terms of the health care or a payless them. at the local retiree benefits that can often be generous. i look inside and the wisconsin state after the full career of 30 years, which is considered a full career would receive a pension of $32,000 a year from their retirement system, plus around $13,000 per year from social security peers about the $45,000 a retirement income based on an average final earning around $54,000. but instead of 401(k) plan, they get $88,000 in guaranteed

benefits say that they work or the same salary he'll end up with $21,000 if they wanted to get guaranteed stable retirement income than employees in wisconsin retirement system get. you get the same contributions in this requiring on the employees contribute to the pension system, even after that the benefits are more generous than what people in a private or get. so there is a comparability issue that is very tough to get out because at the benefits are very difficult to figure out. salaries are easy to look at. additional benefit that many public employees get its retiree health benefits. this is a big difference between state and local governments and wisconsin, where the state-level retiree health benefit or not all that generous compared to

california or ohio. the local level, benefits can be extremely generous. the milwaukee retirement system in the hot coverage you get after you've retired i believe is one of the most generous in the country. according to their accounting reports, it's the equivalent of getting an extra 17% of pay each year. not something a private set her work are almost never get these days. so is hidden benefits that we really have to account for coming even if salaries are a little bit lower, i called at the benefits more then make up that difference. what that tells you is there is an issue of fairness. you want public employees to be compensated comparably to private set workers. you want to account for how much experience and how much education you havecome up to my thing is roughly comparable between the public sector employees getting paid the compensation and taxpayers who

are providing that. in a lot of cases that's got a little bit out of whack. i think one of the poinsettias come up in terms of his bargaining is this disparity between the benefits of the retiree at the state and local levels is really interesting. part of it comes that essentially the bargaining power , the buyer can experience of local government relative to large public sector unions is difficult. the state government is bigger. even in many states they have difficulty partnering effectively. local government has a hard time because the public to unions are large and well organized in a school date should my go at this every year. i think even more tools to negotiate a little bit more effectively can bring this back in line and give a more stable and more fair level of conversation, some in that will

keep in expenditures and things other than cost if you think about schools are being squeezed in terms of things like that. probably that can come because compensation costs are racing. i think you want to have a greater comparability between public and private sector conversation in the burgeoning girls in particular to tools that you don't know what the outcome is going to be. it allows a process that can produce over time. >> just a couple thoughts. one on your analysis of private public dirt, one of the interesting points i made a net privacy today, say it again now as i said throughout this process my respect for people who go into public service. i said at last year no say it again and i understand people go for different reasons and it's 99 out of 100 not because of the benefits or their components.

but there is a disparity. but will be dead by then about trying to address unevenness between private sector. it was about addressing the long-term budget issues. looking now to the future both the state and particularly local governors. if i tried to come in enough day came in and tried to specs that, i would try making modest adjustment to employee payroll contributions not the benefits themselves, but the retirement system or things like health care. one year we went to the option of saying instead of that, let's do for four months one week a month to 35 hour work week all in an attempt to lay project people's jobs and at the same time as jobs ultimately provide to the public. in nearly every instance,

largest unions at the county said forget it. but rather had before 500 people laid out because essentially their message was to be gone in a couple years. our employees will come back from my often don't have given up anything in terms of our benefits. what we did was not take benefits away. it was to make realistic opportunities for contributions to pay for those and the irony is wisconsin's case now is matching their pension contribution. engine for state employees is 100% funding. we are not taking benefits away from people. get illinois where they proclaimed in springfield they were going to make reforms, and they have a pension system that lets how to find it and they've got the speaker democrat down there in the past talking about reducing the pension benefit itself for retirees. he don't make structural changes in the finance interface with the horrible decisions on the tail end.

by doing this, we get ahead of the curve, so were better off on that is called us credit positive, but it's also about protecting not only the taxpayer, but ultimately their career in public service and then at a certain expectation when they require that they will be benefit they are in states that don't make those changes that will be a problem. one other interesting thing is to put this in comparison with the public or, i've got a younger brother a few years younger in this debate was happening last year, he would point out to me. he and his wife and family are typical metaclass family from wisconsin. my brother is a minister at a local hotel and works part-time as a bartender. wife works at a department store. they've got two beautiful daughters, my nieces. you're the epitome of a middle-class family in wisconsin. he said to me shaking his head, i pay more than $800 a month for the health insurance premium and a little bit i set aside for

401(k). you're asking for a fraction of that and people are upset about it. to me that was the disconnect a lot of folks have who had worked outside of government that will be scored is not radical. it's actually still pretty generous compared to what most people are outside of government. it is a very reasonable expectation to make sure we can pay for the benefits we ultimately offer. >> i did a quick calculation where i showed that to match the pension benefit that a full career wisconsin state employee with good and to get a guaranteed benefit in retirement as they do come a private sector work with the same salary would invest somewhere close to a third of their salary for 401(k). so one of the things you focus on the main contributions the same when one of the defenses is benefit productions and making contributions based on a formula in the background. that formula is generous.

almost nobody today can put a third of their income into a 401(k). that's really a disparity there would be to do more to boost private savings, no question about that. getting the comparability there really does make sense. these things are just very, very difficult on people because around the country, particularly when ellicott pensions with a contribution to state pensions and medical pensions has gone up because the are dropped and that the costs borne by taxpayers. i think it makes sense to try to smooth that out going forward. it's going to be a tricky situation, this certainly wisconsin is a much better situation than in illinois or things are pretty dire. >> some of the reforms are in place. but it's been the effect across theater at the local level on budgets? are using dynamic effects to anticipated? >> it's tremendous. in fact, early on throughout this process we did a website

i'd wia.gov come up with a map of all 72 counties from every different county, from other jurisdictions about school districts to pass budgets for the property tax levy didn't go up or they pointed out because the reforms they were able to -- the great example is to convert it took a $400,000 deficit and turned it into a million hot dollar surplus. the is set to hire more teachers and ultimately said about $300,000 aside for merit pay. we have seen one of the great example as i get a kick out of is the mayor of milwaukee, tom barrett ran against me for governor in march nursery debated this effect but we were proposing would devastate the city. on august 8, the comptroller reported to the city council that are reforms will save net -- net savings from the city of milwaukee somewhere between 11 and $19.

of course he was asked by reporter at the time if he thought as to the judgment of the city that had but a governor deserves the credit with response that it's a false question. i don't know how false that is. but it's pretty simply the facts. i mean, i'm a great believer in the truth. if you repeat the truth over and over again no matter how many attack at, no matter how many distortions out there come sooner or later they believed people gravitate towards the truth. for us in wisconsin are two key benchmark but i think to find the truth in her state. one was september 1st in my two sons, matt and alex and every other state goes back to school and in nearly every school district across the state, families saw their schools for the same or better. they sought in many cases the reforms not only didn't cause damage, they actually empowered local school districts to make

financial decisions and not the budget in some cases hire more teachers. but also, the reforms are just about finance his peer up a free work worlds and other changes, now schools and local governments can hire and fire based on merit. we can pay based on performance. the music and that the best and brightest in our classrooms and government positions across the state. i was doing a q&a in northern wisconsin a couple weeks back and at the end one of the superintendents of the small school districts cut up and made a statement intact about how reforms save the money and it's good to keep their staff in place. he said something almost as an afterthought as he went down. i heard and admitted him up and repeated. he said the best part isn't just the finances. the best part is i go back to my office and spend my time worrying about curriculum and not just about grievances.

and he said for a specific request rates. change the dynamic in our state. you're not going to predecessor was the governor with total democrat-controlled account hundreds of millions of dollars in public education. the difference was they didn't get this schools anyway to respond to that. milwaukee -- it's interesting there is a situation where young woman with india in a new teacher of the year by the english teachers council in wisconsin. she got this great award a week later because of these cuts she was laid off. why is that? because the old collective bargaining contracts, last in, first out. and for the best teachers in wisconsin over some of the first one played out. but that's changed now. the process has changed other than a handful of school districts to ever not been in contract before reforms and into effect. for everybody else is wide open. in indiana was damaged in most

any data for state employees can mistake out better. get a big difference was a couple of weeks ago when i got property tax bills and for the first time takes years, the tax levey went on wisconsin. our local efforts in schools or better. the reforms are working. >> one of the points they've seen me make is that you very cute this publicly that the reforms will be better for public employees, will be better for teachers. they've been in politics a long time to know that it's very difficult to convince somebody that you know their best interests better than they do themselves. so you make these arguments to teachers and you have some good examples, but they are still opposed to it. how do you breakthrough that? had he convinced them it actually is your best interest? >> again you keep pushing it over and over again. i got a reading initiative just to announce the details of their superintendent public instruction, but i like to read

a elementary schools and meet with teachers afterwards. you can imagine a wide spectrum of people who hate and people who are open-minded and somewhere in between. i pointed out that if you look at other states around the country, where they didn't do the forms we can accommodate to cut back on aids to schools and higher education and not force laos. so other places there's a lot less public employees and teachers were. we were able to avoid that. the handful of playoffs are in the districts are ranter contracts before reforms went into effect. in total there's about 1200 more that patterson is wisconsin and layoffs overall statewide. like i said, layoffs themselves are concentrated in districts that can take advantage and instead put contracts through. on turn one of the great things in august about a month out those teachers in their state come back and they're getting classroom study. it is amazing how many teachers would come out and say i'm

really excited about what he did because i went back to school in a ruinous here because they want to be here. they're pumped up comment do's. convert directly with my principal. i'd have to worry about grievances and other issues. i can talk to her superintendent and principal and others out there. i just think there's a whole mother dynamic in place. long-term will reward the best and brightest and be able to keep those great teachers in the classroom and were ultimately going to be able to have a system set up not only save a only save a bit in each of the rewards not only let dollars, but another raise the confidence do they have an excellent c. they provide for students. the biggest winner in matters tuning because students will win because most people i know, my wife and i and our close friends or elementary school teachers. the people i've known, including the kids to teach my kids went into teaching for other great reasons. they want to inspire kids, help

them. most say thanks to want to do that. but along the way, somebody got tied up in the bureaucracy of not only the union collective bargaining, that education itself and what we did also be allowed us to breakthrough that it empowers teacher to do what they got in the profession for the first place. >> one of the things that's a little frustrating but have wisconsin stories per trade if it's portrayed as your administration on the one hand and the unions on the other. but their other stakeholders stakeholders involved in interest parties. you mention that there's an positive feedback from bond rating agencies. but it's been feedback from other stakeholders in the business community? >> welcome a look at our reforms with collective bargaining as well as with the other things we did. we passed tax relief, nature tort reform, regulatory reform, repeal the estate tax agency and

adult things to create a better business. in 2010 the last of my predecessor was in office come to see the statewide chamber does a survey to estimate players that may say whether today that wisconsin was heading the right direction or not. 2010, 10% of our employers were sent to the right direction. a couple weeks ago they did the survey came in wisconsin. the number is now 94%. the majority of employers say they're going to hire more players. now, we understand confidence and certainty in the marketplace and ultimately job creation, so we need to do more of that. the three years we lost 150,000 jobs in the dirt. in the first 11 months of last year, numbers flagged by a month and we can just over 16,000 net new jobs in a private set to appear it was subtle way to go when there's a lot more but to do in in the future. that's a tremendous turnaround from heaven not the hundred 50,000 jobs in the past insert

only turnaround in terms of the dealing not only within the state, but even nationally. msnbc, ford, survival index come even chief executive magazine annually puts a ranking from one to 50. two years occur where a 43 come a year ago we ranked 41 after taking office about six months and tell her form started taking effect. we went from 41 at 224. a jump of 17 spots, fastest increase in the country because people realized that only have we created a better business climate, but when you tackle structural problems and fiscal problems that were the band-aids , but she makes structural reforms that both the state and local level, you make it better stay to invest in. not just for big investors, the small business owners. thinking about adding the five or six or seven more employees who are worried that the future may hold. everything you can do to provide more certainty and stability makes it easier and i think in

the coming year, 2012 comments a tremendous job growth in wisconsin because of that stability. >> and or, do you see that when you look at different states? what are the effect when states have pursued reforms as opposed to those who haven't? >> well, one of the interesting things is the states and laboratories of democracy we have a lot of different things happening in states across the country. it's interesting to see how things are playing now. you have in california governor brown has hardly seen as a conservative has proposed to significant changes to the pension system for public employees bayard instead of having an traditional pension to have a mix of social security for a smaller td plan. even in new york ran from, governor cuomo has been proposing changes. it's interesting to see how this played out. illinois is in pretty dire straits is really having trouble getting on top of this.

i think the real advantage is doing it. 1.8 added in terms of the changes to compensation is the economist or theoretical standpoint on this. the test of whether these cuts were too large for the increased contribution is to pensions or health care were too big for the workers and state employees are quitting her of her unable to hire people as the state or local governor still able to reattach and retrain employees? >> particularly in a tough economy, with 7.3% unemployment down from 7.6% a year ago, certainly better than 10% in illinois and better than the national average. i think it was a large part driven by some scare type except the public employee unions to try to claim we were going to take and if it's away. i still get that today. i get questions all the time that people think particularly

pensions. we are not. for making a payroll match to match that. but it is interesting, not only the employment site, illinois a great example because other states and why a man under tremendous pressure is because it is not just republican circus there it is. he mentioned cuomo in new york. you think about paul patrick signing legislation in massachusetts, largely driven by the legislature there, but that was the broken reform for local governments. you think about rahm emanuel and muddy sewage of the city of chicago tackling those challenges. who would have thought when occupied chicago protesters would mention my name in the press, but that is largely because once you're an executive position if you are honest and look at the facts, for a republican or democrat or

conservative standpoint, savings or may choose different ways. i take to save money and put it back in the hands of entrepreneurs who feel the economy through entrepreneurial spirit. liberals may want to put it in the hands of more government spending. but either case is increasingly come at least a month executives , understanding it or have the option either way if you don't tackle the virus, which is like a speaker and out of control. illinois is a prime example is satisfies in california to a certain extent. but illinois has a pension system that's only about half done. they have a bond trading above their fiscal agents this year talked essentially advised bond buyers not to buy their bonds and raised the question, what is the bottom with the bond ratings out there. and mention that with chief executive magazine. we went up 17 spots not. illinois the last tigers failed to tackle this challenge has

dropped five years, 45. "the wall street journal" editorial earlier this year or early last year cause a death spiral. if it wasn't for chicago being one of the 12 or 13 megacities at the world, the failure to act on things in springfield would be devastating. for other tax increases this year and in wisconsin saying they didn't do we get coming out there about carving out companies like sears and caterpillar in others because those companies threaten to leave because excessively high tax burdens and failure to take on burdens. they push more of that up to taxpayers in the state. to me, tackling their foreign comic even though it's brought -- i didn't seek national attention. i just look at the second small business owner. the site problem and solution on local government and what to fix it. in retrospect it would've been nice to spend more time talking about details in january and february, building a better

foundation. i talked about the tens of millions of dollars wasted by school districts not been able to bid out health insurance for the excesses, not successes in overtime for state and local governments have. i'm talking about that now. from my standpoint i said hey, i was allowed to fix that. i spent 18 months in a job interview talking about the fiscal and economic challenges may state is. once i got alike did, which is essentially hired i said i'm not going away. you've got to tackle it right away. so we may be one of the first, certainly not one of the last certainly not republicans doing that. a lot of democratic executives who recognize if your office with the public he got it fixed it. >> i want to talk about the recall and then it, but i want to mention one thing that struck me in doing some reading before this event. you're presented sometimes says

rick in the union, union buster, but one question that is interesting to a lot of people is this question how to think about: the bargaining. i want to read you a couple quotes i came across. here is one. meticulous attention should be paid to relations of public service to the public itself into the government, the process of collective bargaining is usually understood and cannot be transplanted into public service. i was surprised that was franklin roosevelt in 1937, hardly an antiunion guy. how should the fair-minded citizen to give up what to bargaining? collective bargaining rights take right away, which most fair-minded people say there's something wrong with that. he can't take somebody's rights away. how should the average citizen and about collective bargaining? >> some of the national union support millions of dollars in february march feistier collection is successful.

collective bargaining in the public sector is it right. it's a sense of entitlement. the reality is non-ascii art in the court yet pointed out, last february that president when i was in madison because i didn't figure he could safely travel to come and do their job, so i stayed put, the chris christie called me because annual luncheon the president has with all the governors, the president took a shot at by saying we were with public employees. so i could have consulted with people may say they got asked about that. i remember i was drawn in the public service by president reagan signed on at the office even if i don't agree with the first amendment. i am sure the president of the united states knows the federal employees don't have wages and

benefits. the president of the united states knows that on average is 20% of health care premiums, about double what i am not getting because i'm sure the president of the united states is not good at talking points from the national union leaders. the reality is that's what it was. it was a political push to train green beret, which is not inherently fair. i mean, the difference between the public and are is there is no one standing on on behalf of the taxpayers. you ultimately have a cycle that put the taxpayers at a disadvantage. so what we did is say the tax year should be paramount. i respect the hard working people at the local jurisdictions as well. if they elect people on the county boards and city councils and state office is, those individuals should be able to make those decisions. it's quite unlike the dirt where there is a union and an

arrangement, there's ability to union can strike. the employer can move at all sorts of options that you don't have in the private air. from the union standpoint, the private sector union is parsed in wisconsin are my partners and economic development. they've been great allies for us. you look at the rate my predecessor put on the transportation fund, we restore that. people like operating engineers and they say about overdoing because their people are back to work again. we stop shifting funds. reduce funds for what they were meant to be for. so people overcome the private sector largely benefit. the other interesting thing which is the side of that, this mantra not only better right,, but the middle class. let's be clear, who pays for the expansive government? who historically in this country and state-by-state pays for the excessive expansive government?

it is fundamentally the middle-class taxpayers and our states and in. but we did is fundamentally about standing up amherst tackiness middle-class taxpayers in pain once and for all three are going to let you be the ones we think about first and adabas and union leader in washington and then he later in that and, but instead we will make decisions that ultimately protect them.

the other benefit i believe and i believe midge has done a good job in indiana is to get to reward excellence and empower good employees to make

i did it in front of the state constitution and the reason i did, and moved it because i wanted to revoke the part of the constitution that is never been altered and never been amended. it talks about spending and talks about how moderation, legality and spending leads to

freedom and prosperity for our people. that came for more than 163 years ago. over our time in our state and i think it's a similar tradition to our founders more than 200 years ago in this country was at their sense of a limited government, certainly a government that put the power back in the hands of the state but in turn the states ultimately in the hands of the people was about a limited government, one that excels in certain areas, but one that shouldn't be expansive so our tradition, you know, we have had like a lot of midwestern states we have had folks who advance the cause on the left in the right and everywhere in between. certainly more play. tommy thompson with welfare reform and school choice and other reforms like that. in our regard we didn't look to do this and i didn't set out in my mind to say i want to -- i just said fix the problem and make your stay great again. but i think other states did that.

we took a page out of what mitch daniels did in 2005 in indiana when he to an executive order, a lot easier than a statutory change but an executive order was able to change collective bargaining and turn his state more efficient and more effective taxpayers. i think that is paid off over time are going to do what other governors did that i think others can agree. chris was out talking about this but it was really this year to his credit with the legislature that was controlled by democrats, he was able to convince enough folks of both parties that this had to be done. i think other states can and should do that because if they don't, again whether you are liberal or conservative, there's going to be less and less resources either to get back to the people from whence he came or to spend on their programs out there. i think it can be done elsewhere. >> i think that is precisely why you are going to see the tens of

millions of dollars coming in from outside of the state into wisconsin, because there are some interest here in washington that don't want this to happen. and they don't want to happen in republican areas but whether it is lincoln chaffee up in rhode island or some of the other states we mentioned or others down the way, they want people to think twice about that because they want people to think there will be retributions if they consider those changes. i think they are impaired or. i think what happens now or if you do years down the road it's going to happen. >> that tease us up nicely. we are going to have quite -- open up questions the audience but i wanted to ask about the recall and what is going on and i that i think our audience would like to know how this this got off the ground and breaking standard where you see it going and just your take on it generally. >> it started officially on november 15 although state democrats and the union supporting them talk about it before then. november 15 they kicked off the recall efforts. they have 60 days by wisconsin

law to collect 540,208 signatures. for a while, they were talking about collecting 1 million. i don't know if they will get to that but i assume they will get well into the 540,000. our state, that is equivalent to 25% of the votes cast for governor in november 2010. i say equivalent because you don't have to be a voter to sign the recall petition. all you have to be is eligible to vote, which means 18 years of age or older, not a felon, on paper and lived in the state for at least 28 days. so it's not an extremely high standard but it is what it is. and, the burden to ensure that people have only signed at once and they are legal residents although not in the state but in the incumbents campaign to challenge so we will look through those and obviously if there are excessive examples of multiple signatures and things of that nature we will challenge that. in the end i will imagine they

will probably get that. in all likelihood after they do they will probably force an election sometime i would imagine now and june, early in june. unlike some states where it is up and down with the incumbent this forces a new election so the minute a people under the law can ultimately force a new election. from oaks folks in our state even those that aren't particularly political one way or the other, most folks are tired of all of the elections. collectively there were more than $40 million spent by all groups and candidates in the summer on the state senate recall elections. put that in perspective, i spent $13 million running for governor over 18 months. they spent more than $40 million in the summer on the senate recall elections. i think those people are just tired of all the attack ads. our ad started november 15 and we were involved in positive testimonials from people, teachers and school board

members talking about how the reforms are working for them and their families and communities and we will continue down that path. people asked me who my opponent is going to be. the person doesn't matter. it will be the big government union bosses in washington who will pour limitless amounts of money into our stadium will try and influence our vote and we are going to have to be ready to get the truth out encounter that. also i think elections are about the future and not just about the past. do we want to go back to the days of record job losses, double-digit tax increases in huge deficits or do we want to move our state forward? i think we have taken our state forward and i think we can move aggressively forward even more so together in our state but we have to get past these recalls. >> if i could ask, are there any reforms on public employee compensation passed in ohio last year? i know they were repealed or a referendum. are there any lessons you take from the failure of the reforms

in ohio? do you think that you avoided through the way you went about things -- >> did biggest fundamental difference between ohio and wisconsin and as much as we have a weird quirk with the recall law we have a weird quirk with the recall. ohio's case once they got enough signatures to get f5 on the ballot in the render and questioned and deal law in ohio says it no longer goes into effect so in ohio's case the voters never got to see the benefits of those reforms. if i had a vote last march, i think it would be much more difficult to win because all people would have heard was the scare stories and the attacks and data nothing to counter that with. in my case i mentioned earlier those two benchmarks, september 1 in the second week of december. those two things alone are a tremendous counter to any attack ads running against me because

people say hey the kids went back to school and my school is in good shape in my school had a teacher. that sounds pretty good and they say i got my property tax bill and i'm in pretty good shape. one of my biggest hits on twitter and facebook for the past few weeks have been people responding to me asking how many of the site are property taxes go down or stay the same but people responded to that. so i think the biggest challenge that kasich another said there was all people heard for the negatives and were outspent by 10 to one or 11 to one or something like that. i think we can win as long as we have enough to get our message out. >> one more question before we open it up to the audience. if i may reform minded governor and i said scott did a great job at pierces big backlash in the recall. is there anything after you

going through this he would do differently? i know you would push for the reform because -- structural reforms would what if you learned in how this has unfolded? >> clearly we laid the groundwork earlier in january to every every and i mean that not just me speaking about. think we would have run an aggressive ad campaign because that is the biggest mistake i made. iges uses as a fix it. you are elected to fix things, going to. the. i had no idea of the national mind that would attack us early on and distort the facts of the truth. again i said before but if people had known how many tens of millions of dollars and school districts wasted in the past by being forced to buy their health insurance from a sole provider without being vetted outcome if they saw the millions of dollars wasted on the abuses of overtime, if they had seen examples of local officials like myself before i

was governor across the state who are trying to do innovative things, not just to balance the budget to make our governor work better but if they heard those stories, for a lot of people who weren't involved in local government prior to this all coming up, a lot of people came out of the blue. one of the retained -- routine things i hear from people i think it's a legitimate critique, they say you know what? umar look at it to make sense and i'm glad the way to sort out but i'm still frustrated because i think you could've done a better job explaining it up front. >> i'd don't shy away from that. i say in retrospect, hindsight is 2020 but if i could change it, or any other governor for he or she i would say you know, have an effective communication plan. build your case early. break it out early and upfront. made the case for why reform is needed and then not just do it but then repeated. once we got engaged, we got -- authentications but you have to find ways to talk directly to your constituents.

not just her press conferences. we have town hall meetings and brownbag lines -- lunches and things like that. we criss-crossed the state. is also very engaging. for all the talk you see the national media and all the attacks in this and that of the protesters, for every protester i get there are five or six people that will come up to you when you hold a listening session or you were touring a factory. they will come up and slip you a note and tell you to persevere and people will give you the thumbs up. there are people who aren't holding a sign up and don't have enough time left on their vacation scheduled to take off of work for couple weeks at a time but there are fashion at -- passionate. they are just not angry about it and so they do that as well. that's everything i would tell governors, fewer going to do it don't go halfway. people say could you have done this? in the end i knew from being a local elected official for all

those years, if we had gone halfway, we would have fixed the problem for year or two and it would have only gotten bigger a couple years down the road. to me that would have been completely unacceptable and i've got to tell you i don't plan on losing but i'm not afraid of losing because in the end if you do something for the right reasons, those things, i was in this town paul ryan and i love to point out there are two kinds of people. they're not liberal or conservative. there are people who get elected either to do something great or be somebody gray. iris kids if you try to -- be the latter. that is what we tried to do. we tried to fix a a problem and a way that made sure that we weren't just fixing it with a band-aid. we were fixing it so that the next generation, not to get too nostalgic here but i remember back in september i was at the governors association conference and i got up real early and ran

over to constitution hall. constitution hall is as big as this room right now and i remember, i love history and as a kid i used to think of our finders finder's -- founders of superheroes. a hall like that, you look at the chair in the back and there's a rising sun and if you look at those chairs, these were ordinary people who just did something extraordinary. and as much as it took political courage in their case it took more than now. was her franklin is said if we don't hang together we will hang separately? they were risking their lives. not just their political lives but their lives but get for 200 years what has made our country great, whether it was economic, fiscal or spiritual or whatever has been that we have had leaders men and women of courage in this country who in those moments were willing to stand up and think more about their children and their grandchildren than they thought about their political futures. that is really not just

wisconsin but across the country, state-by-state. i hope it's as we have these ongoing discussion several he more people willing to think about the next generation more than they do about the next election. >> we want to open it up to folks in the audience for questions. just a couple of ground rules. we have microphones that will be going around so please wait for the microphone. identify yourselves and please make or question the form of a question. we would appreciate that. >> max rosenthal from the hub and impose. he spoke about the national money they came that came in over the recall process. you have been critical of unions and money sources coming from out of state but obviously you receive a fund-raiser today in a significant chunk of your money come almost have it comes from sources outside of wisconsin. why are you comfortable with taking out-of-state money and not what it comes to their side and are you concerned about how it is going to play in the

upcoming. >> the people from around the country who are helping us at the grassroots level are trying to match the amazing levels of money coming from the unions and washington and throughout the country so they think is a legitimate question. for me i wouldn't be raising a penny right now if it weren't for these recalls that occurred largely by the national unions. just so it's clear you're right and terms of total of hours but in terms of all my contributions in this last report we had nearly $47,000. 79% of the donors were people getting $50 or less so money coming in from outside of wisconsin in many cases is coming from people giving us 10, 15, $20 saying we want to help you counter the money coming from washington. a legitimate question but we are just countering the excessive amounts coming in from outside of wisconsin.

>> hi governor walker. andrew ackerman with dow jones. are the private sector's jobs each month since june including two of 12,000 november, disaster just may be your -- or not working especially when the rest of the countries adding jobs? pinellas pinellas survey i just mentioned where we went to 94% in wisconsin is headed in the right direction, in that same release one of the things i talked about when they ask a random question to open and question about feelings people had about the future one of the things that group in the chamber identified was the concern and in place had about recalls. they write -- like the reforms that they were concerned somehow that might stop and somehow -- so i think the sooner we get back to that the groundwork has been played and we saw the net increase in jobs at the beginning of 2011 but anything

that adds uncertainty it will continue to be a factor for us. >> just one other quick question. when you're talking about fairness to taxpayers, concerning reforms, one of the things i have never quite understood is why emergency responders works glued it from the pension reforms yet they have the most expensive pensions. >> great question that's one of the things in ohio where they did include, was politically was one of the reasons the referendum went down. it was simply, i had in january and february be looked at this, the budget and what our options were. we want to make sure we didn't do this in a vacuum and we had a strategic plan should there be work shortages or walk offs anywhere the state or federal level. so we had plans that could cover my correctional facilities in the state, my mental health

facilities and 24/7 type operations but in wisconsin i have 1700 municipalities and 72 counties and my concern was i did have a way to cover all of those jurisdiction should there be a work shortage amongst fire or police officers in the state of wisconsin. they're professionals and i would imagine the vast majority would consider a work -- but if one jurisdiction did that in someone's life is at risk because of that, i thought i had a higher responsibility to do that. people say, how can he do that? the teachers in the madison school district walked off the job for three days and left parents out in the cold. that didn't cause anyone's life to be at risk but made a lot of parents upset he didn't have provisions for childcare and after a couple of days teachers went back because the parents were acting very negatively politically to that frustration. in that case it was an inconvenience. in the case of public safety, the fact that someone's life

could be endangered was too high for risk so that is why we did it. it's a simple practical consideration but a very legitimate question. >> tom curry with nbc politics.com. governor you said earlier that in the coming year you expect tremendous job growth in wisconsin. if good times and prosperity returned to this day, what is the likelihood that the legislature or perhaps the future governor, what is the likelihood of reforms that you have enacted in collective bargaining will be rescinded because after all it was the session that created the situation you face when you came into office. >> remember we didn't do this just -- the reasoning was we had to balance a budget and those five choices i became at the beginning were the best of all

the other options and other states and governors have picked. but if we were to resend that we have added deficit at the local governance. conservative or liberal and like like you would be hard-pressed to find many local officials who would he out there even right now arguing to resend the collective bargaining. why? because they benefit from those. the gentleman who ran for me for governor balances budget on my reforms. if that isn't -- doesn't make a case i don't know what does. so long-term, while i think some in the recall movement to make the false pretense or present this as a choice between yes or no on these issues, the reality is if somebody is going to campaign, nobody ran for common in the people ran in the recall election as state senators ran on a platform of repealing collective bargaining. a couple of races they actually ran on medicare.

which you all know has nothing to do with the state and has everything to do with the federal government. they round on anything but that issue so it's clear to me that people like the reforms. whether they like the process is more debatable but local governments certainly like it in the public has benefited from it and if someone were to run in the argument that they could repeal it i think politically that is a pretty negative outcome because people think about it. that means you have this huge budget hole and you have got a structural hole in the local governance as well that would have to be filled either by having massive layoffs, cutting things like medicaid or raising taxes and that would be crippling the state's economy. >> governor, josh calling with a pr. on your inauguration day before

you were sworn and there were unions organizing at the swearing in talking about a recall before you had signed a bill or evening governor. how much of this recall is about public policy and how much of it is just a forgone political conclusion? >> taking a step back, the recall web sites was registered november 2, 2010. they didn't come up with it until february but you don't register a domain on november 2 because you know, remember on the tonight show they had johnny carson and the guy that would hold the envelope up to his head. it wasn't because somebody knew in advance that this was going to happen. i think a lot of these left to center groups were looking for an opportunity, the unions in particular jumped at this chance. i find it interesting because if you fundamentally take the case, why are they going on a recall against paul patrick, the

speaker of the legislature in massachusetts or doing similar things in other states? well, it's because there is a political alliance there and i remember think it was the "boston globe" errata column months ago where they looked at some documents connected to the white house were they told folks in massachusetts to quiet it down a little bit so they get more aggressively go after me and kasich and not make the public realized this wasn't just a republican issue. a lot of elected officials are looking at this so i think it's about power. i think it's unfortunate for the people in my state because people my state are going to probably have to go through tens of millions of dollars more worth of negative ads largely funded by groups from outside of our state. i am going to seemingly silly -- seemingly endless -- a swing state that has two key house seats up up and opened u.s. and so my voters in wisconsin won't get much every reprieve after

the recall elections. i think most people in state matter where they stand politically are actually tired of it that we have a handful of people, it's ultimately about power. they don't like the fact that we gave public workers of the state a choice. for schoolteacher in milwaukee who pays almost $1400 when their contract is up, he or she said the choice whether they want the $1400 roughly to go to union dues or whether they want to keep that for their family or health insurance premiums or whatever they might want to use it for and that is really what is at stake. to give them a choice, there's a fear that those public employees will choose to keep that money and that is ultimately what this is about. it is about as clear of the contrast as you can get. it will be someone hand-picked by the union and they will want someone to go back to what we had in the past, someone who will go down the same path that i believe illinois going backwards on where they will have record job losses as we had

in the past, massive deficits and double-digit tax increases which we saw a few years ago or we can go forward with a much more optimistic approach that we will expand on in the future. >> governor sean paul with "national journal." i want to ask you about your read of the mood of the electorate and what was on the 2011 recalls, credibly divided electorate irked almost nobody was in the middle and there was no opinion. they were with you all the way are really against you. do you see a similar divide if there is a recall election triggered this year, and secondly, you have spoken about the effect of negative ads on the mood of voters in wisconsin. are you willing to say that if and when a recall is triggered that your campaign will not need running any negative ads against a potential democratic opponent? >> two parts to that. to put this in context, not only

in wisconsin but other states. in 2,002,004 wisconsin was the closest blue state in america so there's nothing to that happened to happen unless it is suddenly made wisconsin have different political views in different parts of the state. that's our tradition. we have had great debates for generations. anybody who comes and looks at the state before 2011 would say milwaukee and madison are overwhelmingly democratic and the suburbs of milwaukee or republican. the rest of the status of pasta. that is why normally includes competitive races weather was ron johnson or others are others out there, was kind of a 40/40/20 split. about 20% that is kind of up for grabs in the middle. that number shrank a little bit as there has been so much debate and discussion. i think, we really haven't been a concentrated campaign giving

our side of the story throughout all this those debates so i'm optimistic that the more the facts get out the more people hear the truth and the more they see the benefits of the local governance not only financially but long-term, i think you will see a shift but i don't think it is going to be a tremendous shift but i think you will see a shift in our direction. i think there will be battles just like in 2012 in the u.s. senate race in presidential race in our state. it will be a close competitive race because wisconsin like a lot of other midwestern states are evenly balanced. in terms of the ads, we have run positive ads up until now. i can tell you we will run ads to find the differences. we are not going to take cheap shots. i think people don't want that but i also think people want to know what the difference is. if i point out my record versus whomever, the union decides to run against me will clearly define the difference. i don't do that as a negative. i think it's a legitimate

comparison the voters want but that would be our expectations. we will talk about our vision for the future and talk about how that contrasts with who the unions into putting their money behind. there are a number of private-sector unions that have endorsed in the past and have not been involved in these recall efforts. >> tom buell with state tax magazine. allotted of this is about the legislation put in place but some democrats have been critical of tax breaks for corporations that spurred the economy and tap -- capital gains tax cuts. i was wondering first off what is your sponsor that? do you think that will be an issue in the recall election and if it might spread into tax issues and other parts of the economy and since the senate is so close i could possibly shift towards democrats depending on

how these races go how do you think your administration will fare with his policies if the democrats regain control of the senate in the future? >> a couple of good questions there. on the text part, i think all the elections more or less are about the future not just about the past so there'll be some discussion but if you look at the earned income tax credit, not as much money is going to offset people don't who don't pay taxes and give them, other taxpayers money. that is just a matter of how much of a subsidy is out there and on the other side, on the tax reductions, they were all tied into jobs. in fact these are the things we proposed. all the bills that i've signed into law, more than 90% of them have had bipartisan votes. out of all the legislation i passed in the past year, more than 90% of them have had those from republicans and democrats. including some of the tax.

why? because we didn't give blanket tax cuts. are tax cuts are tied into job creation. you create more jobs in wisconsin, and send us whether small business or any other size business out there, the ultimately capital gains we exempted all capital gains, 100% exemption for investments made in wisconsin-based companies. why? i want people to take their's and sand dumped them into companies that are in wisconsin that will create more jobs. i was elected to fix the economic and fiscal crisis in the state and those were things that we believed over time would have a tremendous impact in putting people to work. to the biggest things we have had so far were direct credits, tracks tax relief for agricultural-based industries in our state. those are the two largest industries manufacturing and agriculture. those are things that row over time and our tremendous

incentive so anybody watching who is in agriculture should come to wisconsin because you'll have one of the best tax burdens in the country and it will only get better over time because the tax bills into this budget. we didn't give it out to corporations and we didn't give it out to individuals. we targeted areas that would have a direct impact on economic growth and prosperity and i think that's part of the debate. someone wants to run against lien say they are to make it harder for manufacturers and others to create jobs in our state, that's a debate i would love to have because i think people understand that for the small businesses and others in our state that create jobs we need every ability to create more jobs and move in that direction. you had one other part of your question. >> yes, the recall elections and the putting -- in the senate back into democratic control. how do you see that affecting

the fiscal policy debate? >> again like i said more than 90% of the bills passed passed with bipartisan support that i signed into law. i still think somehow, i think republicans will retain the majority but it will flip a 17-16. i think there there is enough discerning democrats including a number of whom voted for almost all of our major jobs initiatives that will continue to work with us on the state issues. i would imagine even coming up in the next month or two, we have got some issues to further create incentives for venture capital investment in our state, to look at reasonable opportunities in our state. i've talked to a number of democratic senators who want to vote for those measures as well as republicans. those are things that as long as we can get done no matter what the layout is of the legislature i think it's better for us long-term if the majority continues but if not, either way.

>> my name is jane norman. i'm a reporter for congressional quarterly and i want to ask you about the health care law which is a major issue for your state in terms of budget policy. i understand you recently said that you were going to put off implementation of the state exchanges until after the supreme court case is resolved on whether not the law is constitutional. i'm curious about your thinking on that and if if you are concerned the state is going to have problems catching up if the law is found constitutional? secondly i wondered if you plan to return any of the money for the health longbow mentation? >> well, on the first day i took office, january 3 i authorized our attorney general join the federal lawsuit. i just wanted the federal government should not ever rolled. does not clearly have a role

defined by the constitution and in health care mandated not only by the state but also i don't particularly care -- i think that is the decision that individual families and employers should be make you not dictated by the government in and of itself but i predict or you believe in reading the 10th amendment that is the right inherently in the hands of not only the state but of the people and so i think we have a very good convincing case in that argument. the supreme court is going to take an unprecedented mount of oral arguments in that regard. i think for any state, the move forward on that without knowing what the impact will be, probably sometime by midyear is particularly in in the state involved in a lawsuit is a poor decision and no i don't think long-term, i think certainly i oppose the mandate. with testified before that the

president's mandate in wisconsin's case cause the majority people to pay more for less health care. in our state, that is a negative for the vast majority of people in our state. we are the one of the highest percentage of states that cover people with insurance. 96% of our people are covered so for us to fix -- to 4% to throw upside down the current health care system even though it needs some improvements, seems like a poor decision for the vast majority people in our state. we would prefer better alternatives to that with federal health care mainly. so for us we are going to push both legally and politically any and all apprentice to that and it doesn't make any sense now. in the end after exhausting all legal and all political alternatives, we will re-examine that. but until that time, we are still holding out hope that power can rest in the hands of people and not the federal

mandate. in terms of funding that the state has acquired under my predecessor, it is not in our hands to begin with. we are just not drawing any of that money down. >> thanks audrey of in her. eric lawson from "the hill" newspaper for your. i was wondering what you are seeing as far as the enthusiasm for fiscal reform nationally. there seems to be a narrative emerging here that the tea party for example may end up having. do you see it a more difficult to push through reforms and you think your you're bold move has played a role at all in the backlash that we may be seeing? >> on the latter part i don't know and i will leave it back to the pundits to decide but i do think, and is not a popular discussion to have ongoing. people like to move bond, both the media and the public in general likes to move on from one hot topic to the next. anyone who looks at what happened in august when our bond

rating was dropped, all those governors and executives at the local level, we know how incredibly important it is to guard our bond rating and what that means not just to bond investors but investors in general. what is says about stability in our governments government so that for the federal government to have that dropped i think is a really, it's a warning sign we should not take lightly. we have a limited amount of time to deal with that. whether or not that is continued or not, anybody who looks at that, i go back to thinking not so much because it's a hot topic of the day that when i think about my sons nat and alex in a couple of years heading to college and a couple years after that getting into the workforce it scares the dickens out of me that they will come into a world where state-by-state and particularly in this country, we are not just generations or even a decade away. we are years away or manager

crisis, and you know we need to look across the ocean to greece and increasingly others to see except what happens when you don't tackle this tough issues. it may not be a fun topic to talk about but long-term -- a lot of times in politics like -- people like to shy away from these issues and understandably but as long as you are constant it you don't -- one of the lessons i used to give lawmakers when i was in office and i would mention the numbers, never personalize your differences. your opponent made be your ally tomorrow. as long as we don't personalize the disagreements on this but really keep repeatedly over and over and over again talking about these great fiscal challenges we face at the state level and similarly if the federal level i think we have no choice but to do that no matter -- no matter whether it's at the top of people's list or not. it should unit will be in a few years. >> time for one more question.

>> heiko on her. i am at work but right from the comments. i'm just wondering about the element of the reforms that capped base pay increases. it strikes me that you know, that is an element that isn't mimicking the private sector. it would be dispiriting to know that your salary would never increase in real terms ever by law and that seems to me to be the effect of that. can you just talk about the logic behind that? >> basically as a group, a group that previously was in a collective bargaining unit couldn't automatically have a whole days salary for that entire group go up as a wage beyond the cpi. but, state government, local government in the past week or two have given out on this is for example. they can put in performance

incentives and do all sorts of things that the private sector doesn't do. they can build and to that but the idea being we want to empower local governments to make those decisions to tie into performance, not just providing away without regard to merit or reforms. >> you would have to be, right? >> as the economy improves that can go up, but it will allow distinction between those who hit performance benchmarks and those who do not. that may be one of the issues that we come back and examine. that was one of those we debated and whether we change that entirely or not and that which is one of those remnants left that would have some rolled over time we may find the will change all that and have a wide-open debate as -- about sellers as

well. said let's get to the final question i want to ask you please at elections are about the future. are there other reforms that you are hoping to pursue this year? obviously you're going to be very busy for the first half of the year with some political fights you have an anticipated or you have done what you wanted to do to get the structural reforms. >> on the structural financial side part of it is the implementation. one of the things i stress to my cabinet cabinet and the reference before is now its, we have been given these tools and it's our charge to make sure the areas we are logically to be involved and we will do well. a number of our agencies have been taking on principles like manufacture and techniques that haven't been used. amazingly many of our -- haven't had real training of madison -- managers for years if at all. anyone running a business knows that not just your top topic your whole management structure

has got to have measurements and guidelines. we like to say you can't measure if you can't manage so we have tried to become much more effective. while we don't have a profit margin, we do have a performance measure, so those aren't legislative reforms would reforms we are going going to do internally. the other part is for us to grow our biggest challenge is in fact in many cases we have employers particularly in manufacturing that have jobs available now. we have a 7.3% unemployment rate yet i have a web site in one of my state agencies that has more than 30,000 job vacancies right now. and in many cases particularly in manufacturing, they don't have enough people with the skill sets they need to fill those job openings. part of what we are going to do is put a greater emphasis on helping the private sector partner with the public sector

to find more skilled job positions and education reform. yesterday we came up with a major initiative that we did with the state superintendent of public instruction. a position traditionally elected with the help of the teachers union. 3% i have our differences and some issues but on this we are jointly together and the other big one is we may end up, and we will see how it works out, may end up been part of a national discussion in wisconsin's cases we are looking at an alternative to no child left behind that we have been spending months together on with various different interests of school and school district accountability where we would have a much more confident way of measuring the success of our individual schools and our districts and then provide that information not only to educators but ultimately to parent, community business leaders and others. we think we can do it better than the federal mandate on no child left behind so that is

another major reform press. we think it's imperative not just for our schools and parents world smiley for our employers to know that the skill set we are providing in our k-12 system are matching the job openings we have in the state of wisconsin. >> that is all we have time for. want to thank you opera, today and thank you scott walker. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] because i didn't speak and i didn't get really a window into my life, i had become an evil cartoon and it didn't help myself wearing a hat coming out of my plea in court, but i've become kind of a villain and i like to show people i'm not an

evil person. i'm a regular person. i did things that were from but i don't have a tailor horns. i grew up like everybody else. [inaudible conversations]

[inaudible conversations] >> thank you so much. >> thanks for coming. 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. >> thanks for being here. i appreciate that. >> how we get past the stalemate? >> watch the coverage of the new hampshire primary and c-span television and their web site c-span.org. ness, house minority leader nancy pelosi talks to reporters about jobs, the economy and the a payroll tax cut extension. she is joined by other house leaders at this 30 minute news conference.

[inaudible conversations] >> good morning everyone. as you know, one year ago, the republican majority was sworn into office. since that time we have seen no major job agenda moved forward. we have seen a budget that wants to break the medicare guarantee. this is just in opposition to everything this country needs. we have important work to do as the president said. we can't wait. we have work to do. the american people want jobs and we are not on the jobs.

this congress is out of session for two more weeks and only a few days in session in the month of january. we have important work to do with our conference, cutting payroll taxes to the middle class, with extending unemployment benefits to those that have lost their jobs through no fault of their own and for ensuring that our seniors can see the doctor of their choice under medicare. our conferees are here and present and ready to work. are chairman, the ranking member of the ways & means committee, mr. levin, xavier becerra, congressman chris van hollen, congresswoman allison schwartz and henry waxman of california. they are here, ready to work. we wish the conference would get to work and not take us to a point of brinksmanship, pushing it to the last minute again, narrowing the choices, adding to the uncertainty for the american

people. we have important work to do to extend those benefits and that tax cut as they create jobs. date create jobs and that is what the american people need and want. they want jobs and they want us to work together. they want to know why we are not on the job now when they are so in need of jobs. in addition to that, we are here to talk about reigniting american dreams to build ladders of opportunity for all who want to work hard, play by the rules and to take responsibility. reigniting the american dream, we want to rebuild the great middle class of our country. we think that is best done by rebuilding the infrastructure of america. again, we can't wait. we have important work to do. one year in office, no conceit african jobs. i know you are saying well we pass one piece of the presidents

job spill, the veterans peace. of course they did. the president offered the american jobs act, they pass one piece but we are still fighting for the full extension of the payroll tax cuts and much of the rest of it just going by the by. where are they? i don't know. where should they be? right here in this capitol, getting to work on this conference committee, addressing the concerns of the merrick and people to create jobs to strengthen the middle class. without i'm pleased to yield to our distinguished assistant leader,. >> thank you very much madam leader. as the leader indicated, today marks one year since the tea party republicans have taken control of the house of representatives.

they can't and the power and their vision of how we should move forward. the centerpiece of that vision is the ryan budget. that i did, as we studied it, did some significant things. above all things, it created a national options for the wealthy and eliminated the opportunities for the middle class. we sought in that budget and attempts to do away with the medicare guarantee and replace it with a plan that would cost seniors over $6000 annually in additional costs. we saw in the plan an attempt

in-app budget, an attempt to make college education lassa tenable for low and middle income americans. we saw in their budget and assault on seniors to make health care much more expensive and in many instances, impossible to attain. we are now celebrating a new calendar year. it is now time for our republican friends to join us and initiate for the american people a new beginning. recent studies have indicated, and we have seen all of these studies, there is tremendous growing rough gap in our country -- wealth gap in our

country. the wealthy are getting wealthier and the middle income are seeing there are opportunities shrink. that is why it, if you look at this budget, you will see all kinds of additional options for the wealthy or the one or 2% and the elimination of opportunities for middle and low income americans. our republican friends -- back to washington and help us reignite the american dream, help us get the american people back to work. and with that, i would like to yield to the chair of the house

democratic caucus, john robertson. >> thank you very much and echoing jim's sediments this caucus, has reiterated a mantra throughout which is job creation equals deficit reduction and we are here today with our sleeves rolled up, prepare to work as our members have during this break and we'll continue to do so. because we know that our task is to rebuild the middle class. we know that we have to reignite the american dream and we know how to do that. we know how to do that i investing in our infrastructure and by making things here in america again. in my district just yesterday met with the greater hartford

building trades council. we were at a school building and at that school building we see what america faces, they need to be able to compete in the global economy by having the best educated students and work horse in the world. and also the need to put people back to work. one school built in 1922 in desperate need of repair, and more than 40% of the building trades unemployed and greater hartford for the last two years. there is a great opportunity here. all we have to do is seize on the president's plan and put this country back to work. some have said that our colleagues are just pure obstructionist, that they want to see this economy continue at a slow pace, so that it will impact the president of the united states. it's a new year. we are going to give our colleagues the benefit of the doubt. that is why we are here with our

sleeves rolled up and prepare to work. it has been suggested to me and confirmed by "the new york times" just in the last week in the science section, that what may in fact be impacting our colleagues on the other side of the aisle is that they have -- . now that for you out there in the audience means this, it's a blindness that they have. to blindness that also works in a way that you don't recognize people's voices. how else can you not hear the plea of 14 million americans that are out of work and need to be put back to work? we are here prepared to work, ready to go time, to reignite the american dream, make things in america and continue to have the greatest country on the face of the earth led by s. great leader, rosa delauro. >> thank you very much chairman larson. happy new year to all. thank you for being here.

i want to say how pleased i am to join with our leader and my colleagues all assembled here. and what we are about here today and my colleagues have pointed out as we is we are trying to look at and direct our discussion and our work on creating jobs and creating a growing economy in this nation. and while that house majorities continuing their extended vacation, we have millions of middle-class and families waiting for this institution to respond meaningfully. to a jobs crisis. it's time that the majority walked in the shoes of the families who are suffering because of this economic crisis. all of last year, this institution was quite frankly dysfunctional. bipartisan political reasons the

house republicans jorde refused to consider any legislation that would create jobs and get america moving again. in 2012 our nation can no longer afford this type of an action so we are here to get back to work, hit the ground running on an agenda of job creation and economic growth. the thing is, we know what we have to do to create jobs and get this economy on an upward path that enriches all of us

who had been working on are igniting the runs that the latter at the firm foundation of the those matters that success keeping them there to find that even after they may have succeeded. we can't wait because the american people can't wait. colleagues are available,

especially i want to say the productive meetings in the theremin room to tears. and have conversation with mark kelley, has been cadre cafés is enough to extend the good wishes of our caucus to gabby, to hear her play and for the weekend as we observed the one-year anniversary of the tragedy. look forward to welcoming her back and hopefully that will be sad that we didn't let the one-year anniversary to go buy the house. our conversations internally and it elegy and publicly the expiration that gabby keffer is a story nation and her idealism is an inspiration to all of us. with that, i'd like to take some questions you may have because

they are getting to work and they need to leave soonest. any questions? >> are you guys going to bring up that surtax to go back after? >> as you see, we are all here to get back to work in the clock is ticking on a payroll tax cut pushed benefits a hundred and 50 americans and is an art to the economy. in terms of how we pay for things and to what extent, that will be a discussion we hear the ranking member of the ways and means and others here part of the conference. from our perspective, we think that we should look at all of those probabilities. i do want to emphasize this point because it goes directly to your question. we have the majority of

republican house members on this committee who have opposed a payroll tax cut for 160 million americans. at the same time, they are on record with their republican colleagues trained to make sure that we keep open special-interest tax loopholes and protects tax breaks for the very wealthiest in this country. we take a different date. we think the way to grow the economy is to empower the middle class and middle income americans and part of that is making sure 160 million americans have a marriage $1500 in their pocket to go out and purchased goods and services for small businesses can sell us goods and services. they met there with a sharp kick down in the unemployment rate and a polish private sector information on the jobs that

here. how much leeway as they took him off the 99 leaves of unemployment benefits, especially if there is an improving picture in the next couple weeks? >> first let me emphasize the democratic house can freeze the ready-to-wear. democratic democratic conferees are ready to work and no conference meeting has been called yet so we hope one will be called very, very soon. i want to emphasize that we need to avoid a turn to brinksmanship. the republican have been duly noted roche and it really hurt this country. we have less than two months and we are here to say we don't want this to go down to the last hour when it can.

there are important issues before this conference. we want this to be a real conference, a real conference where we sit down -- about the issues. chris van hollen has discussed one of than peered to the extent that the nature programs need to be financed, we want to look at a wide variety of financing them and weep to not want health provisions to pay for non-health provisions. best of unemployment, let me just emphasize this a record number of want turn on kuwait in the country beyond any level on record, almost half of the unemployed have been unemployed for at least 26 weeks.

and so there has been some improvement for the vast majority you're an way, they are looking for work. the fact remains for every john kerry three to four people who are looking for work. and so, will sit down with the republicans. we urge that they can't hear and sit down with empty chairs and were willing to talk about these issues, but we should not be sacrificing the needs of unemployed people who are looking for work and we should not do so in the name of what some republicans have called for reforms that really would undermine the basic program. so you will not get specific cancers today to each question

he cares we want to sit down and compare. but i watch say that the house republican bill to past when it comes to unemployment was totally fun except it will keep democrats in the house and i think in the senate. and you need to face up to this issue and you need to face up to the other two legs. plus i think we need to look at jobs. ideal not [inaudible] >> the answer is to sit rio conference. this should not be done in secret. we should not be talking about things that are under the table. look, i know you're not used to a conference.

i don't know how many of us have been on a conference recently. >> a wall street reform has an open conference. >> so that's why we're here. everybody has to understand this is only postponed until the end of february. i guess there's one extra day this year in february. i don't think we should let the republicans lead us here. >> i think you have a role to play in this because this is a matter of great interest to the public and the fact that this conference both by its nature should be an open conference. >> and hobbyists here, we talked to henry? in that link.

>> the super committee stated they pledge of having an open process and we saw over the weeks -- >> this is different. >> this is a completely different scenario. the soup commander i had hoped would be more transparent and a then, but they wanted to lay some foundations that they could do privately. and you see, they did not succeed. i think that the public opportunity to see the negotiations leads to a better product. this is a conference committee of two houses of congress that the united states by its nature. you have to have a row to close it. it is a bit nature and open conference. i went to call upon allison. congresswoman allyson schwartz and our vice chair, hot but share a of california if they want to have anything to add. any other questions on the

subject or just comment to make whatever comments they want to make whether recurrent substance urbanist subprocess to >> i have been appointed to the conference committee. i served on one other makers here in the coast guard bill, so i have a little bit of experience on this. this is the subject of this conference committee is extremely important to the american people. it became clear how important it was to 160 million working americans to have that 2% euro cut. as well to extend unemployment insurance during this continued recovery of the economy. jobs are what we ought to see. americans have access to unemployment compensation when they don't have many jobs as they need to. we want to work on both. the third area is on my counter deeply about, making sure

seniors have access to medical care they need under medicare. i appreciate and take seriously the fact that the republicans agree to work with us to extend each of these three areas for the rest of the year and that is different from what they say two months before that. you've heard already some are still in certain about this. from our side we will take very seriously the conference committee and finding a way forward to make sure middle-class americans, all 160 million had a pair of a kite and seniors have access to medical care and should extend unemployment that we grow jobs. that's our task and i look forward to being a part of it. >> thank you am not an later. i've only added to the comment of the super committee where the very discrete type in front of us is a conference committee. we are not out to change the entire budget. we are to achieve a particular

goal as the ranking member, mr. levin said, deal with the extension of the payroll tax cut so we can give people money so they can go up there and stimulate the economy so we can create jobs. we can make sure people on medicare continue to visit their ears without concern. doctors say we can no longer afford to be in the program. and making sure that americans out of work through no fault of their own don't find themselves caught up in a system that's willing to bail out banks, but not american workers. and so those are the three tasks before us. anyone who wishes to metal beyond that is risky and the clock expiring at february february 29th. so most of us believe in the democratic side we have a discrete task in front of us we can achieve because the american public very much wants us to succeed by partisanly on this particular issue. they're ready to work away hope our republican colleagues will join us.

>> dejected questions? >> with the congress in recess yesterday? and are you at all worried that president obama has said it may make it easy for president in the future to circumvent congress? >> i'm very proud of the president of the united states and the appointments he made yesterday. am very glad that he did in its import for the american people to know what challenges face and as he tries to provide leadership for the agencies that governments, which have an voted on by the congress as part of the public policy. i officially want to address the consumer protection agency. and the wall street reform bill we had the greatest consumer protection in the history of our country. republicans want to block the appointment not because they don't think the person is qualified but they don't want

that agency, so i'm proud of what the president did. >> last question. critics are saying that the president was not able and congress was not actually in recess. we do not have a role and confirmation process, but were glad the president took the lead. and made the appointments. >> alexei d. upon the reelection campaign that criticize congress as part of its efforts. >> well, think the president clear that the republican congress has been an obstruction to job creation this year. i just think this year you take me back to the fact that it's one year since they were sworn in as the majority. one year without any major jobs initiative, any jobs agenda.

starting the year with divine budget, starting their initiative at the right budget which broke the caring tease for medicare, which did not create jobs and which did not reduce the deficit. as i mentioned earlier, one piece at the residence north american jobs that was passed and relate to real veterans more than that. our returning vets are coming back unless it is then here we await future worthy of their sacrifice. and that means a healthier economy where they can come home, succeed, get jobs, have ownership of businesses. that's what the president small-business initiatives are so important. that's why becoming america is so important jobs that congressman said cannot be exported overseas. so if we do what we are veterans and an economy that allows them to succeed when they come home. yes, it's important to have the

discrete note that encourages hiring veterans, alluding to stronger help the economy for they and their families, for them and their families to succeed. so with that, i joined the sad and wishing you a happy new year. again, we are here. we're going back to work. will be in session for as long as they take, but we also would like to have our colleagues come back, have a real session. to your point they have the appearance of a session so there is less the can do, but not a productive session for the american people. we can't wait. we work to do. they're going to work right now. thank you all very much. [inaudible] >> -- what is your take on it? >> present a bomb was that the pentagon to unveil his defense priorities for the u.s. military.

that's next on c-span 2. after that we here for the new head of the protection bureau >> president obama outlined in and defend strategy that includes a smaller military force then cuts to some weapons programs. the new military strategy includes $487 billion in cuts over the next decade.

additional 500 billion in cuts could be coming if congress follows through on plans for deeper reductions. the president and secretary pineda bridger and the joint chiefs chairman general dempsey and other pentagon officials. >> good morning, everybody. the united states of america is the greatest force for freedom and security that the world has ever known.ll and in no small measure that's

because we built the best equped trained, best led, best equipped military in history. kee and as commander-in-chief, i'm going to keep it that way. us, 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 global responsibilities 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. .. make this place more efficient get rid of

duplication and get rid of waste and my predecessor began that process and we are continuing it as part of this budget. that is a significant part of the budget that we have worked on. two, we have got to look at the whole area procurement and weaponization and look at all o. those areas, the tremendous costs associated with those areas. we want to make sure for weapons we select, meet the needs of tha defense force we are building. that is the key. 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 vic questions. [inaudible conversations] >> okay. >> folks, i think you know who is going to be spein th >> folks i think you know who will lead leave be speaking with r 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 penny mike 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