cannot be achieved through a strong military alone. it require strong diplomacy. it require strong intelligence efforts. and above all, it requires a strong economy, fiscal discipline and effective

government. the capability, readiness and agility of the force will not be sustained if congress fails to do its duty and the military is forced to accept far deeper cuts, in particular he be arbitrary, across-the-board cuts that are currently scheduled to take effect in january of 2013 through the mechanism of sequester. that would force us to shed missions and commitments and capabilities that we believe are necessary to protect core u.s. national security interests. and it would result in what we think would be a demoralized and hollow force. that is not something that we intend to do. and finally, i'd like to also address our men and women in uniform and the civilian employees who support them, who

i know have been watching the budget debates here in washington with concern about what it means for them and for their families. you have done everything this country has asked you to do and more. you have put your lives on the line, and you have fought to make our country safer and stronger. i believe the strategic guidance honors your sacrifice and strengthens the country by building a force equipped to deal with the future. i have no higher responsibility than fighting to protect you and to protect your families. and just as you have fought and bled to protect our country, i commit to you that i will fight for you and for your families. there is no doubt that the

fiscal situation this country faces is difficult, and in many it many ways we are at a crisis crisis.. but i believe that in every crisis there is opportunity. out of this crisis, we have the opportunity to end the old ways of doing business and to build a modern force for the 21st century that can win today's wars and successfully confront any enemy and respond to any threat and any challenge of the future. our responsibility, i responsibility as secretary of defense, is to protect the nation's security and to keep america safe. with this joint force, i am confident that we can effectively defend the united states of america. thank you.

>> good morning. as chairman, it's my responsibility to work with the joint chiefs to ensure that the armed forces of the united states keeps america immune from coercion. the strategy just described by the present and the secretary of defense enables us to fulfill that responsibility. it sustains the sacred trust put in us by the american people to defend them and our country. this strategy emerges from a deeply collaborative process. we sought out into the key insights from within and from outside the department of defense to include from the intelligence community and other governmental departments. we wait facts and assessments. we challenged every assumption. we considered a wide range of recommendations and counter arguments. i can assure you that the steps we have taken to arrive at this strategy in false all of this

and watch more. this strategy also benefited from an exceptional amount of attention by our senior military and civilian leadership. on multiple occasions, we held all day and multi-day discussions with service chiefs and combatant commanders. the service chiefs, who are charged with developing the force for this strategy, were heard early and often. the combatant commanders, charged with executing the strategy, all weighed in time and time again. and we were all afforded extraordinary access to both the president and the secretary of defense. frankly the breadth and depth of dialogue to arrive at today strategic choices was both necessary and not worth the. today we are here to discuss the broad contours and the central choices of the strategy but this is not the end. rather, it's a waypoint in a continuous and deliberate process to develop the joint

force for 2020 that the secretary just described. therefore budget cycles between now and then. each of these cycles presents an opportunity to adjust how and what we do to achieve this strategy in the face of new threats, and the context of the changing security environment. is a sound strategy. it ensures we remain the preeminent military in the world. it preserves the talent of the all-volunteer force. it takes into account the lessons of the last 10 years of war. it acknowledge is the imperative of a global, networked and full spectrum joint force. and it responds to the new fiscal environment, though it's a learning organization it's important to note that even if we didn't have fewer resources, we would expect to change. as a consequence it calls for renovation, for new ways of operating and partnering. it rebalances our focus by region and mission. it makes important investments as the sex -- secretary noted in

emerging and proven capabilities like cyberand special operations. now there has been much made and i'm sure will be made about whether the strategy moves away from a force structure explicitly designed to fight and win two wars simultaneously. fundamentally, our strategy has always been about our ability to respond to global contingencies wherever and whenever they occur. this won't change. we will always provide a range of options for our nation. we can and will always be able to do more than one thing at a time. more importantly, wherever we are confronted and in whatever sequence, we will win. we do accept some risk in the strategy is all strategies must. because we will be somewhat smaller, these risks will be measured in time and incapacity. however, we should be honest. we could face even greater risks if we do not change from our current approach. i am pleased with the outcome. it's not perfect.

there will be people who think it goes too far. others will say it didn't go nearly far enough. that probably makes it about right for today. to its is what we need in this world and within this budget to provide the best possible defense for our nation at a time of great transition. it prepares us for what we anticipate we will need in 2020. this is a real strategy. it represents real choices and i'm here today to assure you that it has real buy-in among our senior military and civilian leadership. this is not the strategy of the military in decline. this is a strategy, and a joint force, on which the nation can depend. i want to wrap up by saying just a couple of words about leadership. it's always important but it's absolutely essential during tough times. and make no mistake, these are tough economic times. in the strategy required some tough decisions. i want to thank you president obama and secretary panetta for

obama and secretary panetta for their leadership throughout this process. the real test though will be in execution. fortunately the young men and women who will be charged to carry out the lion's share of the strategy know something about leadership too. it's the very cornerstone of our profession, the profession of arms. and for the past 10 years they have done nothing but lead under the most difficult circumstances imaginable. and it's for that reason, above all others, that i am absolutely convinced and fully satisfied that the strategy will meet our nation's needs for the future. thank you. >> thank you mr. chairman, mr. secretary. press, we will have a chance for a few questions here with the secretary and the chairman and i'll feel those. field those. following that, the process here has been led by the deputy secretary of defense, the vice-chairman of the joint chiefs of staff and the under-secretary of defense for policy, all of whom are here.

they will then, and be able to answer quite a number of questions in depth. so why don't we start on questions on strategic guidance. >> mr. secretary, this document says and the president himself said when he was here that the military will get smaller. the question is, how much smaller? how much we propose to cut the army and the marine corps and over what period? and also this document says the u.s. military presence in europe will quote if all. is that another way of saying that it will get cut? >> well, as we have said in the policy statement, and the president referred to it and i referred to it and marty referred to it as well, we are going to have a smaller and lienor force. what those numbers are will be part of the budget that will be presented by the president and at that time obviously we will deal with those final decisions as to the exact size. but there is no question that,

look, under any circumstances we were looking at a drawdown as a result of the end of the war, and hopefully the end of the transition in afghanistan. but budget constraints required that come, in addition to that, we have to develop a smaller and lienor force, but one that has to be more agile, flexible, innovative and creative. with regard to europe, we will maintain our commitments with europe. we will maintain our article v requirements. we will be able to deter aggression. we want to build our partnerships there. and one of the things that we have made clear with them is not, you know, not only are we going to continue our commitments there, but we are going to develop the kind of innovative residents that we think will make clear to europe

and to those that have been our strong allies over the past, that we remain committed to protecting them. >> could i elaborate on the european one, sir? the strategy talks about her shifted the future, and all of the trends, demographic trends, geopolitical trends, economic trends and military trends are shifting toward the pacific. so our strategic challenges in the future will largely emanate out of the pacific region. and also the indian ocean for that matter but the point is, so our strategic challenges are shifting and we have to pay attention to those shifts but what we will always be build on the strong foundation of our traditional strategic partnerships and nato is chief among them. this is not a separation in any way from nato and we are in dialogue and will be dialogue with them.

>> david. >> mr. secretary i wonder if you could square a statement you made in your remarks. we will have the capability to confront and defeat more than one adversary at a time. with the guidance, which pretty clearly states that you will have the capability to fight one regional conflict and what would essentially be a holding action in a second regional conflict. are those two consistent? >> you know, i think that the structure for making defense decisions, looking at past as well as the present, has always been canned the united states confront enemies, aggressors, more than one, and be able to defeat them. that is the key question. whatever strategic formula you use, that remains the fundamental question, can we confront and defeat any enemy that faces us? and the answer to that question

is, with a joint force that we are creating here, we can. we can confront than one enemy at a time. the nature of warfare today is that, as you engage, you have to look at how you do it, what forces do you choose to be able to confront that enemy, what exactly is involved? the reality is he could face a land war in korea and at the same time-based threats in the straits of hormuz. we have the capability with this joint force, to deal with those kinds of threats, to be able to confront them and to be able to win. that is what counts. >> the past 10 years in iraq and afghanistan, that you cannot fight to defeat an enemy into theaters at the same time? >> well, i think the bottom-line of what we are seeing happening is that we have just ended the mission in iraq and we are in the process of ending a mission in afghanistan. i think our view is that we have

achieved those missions and we are in the process of achieving those missions. >> mr. secretary? >> mr. secretary, the president said that you're going to be getting rid of outdated cold war systems. can you give us any sense for what he was talking about there? what types of systems? >> well, again, the budget drop here at the end of the month will illuminate programs that have been adjusted or terminated and others that have been reinforced. i think what the president had in mind, at least what i believe he had in mind, is that there are -- back to the question about can we do two wars? that to work paradigm has been a bit of an anchor frankly and trying to help us figure out the future. and it's not about whether we will fight adversaries as they confront us. is how. so, to thread those two questions together, your

question about what are the outdated systems and process in programs, that is the work that we have been doing and must continue to do to determine the how was it without tying ourselves to a paradigm that frankly is a residual of the cold war. >> mr. secretary will efficiency reduce your personnel costs when you have taken an honest look at what you spend per man in the military, or honestly are you going to have to look at reducing retirement benefits for active servicemembers to pay more for their health care? >> again, the specifics will be provided in the president's budget that hopefully will be released in the next two to three weeks. soon after after the president's state of the union address. ..

and look at all of those areas, the tremendous cost associated with those areas. you ought to make sure the weapons we select to meet the needs of the defense force that we are building. that's the key. but clearly that's another area that was reviewed. thirdly, the area of compensation. that has been an area that is increased in terms of cost. we want to maintain the quality

of benefits that flowed richardson to their families. that is a key breadline for us. we are going to maintain those. at the same time we have a responsibility to control costs in those areas as well and that is part of what we present part of our budget. lastly, for structure reductions. all of those pieces are part of the budget and you'll see the decisions associated with that when the budget is revealed. >> wait time for tumor questions. bill. >> first thought, what is the reaction he'd been getting from congress on this plan? on the issue sequester, the sacrifices the military is making downsizing, will that be enough to kind of sound enough alarms to sell sequester reducing some other actions will need to be taken? what the military has to get more between now and the end of the year? >> i have made it a point -- we

have automated a point to stay in close consultation with the members of congress that we do it on the key committees up there. and i spent time sitting down with their members, briefing them on discussions we've had increased demand on the defense strategy. i briefed the chairman yesterday as well and the ranking members with regards to the strategy we are working on. i think all of them wreck is the challenge we are facing. i let them recognize how tough these decisions are. but i think all of them also recognize that we can do this in a way that protects our national defense and establishes a defense force for the future. so i am confident that as we work through this and ultimately as we reveal the decisions on the budget that reflect the policy we are putting out here, that they are going to be members that will clearly not

support, those decisions. i mean, that is the nature, and making hard. i think overall because we base this on strategy, because we base this on a policy of saying this is a kind of defense for a screwup for the future, i think that within that framework, if we cannot stick to that and if we cannot use that as the basis and foundation for the debate that's going to take place, i am confident that ultimately congress will support were trying to do. >> let me follow-up on what david martin jay said. the strategy talks about moving away from potentially fighting to land were simultaneously. he mentioned the tension in the persian gulf. clearly iranians know they are fighting a ground war until 2014. are you saying within a strategy that fighting a land where within the persian gulf in iran, for instance, is off the table

with the new strategy? >> i want to make sure i get a shot at this one because this is secretary of defense gates said were never going to find another landlord. at the west point class of 2014 at my doorstep. we are global power and we have to deal to conduct military at tvs and introductions out that the full spec. nobody has said and know where this document doesn't say we're not going to fight and worse. it doesn't say what the stability operations. it says we have to be capable of conducting operations across the spectrum. if it matters go up and scale, time, risk, reversibility and those are the issues we continue to work as we work on this living document. but it would be really a mistake to suggest or for you to walk away with the impression or anyone to walk away with the impression that we are acquainted nitsch ourselves to something on the the spectrum of conflict and declare ourselves a

global power. >> thank you, mr. chairman. >> what message do you have for a man >> what message do you have for a man >> what message do you have for a man >> what message do you have for a man we expect them to be a responsible member of the community of nations, not deny freedom of navigation, freedom of movement, freedom of access. and we are determined they will acquire nuclear weapons. >> the conversation on one thing you just said. you're committed to maintaining the quality that seems to leave room to reduce the quantity of benefits. specifically, will they be cuts in future benefits for our armed forces? >> and again, that is something that we will present as part of the president's budget. i want to make very clear that we are going to protect the quality. we are going to protect the benefits that are provided to

our troops and to their families. at the same time it's a set, we have some responsibility to try to control costs in this area. i think the troops understand how it got to control those costs. but when it comes to their basic benefits, when it comes to retirement benefits for those who have served, when it comes to the benefits they provide their families, we are going to continue to provide that. the >> thank you very much. >> folks, it will be about seven or eight minutes slowly sat at been in the deputy secretary,, the vice chairman and the undersecretary for policy will be here to answer more questions. [inaudible conversations] >> okay. >> folks, i think you know who

is going to be speaking. this is on the record, deputy secretary of defense, ash carter for the joint chiefs of staff chain would of thought and the undersecretary of policy and deputy secretary carter will begin and field questions. >> good afternoon. is this mike on? well, we are here to answer your questions. and let me start things off by anticipating the question i'm sure you're going to ask, which is what is new here? and let me just touch on the main points in the circumstances that led to this guidance is the secretary said and the chairman said the pivotal moment we find ourselves in. where we would need to take a

thorough and careful look at our defense, even if we didn't have a budget crunch. and then of course, we do have a budget crunch, with them at second reason of the review that has been -- that is led to the strategic guidance. what is new in the strategic guidance to set clear priorities that sets for us as we finalize the budget. quite ugly, strategic guidance is the comp is restrict the budget review leading to the president's budget for fiscal year 13 in the years thereafter that will be released in a few weeks after final decisions have been made. what's new specifically in the strategic advances first, to rebalance our force structure and investment towards the asia-pacific area, where there asia-pacific area, where there are several potential challenges to stability in the middle east were challenges persist. and towards advanced capabilities to maintain access and power projection, which are relevant globally.

second, to take a different approach to foresight and structure. obviously our forces will be somewhat mahler under a smaller budget. but what is important is their shape and the guidance tells us two additional ways to change the shape. for one thing, we will not retain force structure in the crown forces for large and prolong stability operations such as have been required in iraq and afghanistan. this does not mean abandoning coin or any such thing. but we do not see the u.s. conducting such operations on itself and is likely in the future and in any of that we will preserve the know-how and capability to regenerate forces have such a need is a rice. wherever we can, we are making provision for such reversibility as we call it for readjustment

and our plans. and as chairman dempsey said, we are at the beginning of what may be -- which will be a mintier transition in an uncertain world. next, while our forces close to be capable of prevailing in more than one conflict at the same time, i want to make clear this is not changing. we are continuing to evolve our approach to this capability since the nature of those conflicts has changed, since we will be able to apply to them in dance and agile new kinds of forces and in some cases we can best meet our objectives and today the aggressors object is in ways other than by land invasion and occupation. and third, will obviously many parts of our budget will have to suffer deep cut, this guidance tells us to preserve investments and even in some cases increase their capabilities in key areas that are clearly important to the future.

special forces and counterterrorism, counter weapons of mass destruction, building partner capacity, sniper, and aspects of our science and technology investments, making sure we don't simply referred to yesterday's pre-9/11 for structure under the pressure of budget cuts. and importantly, click to add that this includes critical investments and waited for your care and other aspects of taking care of troops to the heart of our whole defense. so that is a recap of the main points of the guidance. and now your questions. what i will do is recognize questioners. >> i'd like to say with what you were just talking about with coin. the u.s. didn't choose either the two counterinsurgency battles that just had in afghanistan or iraq. assigned itself in situations where those taxes are needed. why is what you are proposing

out different from what the military did after vietnam, where pushed a lot of the coin sort of resources to the reserves then focused on, you know, major combat operations? it seems -- why are you -- it seems that the military is turning back on the ghost of a certain degree. how can you be sure that you're not going to beat them? the >> no, it's different in two respects. first, we are careful to preserve the know-how and some specialized capabilities that have proven so useful and that we have learned so much about over the last 10 years. we are not retained in the large force structure necessary to sustain long large-scale stability operations. and that doesn't mean we can't regenerate them if we need them in time to conduct such operations in the future that becomes necessary. it's about forces and be.

and we do not need to keep forces in being of that kind on the scale in which we've used them over the last two decades. so we are going to keep the tradecraft in the options reconstitute, but we are not going to keep the large for structure in being. >> banks. i want to clarify something the president said about the topline. i think i heard him correctly and saying the budget may actually go out. and if that is, is adjusted for inflation? is the number will see? may soon as the toppling of the base budget. >> as the topline and the base budget, yeah. >> real or for an inflation-adjusted numbers? >> in nominal dollars. >> so i think it's a fair question to ask, why is 450 plus cats now on the table are as far as you think you can go. the secretary said anything about that can be disastrous.

>> $489 billion is almost half a trillion dollars is the amount that we need to take out of our plans over the next 10 years. about 263 at the next five years. and that is your just attacking about the base budget, that is on top of a reduction in the overseas contingency operation. you put those two things together and you have over the next four years a reduction in total defense spending as rapid as any we experienced after vietnam or after the cold war. now, that is natural because these wars are coming to an end and so far that is what creates the pivotal moment that was the reason for carrying out the strategic review that we did. $489 billion is a lot of money and you'll see in two and a half

weeks when we describe the budget plans that we've had to make with that reality how significant those changes and significant those changes and plans are. and we couldn't do that responsibly without the kind of guidance that we got from the president and the secretary and the chairman. >> secretary carter, just to follow-up on that line of questioning, do you think that what you prepared now and the strategic review in the budget that comes behind it will be unmasked to convince congress to act to avoid the sequester -- the sequestration that p mi and damocles over. >> my view and i'll ask michelle to comment on this also, but my view is that when members of congress, we knew, when citizens

see the magnitude of the task that we've had to undertake to meet the $487 billion target, you'll understand why we gave the harsh warnings we do about sequestration. we are going very, very far with $489 million. as the secretary said, we are looking at things that we haven't had to look at in this department for a decade. he has made us put everything on he has made us put everything on the table and undergo a very thorough process. we've undergone the strategy exercise first so he wouldn't make her budget changes without having a strategy behind them and the strategic insight behind them. so when you see with $489 billion is, people are going to easily understand why sequester it be so disastrous.

>> outages that the secretaries repeatedly used the phrase hard but manageable choices. when we rode up the budget details, you'll understand the heart part because there's a lot of hard choices, both in terms of trade-offs ima but also in terms of people stepping up to the plate and making test political decisions to do the right thing for the nation's defense. every strategy does have grass on tran risks. we think we've managed this with the risks are acceptable, but there is a point if you went too far down the road of further cuts, testing and would no longer be true and it frankly have to go back to the drawing board to rethink our strategy in new in order to manage additional reductions in additional risk. >> if i could add one thing. i think one thing that is important to point out and the reason why we are doing this the way we are today. that is a dissolve them a

strategy. sometimes the behavior of the department would have to take a study that has been to simply had a proportional cut, look and see what services come back with and try to build a strategy out of the ashes. in this case, if you pardon the pun -- in this case the chosen delivery to you to assess the geopolitical environment, what kind technical changes in how kind technical changes in how warfare is changing the 21st century average is clearly changing has crafted a strategy that can guide her budget decisions and that's what you see in three weeks. that is a terribly important cultural change for the department. >> can you talk about where the f-35 and the most important bits in a strategy and does this justify keeping the quantities at the 2500 plus quantities of aircraft. and if ever questioned, in the pacific to envision setting up an adaptive approach for missile

defense comparable to what it has set up in the middle east over the next couple years -- over the last couple years? >> tony, i will say the question on the joint strike fighter for a couple weeks. i will just give you a general answer about a strategic -- strategically as we've said many times about the joint strike fighter. we wanted. we wanted to succeed. that is why we are working so intensively on advantage early. but as you ask about any particular program or any particular dvd, i take you back to the point that sandy winfield just made. but the strategy has told us this areas where retail want to cut, where we want to preserve capabilities and words that we went to increased capabilities like sabre. we don't want to just give everything a haircut. that means that some other areas that are not emphasized in the priority, and the strategy for going to have to take more than their share of these guys.

so the things that are part of the future take less than their share of the cuts. that is why having the strategy has been so valuable to us because we haven't wanted to go right across the board. >> as the president's announcement that australia made clear, we continue to evolve our presence in posture in the asia-pacific region, both to do with challenges emerging and opportunities. we are the have very robust cooperation on ballistic missile defense development with our japanese partners. there's partners in research and development of systems with us. and we continue to discuss ballistic missile defense with various partners and allies they are. i think this is an evolving conversation. i don't think there is a concrete set of plans that define an endpoint at this point. but it is a matter of discussion with our allies and we will continue to work with them on these issues.

>> to ask you about the nuclear arsenal, is it possible that schools can be achieved with the smaller nuclear courts. smaller nuclear courts. could you elaborate on that? whether the department was preserved? >> sure you can. i'm going to ask michelle. >> so, the strategy is very clear that we will continue to clear that we will continue to field a safe and secure and affect it deterrent and that we will continue to modernize when we capitalize as necessary. i do think it is better judgment that we can maintain deterrence at lower levels, but i will do for any discussion of specific programmatic details to the budget when it rolls out. >> can we expect to hear more of that when the budget rolls out? >> i want to ask a question about coin in the next got another question as well. but specifically the coin

insurgency forces, is that just relative to forces? be built small air force us to do the isr that it hoped out point. do we expect to keep those? to retire those clicks in a good question. and the remarks i've made that were mostly oriented towards ground forces. you are right there a lot of capabilities that were developed over the course of the last decade to reflect modern type allergy in modern warfare, not just coin warfare, that we want to make part of our -- of the future. so when i talked about this -- we're not going to keep the large force structure and being, but the critical skills come in the critical enablers, the novel thing for over the last day kate has taught us, keep included on force structure. you'll see examples of that one in a couple weeks, deliberate ones will rebuild and some of the things you see ads on iraq

and see in afghanistan and describing are deciding how they will fit into the force structure in the long run. let me ask anders winnefeld to add to that. >> we learned a lot over the last couple years and they suicides in iraq and afghanistan. it's sometimes important to to keep the between calling and counterterrorism. purdue enough a lot of counterterrorism work using those tools. an interesting thing for me has been that a lot of what we have learned in the coin business transcends to coin business and is applicable to a lot of other things who could find yourselves doing in the world. by the same token, a lot a lot of the things we've built and added to and it's not just isr platforms and approaches to warfare and the like are applicable to other forms of warfare as well. so we're not going to throw the baby out with the bathwater. we will take the lessons and technologies to develop over the next 10 years and apply to the

future. >> my second question on reversibility was strung out there with regards to being able to reverse her forces might be. it also seems to such an industrial base. >> is a couple different dimensions. reversibility means as we make these momentous changes, this $487 billion worth of changes, they are causing us a necessity to have to stop certain things, paused certain things, slow down certain things. and in each case, to the extent we can do so, preserve the ability to change course. server example in the ground forces, as we reduce ground forces, we will do that in such that in such a way to keep the mid grade officers that would be necessary to support a larger force in the future if we decided to reverse course. now, we can't afford to do that comprehensively, but we can afford to do some of that

industrial base, same thing. as we make program changes, we want to make sure that 10 years, 15 years from now we still have an industrial base to support their key weapon systems, even if were not able to abide in this areas that the race or in the volume that we had planned the war we were handed this $487 billion cut. another example, science and knowledge and innovation because that is the seed corn of the future. i want to make sure we don't eat the seed corn. reversibility is the concept reviews to remind ourselves that we want to act in such a way that to the extent we can with the $487 million cut, preserve options for the future. >> bicolor focus on reversibility, avoiding departmental hubris because it's entirely possible. secretary gates was fond of pointing this out that we could get this wrong.

we will remain alert as progressives, as the chairman referred to the four budget cycles going to 2020 and we will be alert to the need to either change course or shift course a little as the world shifts beyond our control in many ways. we have to make very difficult choices of $487 billion of cuts and we think we've got a pretty good pathway forward that would allow us to change course. >> let me take about two more questions. serve. >> secretary cannot imagine they would need to use innovative matters in latin america and africa. does this mean in any way smaller footprint and could you elaborate about this innovation innovation -- >> if you don't mind, i have a lot to say on that. >> the truth is in the last 10 years we been so focused in iraq and afghanistan, there hasn't been a lot of a lot of forces available in some of these other areas to be available for

areas to be available for engagement and so forth. that site, that has forced us to pioneer severely antiquated approaches. the use of small teams to the sof team to build cartner capacity on a rotational basis. a very strategic use standard theater engagement, exercises a foreign military souls, foreign military assistance and so forth. some of the work that has come out of that we are going to continue to apply the insights and innovative approaches to ensure even as he put an emphasis on asia and the middle east, we are not been in every other reach the world. we are going to stay engaged, keep investing in relationships and keep investing in building the partner capacity in those nations. but we are going to do it in creative and different ways. >> and i would tell on that and

we've invested a lot in our special operations forces may be doing remarkable work. the lion share what they've been doing has been contributing to the coin type. the head element than they are very, very tight to that. he's a very agile and flexible forces. small units as michelle pointed out, that are also good at working with partners. and as the waters start to draw down, afghanistan coming down, we'll retain forces and leverage them into other missions to include the types of things you asked about that could include working with our donations and other comments. i would also point out another example of the innovation. there's this program called the state partnership program that the national guard has. the national guard has. ..

we are obviously will have less modernization than if we had $457 billion more. we figure out where to focus that to best strategic effect. that is the value of asking this document. you see where we invest and how intensively we invest is shaped by this.

that just gets back to the same point sandy made earlier, this is not a haircut. we're trying to change the shape and not just the size of each and every piece of our budget activity. with that, let me thank you all for being here. [inaudible] >> we'll get an update and analysis of president obama's new defense strategy. pentagon correspondent, tony, capacio. "bloomberg news". joins us on "washington journal.". then the rural economic issues play in the new hampshire primary. we'll talk to karen testerman of the faith and family coalition and andy

smith on voting demographics in the state. "washington journal" each morning 7:00 p.m. eastern live on c-span. >> up yex on c-span2, we'll hear from the new head of the consumer financial protection bureau richard cordray. then wisconsin governor scott walker talks about budget challenges states are facing. later house minority leader nancy pelosi talks to reporters about jobs and the economy. >> thank you very much. thank you. >> good to see you. >> tuesday night. >> oh, thank you so much. >> thanks for coming. glad to meet you. nice to meet you, thank you. >> c-span's road to the white house coverage of politics takes you on the campaign trail with the candidates.

>> how are you? good? >> great to see you. >> thanks for being here. appreciate that. >> how will you get passed this bill. >> watch c-span's coverage of the new hampshire primary on c-span television and on our website, c-span.org. ♪ . >> next we'll hear from the new chief of the consumer financial protection bureau, richard cordray, who said the new consumer watchdog agency is committed to working with congress, state and local governments and other federal agencies. president obama installed mr. cordray as a director through a recess appointment after senate republicans blocked his nomination. from the brookings institution, this is 45 minutes. >> good morning. thank you all for joining us today which officially marks

our guests first day on the job. richard cordray is the chief of the consumer financial protection bureau, a new federal agency that began operation about six months ago. the agency was created in the dodd-frank wall street reform and consumer protection act after the recent financial crisis. the bureau's role is to regulate consumer financial products and services including mortgages, credit cards, and the like. in its first six months the bureau has started to take steps to make consumer financial products more transparent, including no before you owe campaign which has focused on improving disclosures, and explaining the costs risks and benefits of financial transactions, easier to understand. in addition to the bureau launched its bank examiner program with them on the ground at the nation's largest banks. the bureau has been without a head since it was set up in the law what they believe

lack of congressional oversight in terms of accountability and funding. director cordray's recess appointment yesterday has ignited controversy with some congressional leaders raising questions about the appointment will stand up in court. prior to the appointment director cordray had been at the bureau serve as head of its enforcement division. prior to this he served as attorney general of ohio where he cover recovered more than $2 billion for retirees, investors and business owners. he take steps to protect consumers from predators. he spent two years at ohio's treasure irand four years as treasurer of franklin county, ohio. earlier in his career director cordray was adjunct professor at ohio state university of college of law. served as a state representative in ohio, was the first solicitor general in ohio's history and was in private practice. he is a graduate of michigan state university, oxford

university and the university of chicago law school. i will leave you with one interesting tidbit that is not on director cordray's official white house bio. he has the distinction undefeated five-time champion on jeopardy. [applause] there you go. with that, please welcome richard cordray. [applause]ok >> that was5a+++fws

to the first question, why does this bureau matter. consumer finance is a big part of other economy. and a place a large role in the daily life of almost every american. whether it is to pay their bills or to finance larger investments in their futures, most people use credit. credit cards give us quick access to money when we need it. student loans help us obtain a college education. mortgages make it possible to buy a home and spread the payments over many years. no doubt about it, consumer financial products can make our lives better and create opportunities to making is of ourselves. but these same financial products can also make life harder. when i served as treasurer in ohio at both the state

and local levels i saw good people with good intentions drowning in debts they could not afford. some people just have tough breaks in life. nobody ever plans on losing their job or being laid up by serious illness or injury but these hard blows can be devastating. sometimes people make the wrong choices and get in over hair heads. others get swindled by scams. i have seen senior citizens defraud of their savings and i have seen families bankrupted by complex mortgages with spiraling interest costs they did not understand and could not afford. these things can happen to anyone. we need to understand that we're not talking about some impersonal abstraction. not about somebody else. we're talking about each one of us, our mothers and fathers, our sisters and brothers, our sons and daughters. people who simply want to make the right choices for themselves and their

families. picture the faces of your own extended family. did any of them ever have money troubles? opportunities they could not pursue because they lacked the means and could not borrow the money? what about our children? what will happen to them when they have to fend for themselves in the financial marketplace? we are rightly concerned about these things because consumer finance clearly has become more complicated and more risky in recent years. hidden fees, and exploding interest rates have infected more products and services. novel and exotic mortgages, battered housing markets triggered the financial crisis that wrecked the economy and hurt millions of people. aggressive debt collection and wide-ranging credit reporting magnify the money problems people experience which now follow them around for many years. bad credit can bar people from getting a job, cost them more money on car loans and home loans, or even block them from borrowing

money at all. with the stakes so high, consumers need better information about the costs and risks of borrowing. and they need to be able to comparison shop for a good deal. consumers also need the peace of mind that comes from knowing that the deal they were promised is the deal they are actually getting, not just tomorrow, but next month, and next year as well. consumers deserve to have someone who will stand on their side, who will protect them against fraud, and who will insure that they're treated fairly in the financial marketplace. the new consumer bureau was created to make sure, see these things are achieved for all americans. the good news is that we've already gotten started. importantly in our first six months, our team has been answering calls and collecting e-mails from american consumers. their stories illustrate the kinds of issues people are facing around the country. we heard from mary in louisiana who took out a

payday loan, a short-term, high-cost loan, that turned into a long-term exorbitantly expensive loan when she was unable to pay it off. mary simply wanted a reasonable chance to repay. instead, the pay day lender told her only option was to file for bankruptcy. we also heard from rebecca in north carolina. she told us she missed a mortgage payment, nine months after her husband lost his job. in the two years since her mortgage servicer has increased her monthly payments even though she believe ad trial modification was supposed to reduce them. she said she was charged for inspections and appraisals she did not asked for and never occurred leaded to increased debts and repeats of foreclosure. rebecca has been frantically complying with these demands because she is so afraid of losing her home. in just a short time we have heard thousands of these kinds of stories. some are outrage just. the problems are welling up

everywhere from small towns to big cities, from coast to coast. these nightmares are happening to people from all walks of life, from people who have fallen on hard times, to people who still consider themselves financially secure. they do not expect any special favors. they just want a fair shake. they want to consumer financial system that actually works for consumers. that is exactly what the consumer bureau is here to do. one of our primary objectives to bring clarity to the financial markets. people have a hard time understanding the terms of a deal when they have to pour over reams of fine print. so we launched our no before you owe campaign to provide consumers with easy to understand disclosures that make clear the prices and risks of financial products right up front. after all, two basic premises of a well-functioning market are, first, that buyers and sellers understand the terms of the deal and second, that buyers are able to compare

possible alternatives. honest businesses want to compete in such a market. and they are satisfied to win market share based on fair competition and excellent customer service, not through deception or fraud. we started our no before you owe campaign by tackling the good faith estimate you get when you apply for a home loan. then together with the department of education we released a financial aid shopping sheet that makes it easy to compare aid packages and understand the payments students will be facing after graduation. last month we released a sample credit card agreement that is short, and written in plain language to explain the key prices and terms. we strongly believe that financial institutions can speak to their customers more simply and more clearly. this kind of straightforward transparency promotes responsible decision-making by consumers. but transparency alone is

not enough. another key objective is making sure that financial institutions are playing by the rules. when we launched in july our bureau inherited the responsibility of supervising the largest banks in the country to make sure they are following the law. in practical materials that means we have examiners on the ground today with broad authority to review loan documents, ask tough questions, and make a bank fix problems that come to light. the consumer bureau will make clear that there are real consequences to breaking the law. we have given informants and whistle-blowers direct access to us. we took over a number of investigations from other agencies in july and we are pursuing some investigations jointly with them. we have also started our own investigations. some may be resolved through cooperative efforts to correct problems. others may require enforcement actions to stop illegal behavior. my last question is, now that we have a director, how

will we use our full authorities to protect consumers? one of the difficulties we faced up to now without a director, we were unable to address all the problems that we were created to tackle. the twin promises of the dodd-frank act, which establish the us that the bureau will have singular focus on protecting consume. >> in the financial marketplace and we will make sure large bank and none banks are held to the same standards. in the run up to the financial crisis many unsupervised first led a race to the bottom and pushed aside responsible businesses including community banks and credit unions and greatly harmed consume. >>. now for the first time we can exercise the full authorities granted to us under the new law. that is a specific difference to having a director makes. today we are launching the bureau's program for supervising nonbanks. we will begin dealing face-to-face with payday lenders, mortgage servicers, mortgage originators,

private student lenders and other firms that often compete with banks but have largely escaped any meaningful federal oversight. these are important markets. many provide valuable services to customers who lack access to other forms of credit and they are big markets. nearly 20 million american households use payday lenders and they pay roughly $7.4 billion in fees every year. many subprime loans during the housing bubble were made by non-bank mortgage brokers. since most of these businesses are not used to any federal oversight, our new supervision program may be a challenge for them but we must establish clear standards of conduct so that all financial providers play by the rules. with our full authorities in of tools toi] address the problems facing consumers. we will spuk seed in our job if financial markets become more fair, more transparent, and more competitive. to make that happen, we need to cult the best data and

information we can to really understand what is happening in the market and how consumers and businesses are faring. we are building a direct relationship with the american consumer. tell your story function on our website let's people tell us about your personal experiences. that is how we heard the stories of mary, rebecca and others. our team is taking complaints about credit cards and mortgages with other products to be added as we move forward. we deeply believe that we must hear from americans about their experiences in the marketplace because as john dewey once observed the man who wears the shoe knows best that it pinches and where it pinches even if the expert shoemaker is the best judge of how the trouble is to be remedied. we are determined to deliver positive results for american consumers. we want people to know what we are doing. our work will support the honest businesses and financial markets against those who deceive customers

or otherwise break the law. we are confident that if the public understands our job, they will help us play an important role of safeguarding consumers as well as the broader american economy. we have been extremely fortunate to have strong leadership at the bureau, beginning with my friend and colleague elizabeth warren who conceived of the bureau and began building it from scratch. for the past six months the dynamic energy spurring our efforts has come from my friend and colleague raj data now the deputy director of the bureau whose thoughtful leadership set a strong guide for our approach. because of the strong qualities each of them brought to our team we will be fashion gnat and caring about the real life problems of consumers even as we're analytical and data driven in our approach to deal with consumer financial markets. as the new director of the consumer financial protection bureau and having been part of this effort for about a year now i know what

an extraordinary privilege it is to work with such a talented and dedicated team. i have to run very hard to keep up with them. they inspire me deeply and as you get to know them and their work, they will inspire you also. think back again to the faces of your own family members, the ones you pictured earlier. like all of us they want to be able to use consumer credit to make their lives better, not worse. that is our goal as well. the financial marketplace can be a potent arena that helps people find and seize opportunity. it should not condemn them to bewildering failure. by working every day to protect consumers we will do our part to help fashion a more resilient economy and a stronger country. join us, work with us, help us make it so. thank you. [applause]

>> thank you, richard. i'm going to ask you questions both about your appointment and also about your work with the bureau. >> okay. >> so i'm going to start with the big one that i think is on everyone's minds which is, how would you answer your critics who say your appointment is illegal? >> i have been appointed as the director of the bureau. it is a valid appointment but i will leave those details to others. this is a big job to protect consumers across this country and i will be focused on doing that job. >> the mic. if you speak up a little bit. >> okay. is this on? okay. as i said the appointment is valid of i'm now the director of the bureau. the important thing for us without me trying to delve into details of that we now have the ability to protect consumers across this country on both bank and

non-bank issues and we are going to be 100% focused, i personally, on doing so. >> great. being able to work effectively with the congress seems critical to fulfilling the bureau's mission. how will you be able to work with the congress that doesn't seem to like particularly the structure or powers of the bureau, not to mention your appointment? >> i've always had success at the state and local levels working across the aisle with leaders from both parties on some hard issues, some financial issues, some difficult issues. so i expect i will be able to do that here. our bureau intends to do that. i personally committed to legislative leaders in both parties and both chambers we will give them the information and input that they need to help us do our work and i'm committed to doing that. >> let me now turn to the work of the agency. i thought your discussion of

know before you owe campaign was really interesting. to what extent do you believe that the agency should alter the design of products offered by financial institutions as opposed to efforts like the know before you owe campaign where you're making sure that their characteristics are properly understandably disclosed? >> i think we begin with a financial marketplace we believe was flawed in various respects and it helped lead to a financial crisis that harmed this country greatly. we begin from an instinct we want to make prices and risks clearer for consumers so they can make better decisions for themselves, better of informed decisions and take greater responsibility for preparing for their future. that is our initial focus but as we go we will deal with situations as they arise. we will carefully analyze the facts and circumstances. we have a entire research and markets team committed

to not only assessing problems in the long run but looking at market trends in the long run. that is how we approach our work. >> you do think there is a role for altering the design of products as opposed to just making consumers better informed? >> i think consumers need to be better informed. there are some practices that occurred in the market that are unacceptable and need to be fixed and we will deal with those as they arise. >> good. opposition from small banks to your appointment was reportedly mitigated by the belief your efforts would be targeted towards larger financial institutions. i think the number i saw in the press was something like 50 billion. i was wondering if you could comment a little bit on that? is that right? if it is not right, you know, is there some number that you're looking at in terms of who you are targeting? and more generally, how should one think about the relationship between the size of an institution and the need to regulate and supervise that institution?

>> i can speak best, karen, from my own experience, and that experience was financial officer as state treasurer in local levels in the run up to the crisis. in my view it was not our community banks, not our credit unions that created problems that led to that crisis. they tend to have community-based business model. they know their customers. they bjork with them in a long-term, repeat basis. it's the best, best understanding of what a customer is, someone who silling with to give you their customer and come and back and back again to do big with you. the problems were created elsewhere they were created significantly by non-bank institutions not subject to any meaningful regulation and not subject to any meaningful standards and led to a race in the bottom. that was true in the mortgage market and other markets as well. in my view it was not community banks and credit unions that created the crisis. in many ways it was them

being pushed aside by many non-banks that created problems. going forward we will be mindful of that going forward. >> did you -- [inaudible] >> still having trouble hearing? [inaudible] >> we're trying to address that problem and for now, probably just speak up. so do you care to comment on the 50 billion number, whether there is like a line in terms of, you know, what financial institutions you're going to be focusing your efforts on? >> well, dodd-frank drew some lines. drew a line we will only be supervising and enforcing the law on banks and financial institutions with assets of 10 billion or more. so that's a line that the law draws. we're not looking to draw additional lines. although we will tailor our program to needs of particular institutions. particularly as we start our

non-bank institution program there will be different exigencies and different demands than there were in the bank sector. this is very important step forward for us and i think that level playing field we can attain between banks an nonbanks, that was a central problem mills of the statute. it has been thwarted until now. now we can move forward and fulfill that. >> great. i'm going to turn to issue near and dear to my heart. some analysts are very concerned that limited access to credit is holding back the economy right now. so for example, the federal reserve released a report yesterday saying the effectiveness of monetary policy had been blunted by limited access to housing credit. i was wondering whether you're worried that some of the bureau's up coming actions could restrain credit supply in a way that harms the economic recovery and slows the speed at which unemployed american workers are put back to work? >> my experience gives me a

different worry. i think that thes7 single event that has limited credit most substantially for americans in2íñ my lifetime was the financial crisis of 2008, 2009. and a lot of the community banks and credit unions we're talking about were hurt badly by that. a lot of businesses and individuals have been hurt by the restricted access to credit. that was caused by the financial meltdown. that melt down was caused in turn by some of these problems and failing to regulate parts of markets and therefore the bad drove out the good. and so it is my view if we do our job well we will i'm prove these financial markets. they will work better. we will help to prevent that kind of catastrophe from occurring again. that will be better for the economy and better for individuals and businesses as well. >> do you have, do you have procedures in place such that you can assess whether a given rule that you're thinking about making is going to be restricting credit in a way that you

don't intend? >> well there's two things about that. number one, we inherited a number of regulations from other agencies and one of the projects we're committed to reassessing those regulations. some may have not been thought about for years. what is their cumulative effect? where can we streamline regulations to deliver as good or better value for consumers with less burden to institutions? we think there is opportunity to do that. as we engage in rule-making over the years ahead and decades ahead there is regular provision in our statute for us to review the effective rules after five years or perhaps sooner in some cases. we will do that. we are very committed to a dialogue with the people that we work with, not just consumers but also the businesses, to understand the real life effects the practical effects of what we do. we've hired a number of people at the bureau who have that kind of real-life practical experience of working within industry and understand how these rules have an effect. it is not an abstract thing.

that will help guide us so we deliver the best value for the least cost. >> okay. so, this raises another issue i want to ask you about. there has been concerned expressed about overlap between the work of the bureau and work of other federal agencies. people are worried about redundancy. they're worried about turf wars. they worry about whether bureau investigations will get in the way of investigations, done by primary regulators. so i was curious as to whether, what degree of overlap do you think there is and how do you plan to deal with it? >> well i think bureau represents a significant step forward in a positive way on that. we have consolidated the consumer protection functions of multiple agencies into one agency now with a singular focus on that aspect of the financial marketplace. so we feel and we know that we have a special responsibility, a primary responsibility to do that and we will.

. . sense of teamwork with the federal trade commission, the nonbank factory. that's another reason we're able to move forward so we can carry weight with them. but the best of limited resources. there's a lot of problems to address out there, so we'll be quickening closely at rtr. we hope that we'll be a model in this respect.

the night before i turn thanks to the yacht dance. one more question that gets back to something you said earlier as well about engaging your stakeholders. he talked in your remarks about engaging the public at least a year from the public about what challenges they're facing in the credit area. you just spoke a little bit about ways to engage the financial and dictations. i think that's terrific. it is a lesson from the last few years that the world is a five are complicated place and i text the theories tell us they are. some of the disappointing performances and closer prevention programs reflect that the fact that people didn't understand, that people designing policies didn't understand the constraints these were facing. so i think another group of stakeholders that she didn't talk about is consumer groups. you know, that is another group

that you probably need to hear from when you're trying to design your reliance. so i think there's also a reasons why you need to have contact with people. people worry about capture by israeli stakeholders. could you talk about that. >> it is clear that has a big job ahead of them. i view it as a very important job in improving life for american people. the kind of people i talk about, which are other people that we know and on the people across this country. everybody is a consumer. we will do our job better. and a chat is better when you have input from people who see it from a different angle than you. that includes in our case both financial firms in the trade associations. and abbas can present the records. but to me, the thing that helps avoid regulatory capture in the long run or any kind of capture

is having a direct pipeline to the individual consumer who feels free to talk to us about the problems they face of at the individual proper mix. today with the speaker does not nhl asked what the problem is, how it affected them and then we think about whether there's something they can do to help that. i think as long as we can maintain that direct link that we are building now, altogether links are important, but also provides the correct day so we don't end up this cute view of how are actually doing. >> thank you. we are going to open things up now to some questions. just to get things started, let me say if he would stand up and say your name and where you are from after a call from you. also we have a limited amount of time, make sure you get your questions? late, that would be terrific. so, let's see. that? on the blue shirt in the fourth row on the left.

>> hi, my name is carter dougherty with limburg news. a devoted follower of your agency and work since he joined in. [inaudible] >> deana, last november i guess it was. as a private enforcement, one of the striking thing since you've been enforcer for much of her public career and yet this is one thing that you haven't yet gone public with. if i were a betting man, i bet their things called strategic mansour enforcement by most that outline where you're going with this. could you get a smart sense of how you see that shaping up here during michigan take out any go after people from ann arbor. what are your feelings? lesser categories do you think in? >> you might want to dramatize that. we have done as you know,

building the bureau. that is something we've been doing actively over the past year, both choosing staff, training staff and moving forward. at this point we are still close to the cradle. we have not issued a sensitive girl. you've not read a single enforcement action or issued a single examination report. but we have lots of work on the pipeline which would be toured in the rate of their production of product. so i'm not going to try to make news on any of those things today. those will be reported publicly when we are ready to report them in the work is like putting a cake in the admin. you put it in and it takes time before it's based. but we are actively moving forward on all fronts and will have more to say as these things right then. >> if i could take a third parade here. >> thank you.

i'm john taylor with the national community coalition. thank you, mr. carteret and congratulations on your appointment. i want to get back to a question karen asked anew in. about this bipartisan issue and how you had good success in working across the aisle with different parties. i'm trying to understand. i'm really trying to understand given what has happened to the american economy rooted now this malfeasant pantomiming that got a lot of people in trouble, i don't understand the lack that official standing in the way of a public agency that's going to clean up so the good act of the good plays in the financial services that will prevail and not those who are cajoling are trying to produce product that is unsustainable. could you help me understand not? >> well, what i said it was and it's very much the case that i have had good success over the years and working across the

aisle. it doesn't mean i always had success on every issue, though we always maintain a good working relationship and i fully expect to be able to do that with the leaders in congress of both parties. they after all represent the same constituents we are serving. they are hearing today in a day at the same stories from constituents asking him for help because they are losing their home returning intact or have other problems they don't understand or think weren't adequately explain to them. some are referring issues over to us. so we really have the same interests i believe that her. i am not someone who impedes people's motives. i don't think that's helpful. i tend to assume that people are always trying to do what they think is right. they may disagree at times somewhat that is. so i'm going to work forward and build that relationship with congress. they will disagree in some sensitive issues. that's to be made. within the bureau, my friends or

colleagues disagree all the time. we work through those things and go forward and not the way we show destinations the developer independent relationship with the congress and i am personally that. >> yeah, that could get the second row right here. >> hi, i am joe plans with "politico." congratulations. not to belabor the point, but i do want to go back it that because you have a congress that is right now talking about legally challenging your ability to take power. it is talking about we don't even think this is a legitimate agency. we're going to court and try to sue. nothing personal of course, that they are like really opposed to doing this. what is your strategy for that? building relationships is one thing, that combating people who are dead set against his bureau even taking flight is another.

i'd like to hear talk a little more about that. >> as you know and somewhat surprisingly perhaps, the issues about my nomination has not become personal and i've never taken any of them personal. it is a process and that's what it is. but let me just say that the most important thing we can do this the bureau is keep our nose to the grindstone and keep doing our work. i think the work we are doing is so important can make such a difference for people in this country as we attack this problem, as we offer a solution or improvement to that problem, we will prove our own case, both to the people who represent the public and to the public at large. i think there's already tremendous support among the public at large for consumer walk jog. they get it and understand the stated good many have examples from their life they are very familiar with. a family member or friend that they can see where this is important and necessary.

the leaders in congress, even those who may have disagreed with some premise is that the statute or authorities that the bureau will begin to see that over time if we do our work well. so to me, the only issue here is doing our work, doing it as well as possible, making sure people understand what we're doing and they can appreciate it in overtime at will will on its way. >> okay, let's see, go to the two in the back of the room on the left back row. >> victoria mcray and what "the wall street journal." i just wanted to ask, given that everyone is predicting there'll be some sort of legal challenge and there is those out there who disagree with the legal reasoning this way, this way,

this way, hesitate or curb or perceived moorhouse satirically than you might otherwise get in that there could he challenges in the future quite >> the answer to that question is no. i don't say that in many militants are challenging away, but the luck of the land gives a certain responsibilities. they matter to the people of this country that we carry them out. with the director in place, we now have our full authorities to move forward. we will do that. and i think as we do our work and focus on during our work which is what i will do with 100% of my energy and time enough for, we will begin to demonstrate to people further if they think we've heard he begun to demonstrate already why this work is important and what is to be done. congressional leaders will see. again, they represent the same people we do. they speak to and hear from the

same people talking to us about their problems. and as we can do better on those problems that help improve things, i think again we will win our way forward. >> right behind you. >> bruce smith from brookings institute. do you have a state regulatory background? that concerns me we have substituted weak federal regulation for potentially much more effect to state regulation. i think something like the countrywide mortgage could handle it to california's level have we not preempted state regulation by the financial glass-steagall legislation in the late 90s. could you speak to that previously? and secondly, i used to teach public administration. perhaps i'm not correctly informed, but he used to be axiomatic to you to not run an

operating function not of the executive office of the president. if you are an agency of government, you should be out away from the executive office of the president, have your relationships with the congress, present your budget to the congress, interact without being enmeshed in the central function of the executive office. could you speak briefly to that, to please? >> sure, as they think you know, the thing that prevented us as an independent agency up until now was that we were blocked from having a direct care. without a director we reported to the department of treasury. we have worked on establishing our relationship over the last six months, but as of today we are now free of that. so we are independent agency and we'll build that relationship with congress, which is how all of the independent agencies to overtime. at the same time will work with officials on different issues.

we work with members of congress and will continue to do so. we work the president and the station, justice department and others where that's appropriate and helpful. but we now have our own mission to charge that we will do that. as to the federal state relationship and cooperation, i actually know something about that. i was about the state attorney general and state treasurer. i strongly believe the states have a meaningful role to play in first and a lot to protect consumers. at the same time i can tell you at the state level i often felt frustrated and the contours of my dority often block me from doing things that could have been helpful to the citizens i represented. and so, have any authority we now how does the federal bureau to address these issues they think is meaningful. i think he was lacking before. there is not a focus on the tumor protection at the federal level in the financial site.

in such focus as there was a soft constraint they very limited resources. so we'll have a partnership with state and local officials. we are already doing in their supervision. we will do it with their nonbank supervision program as well. we are working well and effectively with state attorneys general. sometimes they'll take the lead on some things can sometimes we take the lead on some things. sometimes they may jostle a bit. it'll be in a friendly week has we'll have the same goal in mind, which is what helps the american consumer? what helps the american financial place if we serve out that the things that will serve the american economy and make this country better as i said in a speech and i firmly believe that. >> it's a sad time -- we have time for just one more quick question. a day to take a firmer right here. >> hi, my name is kelley dupont with northern trust.

i just want to add to the following question kerry raised earlier about the intersection between the cf bb and other regulatory agencies. we are worried about regulators and the safety sadness issues about growth to come out of the occ and the fed, et cetera and how that will overlap with the rule making of the transcendent. >> it's a new relationship. her new agency with a new kid on the blocks were all to find her own way and insert the other agencies are as concerned about us to develop this relationship. the best answer for us to build this good communication back and forth and learning to work together so we work through the awkwardness or newness of this is a cooperative relationship that has our eye on the right ball, which we can do to fulfill our mission and serve the public we'll represent together. i am not saying that is entirely uncomplicated. there are difficulties and not.

but if we communicate well, we'll avoid duplication, avoid overlap and we will avoid disagreements that can be ameliorated. that's important for us to do. i think everybody should expect that at this. i think we expected of ourselves. but it will take time to develop the relationship so everyone is comfortable with one another. >> grade. proud of time. richard, i'd like to thank you so much for taking the time to speak to us. [applause] i want to issue really the best of luck with your new rule that if important. if i could get folks in the advance just to give me one favor, which is to stay in your seats while direct or cordray the city to get out and get to work right away, that would be

terrific. thank you very much. [applause] [inaudible conversations] >> up next on c-span 2, wisconsin governor scott walker and veggie challenges states are fading.

>> wisconsin governor scott walker said earlier collective bargaining is not a right for state civil servants. he spoke at the american enterprise to toot about budget challenges for state. governor walker is currently facing a possible recall election. groups in favor of this week i'll have until january 172.540000 signatures. this event is 90 minute. >> good morning, everyone. thank you for joining us at the american enterprise institute. i am mitchells, at aei and also editor of america.com. we are honored today to have wisconsin governor scott walker with us. over the last year, wisconsin has emerged as a crucial battleground in the fight over the future of the free enterprise system. specifically the battle and

privileges by public employee unions. let me give you a bit on governor walker's background. walker began his political clear in wisconsin in the state assembly in 1993, where he earned a reputation as a fiscal hawk in the armor. after a stint as milwaukee county executive, he ran for governor and a platform of eliminating the state's budget deficit, creating jobs and cutting taxes. this week marks -- i think is this week marks the first anniversary of scott walker's inauguration in what year it is then. [laughter] in march of 2011, governor walker signed what is known nationally famous legislation to reform public employee bargaining as well as other reforms with an eye towards putting wisconsin on a solid fiscal path. public employee unions five bitterly and unsuccessfully to block reforms. now they are spearheading an

effort. but that is done all he did in 2011. the milwaukee journal sentinel, which issued out to pose governor walker's reforms and criticized recently wrote, quote, governor to announce the budget. he did reduce structural budget differently and did put a lid on property tax increases. he did give schools and municipalities more control over budgets than they've had in years and his efforts at economic development for corporate tax rates and a revamped congress to permit was promising. so that's a lot of accomplishment in a single year. the conversation today with governor walker's designed to shed light on what's happened over the past year was happening now, but also what it might mean for others dates who face similar issues and for the country as a whole. joining governor walker is my colleague andrew biggs, a resident scholar here at aei and prior to joining the principal

deputy commissioner of the social security administration. over the last two years, and are as good doing an extraordinary amount of research on employee comp patient, benefits and pensions and revealing than a foot can only be described as unsustainable as his entrance at work dates across the country. the thank you for being here, governor. >> great to be with you. >> maybe would be useful to take time and tell us what the context was when he came into office and go into some detail about the reforms you propose that were ultimately people and why he decided to do this. >> well, i'll start with that. when you think about it, a year ago governor faced a deficit. governors to public incumbent democrat, independent come you name it. nearly everyone of us faced a

deficit in the 90s by five different ways you can balance the budget using all or a combination of those different ideas. one is you can raise taxes. my neighbors to the south have shown just how the attempt to do that and risk taxes on the 67%. six months later they still have a big budget problem. but that doesn't necessarily work in these tough economic times. another option is you can relax public employees, which is what they're talking about in illinois and connecticut talked about this year, which is what other states talked about. i thought that doesn't make a lot of sense. i don't want any massive numbers in the public or private area. the third option is you can cut coursers is like medicaid. and our state come a lot of people would be surprised, i actually added $1.2 billion to nine medicaid program in wisconsin, one of the largest increases in the country because i thought the growing needs of seniors, needy families in my

state come although i did put an reforms so it wasn't a permanent entitlement, but a way of providing a safety net, one of the largest per capita, so i visited make a choice of cutting that either. and a fourth option is you can use the citrix. my state have been done previous times in the past and was part of the reason why we have such a large deficit to begin with. we look back and restored some of those -- we stopped the raid on the patient compensation and repay the state of minnesota to tax reciprocity payments so they can put money because we knew that was not a good long-term strategy. so you look at those first four options. none of those in my opinion were options, even though other states chose to answer budget. instead we picked up the option, long-term structural reform. i like to say we pick them out chin to talk more about the next generation and the next election. i've got two sons, matt and

alex, junior and senior and i wanted to make the state i passed onto them is greater than the one i inherited from the past and for us, that's the real key. in our case on every state is like this, but in wisconsin case, the biggest single portion of our budget overwhelmingly is the local government. having been a county executive, and if you just pass by a cut from local governments that would foresee their higher property taxes, which i didn't want her devastating cuts there as well. so the only way to offset that and give local governments to assist various state government was reform one of the biggest portions of our budgets, which is compensation. what we did was eliminate click bargaining from the state and local government employees for everything except a salary. we kept it so times are tough. like now was there and sacrifice times are good. public employees got the benefit is the rest of the taxpayers

did. so do respect for the taxpayers of wisconsin. in doing so we are powered not only local government does well to ask for things like a master of pension contribution, which nearly everybody in america does for their retirement and to make a very modest contribution for health insurance premium. in our case 12.6%. the average taxpayer in my state pays 20 to 25% outside of government. so we did all those things, but more importantly without our school districts to do things like that out there health insurance, which is to say tens of millions of dollars. school districts in particular had to buy health insurance from a company owned by the teachers union a bidding that out and hope in the that to our reforms. school districts have saved millions and millions of dollars just by changing where they bought their help insurance from. were able to rein in abuses at them like over time other access without they are by no longer

having opportunities were some other state employees could literally call in sick on their ship and come back and work the next shift. bus drivers in places like madison made $150,000 summer because of overtime. those things about change and now the powers back in the hands of local officials ultimately the taxpayers of our state. so that's ultimately what we did. seems pretty reasonable when you hear us talk about it. probably the biggest reason i think i am a target is in addition to all of that, we allowed nearly 300 public service we have in our state. third out all of this, despite what the others have said, i've repeatedly talked about my respect for the men and women who dedicate their life to public service, both my kids go to public schools to whether a tradition as well. but we allowed them to do was to ultimately choose. they have the right to choose now in wisconsin. they can choose whether they want to be part of a public

employee or not can no longer can they do us but taken from payroll. in the end, that's about the focus from out here in washington in terms of the national unions were focused on and it really comes down to is i took away the gravy train come in the free money they had before and gave that right back to the workers to make that decision. not something mandatory and that's really the focus is. >> thanks. i want to talk about some of the specific sonoita creek entering here. andrew, maybe you can give some of the broader trends that have been going on at the lit matches just in wisconsin other states, too. >> thinks a much, governor for coming today. the background of social security in an assertive federal programs. in a way i see it as is trying to fix state and local

governments without public. compensation might ask in the budget without thinking about entitlements. it's technically possible to do, but very difficult to do. what strikes me about wisconsin in a done a lot of work working with different states. what strikes me as one senses how remarkable it is in this sense that it is not in illinois, not at california, not a rhode island. so the egregious problems are a gracious overpayment drew up in conversation at a good employees. i spent a little time running a few numbers to show how compensation for unemployed wisconsin could compare to a private set her work repair my cat. wisconsin state and local employees choose salaries a little bit below the private sector is a similar education and experience to get. maybe 5% were the differenc