the drive for '25, that is that takes us to the 2018, i want 35. so we need more to get that done. so for us this cast of characters, it's not about them, it's about president obama, how well he will do. our candidates, how they compare and contrast to the candidates they're running against. so, um, i'm not going to be tempted into telling you who would really be the biggest winner for us on the republican side, but we feel it's not about them. it's about us, and it's about our president. ..

>> what does that tell you? >> it tells you that you really do not have an understanding that the education of these young people is critical, to not only their self-fulfillment, but to the competitiveness of america. anyone who has ever been to a d.r.e.a.m. act event, and i have been to many around the country, knows that these young people are more articulate from the subject of our founders, our country, and what america means. they are the living example of the american dream.

part of what we are proposing this year is reigniting the american dream, building ladders of opportunity, work hard and take responsibility, put down ladders for them to come up and not just roll up the ladder and walk away. that would be the difference between us. we have important work to do, and the d.r.e.a.m. act, we passed in the house. i was very proud. it fell short in the senate of, i almost wish that sent over promise. i think it's indicative of a hard line that doesn't seem consistent with who he was as governor. >> a hard line, you said you? >> that's a hard line. how do you think that will affect republicans efforts to improve their performance? >> i don't think it will be helpful at all. i think it will be harmful.

>> why? >> the hispanic community, and again, i was just in el paso, in three places, california of course every day, the hispanic community. education is a key issue to the hispanic community. it is, it is the key in our whole society to making a difference in how people perform, how they succeed. it is, i always say this, when these families come to america to make the future better for their families and the next generation, with that hope, with that determination, with that optimism may make america more american. because those are of america's driving principles, optimism, hope, determination to make the future better. it's what we were founded on

with that predicate that each generation would take responsibility for the next. so when they come, that reinvigorates those ideas, but education is central to it. and the hispanic community knows that. and so for these children became year, many of them as babies, some of them with no familiarity with the country they came from, not even speaking the language in many cases, of the spanish language, of doing well in school, and the rest, they are here. they are here and we are saying we're not going to give them the opportunity to go to college and succeed. they are, among them some of the most fabulously talented young people. so, i think that one thing we did on immigration, build comprehensive immigration reform, was to hold it together

for a long time. we're not going going forward in less we have full package, legalization, secure our borders. you held it together but it didn't past. >> know, but we made a departure and said okay, let's just go with the dream act. that was a departure. >> comprehensive didn't past. today it's back to school day for the house. is the payroll tax cut extension, madam leader, would you before extending it for the full year if you are paid for by spending cuts rather than taxing the wealthy? >> well, i think, i'm always open to seeing what offset someone may want to put forward, but it seems hard to explain to someone why we have tax cuts in the wealthiest people in our country, which are not paid for, 350,000 of the wealthiest

families in our country have tax cuts, and they made over a million dollars a year, but we cannot catch one red cent of that money. but if we're going to have a tax cut for a hundred and 60 million americans, who have to pay for, we will have on employment insurance which is part of the package that people have paid into, we have to pay for that. we shouldn't have to do that. and so, i would say of the three things, payroll tax cut, the unemployment insurance, and the ability for seniors to see the doctor, their doctor under medicare, that sgr would be paid for by the overseas account, perhaps some of the other rest of it could be, but it would be hard to say --

>> that's the first time you said that. >> know, i've been for that. >> but i think, i think you're thinking pay-fors is evolving and what is change about your thing to pay-fors as you go into these? >> i'm open, we talked about pay-fors in the grand bargain of the supercommittee. and so we said if you have a big deal that's going to save, cut the deficit by $4 trillion, then some of these types can be justified if you have growth, you have to have growth. if you have growth, entrepreneurial package, how do we have growth to create jobs? what revenue can we bring in to further growth, but also to offset the deficit, and the cuts, the spending cuts that

would balance that all out. but you can't say well, we're not doing the big package anymore, but we still want to do these cuts over here when you get really nothing for it. >> so, you're proposing another grand bargain, another larger package because well, i never give up on that. i never give up on the. that's not going to happen unless two weeks or whatever it is when we come back, i think we're four days in january. >> but your expressing more openness than you have in the past? >> to offset. i think we have to say okay, if you think him and i do think he should have to pay for it because you don't pay for tax cuts. the wealthiest people in america, why are we paying for for these people? there's a reason for that, because if you, as you offset it you are tearing some of the stimulative impact of these tax cuts, the tax cuts are important

because they are received by people who need the money, will spend it immediately, inject demand into the economy and create jobs. there is a macroeconomic purpose to those tax cuts for 160 million people. and for unemployment benefits for a million, who lost their job through no fault of their own and want to go back to work. so that, that if you look at what the economists tell us, the unemployment insurance is one of the biggest drivers of job creation because we need that money to spend immediately to me, not only to have any survival on the payroll tax cut, a similar impact. so to the extent that you start

offsetting, you start weakening the macroeconomic impact of it. so, however, you know, in order to get that job done, if there's a way to look at some offsets, which could be revenue, could be subsidies for big oil, subsidies or airplanes, could be some of those kinds of things that might be used for that, but it shouldn't come out of our investments in education and the rest, which again, grow. nothing brings more money to the economy, to the treasury, let me say to the treasury, nothing brings more money to the treasury and education of the american people. k-12, higher education, postgrad lifetime learning, nothing brings more money to the treasury and education. >> housing is a huge issue in california. it could be a big fish in the

presidential campaign. getting all the efforts that the administration has made to stabilize the housing market, you think it's time now to accelerate foreclosures to let the housing market reset? >> our members from california have written to the president asking him to appoint, well, i don't want to say replace marco, but he has been there for a while and they are not pleased with the pace of things there. but what i'm seeing now are some more, i wouldn't say overly enthusiastically, but some more positive signs about how bad is going. i've always been one who said reduce the principal, you know, there are all kinds of ways that we could have reduced the principal and interest payments, and to the extent that we did that we would take some of the

upside when these houses eventually came, when the market came back. federal government would have part of the upside, and the owner would have part of the upside so that somebody else who was paying his or her mortgage on time and all the rest didn't say, i was penalized because i did what i did. >> some of these pending foreclosures are cancer that need to be cut out, right? >> well, it's just a question of, you know, how they originated. some of these were subprime loans. somewhere people just lost their jobs, nothing to do with the subprime loans. and there was an initiative, which exists to help people have lost their jobs who have many of the make payments for the last three months or something like that, for them to stay in their homes. this is really going to be a

tough-minded, cold-blooded analysis of all of this at some point. i've had people come to me and say, my banker has said to me, even though i have said, you know, i am back to her, i have the money, i will put it in the bank, you know, three months ahead of time so, you know, i'm going to pay, and the banks have said them the bank in this particular instance said, your more valuable to me in foreclosure and who needs to do this cold-blooded analysis? >> i think we have a responsibility. >> outside of government? >> everyone with a hand in it, because it's not, that would be enough reason. it's not just about people staying in their homes and the dignity of that. it's also about what this means to our economy. and our economy is never going to be fully well until this

happens. now, there's some who have said let it drop bottom and as it comes back, then we can recover. >> so what should the administration or the congress due to jumpstart the housing market? >> well, i think we're a little bit, i think something could have been done sooner, similar to what i said before, which is how do we keep people in their homes? how do we keep them paying what they can pay, and take some of the downside of ownership as they stay in their homes? >> congratulations, you've had a great run. i think sue has a question for the leader. >> madam leader, thank you for doing this. i wanted to ask about, he referenced it early, about redistricting and its impact on 2012. one of the things that struck me and i know not all of the maps have been fully done, but we will look at on a national

level, it does seem that this year, this round of redistricting has continued a culture of what could be called income of protection but a lot of the districts where incomes have been drawn in a way that makes it easier for lawmakers to get reelected, or at least does include them in more competitive district. i wonder in your drive or 35 now, if you worry that the nature of redistricting has just created districts just i the maps are not competitive enough to put in play a number you would need to put in place? >> you never know what the consequences are going to be of redistricting. in california, the republican party made it very, very expensive and concerted effort to put a commission on about, commission to draw the line. i'm all for commissions drawing lines, but there have to be certain standard and i would hope would have a a national bill that has that, though standards and then states could

take them on, and put their own characteristics in their own states. what happened in california, and i never have ever, ever feared and objective redistricting, you know, that's what we want is an objective redistricted and what happened in california is they spent a lot of money, they pass this redistricting commission which was, would not have been the redistricting commission, my thinking and best in terms of voting rights act and that kind of thing, and what will we do in california would probably pick up four seats. because if you keep it up to actively, that's, same thing in texas. i do not call me to go into the back and forth in texas. they thought, the republicans thought the worst venue for preclearance, which is the district of course here in washington, d.c., the justice

department, they took it to that court. that court said toback -- go back to the texas legislative be drawn maps, take it back to the court, san antonio, san antonio drew the line, probably gave us three or four seats. the supreme court decided they wanted to hear that case. they reached down to do that? now, in that case, what we're concerned about is why would a supreme court, with all the important work that they have to do, get involved in an interim redistricting? this is just a redistrict yearning for this next election. it's not a redistricting for the 10 years. so this is something just the court in washington said the court in texas should drop alliance and go forward. so we are concerned that they may want to use that case to

repeal title ii and title v of the voting rights act. justice scalia is in charge of the texas -- they divide the country and nine. sections committees in charge of texas, and decide, not a fan of the voting rights act, decided that they should hear that. so we are concerned about what it might do in terms of the line, but we are more concerned about what it might do about title ii and title v of the voting rights act. but any of these places, again, if you can have -- i'm all for having commission, a national commissioner of august and national commission, legislation passed that has national standards for commissions that states would use to take it out of the legislative process. legislative process, for you if you have a, but against you if you don't.

just in terms of the public's confidence in the system, let's just take it all to stay determined commissions that lead national standards in terms of voting rights act. so we will do really well. they said they were going to win 10 to 20 states, -- seats, republicans. with stiff competition might you. that was one of the most foolish statements was made about redistricting. it would probably a wash or we might win a couple seek. >> to follow a. in texas and california those seeking mentioned are still only six or seven, assuming democrats when the ones that you mentioned it when you look out at ohio, pennsylvania, tennessee, illinois even come it's more culture of saving the seats that they have now, not necessarily growing the majority. it's hard to see pennsylvania as a good example of the place with a larger just protected

incumbents that are there which is a seat the democrats should be able to play more competitively but not in the lines been drawn for 2012. >> illinois will be very positive for the democrats. the republicans did a number, your crack, in pennsylvania. they really did a number, they just sort of block and members will be running against each other in some cases maybe they're of the same party. now, we feel pretty good about california, new york, which hasn't done their redistricting yet, but just what the makings are there. illinois, new york, california, texas, florida, arizona -- well, i want to show my whole hand here today, that we believe that the makings of the 25, their 35. >> you predicted here you're going to retake the house maybe with that question. >> what i always say is right now today we see a path to that

victory 10 months from now. >> you must be able to go further than that? >> no. what i said to my colleagues, you're used to sports analogy, and i grew up with five brothers and i'm into sports all the time, but when we, when we are fully back here in february, it will be nine months until the elections. thinking another way. nine months we have to have every one of those days very, very healthy days of that, in nine months we give birth to this wonderful victory. they go ahhh, don't want to talk about that. we're going to make very good use of that without raising republican come with that redistricting the republicans, without recruit the republicans.

this is the most important part. you have to have a candidate. the candidate usually will tell. >> on the race for commute than 400, what is the pitch that jamaica people to give money to house democrats as opposed to the senate for the presidential race, or super packs are all the others have? >> we work very hard. we have a plan, and as i said we had the candidates and that's a big selling point. [inaudible] >> yes, the candidates. in order to win 25 seats you have to play in about 50 states. so we have to have speeded at how many are you going? >> about 75 that we will reduce, we will see how they play. maybe all, but how to play and then that comes down to about 50 the are you a 75 have? >> we are at 75 now. >> when does it narrowed to 50? >> maybe it never does. maybe they all succeed in the destiny. but here's the thing.

we have about 70, like 35 women, over 30 are women. we have a large number of hispanic candidates. it's really a very mixed group, with the women we have, a police chief in our land, a police chief, a young woman, been in the police department for like 20 years, rising to the level of police chief. i know how to protect people. you have tammy duckworth who served our country in the military. you know her personal story. not today, not on my watch are they going to do this to the country. >> what is your interest with her speaker she will be your. >> why are you show confident? >> just the district. it's still the primary there, she and another wonderful person are running, but i believe that tammy, she has ran before, she has a national constituency. her story is a very compelling

one, so we believe that, that she will be here. that's not to say that the other candidate might not, will win that seat, whoever the nominee is in that seat, we will win that seat can it tell us something about speaker boehner that we don't know. >> i haven't the faintest idea. [laughter] to me what you don't know. >> you can relate to him. a lot of partyline votes, number two who want her job, but you've seen that movie -- [laughter] what advice would you have for him as he goes into this session speakers well, i would hope he doesn't need my advice, but i would hope that they would act on behalf of the american people. that didn't happen last year in they wouldn't describe quite that way. but specifically how would you play your cards to fully? >> here's the thing. you have to give them some sympathy in this respect. when i became speaker, i knew the members a long time. i have helped each one of them

when, relationships over time, and when we what to do our legislation, it was like a finely woven fabric, and everybody, everybody's thread, strong, strong thread of what they brought to that, we build consensus and we wove our legislation so that it was very strong, and people stayed with us. you can do that if you know the priorities that people have, the particular nature of their districts, the courage that members will have to do what they need to do. and so, we all know each other very well, and we were able, the opportunity presented to us, when we won the house and then when president obama won, we

knew what we were capable of. >> how does that contrast with house republicans? >> you know all these people came in, i don't know how well they know each other, then they would, much less the other members, and so it's a different, it's a different dynamic. i really do think that, contrary to what you may think or know anything, we always build from consensus. that's harder to do if you don't know what the possibilities are because you just don't know the members. >> very little time. [inaudible] >> he is not really in charge. what are your observations about his ability in the nine to 10 months ahead, at least, to marshal his party for legislative progress? >> the speaker of the house has awesome power.

power of setting the legislative agenda, the power of appointment to committees, the power of recognition, who will lead on any particular issue. and it's a very special place in the legislative and the federal, legislative process in the federal government. again, far be it from the to give any republicans any advice how they have their dynamic, but i would hope that what we all come here to do, i don't think anybody comes here to be a party regular. i think you come here to do, to work together to do what's right. when i came 25 years ago, it wasn't this way, and it wasn't until newt gingrich that it got to be so poisonous, and then after that. but i think that i would be the

last verse and on earth to be giving any advice to them, except the strength that we had from our own and what we were able to accomplish, which was very significant, which i'm very proud, is more related to the lives of the american people and the less they related to a philosophical ideological agenda, the more successful we were in moving forth the legislation in of course, did that answer your question? ave[inaudible] >> keeping them corralled. anything from mr. boehner in particular rather than just a philosophical that you just gave us. how does he keep his people and laying? >> you're just going to have to ask him. but one thing he's going to have to do it is going to have to want to keep them in line. >> what do you mean by that? >> well, i don't know, we've

been, the republicans this year, that was almost bare on the default, well, let's start with the first c.r. they didn't have the votes. and negotiated the c.r. and then they didn't have the votes as we had to preside the votes but we did have input into the bill. that's one. then you go to the default. that was terrible, that they, by and large many of them openly said they didn't think, they said it was okay if we default, that they would take us to a place where we would be downgraded because of the uncertainty as to when we would pass legislation to honor the full faith and credit of the united states of america. that they wanted to or not, what did he want to do? ditty just want to prolong it, or have discussion or did he want to find an agreement? i really don't know.

>> rapid round, a couple of question from david rogers. historic figure both as the first woman speaker and the legislation you passed, what do you want now most besides the gaveled? >> what i want to see is that health care reform bill, be recognized what it is. i think we are in clad in terms of the law, but you never know what happens in court. so one of the reasons i'm here is with the passage of that bill, and now its safekeeping and its transition into what the public knows what it is in terms of the difference it makes in their lives, no longer being a woman be a pre-existing medical condition. millions of kids already are on to their parents policies, and to their 26 years old. children, young children for a while now have had, cannot be discriminated against because of the pre-existing medical

condition. it's about innovation, about prevention, it's about healthy america, not just health care for america. so that, my focus is still on that. >> david also asked about unlicensed spectrum for super wi-fi and high-tech community. are you surprised the gop is against this, and unwilling to guarantee some reserve capped unlicensed for this purpose of? >> nothing surprises me about the gop. but i do think it's really important that we recognize the importance of the unlicensed spectrum as we try to use the spectrum as a cash cow, atm machine, to pay for things. >> last question from david. if democrats could get a promise of a permanent doc fix or medicare, would you give more ground on medicare savings, or are you resigned to just another patch? >> when you see more ground, if we could get a permanent fix which is what we've been for all along, we can get a permanent

fix. there have been some interest on the part of the republicans for a piece of sgr. we would like to do it, get off the table so there's no uncertainty as far as our seniors and their doctors as to the. as to the care they will receive. again, it would not relate to sgr. is there some other element that would come into the picture that would justify doing something on medicare, but you can't say we're taking care, now will hurt you some other place. and less there's another upside, upside to it. there's real concern in our caucus that republicans have said they will put their budget again this year, the ryan budget, which makes seniors pay $6000 a year more for medicare. you know, why is that a good

idea when we can get the money someplace else to? >> the penultimate question, you are passionate about democracy in china, always talk a lot about that on your business. do you still think about activists who were arrested, jailed in tiananmen square, is it still raised with chinese delegation? >> absolutely every single time, much to their dismay. we had a little bit of a change with the chinese government. they decided that we have been fighting for so long that we might as we'll get to know each other better. so they invited me for head of state visit to china a couple years, a couple of years ago. and i told them, i want to focus on climate issues and energy issues, and that's a place we need to work together. but i'm not going to ignore the human rights issues and aspects of it. so, i see them, many of the dissidents are in the u.s. i see them from time to time get their start -- there is still people in jail?

>> oh, yes. some are getting, some are being released, others are being arrested. some of them were in jail at the time to yemen came out, and now backing. but most excruciating pain that a tyrant can exact on some political prisoner is to say him/her, nobody remembers why you were here. they don't even care that you're here. and we promise the chinese dissidents, as was other dissidents of the world that we will always be leading the drumbeat so that their names will be read at rallies or on the floor of the house are the rest. last year i had one really special privilege, was to be invited by the chinese dissident who won the nobel prize, to be a part of the delegation which

went with, his family couldn't even go by the delegation he chose to represent him in norway, as you may recall there was an empty chair. the nobel prize sat on an empty chair. it was a very eloquent statement that went around the world that met the chinese would not allow him to calm and actually, the nobel people said this further proves that we were right to give this nobel prize. >> how do you think ambassador locke is going to just because i think is going to do great. he's made a big hit going over there. he was like standing in line with a backpack on his back, with a coupon getting coffee. i guess starbucks is, the equivalent of starbucks. that made a big hit. he is proud of his cultural heritage himself, but as we

leave the subject of human rights, let us focus on what's happening in syria. this is just stunning, 5000 people probably already killed by the regime there. people were hopeful and we were all hoped for a long time that there was some progress. i'm going back some years now, but clearly the regime has a 10 year into what's happening in its own country and reaction to it. and i have to get you, i forgot to ask you, state of union this time. are there going to be dates again? what's going on with that? you had a buddy system with republicans, right? [inaudible] [laughter] it's always worth a try. i would like frankly to have a date for when the countries will meet to do, to do the tax cuts into is going to be your buddy this time? >> i get back to i will see you. >> will you have somebody? >> we will go ask each other.

but it's a nice gesture. but the fact is that let's not fool ourselves into saying we are singing kumbaya and saying we're not giving tax cuts to 160 million americans and even. >> you sound like it you think it's silly? >> i wondered why people sat on different sides of the aisle. when i became speaker i said can we bring the podium, you know, the speaker's podium, in chamber, closer together? why do we have to speak at different podiums? why can't we speak at each other's podium's? i'm all for this but are just like to see some follow-through as will be meant as we say goodbye, you've done something that i'm going to do, and that i rather fear, and that many people in this room are going to do. you switch from blackberry to iphone. >> oh, yes. i love it. >> why? >> will, it's just magical.

[laughter] manifestation, it's a manifestation of all of the choices that people have in life. 25 years ago i came to the congress, some of you were not even born, and we have three networks and a newborn cnn. my friend from cnn. that cnn was very new at the time. that was the choice. passage of the telecommunications act, that was the late '80s. in the '90s, by the late '90s, five, 600 channels to choose from on tv. and now, right in your very own hand, not only that choice that you have, but a choice to receive your information in real time, and so many different ways. not waiting for the nightly news or anything. just to have it in real time. so information is king. it's everything.

it's so important. so i just love having my little pal there. but i tell you this but let me tell you this one store in closing. [laughter] my three year-old grandson, alexander's little boy, this was at thanksgiving. and he said i'm a chef. he wears his white hat, a rope. are things getting weekend i was cooking and he was on like the counter behind. and i said okay tom, set it up. do you want to cook breakfast? he said no. i said you're the chef. and i turned around. he had picked up my iphone, three years old, and was watching cartoons. i couldn't get cartoons on their in a million years. three years old, so just imagine the difference that all of this is making.

think of all the choices we have. in some ways we are spoiled. in other ways it's right that we should have all of that access to information, to make us better informed, and that's what we want to do with the election is to make sure everybody knows where the money is coming from, who is supporting whom so the decisions that are made are made in the public interest, not in the special interest in it i feel much better about my coming change. i want to thank our live stream audience. thank c-span for caring "playbook breakfast." thank our friends, salute our urban alliance, graduates, congratulating. we think our friends from bank of america for making this conversation possible, all of you for coming out in the rain. madam leader, thank you for -- >> i think i love you, too. for the opportunity to speak with you. [applause] [inaudible

conversations] >> house minority leader nancy pelosi this morning at the museum here in washington to greet she will be joining her colleagues to begin the second half of the wonderful of congress. legislatively we expect a brief stay in the house with members working on collecting the sergeant at arms today. you can see the house live with a gavel increasing our companion network c-span starting at 2 p.m. eastern with votes at

6:30 p.m. here on c-span2 at 10:15 a.m. the senate returned for a brief pro forma session. legislative business will resume in the senate january 23. >> and web live pictures from the woodrow wilson center here in washington. up next were expecting remarks are moment security secretary janet napolitano, former national security advisor general james jones, and former acting cia director john mclaughlin will be discussing the work homeland security is doing to strengthen global trade and travel routes. also combating terror threats. we are expecting opening remarks from former telephone a congresswoman. we will have likely gets underway here on c-span2. it should be just a moment. while we wait, comments from senior white house adviser valerie jarrett, a memorial event hosted by the national action network took place yesterday.

>> thank you, thank you so much, reverend sharpton. good morning. it is indeed an honor and privilege for me to be here this morning. i want to say looking at that video, reverend sharpton, your words were inspirational, and she joked about the fact that you look different. i think we should all ask the congratulate you. is a very conscious decision on newport to decide you want to live a little blogger and exercise and eat well. and we appreciate you doing that. so how about a round of applause? [applause] i appreciated your kind words of support, and i appreciate your friendship, so thank you. i also want to recognize the wind beneath your wings, who does a terrific job, congratulations. [applause]

my colleague and friend who worked so hard each and every day to protect the environment so our children will grow up in a cleaner world, lisa jackson, administrator jackson. [applause] barry gordy, alexis, james mitchell and maurice cox, all you have done a tremendous job in your careers, not just professionally but your civic commitment to the movement, so thank each and everyone of you as well. [applause] so, yesterday i was in atlanta. i had the humbling privilege of addressing the congregation at ebenezer baptist church. and as i was talking with the president the day before i went into, we were reminiscing about his last trip to -- >> we will leave this event at this point. you can see it in its entirety on our website, c-span.org. we are returning live now to the

woodrow wilson center for remarks in homeland security security secretary janet napolitano and others, talk about the work homeland security is doing this morning. live coverage on c-span2. we expect remarks also from john mclaughlin, former state -- former cia director and general james jones. >> and in the moment i will introduce many dear friends who are members of the aspen home in security advisory group. unlike the lincoln memorial or the washington monument, the wilson center is a living memorial to our 20th president, and provide an essential link between the world of scholarship and policymaking. that is essentially what the homeland security advisory group, the aspen institute, which i co-chaired with my very good friend, former sector of homeland security michael chertoff, aims to do. we are a bipartisan group with

extensive expertise and strong opinions, no surprise, they meet periodically to discuss homeland security and counterterrorism issues and make recommendations to policy members. many of this group are with us, and i can't be sure everyone is sitting in front of me, but i see many of you. let me just list you apathetically, charlie allen, is charlie allen who? no. zoe baird going to is here. stewart baker. richard, p.j. crowley, steve hadley. brian jenkins, all the way from california. michael leiter, who was a marvelous head of the national counterterrorism center, and poppe to be. stuart levy, is to hear? no. jim loy. paul mchale, former colleague in the states congress. phil mudd. eric olson.

dan, is he hear? no. maren? guy swan, yes. evan wolf. gary hart, former senator gary hart, very good friend and another of the group here from colorado. and the indefatigable director, former homeland security inspector general clark ervin. the wilson center is pleased to partner with the aspen institute to host this event. the second public discussion we have filled with secretary, open secretary janet napolitano. today, we are examining the international dimension of homeland security. most people don't recognize what an important role the department of homeland security action place internationally. as a recovering politician, as i mentioned who sat on the house homeland security committee and

shared it subcommittee on intelligence for many years, i do know about this. representing two of america's largest ports of entry and terror targets, lax and the part of lost interest, i spent a lot of time thinking about the best ways to bet the people who enter our country without slowing tourism or commerce or compromise in individual rights. but it's not just about securing borders. as a co-author, actually the original author of the safe port act of 2006, i urge that we needed to push out america's borders, because we don't want to discover a container ship with highly enriched uranium at the port of los angeles. we don't ever want to discover it, but surely if it is the situation we want to discover it at the point of importation, or want to discover it when that content is penetrated on the high seas. and that is why we not only need state-of-the-art intelligence, but we need the homeland

security department charged with protecting our homeland, not to be on the case. it doesn't help to screen air passengers with cutting-edge body scanners at lax if a passenger into a cocked waltzes to the airport with a weapon. so to thwart threats, the department of homeland security needs to and does maintain healthy relationships with our international partners so we can share information about individuals who may post security threats so we can identify those who might have so-called clean records, but nefarious intent. these are all appropriate applications at u.s. home is a goodie. this morning our panel will explore these issues, and we have an extraordinary and experience group of people, including secretary napolitano, a former national security advisor, and a former deputy director of the cia. moderated by an excellent

homeland security reporter who just happens to be a woman, janine messer. before we have in this panel secretary napolitano will say a few words that everyone knows she is the former governor of arizona, and our third secretary of homeland security, our second, sitting right in front of me. she was the first woman to chair the national governors association and was the first female attorney general of arizona. you do need to know, however, that i knew her, she says, i never, i know when i never come when she was a young lawyer in phoenix. she says she had a perm. that is somewhat unimaginable. [laughter] somewhat unimaginable, but even then it was absolutely clear that janet napolitano was someone to watch. and i think she is not on a summit to watch in this job she summoned to watch in a future. she's a dear friend and his protecting our homeland as we

stand here and sit here, please welcome secretary janet napolitano. [applause] >> so, thank you very much, jane, for the introduction. thank you to the wilson center for hosting us today, and to the aspen institute as well. and i really want to, their committee on homeland security co-chaired by jane harman and michael chertoff, a number of the members are here today, and it is part of our ever maturing process had homeland security to really think strategically about its role domestically and in the world, and how we serve the people of our country in the best possible way. i'm also glad to be here with my friends, jim jones, john mclaughlin, and i think we'll have a very interesting discussion about homeland security and its role in the

international sphere. and let me, if i might, turn briefly to that to kind of set the stage for our discussion. we have personnel now stationed in 75 countries around the world. we have the third largest international footprint of any agency of the federal government. our work in international sector is increasingly substantial. it's essential and innovative. it recognizes that in today's world, domestic security and international security are inextricably intertwined. a security decision made in one part of the globe can rapidly impact security half a world away. and that means that we have to look at our physical borders as our last line of defense, and not as our first. our international engagement that dhs is focused on a set of core approaches and goals.

these include improving information sharing, fostering better operational alignments and joint activities, and ensuring better law enforcement coordination with other nations. since i became secretary almost three years ago to the day, we have not executed 118 major international agreements that go to many of these goals, with a number of other important initiatives currently under negotiation right now. i'll start, for example, in aviation sector. we have now negotiated a new passenger names record agreement with the european union, the post lisbon treaty european union, to improve information sharing and ensure that dhs personnel have the information they need to identify threats before summit embarks on a plane to the united states. that we have greater tools, that

we have greater awareness. the agreement has been accepted. it has been approved by the council of ministers. and we are now awaiting a ratification vote in the european parliament. it is, and i will apologize in advance for the alphabet soup, i will try to explain some of these as we move forward. but pnr, passenger name record, is a critical tool to access a passengers risk before he or she boards a flight to united states, it allows us to better identify passengers to whom we should pay more attention. it also, by the way, as we move forward will help us also identify passengers who are low risk and can be expedited through lines. the new agreement incorporates all of our commitments into a single document, and it does i think health and ensure the safety and security of the traveling public.

and i mentioned that to start with because this is a major agreement for which dhs was actually named as the lead negotiator on the half of the united states. but that's not the only one. moving onto cargo, we are working hand in hand with our international partners bilaterally, and to multinational organizations like the world customs organization, the international civil aviation organization and international maritime organization, to secure agreements, to improve security while promoting the movement of cargo around the world. with respect to cargo security we have worked with the dubya co, icao. i told you to be off the bits in distress nation. and with our partner nations to share info, build resilience and smooth travel and trade. a good example of this is a program known as global shield. global shield protects the supply chain by preventing the theft or diversion of precursor

chemicals that can be used to make improvised explosive devices. bomb making materials. and as of december of 2011, we have accounted for the seizures of over 45 metric tons and 19 arrests related to the illicit diversion of these chemicals. more and more nations are now joining into the global shield network. with respect to passenger security, i always, i would mentioned pnr, but we are also moving to pre-clear more passengers through the world. this is done with cbp. cbp as customs and border protection as you know. what preclearance is, is somebody can actually go through the customs process, the international border travel process abroad so that when they finally get to the united states, they can expedite through, through the lines. it allows us to screen

passengers internationally, and it's identical to what they would do to here except it is preclearance. last year we processed 15 million travelers through 15 preclearance locations. and last december i announced a new immigration advisory program in abu dhabi that is specifically designed to lead to preclearance agreements at the airport there. this would be the first such agreement in the middle east. we also have announced a new in qatar and negotiations in other ways and other countries as well. programs like that, and programs like global entry which is cbp's kind of fast travel program, that gives you your precleared card to expedite the international arrival. a new pilot that we have just started called reject, which is domestic part of global entry so

that working off of this same platform would include passengers through domestically. all of this is designed to improve access to passenger information, to allow us to better assess passenger risk, and allocate resources to high-risk travelers. these programs make the passengers travel experience safer and more efficient, and that already has had a positive impact on many. rather than standing in line after entering the united states, and by the way, in our discussion somebody wants to raise an issue about where they last stood in line, one of the problems we have, of course is that some of our airports are older and they are not built for the wide-body planes and the mass arrival of passengers all at the same time. well, one of the ways we can do with it is better differentiate among passengers and also conduct more and more of our activities outside of the physical border of the united states. that all requires international

agreement, and building that consensus, and it's right in that sweet spot where security and economic and efficiency can be united. let me touch briefly on two other areas where we are heavily engaged in the international sphere. one is cybersecurity. in an age, of course of rapidly evolving rapid -- cyber threats, physical borders are almost irrelevant except that they have jurisdictional meaning, and that requires us to work internationally. we are working now with international partners on budapest declaration, on the european cybercrime forum. we conducted an international exercise this fall, and we are working within the auspices of the useu working group on cybersecurity and cybercrime. we also recently entered into a partnership with mexico to enhance our mutual cybersecurity and infrastructure protection

efforts. and then, the third area i would like to briefly touch upon is how during violent extremism. we know that terrorism, whether homegrown or imported internationally, remains a threat in the world today. .. >> we have who are within the united states the first line of prevention. so what does all of this mean in concrete terms? it means, obviously, that homeland security requires working internationally as well

as within our borders. it means that there is a new avenue of negotiation and diplomacy occurring outside traditional state department avenues, although we work very closely with the state department and coordinate our activities with them. it means that we are finding new ways to unite effective security with good economic business practices as we smooth and secure the movement of goods and people around the world. and given the economics and the sweet spot i described, it means that it is within the self-interest of the nations of the world to participate globally in these initiatives. and finally, it means that we have matured the concept of homeland security to the point that we can dissolve the traditional dividing line between international security and homeland security and recognize that each can strengthen the other. so thank you for your presence and your attention here today,

and i thank, also, many of you for your ongoing efforts in this arena. i look forward to our discussion. thank you. [applause] [background sounds] no, knox. [inaudible conversations] >> thank you all for joining us. secretary napolitano, thank you

for setting the stage, and i just want to assure you that we all have -- [inaudible] [laughter] let me introduce our other two panelists. i'm sure many of you are familiar with them, but general james jones is here with us, 40 years in the marine corps holding many important positions including commandant of the marine corps and the head of all marine forces. he then became president obama's first national security adviser and now is president of the jones group international. and john mclaughlin, arising to the post of deputy directer and eventually serving also as acting director, now a senior fellow at the nitze school of advanced international studies at johns hopkins. thank you all for being here. well, i can't have this menu of guests guests and not ask you, first of all, about the current threat situation. a couple of weeks ago a video

was released that appears to show marines urinating on members of the taliban. there's been a lot of discussion about what reaction that might evoke. secretary napolitano, let me ask you, are you seeing anything in the chatter or other indicators that worry you that perhaps this has been some sort of a trigger to action or may be in the future? >> um, first, i think the activities that were videoed are not the policy of the united states, they're not the practice of the marines or our other fighting men and women, and they deserve the highest condemnation, and i hope and know that appropriate actions are being taken in that regard. so we begin with that. we have, obviously, are always watching for things that could trigger an international reaction, that could have impacts within the homeland. and it's an example of how something that happens abroad or

that happens in the so-called international or dod spheres could actually have real impacts within the homeland. i don't want to talk about the intel we have except to say that that is the kind of thing that in the past has caused violence and violence against western interests and against the united states, so obviously, we are monitoring very carefully what is going on. >> the other big point of tension right now, iran. much concern over their nuclear program, escalating tensions with the u.s. over the trait -- strait of hormuz and so forth. let me ask you, general jones, what aspect of this relationship between the u.s. and iran concerns you most at this point in time in terms of its possible ramifications for the homeland? >> well, i think it's enormous. i mean, i think 2012 is announcing itself as the year that iran is going to have to be dealt with one way or the other. but it is the enormous shadow

that casts its -- that demands our attention in many different ways. the threat of iran pezing nuclear -- possessing nuclear weapons, obviously, is a threat to one of their sovereign country neighbors, israel. it's a real threat to a possible nuclear arms race in the gulf. and, third, it's -- and the most pervasive threat as national security adviser is the one i thought had the most risk is the fact that in a world that's increasingly populated by nonstate actors, iran could export that kind of technology of a weapon of mass destruction, nuclear but others as well, to a nonstate actor. and if that happens, i think the world that we live in changes dramatically. so it's a big deal. >> the u.s. has tried to mount an international effort vis-a-vis their nuclear development and had limited

success. does that show the limitations of international cooperation on security issues? >> no. i think, i think it certainly is always difficult, but i think one of the signature achievements of the administration in the first couple of years was to be able to rally such generally disparate countries like china and russia and many other countries to the cause of sanctions against iran. sanctions that have not really run their course, nor have they been ratcheted up just as fully as they can. and we're seeing individual countries and some of our arab friends and neighbors starting to really tighten the screws on iran. so there's still a ways to go in terms of things that can be done. and i think iran knows that. and i think that's one of the reasons we're seeing the bellicose behavior of iranian forces in the gulf, in the gulf, in the arabian gulf or

threatening the straits of hormuz which is one of their favorite tactics. but it's clear that where world opinion is concerned the majority of the countries that we have relations with are certainly with us on the side of the issue. >> john, are you also concerned about iran's relationship with certain groups like hezbollah? >> yeah. i think the problem with iran is that, you know, we have basically three courses of action. we can use diplomacy, we can use sanctions, or we can, you know, people keep saying that the military option is still on the table. i think it would be a very bad option, the latter one, to use. and one of the reasons is that iran does have this relationship with hezbollah. hezbollah has not attacked american interests in recent years but has lots of plans on the library shelf for doing that in the event we got into a confrontation with iran. and hezbollah, of course, has been present in the united states at least in fundraising.

so the, one of the big problems with iran is that if you get into an open confrontation, a military confrontation, you risk a cycle of retaliation and response with great difficulty seeing where the end point is. >> if i might on iran, a couple of things. one is we've seen some activities that are in open source, obviously, now that seem a bit irrational but can fit into an overall picture. for example, the individual brought to the united states ostensibly to assassinate the saudi ambassador here. that's an example where cbp working with our other domestic law enforcement partners was able to help make sure that that arrest occurred and that no activity was underway. the other thing is when you talk about some of these organizations, one of the things

we do is analyze at what point do you move from, say, fundraising for lack of a better term to planning a tactic or an operation that could actually take place against a western interest, a u.s. interest abroad or within our homeland and share that kind of information with the police around the country and law enforcement around the country? so they know the kinds of things to watch out for. and to share with them information about where we know specified groups could be located. >> now, we've just had an arrest in thailand of someone, purportedly a member of hezbollah interested in targeting tourist spots, possibly israeli targets. any iranian connection there? and was that, by the way, an example of international information sharing supporting something? >> let me not comment on the connections there and so forth, but i think many of these events

that are in the open source press are now good examples of information sharing that is occurring around the globe. between security, homeland-type security officials as well as other officials. we all have an interest in making sure our peoples are safe. >> general jones? >> i'd just like to point out that i think we've been very fortunate in having two outstanding secretaries back to back. secretary chertoff is here, and i was privileged to work with him in my nato hat, and it was at that point really i started thinking about the international aspects of dhs. and when you look at the threat envelope that's out there, one of the last things -- conferences i attended as national security adviser was a russian-sponsored conference which 43 countries attended. and the main subject of the conference was the increasing cooperation between terrorists, drug merchants and organized

crime. and this is right in dhs' sweet spot in terms of an emerging threat. 43 countries roughly at the table talking about this, this was about a year and a half ago. and this is, this is a clear and present, rising threat. and dhs is, as the secretary admirably pointed out, we want to defend our borders as far as away from our physical borders as we can. and the way you do that is by international engagement. and so the presence of dhs and the importance of dhs on the international arena as part of our combatant commands, for example, having a residence in those commands is very, very important in order to deal with that threat in conjunction with the interagency process. and, um, i think one of the great things that we did early on in the administration was to

decide to combine homeland security and national security and rename the national security staff the national security staff. and that has spawned a great cooperation which i'm sure goes on today. but when you see, and mike glider's here as well. when you see the cooperation that exists in the interagency level in which dhs is one of the prime movers of in the process, i think it's very comforting to the people of this country to see the progress that's been made. >> just to follow up on that briefly, when you have a merger of homeland security and national security at that level, what do you lose? don't you lose some capabilities through a merger? or is it all positive? >> well, since it happened early on and with the, with the agreement of the secretary, you know, from my standpoint we didn't lose anything, we gained

a lot. and you saw that reflected in not only the amount of work that was being done involving the interagency where everybody was present at the table. and it wasn't instant. and we had to grow it a little bit. but i'm quite sure that in the past year it's even gotten -- it's gotten even better. i'd be very surprised if it hasn't because we see, um, and the president presided and, i'm sure, still presides over regular meetings involving homeland security, dhs and dhs is always present, the secretary's always present at the table where other big decisions are being made in terms of international security as well. so this, this growing, um, partnership is really a tremendous achievement, i think. and if you liken it a little bit to what we did to reform the intelligence community where we took -- >> we'll leave this discussion for a brief moment as the u.s.

senate is about to gavel in for what's expected to be a short pro forma session. we'll then return for more from the woodrow wilson center. the presiding officer: the senate will come to order. the clerk will read a communication to the senate. the clerk: washington, d.c., january 17, 2012. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable kirsten e. gillibrand, a senator from the state of new york, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. the presiding officer: under the previous order, the senate stands adjourned until 2:00 p.m. on friday, january 20, 2012.

>> the senate gaveling out after a quick pro forma session. one more pro forma on friday. senates returning from their holiday break for legislative business monday, january 23rd. and we are back now live to the woodrow wilson center for this forum on the work of homeland security. >> you need to be able to pick up the phone and call some police chief in a southeast asian country and say i need you to do this for me tomorrow, and they need to respond. and that only comes about through constant engagement, and to the degree that we've also integrated our own information, homeland and foreign, it facilitates everything. >> yet certainly you can't share all information with all players. >> that's right. and i think one of the things, one of the value-added propositions of dhs, if i might, you know, sometimes we get the question why do you have your own intel and analysis section? you've got the cia, you've got the fbi, you've got the nctc, etc., etc., etc. the value added is really to

take intel that is obtained through a variety of ways and to integrate it into what is, what is and can be and should be shared realtime or over time with state and local law enforcement and with the private sector within the homeland and to combine the intel, the data points with analysis that really says, all right, we have this. these are the things you want to watch out for. these are the kinds of behaviors, the tactics, the techniques that good law enforcement should be aware of. and we share those things through integrated centers throughout the united states. we have 72 of them now. we share those things with the private sector particularly where critical infrastructure is concerned. our utilities, our telecommunications. and build in that way kind of the homeland security aspect of what is being collected and analyzed around the word really. >> but internationally you can't share all information with all countries, you can't trust

everyone, can you? >> that's right. and we don't. now, some countries we have a very, very close relationship with, and the mutual sharing is very robust. others, of course, decisions are made about what can properly be shared. >> in your department you've recently created a new position, assistant secretary for international affairs. what do you hope creating that office will accomplish that you're not already doing? >> well, we had, we had one, and we just kind of reinstituted it. and what that office is designed to do are the follow-up and all the operational things that require time and attention. they, if we decide we need an overall strategy on protecting the global supply chain, that's kind of a policy decision, and a lot of things go into that. but at some point you've got to deal operationally, well, what does that mean at the ports?

the airports, the seaport, the land ports. what does that mean for training domestically and internationally? what does that mean, which countries have to engage? you know, who is going to intersect with all of the alphabet soup of international organizations? and to do that at a level that is very focused and concentrated on the operational activities that need to follow up on the policy decisions that are made. and so that's really what that shop is designed to do. >> now, you also have the state department forming a bureau of counterterrorism, supposed to work hand in hand with dhs, but i guess i'm wondering how much unity of effort there's going to be and whether those two entities and the others that exist end up tripping over one another or being duplicative, or is it all positive synergy, as they say? [laughter] >> of course, it's all positive. [laughter] >> i can't speak about the state department, but in sort of

reviewing all the things that dhs is now doing overseas, i was, frankly, surprised by the sweep of it and the breadth and the numbers. the question i asked myself was how does this fit with what my former agency is doing and with what other intelligence services are doing. and i have to say i came away thinking it's very complementary. it's very complementary. because what homeland security is doing is, essentially, a layer above what's going on in the intelligence realm. so, for example, if someone in the intelligence field develops concerns about a group of individuals who may be traveling, it helps a lot to have a customs and border person from the united states at an airport. it helps a lot to have dhs doing passenger name recognition. it helps a lot to have an i.c.e. agent who can look into whether there's a high risk traveler involved here.

so, you know, i'm not doing this anymore, so i don't know precisely how this liaison is working, but if i had my hands on it, tild assume that there's an advantage to be gained here in terms of how traditional intelligence works in the field, having people from dhs out there who can take this material and do something with it that, ultimately, protects the homeland. >> one of the things that national security adviser i tried to encourage among different countries is the idea that they should, other countries should have a national security adviser so i'd have somebody to talk to. [laughter] >> was it that lonely at the top? >> no, no. [laughter] but a lot of them did. quite a few did. and the united states generally gets mimicked in a lot of ways by our friends and allies. i was curious, secretary napolitano, if you're seeing an international trend towards developing homeland security departments. your peer group, or do you have to do like i did and that's basically, well, they don't have

a national security adviser, so i've got to call, you know, the next closest thing. >> i think what is happening is they are, many countries have departments that overlap with homeland security, and their missions are being amended or changed to more closely mirror the myriad of missions we have now swept under the like rick of dhs. -- the rubric of dhs. my peers are the home secretaries, the interior ministers of the world. those tend to be the closest relationships. but because of the things that we do, we also have partnerships with ministers of transportation, we have agreements on the adopt -- adopt of counterterrorism science and technology and sharing some of that technology. so that occurs at a different level. we have agreements sometimes with commerce departments and things of that sort. but the primary relationship i have, the people i call on the phone, the people i meet with

abroad and hear are the ministers of interior and in some cases known as the home secretary. >> some of our closest relationships are with the europeans. the europeans find themselves right now in a big heap of trouble. economically. how is that impacting what they're doing in terms of protective measures in terms of intelligence? is it hurting? >> well, i think right now they're under tremendous budget pressure as are we all. and some of your earlier questions suggested that, are we being necessarily duplicative and redundant and the like. we are trying not to be recognizing in some areas you do need multiple layers because there are different functions to perform. i think we don't know. i think the intent is not to see a degradation, but when you actually read the budgets of some of these countries and see the reduction of personnel, how that will play out over time is unknown. however, the budget pressure, i

think, on all of us requires us to act more internationally. we have to leverage resources with one another. and we are actually exploring some pilots where we leverage inspections and checks abroad with other countries. we'll do some, they do some all to the same standards, all with some mutual embeds to make sure those standards are abided by. but the idea is to say, look, we're all under budget pressure, there are some things we could do together, and we ought to be exploring that. and we are. >> how worried are you about the future ramifications of their economic trouble? >> well, you know, i worry about a lot of things. >> i'm sure you do. [laughter] >> that's my job. but i think, again, when we meet and speak and speak with each other, the idea is, all right, that's the situation we have, that's the hand of cards that we've been dealt. how do we make this work so that there is a maximum ability to

detect and interrupt before violent action takes place. >> now, the u.s. has internationally provided advice and sometimes equipment to help partners in this security battle. um, is the u.s. still going to be able to do that to the extent it has been given the budgetary constraints you're facing? >> um, well, a lot of that we do through the state department, and this is where funding for the state department, one of the many reasons the state department is key in all of these security areas. for example, our efforts with mexico which have required us to help provide training and equipment up to and including things like some helicopters, that's all funded through something called the merida initiative. that's through the state department, we work with them on how and what makes sense. we work with the mexicans on how and what makes sense, what should be prioritized and,

obviously, on the joint trainings, vetting of law enforcement personnel, etc. so all of that happens within the ambit of the state department and exemplifies the kind of linkage that has to occur there. >> i, i -- we talk a little about the current threat picture, and i don't want to, clearly, spend all of our time talking about the threat, but i would like you to look forward in time for me. six months, a year. tell me what you see merging internationally -- emerging internationally as your principle area of concern, your top two or three. the list could be endless, i know. we've got yemen, iraq, somalia, pakistan. but what are your top two or three? john, do you want to start? >> well, i don't think we're out of the woods at all yet with terrorism. it's become a little too fashionable, i think, to say that al-qaeda is strategically defeated and so forth. in a sense, it is. the al-qaeda we knew at the time of 9/11 is defeet, that al-qaeda. but the al-qaeda of today is still alive, it is less

hierarchical, it is less structured, and it's more in the mode of, they have a motto, it's go do attacks where you have. where you are. there are ways in which it's been weakened. for example, i would say the middle l rank bench is pretty much gone, so there's a big gap between the very top leaders of that organization and the, and the muscle at the bottom. those middle-level leaders are either dead or captured. they're having some trouble fundraising. finish and the arab spring is not working to their advantage yet. >> but it's not -- >> yet. >> -- yet clear it's going to work to our advantage. >> that's totally up for grabs, and it's act i of a three-act play. so we don't know what's going to happen next there. then you come to the affiliates. if i were giving you my top two or three worries, i would have to say i'm still worried about al-qaeda central, the core of al-qaeda, but i'm in a way or

more worried about the affiliates. and there the alarming thing is the relationships and connections that are developing among them. the major ones are, of course, al-qaeda in the arabian peninsula in yemen which now if not controls, at least is influential in about 50% of that country -- >> the impact of the death of al-awlaki? >> i don't think it's had a big impact on them operationally. it's had an impact in the sense that he was their principle spokesman to an english audience. their leadership is still there. there are two or three characteristics of that organization that we have to worry about. one, they move fast. their operation that sent alabama -- abdulmutallab was cheap, and they have a strategy which is a thousand cuts. so, basically, attack us where they can.

and they're not routed out of important cities in yemen yet. and they're connected. that's the other thing, they're connected both to al-qaeda core, and they're connected to al-shabab in somalia which is strong and which is a magnet, it seems for americans of somali heritage who are becoming quite important in that organization in terms of leadership. >> are we still, by the way, seeing americans leave for somalia, or does that -- >> yes, we are. and we work very closely with the somali-american community itself, building bridges there within the homeland. but al-shabab, obviously, is a growing organization and one that is quite concerning. >> your top two or three. >> well, you know, i don't rank 'em like basketball teams in a way. [laughter] i would say, i would agree with john that we should not be facile about the threat of international terrorism. it is there. it takes different forms.

the threats constantly evolve. and the targets of opportunity constantly change. it requires us to always be leaning forward and to try to be thinking proactively what is the next best thing. and so, you know, the al-qaeda affiliates, aqim, aqi, aqip, etc., all are of concern. al-shabab is another one. and then one of the things i constantly keep my eye on is what is going on in mexico and central america, what is going on south of us in this hemisphere that could actually effect us unduly in the homeland itself. >> and your level of concern with an election approaching? >> well, you know, there's an election in mexico in july, so they're in their election season now. president calderon has undertaken really a heroic effort there to try to rid that

country, our neighbor, of these cartels. it is a very violent struggle, we see it all in the papers, and it is ongoing. and our hope is and our plan is to keep working with the mexicans, the mexican federal government in particular, on those efforts. >> what if he's not reelected? >> well, he won't be reelected, he can't -- >> right. excuse me. >> party change? >> yeah. and, by the way, a story just in recent days about indications that the drug cartels are trying to influence the election. >> well, i think we will work with whoever is in power in mexico. we have good relationships there at a lot of different levels, but it's simply an indicator of while we keep our eye on the middle east, africa, other places that are obvious hot spots, this is one that we also work very closely with because it's so close to home. >> general jones, your top two or three. >> well, i think not necessarily

in any particular order, but i think in addition to terrorism, um, proliferation is a huge threat and cybersecurity is certainly one of the, one of the giants that's coming down the road at us. but i would say that the one component that defines all of these threats is the speed with which you need to respond to them. the speed is really something that is, defines the times that we're living in. you have to be able to respond pretty quickly. and i was very encouraged during my time as national security adviser at how we were able to build rapport with friends and allies, a lot are traditional friends and allies, but the speed with which we're able to pass information and share information, more information than we ever did in the past without vetting it because time was of importance. when you think about threats, you know, there are really two

formulas, if you will, to think about a threat. the first is somebody has a hostile intent and puts together a capability, then that's a vulnerability for us. and then if you take the vulnerability and, i'm sorry, the capability that becomes a vulnerability, and then you take the threat and vulnerability and then you have risk. and then the newest formula would be that risk plus consequence helps you or forces you to determine what the priority you're going to respond to the threat in. and that, i think, gets into some of the questions that you were talking about with regard to, you know, how much of your resources you're going to devote to this priority. and it really is a clear priority. >> on that point, on proliferation it's worth mentioning, too, that in the context of terrorism a number of the people in al-qaeda who had interest in proliferation and in wmd attacks are still at large.

we -- among those that we've taken out are not all of the wmd people. and zawahiri himself as a physician has always been interested in a wmd attack. and i think we cannot underestimate him. he doesn't have the charisma of bin laden, no one's printing t-shirts, you know, but he's a tough, disciplined guy who has a lot of credit in the organization for his time in prison and his operational ability. so -- and there's a lot of stuff lying around in the world. the president has an initiative underway, of course, to tighten up on loose nuclear material, but we haven't made a lot of progress on that. there's something like 2300 tons of enriched uranium and highly-enriched uranium and reprocessed plutonium that's out there with varying degrees of security, and we know it leaks. 2003, 2006 we picked up

significant amounts coming across the border in georgia. >> so what do we do about that problem? it's still significant -- >> it requires exactly what the secretary but talking about in a different context. it really requires international agreements and commitment by a lot of countries to tighten up on the control of those kinds of substances. and within the terrorism context, it requires a lot of focus on that because, you know, that could be a game changer on the terrorism front. that would be the big game changer. even a dirty bomb as opposed to a nuclear weapon. that would put them back in business, it would inspire their recruitment, and it would put them back on the map at a time when they seem to be back on their heels (but we've been talking about international cooperation on that front for decades, and yet we still have a long way to go. how do we get there? what's the obstacle? >> well, i think in this area in particular our efforts, our protection efforts for the

country really begin with good intelligence. because there are different, so many different ways that material can be smuggled into the united states. um, and so good intelligence and good information sharing. and that's where the international engagement really has to occur is that realtime information sharing. and as general jones said, a lot of times you don't have the opportunity to make sure it's perfect information, the perfect can be the enemy of the good. it has to go. >> however, back in 2005 the rob silverman commission said, quote, the u.s. has not made intelligence connection on loose nuclear material a high priority. has that changed? [laughter] >> i think it has, but it's one of those really tough targets because you to need excellent cooperation among allies, but you also need things like provision of equipment to

partners who have the potential to monitor borders, sophisticated equipment that can detect, in particular, nuclear material coming across borders. and we've done that. that's how we know that it does leak. we have intercepted significant amounts of enriched, highly-enriched uranium in different parts of the world. yeah, i think it's improved, but i don't think the president would have undertaken the initiative he undertook in prague were it not for the fact that there's still a long way to go here. and in terms of gaining international cooperation, it also involves, you know, treaties on things like control of fissile material which we haven't approved in our own country and which are still controversial in many others. >> i think we've made a lot of progress. um, particularly with russia, i think. for the first two or three years of the administration, we've been able to, i think, work very closely with the russians in terms of having our two

countries at the lead of this, of this effort. and that should continue. the conference that was held in washington, i think, in 2010 was also very good. so i think it's absolutely essential that the united states maintain its leadership in this particular arena. >> and if i might, um, in terms of this but also the importation of other kinds of weapon-type material, that's why we have a secure container initiative negotiated around the world, to really be able to screen high-risk cargo around the world. that's why we have something called ct pat which is, basically, a form of the same thing. it's why through tsa and cbp we now have united databases so that we can track travel

patterns in such a way that it enables us to do further qualification on the travelers or travelers who have had a pattern through cubs that cause us -- countries that cause us to say, look, we want to make sure we double check. so those things all go together and are kind of the operational side at what to you do. >> the other thing i'd say is, you know, particularly in the intelligence business you're constantly struggling with prior mys -- priorities. you can't do everything. you get a lot of reporting on the movement of illicit materials. one thing i would say to you that i hope would be slightly reassuring is that on those kinds of reports, they are all run to ground. in other words, you get a volume of reporting on everything. some of it you just have to not pursue. on that kind of reporting, every report is run to ground no matter how off the wall it appears to be because you can't take the chance that one of them might be right. so that's a very high priority. >> i think, um, you know, we

talk about, we tend to gravitate towards talking about things that are kinetic -- >> yeah. >> because those are things that are, you know, obviously, involve lives and sometimes hundreds and thousands of lives. but the energy, the security threat that we face on the asymmetric cybersecurity -- >> right. >> -- when you have a disaster like a wikileaks, for example, it causes people all over the world to kind of pull back a little bit. it's a natural reaction. you say i don't ever want to get involved in that, so i'm going to be really careful about what i work with in terms of the other countries. and, um, and we have to be very aware that the cybersecurity threat that is growing in this country effect everything we do. >> zappos. >> pardon me? >> zappos. >> we know what zappos is. [laughter] not to worry. [laughter] >> unless you're into high-heeled shoes.

>> yeah. we have better intel. [laughter] >> so what really effects our commerce, it effects our trade, it effects our industrial secrets and everything else. and that is, to me, the most competitive arena that the united states faces in addition to the kinetic threats. but how do we compete in this new world, and what role does cybersecurity protection going to play, and how are we going to do that? >> and how can even the international community grapple with a cyber threat when you're dealing with so many nonstate actors? how do you -- >> well, if anything, one of the things you work on is how do you protect the networks and do it in such a fashion that critical infrastructure is protected. we, we did an exercise that included a number of our international partners this fall called cyber storm, and, you know, these could be exercises that involve infiltrations or attacks by nonstate as well as state actors.

now, how you attribute and what actions are taken as a country, you know, that's differentiated a bit. but in terms of prevention, interdiction, response, that all is something that we are working on and must work on internationally. and i would say we're really, in my judgment, only at the beginning of that. this is the new kind of, the new international sphere that's going to require quite robust engagement if we're to be successful. >> i just want to touch on one other subject before we open it up. a lot of the programs you've outlined here are about keeping that stuff out of the country. there's a lot of stuff here that people can use, and we've had people like najibullah zazi who was going around to beauty stores buying what he needed to conduct an attack. so it comes down, in large measure, to the people. and intelligence is imperfect. we don't always know who the bad guy is when he's coming in. we still don't have the exit

system worked out so we know when people are leaving. general jones -- >> if i might, though, if i might, jeanne, faisal shahzad, the times square bomber, david headley who was we connected wih the attacks in mumbai, all three of them are examples of cases where pnr data was actually very helpful in identifying an unknown actor before the fact. >> but, general jones, when we were speaking on the phone the ore day, you mentioned something that isn't mentioned very often in washington, which is a national id card. do you think that's something that it's time for to help secure the country? >> well, this is a very personal opinion, but i do believe that technology has gotten to the point where something like that could be con contemplated. now, how you put it together is up to us. but, you know, i think who

individuals are really matters. and, um, and i, frankly, having grown up in a country where you had to have a national id card to have access to just about anything, that would be france, postwar france, i mean, it's called the gray card, but it was the document that you had to have when you were pulled over by a policeman or questioned by a lawyer or anything. you had -- or tried to get access to health benefits or anything like that. so it's not a new idea. but when you think -- >> but it's very controversial. >> it's very controversial. but if you really are thinking about security, i believe that there's more that we can do to assure the security of this country by virtue of knowing who's in the country, who's authorized to be here and who's coming here. and technology can help us get there.

whether politically anybody wants to take that on, that's another issue. >> well, let's ask secretary napolitano. would you want to take that on politically? [laughter] >> i mean, after we do counterterrorism, immigration enforcement, cybersecurity, et. [laughter] look, i think that that's not in the cards, so to speak. and, but there is room for a national dialogue about security and privacy and security and other values. and we are always in our shop, we talk about that a lot. we think about it. we actually have a presidentially-appointed privacy office in dhs. and many of these agreements i discussed with you today like pnr have a huge privacy implication that we have negotiated very carefully with the europeans, being cognizant of their interests in that regard. um, that is not to say, however, that there isn't room for things

like a global entry card where those who wish can voluntarily provide information and subject themselves to a check. in exchange for which they, in essence, can be construed as prechecked as low risk travelers and move through the system more conveniently. but there's, there is real room there for discussion and debate. >> i'd love to take some questions from the audience here. i see some at the back, but why don't i start right here with congresswoman harman. do we have a microphone here? yes, we do. why don't you come forward. >> is this on? >> it was. >> it was? is? i'm not sure. it's not on? why i can't learn to turn on the

microphone in this place, i don't know. i think it's on now. yes? janet napolitano just made a comment about security and liberty, and i wholeheartedly agree. i don't think they're a zero-sum game, and i think we have to think about both at the same time. the wilson center will be having more conversations about that. but my question is about something that wasn't mentioned by this excellent panel, and that is the role of the private sector. cyber, for example, cyber threats have more -- they, of course, effect the dot.gov space, but the largest space in the country is the space everybody else in this audience uses and you, too, also, on the weekends, and that's all of our private carriers. and in order to do the job we have to do on cybersecurity, i know you agree, secretary napolitano, we have to build adequate connections with and

information sharing with the private sector. so i just thought i'd raise the question how are we doing, and i thought i'd ask general jones and john who are now in the private sector how you see this now that you've left the government space. >> well, i'll start. you know, this is an area where we are continuing to grow our engagement. we appreciate that roughly 85% of the nation's critical infrastructure is actually in private hands. so we have to have those connects. the way the department is created we have critical infrastructure councils with each of the major components of the economy, but i believe as we move forward we're going to have to do even more with the private sector. i think congress moving forward on a cyber bill will be helpful because it will, it will establish what we are actually practicing under, but it will establish in law what the

different authorities and jurisdictions are. and i think that will be important. but, jane, i think you've really put your finger on an incredible area where it's not just where we have to intersect internationally, but across the public/private sector. >> but does the private sector want to share information with you? >> sometimes. sometimes not. i mean, sometimes they may view it as not to their competitive advantage to do so, or they have information that is something they would like to protect because it is part of their intellectual property, but it also implicates some other things. so we have to work with them and be creative, creating things like information lock boxes, looking at different types of secure networks, other ways of sharing information that we could then share more generally. and these are easier things to say than to do. this is an area that's going to require our best minds over the next months and years. >> and i completely agree with that. i think that the public and private sector have to work

together. they're not always going to be able to be, have conversion interests, but it's just going to have to be done. and it's a huge task. >> you know, it's the most complicated problem of our times because it brings together technology, culture, social issues, privacy issues, and it's changing all the time. that's the other problem. it's like, um, going back to the invention of gun powder and wondering what was, you know, how do you use that stuff? this is totally different and totally revolutionary. the private sector, of course, worries about proprietary information that it might have to put on the table in order to be protected, and i have an alarming thought about all of this which is that in some ways the discussion about cyber mirrors a bit the discussion we used to have about terrorism back in the '80s and '90s. there was a great deal of difficulty coming to a national

consensus about what to do about it until we had 9/11 which then crystal rised everything -- crystallized everything. and we knew what to do, and the nation moved forward. we haven't had that kind of event in cyber yet. we imagine it, we talk about it. the attack on zappos, the attack on stratfor where i lost my credit card, the only good thing that comes out of those is, i think, a few more of those and there'll be growing public awareness that this is a serious vulnerability that i think will overcome some of the private sector reservations about working with the government on this because of the terrible ramifications when there is a breach. but you, you almost need a demonstration effect here to get everyone focused in on the right page. >> and the potential is out there. >> the potential is out there. it's probably going to happen. you know, the cyber pearl harbor we all worry about is probably going to happen sometime, and then we'll have national commissions, and we'll figure it out, and we'll do something quickly. >> and we'll say why didn't we do it 10 years ago, 15 years

ago, 20 years ago? >> yep, absolutely. >> questions over here? >> thank you all. don lauren, former deputy assistant secretary of defense for homeland security. thank you for your participation this morning. the graham-talent commission report opines that we are likely to see a terrorist organization use a weapon of mass destruction by the year 2013. and it goes further to say that there's a very strong likelihood that that would be a biological weapon of sorts. i ask all three of you, do you believe from a biosurveillance, biodetection perspective that we are a nation prepared to deal with that or prevent that? >> a tough one. >> yeah. i'll start with where we are. we do have deployed in a number of cities of the united states biodetection devices -- >> that detect a limited number of pathogens. >> that's correct.

you know, one of the issues in the current budget climate is whether we move forward with the construction of a new national biolevel iv laboratory that would deal with pathogens, disease which is a concern as well, and that's something that we're working on right now. that is, you know, when you think about bio, one of the things you have to think about is the development of detension technology, diagnostics, better diagnostics, quicker diagnostics, prophylactics, the development of prophylactics, the development of response and response mitigation and how they would be delivered if you were to have such an attack. kind of, and so kind of moving backwards through those, we have been working with hhs and others on kind of the response mechanism.

we have been working on storage and storage of prophylactics for certain pathogens. we have been improving the technology, although we are not where we need to be in terms of detection. this is an area where intel plays an incredibly important part because bio is easy to imagine, but it is difficult to execute. and it does require training,ing education and the like. and so there are opportunities there for intel to help. and then in terms of our overall ability to develop these things and to improve them, we have to at some point look at what our national laboratory facilities are and what they need to be. and those are, that question is really part of the ongoing fiscal debate. >> general jones, isn't biotechnology capability growing in many parts of the world, and is that a concern? >> i think it is. and when you talk about proliferation, you know, people immediately gravitate towards

nuclear, but chemical and biological threats are out there, and they're growing. i don't know whether i agree that, you know, i wouldn't even pick a year, to be honest with you. but i'm sure that, i'm sure that there are hostile nonstate actors out there that are trying to figure out how to do that. and this is a very dangerous world that we're going to continue toly in. to live in. we may not have a conventional war in this century, but we're certainly going to be fighting unconventional, asymmetric threats like proliferation and all that entails for the foreseeable future. >> john, you said every lead in this area was run down, but -- >> it is. we, you know, we worked hard on al-qaeda's biological weapons program years ago, and i'm sure we till -- still do. to a degree, the trail kind of went cold here at a certain

point, particularly on the anthrax program -- >> is that of concern? >> that's of great concern, yeah. why hasn't someone done this up until now? everyone will tell l you that the barriers to weaponization, the barriers to delivery and the barriers to culture acquisition have dropped significantly in the last ten years. look at the doctors' plot in the u.k. some years ago. they were not in the biology, but it illustrates to you that medical personnel get involved in terrorism, they have access to cultures. you can buy stuff on the internet that can deliver a fog of pathogen down pennsylvania avenue very easily. so in a way, and you can make a lot of this stuff in your kitchen with your mother's cabinet of chemicals and foods. so the mystery is why they haven't done it. and it is hard to execute, as the secretary said. so the bottom line here is i

don't know whether i'd put a date on it, but it certainly has to be at the top of your concerns because like some of the ore things we've talked about, it'd be a game changer. >> and internationally, is hair on fire about this one or people? just watching and waiting? >> i don't know, to tell you the truth. my guess is that people internationally, someone else would have to answer this, may not be as concerned and focused as we are because, um, because it hasn't happened yet. >> nuclear occupies a unique slot when you talk about proliferation, it's generally about that. >> yeah, usually. >> i but i think the probability of a cyber attack is higher than any of the other three. >> easier. >> in terms of the near term. and it's not as kinetic in terms of lives lost, but it could be very disresultive in terms of how things work in this country. >> let me take one of the questions in the back. here in the dark shirt with the hand still up.

>> there are lots of dark shirts. >> i know it. [laughter] i wish my eyesight was better. >> is it on? >> yes, it is. >> my question is really for jane harman, and that was -- [laughter] how much does the, um -- >> jane, are you -- >> jane, how much does the soaring, if you will, of the deliberative process in congress impact our credibility for the administration in this country to negotiate all these aspects? >> i, i think everyone in this room can answer that question, and the answer is a lot. it's obviously personally painful for me to watch this and paul because we were in it. and i sadly think the paradigm has changed to blame the other guy for not solving the problem rather than work with the other guy to solve the problem, and it has huge blowback for the

executive branch. i'm sure everyone who has served in the executive branch would know that. judge webster is one of the, he's hardly a relic, he's a vital young man on our committee, but he served in government at a better time. gary hart did too when people solved problems. and these problems are exponentially harder, and if image people have abroad is that we might even default on our debt, they surely can't take us seriously. so it's for a longer conversation. i think i'll now take medicine after trying to answer it. [laughter] but it's a big factor. >> and if i might, one of the things that has not happened yet in the congress is to realign itself with the new functions. when you have a homeland security department that has an international aspect that's quite significant, but the old kind of committee jurisdiction lines still pertain -- >> somebody there now? >> it's over a hundred

committees and subcommittees have jurisdiction over our department -- >> [inaudible] >> and it's the only 9/11 recommendation on which there's been no movement. >> members of congress here? >> there is no opportunity for a lot of overall strategic thinking as opposed to programmatic. >> another question, gentleman with the glasses with the hand still up there. >> hi, my name is brian, i'm the washington correspondent for euro politics, and my question is for secretary napolitano. on the u.s. visa waiver program, can you just say what the future is for it? i know there's four e.u. countries knocking on the door quite vigorously, and perhaps croatia next year if it joins the e.u.. and one other question, on the 100% container scanning rule, i believe there's a july deadline for when you have to extend the waiver, and i believe you had

named you were -- signaled you were going to do that. can you just say what your latest plan is for that? .. >> it makes everything easier for people. i was thinking, trying, with respect to cargo, we will and

are in the process of screening 100% of high-risk cargo coming to the united states. but 100% of every container coming into the country would require an international engagement far beyond what is unconscionable in the near-term, and requires other things, redesigned of ports, et cetera, that ship cargo to the united states. that's why we have in their place put together efforts that allow us to differentiate high-risk from a low risk cargo in shippers and trans chippers and cargo forwarders and insiders in the light. that's why we have the container security initiative. they are all designed to give us intel and info sharing, opportunities that basically serve the same function as putting every piece of cargo through the same kind of device. >> one more question here in the

front. >> high, thank you. >> try it one more time. >> hello? thank you for taking, for being here. i would like to ask secretary napolitano, you've talked about their travel and efforts in that department, also of ports of entry. but i wonder if you would give us a sense of the threat at the border, canada and mexico, not just of the regular illegal immigration that people talk about, but people coming into this country from some of these areas we have talked about like somalia and yemen and other places where there's a threat. can you give us a sense of how dhs is tracking that? >> yeah, actually we have done

quite a bit in that arena, recognizing that there are many things that could transit these huge land borders we have. the president and prime mr. harper announced what's called beyond the borders which creates for the first time a perimeter sense of security coming into north america. we are trying to take some pressure off at airports and land ports along the northern border in that regard. and also enable us to follow travel patterns and the like better. with respect to mexico, we have been working very closely with them. there's a whole category called sia, special interest aliens is what it stands for. but we watch that very carefully. work with the mexicans on it. we have been working not just with mexico but countries of central america in terms of following more closely people transiting the airports and the like. so again, our efforts there are

to try to get as much info and to take as much pressure off the physical land border as we can. >> and a last, we're out of time. thank you. >> i like to thank all of our panelists -- [applause] and our ace moderator, jeanne meserve. we could easily go another hour. i think there are a lot of questions in the audience, and this is a subject near and dear to my heart, and i could ask another 100 questions, but i won't. just to keep us safe, janet. please do that. and thank you, thank you all for coming. i would now ask that the members of the audience remained seated, just briefly, and to our panelists leave, and to the members of the aspen homeland security adviser group move down the hall for a different meeting. again, i'd like to thank the

aspen institute for joining with the wealth of center to put on this activity, and to say that i'm very proud to co-chair the aspen institute group with my dear friend, michael chertoff. thank you again for coming. [applause] [inaudible conversations] [inaudible conversations]

>> coming up live in about an hour on c-span2, the u.s. conference of mayors winter meeting. focus on the economy and job creation.

>> leading up to saturday's south carolina primary, see spence road to the white house coverage takes you like to the candidates events all this week. >> we need to limit these entitlement programs. we need to captain, cut them, cap them, send them back to the states, remove the federal oversight and let the states have the flexibility to deliver these programs. >> we have brought to the forefront, others have token we talked about it to get into office and the nothing about it. but right now it is this liberty movement which is seen as a patriotic movement, and individual liberty movement that is saying to the country into the world, we've had enough of

sending our kids and a money around the world to be the policeman of the world. at the time to bring them home and as candidates get their message out meeting voters. >> governor, i was undecided until right now. >> thank you so much. >> we feel very good about that. we feel like the conservatives are coalescing around our campaign and that's going to be good for us, not just in south carolina but as we go forward to. >> find more video at c-span.org/campaign2012. >> now to the book brookings institution in washington for discussion on job creation of the global economy. wounded from several economist and former treasury secretary robert rubin talk about innovation at the state and local bubble. this is about an hour. >> so i wanted to begin this

panel by illustrating the urgency of i think effective state and local economic develop policies, especially in the current environment with three i think simple observations. the first is that local economic distress can be real, like in the black war world of economics there aren't anything economists call frictions, but something that happens and in the world a just and everything is fine. in practice that's not what happens. there's a really i think good example comes from the recession of the early 1980s. if you just look at the 600 counties who had the biggest shock, pittsburgh and buffalo and the crew come and ask what happened to those places 30 years later. they are are really astonishing things which i think is not always appreciated come is those

places, not continue to bear the scars and incomes are lower, but they have not yet returned to the growth path of the rest of the country. so if you just think about that, 30 years later they still in many respects look like different places. before they look like just the rest of the country. so that's one observation. the second which i think is related to the first is that there's a long history of local economic development policy proposals, and i think the shortcoming of that history is that there's an element of merry-go-round in history. ideas, and go in and out of fashion without any real rhyme or reason. and along the way we never develop a playbook of the ones that work and the ones, despite the best intentions, didn't work out quite as well. and so i think the valuation of state and local economic policies has to be part of developing an effective set of

that. and then the third is, i think, i don't think anyone has accused me of being a political scientist or having particular insights that deserve lots of notice about political environment, but i would say someone is not an expert it does seem like the federal government is not going to be a leader in growth policy for state, local and economic issues in the coming years. and so i think that shines an especially important light on trying to identify policies that work well, and for that we have really a fabulous group of people here. i can't quite believe the testament to the growth through innovation project, people we have here. and i think the way we're going to run this isn't going to ask each of our panelists a question in this broad topic area, and i thought i would start with bob

rubin, who, despite being former secretary of the treasury, actual has a lot of expertise when it comes -- [laughter] that i can. >> see what this sentence goes. >> a lot of expertise when it comes to local economic development. the chairman of the local initiatives support corporation, which gives away, or makes investments of more than a billion dollars a year i believe in local communities. so bob, i guess my question for you, besides recognizing your fast knowledge as treasury secretary -- >> that's not quite how you said it. >> trying to recover. it like being in the bottom of a deep hole. [laughter] >> i wonder if you could talk a little bit about what role

states and cities play in a national growth policy. >> okay, good. let me give you my view as best i can. [laughter] look, i have thought for a long time and made i was mentored a little bit by bruce katz and investor project but it seems to me for longtime and a with the destruction of the federal government it's even more the point. the states and cities have lots of natural advantages, states, city acted out to be an important part of any growth strategy. at me be more specific, that follow up on that. one is states and cities have competitive advantages in various areas. it seems to me that one great opportunity for countries to build around those comparative advantage. some obvious examples are silicon valley developed throughout stanford and berkeley. you can develop industrial parks around transportation hubs. you could develop, of course you could ship them, the output more readily, but also industrial

parks around with our large levels of low skilled labor and that we have labor-intensive industries, more obvious and advantageous positions. but i think there's a lot of opportunity. another good example are the many areas of this country that i think of great natural endowments that are still underdeveloped as tourism site, upstate new york being one example. so that's one set of points. another is we have these federal systems. the federal system gives a great advantage which is we can try different approaches to areas that are critical to growth, and then see which ones work best and take the best practices and spread of osha. a certain amount of that's going on in k-12 education, health care costs and in other areas. i think that's something we could build a great deal more, more around. a third one which i think has gotten far less focus than it

should is that we have an immense infrastructure needs in this country but we have a -- i think is an opportunity to attract very large amounts of capital from entities around the world, for example, china and the middle east. the latest content greatest impediment to that kind of the infrastructure is the concern about political reaction. you can structure that either by ownership of actual infrastructure assets, or the infrastructure assets could be publicly run by the ownership of -- i think there's a can is opportunity for mayors and governors to develop strategies around infrastructure, and then work with these entities so that the mayors and governors bring their own expertise about navigating in our system to help them navigate through political issues and the regulatory issues. and, finally, let me mention this was michael just mention. it's a very technical subject, all the technicalities aside, the fact, the realities as

michael said, this distributes in the various forms about a billion dollars a year in inner-city. i think there are four essential points that you can take from this experience. number one, the 501(c)(3) is run as a real business, real business metrics. seems to me that could be applied to the public sector. number two, the projects, thereby develop intimate lead and not let from washington or list or from anyplace else. but i think that's another example of what could be done in the public sector. third, a lot of it depends on long-term housing tax credit which means in the introductions public funds are being used but they are combined with the private sector expertise. more accurately, private sector financial discipline. another lesson. and, finally, this provides technical assistance with respect to the projects and also with respect to these local neighborhood institutions that

he felt the project. i think there's a lot to be learned from that experience in public sector activity, and that he won the by making one observation in that regard. michael told me once of a study done someplace or other that he seemed to think was a series, or maybe he wouldn't have mentioned it, that show the return on infrastructure in the united states today is about 2% per annum. that has to be because the infrastructure investment resources are allocated by a political process rather than the kind of activity to have a list where capital is allocated based on private sector investment criteria. so for all those reasons i think michael, stay a local activity could be under any circumstances and should be rather, any circumstances an important part of a national growth strategy and particularly now where our federal government seems to be relatively dysfunctional. >> can i ask a follow-up question? so, i understand your vision for a lot of the knowledge applies locally. suppose the federal government

were operating on its maximum efficiency curve. what could the federal government do to facilitate some of those activities at the local level? >> oh, i think it's a lot about, alice rivlin once did some work on this if i'm ever cricketer i think there's a lot of opportunity. you have a choice, a lot of activities that you can either run them through the federal level or you can evolve them down to the state and local level and provide federal funding for them. i think there's a lot to be said for the devolution idea. that we didn't have neighborho neighborhood, localities decide where a bridge to be or where street should be or where roads should be or where manufacturing, where an industrial park should be as opposed summit in washington who doesn't know the area. and we can also i think create more accountability and more efficient management and more metrics and application of it to do so for. i think it's devolution with federal funding. >> okay, next i wanted to turn to, thank you, bob, the shirley

jackson, actually has many roles. she is a very unique perspective on state and local development, both as president of a major research university, through her service on the presidents council, advisors advisors on science and technology, and is co-chair of one of governor cuomo's economic develop my councils in the state of new york. and with that perspective i wonder if you talk a little bit about your views on the elements that comprise and innovation ecosystem which are not you and i have talked about before, and further how do cities and states fit into all of that? >> i thought i would just talk about what is good default view of what key element of an innovation system might be. and they did talk about three examples that are actually space 50 years apart. 25 years roughly each, 26, to be

exact. and those elements are a strategic focus, idea generati generation, translational pathways to bring things into commercial realization and, therefore, provide an economic base and infrastructure. and that means human, financial, and infrastructural human, physical i should say, and financial capital for infrastructure. so let me talk about three things that have occurred over time. back in 1959, and i don't know if most people realize it goes back pepfar, business and academic leaders down in the raleigh-durham area came together with the idea of creating a locus for height and research activity and business. and they started with creating a

park, a research triangle park. and the idea would be, be a proximate to lease the three great research universities in the area, duke university, north carolina state university, and unc at chapel hill. chapel hill. it has since evolved to include a larger number of universities, including a historical minority institution. and they started out with about 200,000 square feet of occupied space. today, it's over 22 million, and home to 170 companies, many major enterprises, or parts of enterprises. so there was an example that i think plays into something that bob rubin mentioned about you have certain assets, you have a certain geographical opportunity, and then once it's out to build on those. and we all know about research triangle today.

fast forward about 26 years, from there, and in 1985 governor tom kane got the new jersey legislature to create the new jersey commission on science and technology. that was at a time when other states were looking at things like this. the idea was to have state capital leverage university industry partnerships in areas that were deemed to be important to new jersey's economy. the structure of the commission deliberately was structured to have government officials, in fact, the state senate majority leader and the speaker of the assembly on the commission, presidents at any given time ex officio of two other research universities of the state, always one public and one private, and then a certain number of private citizens who were gubernatorial appointees,

and i was one of those. it was not a paid position, i assure you. and so the commission focused on creating centers advanced research centers, building actual infrastructure. then it had a budget to do a competitive grants program in certain research areas that the commission discussed in deemed to be important things i'd advanced biotechnology and medicine, informatics at that time, and computation, and so when. and it's interesting and the way how many of those things are still thinks people still talk about to take. the one thing that was missing from the discussion at the time was of course man know, nanotechnology. and i would say that that effort in fact strengthened mightily rutgers university as a research university. it certainly has played into the pharmaceutical industry, and in

new jersey, and helping to retain it, not alone but it has played into that. and has just improve the overall stability of the state. so now we come 26 more years down the line in 2011, and governor andrew cuomo was elected new york state, and he creates, he has a state divided into 10 regions, and each of the regions has eight to 10 counties in it. and creates regional economic development councils. and sets out a competitive process to have each region develop its own strategic plan, and to have those plans been competitively evaluated against each other, but to lay out a framework for it with at least a five year outlook. and in the end, there were four

quote unquote many plants that have certain characteristics, but all of the region develop, 10 regions develop these plans and, therefore, have a strategic outlook for the next five years and causes people to come together and collaborative ways. somewhere further down the pipe than others and that in terms of readiness to launch activities. and so it's a still a work in progress. now, what's the difference and how does it relate to what i said? one, on the idea generation side, one can make the argument that we have the academic and business leaders come together, or you create people who are legislators and heads of universities and business leaders in a new jersey context, it's kind of more of a top down process, and identifying key areas for investment and so on. what's interesting in the new york situation is bad, that it's a bottom-up because each region was asked to decide what was important for that region.

now, when that happens one runs the risk of confusing development with economic development, because people always want to build and have shovel-ready projects. but i think these are interesting experiments, and i would say there's been persistent effects to varying degrees for each one. the one in new york is new. now, new york is coming out of this process out of having a very top down process under a previous governor, and it made a huge investment in nanotechnology which looks like at least is bearing fruit in terms of a major facility, that it costs $1.2 billion to get there. so then if you go back through, all of these have elements, some more directly investing in human capital, in research. most of them investing in some kind of infrastructure. and the financing mechanisms

were different. in new jersey, the bond issue. in new york it's appropriated money. and, frankly, i don't remember it in north carolina. so, so i think these are elements we need to a little bit about because, the question of what is strategically important, how is competitive advantage really persistent competitive advantage developed and/or convert. and that played into working we are doing in pcast. and if i have a chance to talk about it i would like to do that. to make sure to come to ask you one question? >> sure. pic you have identified all kinds of ways which states a cause can be dynamic. i tried a little of it but at the time at all as every state is facing actually difficult constriction, pressures other oh, where is the financing for all this going to come from? >> that's a good question. let me talk about new york because we are right in the middle of the. you have a governor who came in,

came in with a real kind of mandate, managed to work across the partisan divide, and get people to really pass a to balanced budget. it required some cutting, and he worked through that and was willing to do that. then essentially it amounts, essentially using funds that the governor always in new york has available to them, and especially -- essentially redirecting those funds. but coupled with that creating a more consolidated funding application process for the usual things that the government would find, maybe at whatever level the budget allows, and so it gives people more of a one-stop shopping so there's inefficiency factor and clarity factor that gets put in. i'm not going to argue that we are totally where we need to be, and there are issues about regulatory reform and other issues that all of the council want us to deal with, but it's

really been willing to make the hard, strategic decisions to redirect. because the new jersey situation came along in a different time when these kind of bond issues could be passed. that here it means taking what you have and placing them. that's always hard to do, but the other is embedded in some of the regional plans, our collaborative mechanisms of having the banking community come together to create loan funds. us as part of one of the plans of revolving loan fund, as well as having local examples of other type of fun at things like that. >> so this is, if i can interject, this is exactly why i was so excited to be able to moderate the panel, because this question has moved to funding. and who do i have sitting to my left but judith rodin who is president of the rockefeller foundation, and i am just dying to ask you because i know you've been doing in crippled

innovative work on financing for state and local governments and i wonder if you could talk a little bit about that. >> we have. we were driven to this perspective because we recognized that there really are not enough dollars in philanthropy or development to solve the large global problems that we faced, and that's when countries all over the world are facing these kinds of situations we really need to look at other mechanisms, create a real ecosystem around highlight opportunities for exploring innovative financing. and so i'd like to talk about three briefly, and they really touch on something bob said, and something shirley said. we are now funding a collaboration among the states of washington, oregon and california. and they're putting together the infrastructure that will ultimately create an infrastructure bank for the western coastal states. it's the governors and the state treasurer's, together, and i

think they've recognized quite correctly that innovation is about process as well as product, and before they're able to create the product they really have to align and platform the kinds of issues which are time frames, paybacks, state budgets don't have tenure budgets, and so how can they really get a payback rise? if they are actually building the kind of infrastructure, including multiyear budgeting, in the states that would allow the attraction of private capital, aligning the policies that would really do that. and they are ready to roll in about 18 months i would say from now, to really begin to attract large private investments with regard to infrastructure, which they think is going to be in the next 15 years, about a trillion dollars of need. and which you don't think they can get through convention -- conventional bond structures. so that a new kind of both debt

and equity structure that can interrupt for a second? these four states -- >> three states in three states, they're not going to wait around for the discussion of the 47 version of the -- >> no. no, i think what we're seeing, and maybe this is even a better place to start. i am actually optimistic. bruce katz and i've been writing recently on what we call the pragmatic caucus, which is what our first two speakers are talking about, which is the fact that in a lot of areas in the united states, the metro regions, are not waiting around for the federal government. >> forty-seven very good plans about national infrastructure bank floating around this city right now. >> right. we hope that they will come to fruition. we actually funded the construction of two of those plans, but we are not waiting either anymore. the innovation is occurring in the states and the meta- regions. it's really clear for whatever reason we could spend 14 hours,

speculating on the reasons. we're not going to get that kind of creativity currently out of the federal government so we opt to go back to a federalist system, if you will, which is what we are really talking about, and look for ways to promote that kind of energy and creativity at the regional, state and local level. to other in credit innovative examples, so we have had the privilege of supporting the pilot in the u.k. on social impact bonds. these are bonds that really tried to take a proven social intervention come in the case of the first u.k. pilot it's reducing the rate of juvenile incarceration, we incarceration. so these are juvenile we offenders. and u.k. government was able to see the cost to them for the repeated re- incarceration. they developed with the investment bankers a model where

they would float a bond, sell it to the private markets and the payout would be, if they could reduce the rate of the reoffending, social intervention, proven social intervention to reduce the rate of the reoffending below what the government had been, it is in the marketplace now that it was sold out there very quickly, and it's been brought, the idea has been brought to the united states. massachusetts has now solicited artist these for proven social innovation. they have gotten 34 really, really interesting ideas. minnesota has actually gotten the legislator to float a 20 million-dollar bond for trying this process. so how you marry private sector capital with proven social innovation where you demand metrics, because the payout requires both metrics in advance and a metric driven assessment

for the payout, you are really getting a triple win. because one of the question is, are these interventions really being measured and monitored. the first, the next different example, one that rockefeller led about five years ago in creating a new york city housing acquisition fund, actually lives was one of the beneficiaries. idea was that commercial banks didn't want to put money out for the acquisition of land. obviously, they felt that the risk was too great, particularly for low-income housing. so a group of foundations came together and put in $50 million for the first level of risk capital. that allow the commercial banks, j.p. morgan, hsbc, to be willing to take the second tier of risk, and they putting 259, and new york city put in the third tier of risk. that has built tens of thousands

of units of housing without waiting for money from hud. so again and again and again, what we are really seeing is that the marriage of wall street capital, equity and debt structures, to government policy in producing social outcomes is really, really going on. and it's very powerful and it's very compelling. >> i think speed is i just had a quick kind of follow-up. another marriage that has worked and created more sustainable advantage has been the marriage of universities, with government and the private sector. you are here in your inclination as president of rockefeller, but you were president of one of our great universities, you know, of the university of pennsylvania.

and at that point you did some amazing things with the university of pennsylvania in philadelphia. can you talk about that and how, that was then and this is now. but are there any lessons learned out of that? >> you gave such great examples of economic development capacity of really bringing together universities and the private sector and government. we sat in the middle of a very disadvantaged neighborhood, west philadelphia, and we felt that we had a strong commitment to helping to rebuild that neighborhood, not only economically but socially. its housing stock, schooling stock, and so we initiated a multipronged intervention over a number of years, initial axa investing university endowment funds in order to then both the believers so that we put our money where our mouth was, but also then to be able ultimately

to attract private capital as well. and so we intervened in safety and security, in building back housing stock, and building really high quality schools that were neighborhood schools. they were not for the penn faculty, and less they there. and building economic development by creating a mechanism that said by west philadelphia first. penn owned five hospitals. we sent our laundry out all over philadelphia and new jersey. we created a minority owned laundry in west philadelphia that now has all of hospitals in philadelphia as their client. it supports 2000 jobs and really has started to move the economy forward. so, i think that moral commitment, the intellectual capacity, and the economic resources that universities have

made him a critical partner as we talk about regional development. in my case, i wrote about this as the role of the urban universities, and you've been doing such magnificent things as well. in most of our large cities and small towns, education and medication is often the largest employer. we don't look at universities to be one of the partners economically in terms of the resources, not only their academic capacities, i think as we think about what states and regions and cities will need going into the 21st century, they will not be able to accomplish this without universities really putting some skin in the game unit and universities let us not forget our really attractors now. >> absolutely. >> we are also externally fortunate to have alan berube

here. wrote a fascinating paper that is part of today's paper released today. and i think alan and colleagues who have their finger on the pulse what's going on around the country at the local level. and one thing that comes out of reading that there is there's a lot of diversity of experiences. and i would wonder, alan, if you could talk a little about what's allowed some places to flourish and kind of tough economic and private and what's holding some places back? >> happy to do that. i think in washington we live in all sorts of different bubbles of our own creation, but one of those of us who live there are fortunate to live in a bit of the labor market bubble. this is a fairly healthy regional economy, lots of buildings being built, restaurants are pretty full. i don't know that many unemployed people. that is because they are all working on infrastructure bank

proposals. [laughter] you know, in the washington area are unemployed today is 5.4%, more than three percentage points below the national average. several months ago i was visiting my friends who live in modesto california in the heart of the central valley of the. you drive out to the house and you passed these ghost town subdivisions on your way. the downtown has a lot of vacant storefronts prevent a person a lot of people are unemployed and unemployed. people have college degrees. their only saving grace is to continue back to sam cisco in san jose for the respective jobs much healthier labor market. but the local market, north of 15%, double what it was before the recession. so the point of all that is this is a very big country, vastly given conditions on the ground when you look around. and i think we talk a lot about the macro measures that i think are finally important for our broad labor market recovery, but not convinced that there really

efficient for addressing the unemployed crisis. the difference is in the nature of the crisis that affect our local communities. the paper i wrote looks at what's going on in the 100 largest metro areas across the country. two-thirds of our publishing to three quarters of our gdp. and i see three factors that are present in combination in varying degrees across these 100 different markets. i think have applications for how you address the crisis at the local level. one is just about industries and what different metropolitan areas do, what they do before the crisis come with a doing coming out of the christ. there were a lot of manufacturing areas particularly the auto manufacturing itself. they were clobbered in the first stage, detroit, cleveland, greenville, south carolina. actually those places are becoming very, very quickly right now so they made up a lot of the ground that they lost during the recession. the unemployment rate in detroit has dropped by five percentage points just over the last two years versus about a 1% decrease nasa.

i think you see a lot of strength in some of these export oriented metropolitan areas that are focused on meeting domestic demand and foreign demand. at the same time you've got these metropolitan areas that we are very invested in housing, real estate, consumption economies before the housing crisis, las vegas, phoenix, a lot of places in florida. struggling to recover right now. struggling to rebalance their economy towards more productive sources of employment, meeting demand elsewhere outside just the local economy and bringing wealth backing. as well as using a lot of government focus metropolitan areas that were buffered from the worst effects of initial crisis struggling right now in public sector cuts and ripple effects of us. a second related issue is just the nature of the housing market and housing crisis and what happened there. erik zabel bit about that this morning. las vegas where prices are 65% off their peak values

pre-recession. pittsburgh where they are only 8% off their peak value. so of course the metro edge to have these larger house because irrespective how many people were working in construction, have experienced stagnant unemployment rates both because against the drug effects of that unemployment but also the indirect effects in terms of how wealthy, household use and with the consumption patterns are. than a third thing we talked about, but not global today which i think is relevant, the metro level, to come is workforce skills. we know less educated workers are unemployed at much higher rates than 13.2% for individuals without high school diploma versus 4.4% for individuals at under with a college degree. at the national level, i'm not totally convinced worked forced skills are very to national labor market recovery but at the local level we do see it affecting the longer road to recovery in some metropolitan areas. both places like philadelphia, little rock, san antonio, where they seems to be a bit of a gap

between what the occupational structure of those metropolitan areas suggest is a from educational perspective and whether workforce really looks like from an educational perspective. and in places like an augustine georgia los angeles, memphis and phoenix to the sort of double whammy of both industry structure, and what looks like a significant education problem, too. so i think that's most of longer would issue but one that may be having some were short-term effects. as the panels have a renewed composure i think are allowed state and local to across the to respond to this crisis, not just generally, right, as the ciro rodriguez to unique sorts of issues their states are facing an effect our program is working directly with several governors come metropolitan leaders across the country on an initiative to support by rockefeller foundation under the auspices of our brookings rockefeller project on state and -- judith me talk about more of some of the examples out of that work. so some of those are highlighted

in the paper, but again i think these places are largely acting and absence of federal leadership, but the upside of that is there tailoring their intervention in ways which i think are really about the unique sorts of challenges and opportunities. >> i think bob had -- >> i do. anybody on the panel i spoke to michael asked me what the government could do to try to contribute to the vitality. i answered devolution or turn the question the other way around. what is the federal government does that in keats the state and local governments? and what of the changes that could be made? one area may be this dysfunctional federal system to get public passionate republican democrats again which is free of local energy. that's a question for anybody. and i will start. the various metropolitan areas that we are working with as part of this project on export initiative to try to increase their reach into foreign markets for consumption of the goods and

services that they produce, they're having to navigate a very complicated and incoherent fake it of federal program policies, agencies that in the end, it's not transparent, things are done on too small a scale because they are distributed and diffused and the way that doesn't actually allow these areas to act on in many cases what is a very coherent strategy but the federal government for better or worse still retains a very large responsibility for foreign trade. there's only so much the cities and metropolitan areas can do on their own. i think some of the stuff that secretary bryson talked about today in terms of bringing greater coherence to the way that the commerce department works, doing that in collaboration with cities and states, and actually acting and more of a bottom-up way that promotes their ability to interact with foreign markets, i think that would be a huge thing for the federal government. >> i will build on that. the problem still land on the

ground in cities and regions in convenient packages that have the labels of the federal agencies. and so, how that kind of collaboration across the federal government can occur with funds that they already have, so we have a sustainable cities initiative among eta, transportation and had. that is one of the first of getting these agencies to work together, to recognize that each of the three of them both hereditary and a funny perspective a real ability to transform that sustained those of urban america your they can't each to in this silent way, but those kinds of collaborations are few and far between. >> i would say the following, the government historically has always played a role in three key areas. in education, in research, and in infrastructure. and many times when we talk

about infrastructure we think about roads and bridges, but let's not forget things like the internet, the government of the microprocessor, you know, gps system. these things came out of mission-driven needs of the federal government, but they are being opened to the commercial sector, actually has led to the creation of many great industry. an area where there are clouds on the horizon really does have to do with support of our great research universities, particularly the private research universities. and they're, they're being heard both by state level policies in terms of support, as well as a definite slow down in funding, federal funding for basic research. so we just had this discussion about the important role that universities, particularly major ones, can play. they ideas they are in the human capital business, but they also

are in the research business and they are a tractor and retainer of talent. so in the grecian policy is another area. and that affects obviously businesses, as you a number of technology oriented companies speak to that. but it has an effect on the research university as well. both, particularly at the level of faculty and researchers, but there are even some wrinkles in the world of students and student visas. so, so these are two key areas, the research and support and integration, but then there are broader issues having to do with coherence of the governmental approaches relative to major infrastructure. particularly as it relates to energy, broadband, the use of the spectrum, et cetera. and these are things that do rest with the federal government.

and earlier in a different session, a more private conversation, i talked about the fact that having a discussion about the degree to which the government should be the first follower versus the first leader. i think there are a number of innovative initiatives and pilots being done at state and regional level, then rather the government having its program that people compete for. it might be the time for the government to focus some of its resources to undergird some of these initiatives. >> you know, i just want to pick up on the thread you put of the. there's nothing that says dennis is has to the highest living standards in the world, an effect on our that reflects, a lot of our history reflects conscious choices. one cannot help but think that if you see the inability to pass a highway bill more than six month a time, or defend me infrastructure needs more broadly, were as basic as

research and development. in many ways were choosing the future. and state and local governments are doing a lot to respond to that, to try to fill in the gap. but i think the role of the federal government cannot be missed in all this. now, i think we have about seven minutes left, and we have such an excellent panel that i think it would be ashamed to not give anyone here a chance to can't talk to them and ask questions and so i thought we would open the floor for questions. >> thank you. if you could -- >> .net. >> i have a question about family, smal small medium enter. today 95% of global market is outside u.s. and, of course, multinational is doing good for export.

but how do you connect the growing markets along with local smes? i know it is encouraged by the federal government, but not message encouraged because image we are losing jobs outside. unless you get closer to end customers you don't really expect to grow exports, so how do you connect the idea? thank you. >> one way, and it goes to one of the innovative experiments that we are seeing on the ground is to really like the smes more effectively into an ecosystem with the larger global companies. so for example, there's an initiative in puget sound putting a number of universiti universities, very large companies, and many, many smes that are a little further along down in the value chain,

together, to collaboratively, and several research institute, to collaboratively work on energy efficiency, i.t. and their goal is to become the energy efficiency i.t. producer of the world, and then export, export, export. the smes then go along in that ecosystem through that kind of collaborative process. otherwise you are really building them within a national or even a local environment any capacity to really grow may not be there as sufficiently. >> let me make one other comment. i had the pleasure of co-leading with eric schmidt of google the advanced manufacturing study that pcast did. and one of the key points that we talked about was the importance of the government, wherever possible, being a leader of providing safe harbor for public-private partnership. where you do in fact bring

together the larger and smaller enterprises, particularly in areas where there is a shared infrastructure. because that can be of great benefit to smes. we have talked a lot about manufacturing, but what we have not talked a lot about is advanced manufacturing. when we talk about, we tend to talk about from the point of it cutting out jobs. but we don't talk about is how more advanced techniques, including the modeling and simulation can of existing enterprises, existing smes to improve old the productivity and quality of what they produce, which helps their competitiveness, vis-à-vis sought into global markets. as well as the definition of advanced manufacturing that has to do with using the new technology, and bringing new approaches and new technology to market. to me those are things, and when you're talking on the one hand

about pre-existing companies and how they can grow and improve what they do, and on the other you're talking about started, entrepreneurial, and having them. but they do come together at the level of public-private partnerships at a certain time. and they do come together, but it comes to having shared infrastructure that can be at a university, it can be government sponsored out of the national lab, or some other mechanism. so i think those are important things to think about in another place in we haven't mentioned the green economy today, at least into session. and there's a whole in the infrastructure around the green economy, jobs that can't be outsourced because there energy retrofit jobs, waste measure, water supply chain, all of those represent really growth opportunities in the united states. and again we're seeing a lot of regional and local governments understand i think with a fair degree of creativity what the

opportunity here is, and it's a real mess in the play at the local level. in the cab region of new york state has taken advantage. one additional comment. the germany economy as you know has enormous numbers of smes and they produce little niche products which they managed to find out a way of exporting and to come in as you go, as you say, appropriate nexus or effective nexus with their customers all over the world. i don't know how the germany economy has done that but it certainly has worked as a model. >> i think with time for a couple more questions. >> thank you. market, virginia. i want to circle back some of the things you're speaking about this morning, anti-into your panel this afternoon. on workforce preparedness and the opportunities that states and localities would have in terms of education preparation and job training preparation. in virginia, although we have a

tremendous disparity between the sort of booming economy in northern virginia and what used to be the timber, textile and tobacco economy on the south of which is pretty decimated at this point, but they share common on which i think, i welcome your perspective on, k-12 education is not really integrated with community college curriculum and preparation. so that our community college presidents complained that when their students come into the kenya to college system, which went a very strong one, 50% of the freshman class, the first year class, our remedial classes. they would like him we've had a big discussion about this in virginia. we would welcome the chance to have some ideas and thoughts about how we prevent these silos and education systems within states, what the federal government could do, what academia and businesses could do to help. and the other sort of non-integrated part of this is we talk a