defenders to the fatherland. [applause] [speaking in native tongue] >> translator: happy holidays, my friends. congratulations on the pending spring. hooray, thank you. i now invite to the stage a courageous defender of the fatherland, a test pilot, a hero

of the russian federation. [speaking in native tongue] >> translator: good afternoon, i congratulate on the day of the russian park forces and navy. i congratulate of the defenders of the fatherland. try to convince you and try to talk you into something. i'm here to explain why i support putin. i remember the early '90s and i remember a time 10 years ago. and i know what it's like now. what he has done is he has fixed an old car over the last 10

years. he now puts the key into the ignition. and the car rides. i don't want us to be forced to turn left. i want our children to move forward. but i'm here because i believe -- 'cause i believe i wish that you will be victorious with god in our soul, with faith in russia, i wish you health. and i wish you happiness. here we have with us representatives of moscow and the many regions of this country. dear friends, igor, who represents the mining factory is the shop floor manager there. good afternoon. friends, i'm not an expert at

public speaking. my job is in the tank-building industry. today, however, one cannot be silent. this is our country. and it does not belong to hangers-on. we're always unhappy about everything. it belongs to all of us. it's us, the best people of this country and the salt of the earth and that is why this country should develop in a way that we think is fit. and we believe that in russia, there needs to be a strong industry. we believe that the authorities must respect the working man that money should go into the development of production. this is a policy that was implemented -- has been consistently implemented by vladimir putin since it has been running the country and that is

why we give our support and we'll continue to do so. we have seen this country make strides starting in 1999. we have seen plants resume their operations. we have seen the state defense order being resumed and it is thanks to his work and his policies that we first developed a hope which was later replaced by our confidence in tomorrow. today, we're here at this rally to say we are for russia. we are for putin. [applause] [speaking in native tongue] >> translator: thank you, igor. we have with us here the industrial heroes. we have with us the entire russia. we have with us here a siberia

area. the southwest russia, how can you hear us? are you with us. luzhniki, attention, can you hear us? luzhniki! [applause] [speaking in native tongue] >> translator: attention, dear friends, ladies and gentlemen. give it up for a presidential candidate of the russian federation vladimir putin. [applause] [applause]

[speaking in native tongue] >> translator: dear friends, i greet you all. everybody who has come here today to the stadium here in moscow and those who are outside this stadium despite inclement weather a great number of people have gathered here it dozens of thousands. it is symbolic. i would like -- i would like to call your attention to the fact that different people have

gathered here, different as far as age, as far as their ethnic background, as far as their religion. as far as their gender, men and women, it is symbolic that we have gathered here today on february the 23rd, which is the day of the defender of the fatherland. because we are today indeed defenders of our fatherland. that's who we are. we have come here today -- we have come here today in order to say that we love russia. in order to say it in a way that this whole country will hear us. and i will ask you -- and i ask you to speak with just one word, to just answer for the simple word yes.

my question is, do we love russia? [applause] >> of course, we love russia. and we're not talking dozens of thousands. we're talking dozens of millions of people like us who share our opinions in russia. there are more than 100 million -- there are more than 140 million people like us. but we want there to be more of us. we want there to be more children in russia. we want them to be healthy. we want them to receive quality education and after that, decent jobs. and we together are willing to work for the benefit of our great motherland. we're prepared not only to work but to defend it. to defend it at all times and always. we will not have anybody interfere in our internal affairs. we will not have anybody impose their will on us because we have our own will. it has always helped us win at

all times. we are a victorious nation. it is runs in our genes. it runs in our dna. from generation to generation, we will win again and i want to ask you again, shall we win? [applause] >> yes, we shall win. but it's not just enough for us to win at these elections. we need to look beyond. we need to win and overcome a vast number of problems of which we have plenty. just like everywhere else. they are injustice, bribery, rudeness by bureaucrats, poverty and inequality. however, i have a dream. i have a dream that everybody in this country, the big boss or ordinary person live by their conscience, live by the truth. and this will make us much stronger.

i have a dream that in the soul of every person in this country, there will be a hope, a hope for a better lot for happiness. i have a dream that all of us will be happy. every single one of us. how can this be -- how can this be done, though? the main thing is that we need to be together. we, meaning the multiethnic, yet single and powerful and unified russian people. i want to tell you that we're not pushing anybody aside. we're not bad mouthing anybody. we're not messing with everybody. on the contrary, we're calling on everyone to rally around our country. of course, everybody who considers our russia their own mother land, those who are willing to take care of it, to hold as precious and those who have faith in it. and we -- and we ask everybody

and we ask everyone to not look past the national border, to not go left or right, to not cheat on your motherland, but to be with us. to work for your country and for its people and to love it with all your heart and i will ask you once again, do we love russia? yes. i want to thank you all for your support. i want to thank everybody who is here at the stadium, at luzhniki, and everybody who's here just outside the stadium. and everybody who is supporting us in every corner of this great, vast motherland of ours. i cannot hug every single one of you. i cannot shake everybody's hand but i can see everything. and i thank you for your support, for your moral help. i thank for every vote. we can still do a great deal for

our country, our for people and we'll do it while relying on the talent of our people, our great history that has been riddled with the blood and sweat of our ancestors. this year we will be celebrating 200th anniversary since the battle of bordoux. we remember those since we were children -- we remember those warriors who before they went to fight the ballot of moscow they swore their allegiance to their fatherland and they dreamed for dying for it. do you remember how they said it? we'll remember him as well. we'll remember all our greatness so let us recall those words. let us die at the approaches to moscow, like our brothers used

to do. and die we promised to. and our oath did we keep. the battle of russia continues. the victory will be ours. thank you. [cheers and jeers] [applause]

[applause] [speaking in native tongue] >> translator: dear friends, and we carry on with our rally. today, we all feel like we're part of one big family. together, in this stadium, we have a microcosm of the entire russia. where is the industrial euros? they're here? where's siberia, where's the far east? where are you guys? you're here. the bulgar area, yes, you're with us. we can hear you, we can see you,

the central part of russia, moscow. >> thank you for the hospitality of our beloved capital city that has always brought everybody together at all times. thanks to you. we carry on with our concert and i would like to ask to come out of this stage, the man, the patriot, the citizen, a favorite of this country who celebrated his 55th birthday just the other day. this is nikolai and his band. equipment is being brought onto the stage and the lead singer will join us in a second on the stage. please give it up and let us say for him and let us say it again.

ra-sha, ra-sha, ra-sha, our presidential candidate is putin, pu-tin, pu-tin. we support a strong russia. we are for a strong country. we want to live in this country. we want to grow in this country. we want to raise our children in this country. we believe in putin. we believe that this country has a tremendous future with a candidate like this, with his team, with his confidants, thanks to you, russia will carry on. thanks to every one of you. russia has a great future carved out for it. and this future is in our children. let us wish happiness and success to our children. so that everything will be great in your lives. happiness and health to our

children. good luck, the best of luck to our children. let us wish them beautiful lives in this country. and in no other country. [speaking in native tongue] >> translator: the band is about to take the stage and i can see that the musicians are on their way to the stage. please give it up to the band. [applause] [speaking in native tongue] >> translator: how, are you doing nickly, we're here waiting for are on this stage. we're glad to see you, luzhniki, and the rest of the country are happy to see you. [speaking in native tongue] >> translator: good afternoon, friends. from the bottom of our hearts,

our band congratulate you on the day of the defender of the fatherland. we wish you all the best. we'll do a few songs for you. we'll start with one that you know really well. ♪ ♪

♪ ♪ ♪

>> congress returns today from its week-long president's day recess. senators will begin a session at 2:00 eastern with the annual reading of president george washington's farewell address. and later this afternoon, they'll consider a judicial nomination for new york state. we'll have live coverage of the senate here on c-span2. and republican presidential candidate rick santorum spending the day campaigning and c-span3 will have live coverage of his campaign spot in kalamazoo at 7:30 eastern. the chair of the securities and exchange commission, mary schapiro recently gave an update on the agency's implementation of dodd-frank. that's a law created after the 2008 financial crisis. speaking at the ronald reagan international trade center in washington, she says the agency is now better able to enforce

the law and identify and manage threats. this is about half an hour. >> good morning. i'm very happy to welcome all of you to washington. for sec speaks 2012. i'm rob, director of the enforcement division. and i'm particularly honored to once again serve as cochair of sec speaks along with my friend and colleague meredith cross, director of the sec's division of corporation finance. as cohosts, for the next two days, our principal job is one of timekeeping. so to get us off to a good start let's move right into the program. the conference covers two days, today and tomorrow, and we'll be presenting a number of panels from various sec divisions and offices to discuss issues, developments, trends, cases, regulations in the sec's work over the past year. we've invited commentators from the industry and from academia

to give their views on each panel. many of our outside commentators have previously served as commissioners or in other capacities so they can offer perspectives from both inside and outside the sec. over the course of the day, you'll also hear from the sec's chairman, mary schapiro, and from four other commissioners. aside from the plenary session, we'll be offering workshops, smaller breakout sessions at the end of each day. the workshops will give you an opportunity to hear from and ask questions of the sec staff on topics of interest to you. the panelists will not be taking questions during the plenary sessions but we encourage you to ask questions during these workshops. and before going on, despite the fact that our conference is entitled sec speaks, i must say that the views expressed by all the individual speakers of the commission staff during the conference will be their own and not necessarily those of the commission, any other members of

the commission or any of the commission's various divisions and offices. now, to start, it is my honor, my distinct honor to introduce the 29th chairman of the sec, mary schapiro. not many people realize this, but when she returned to the sec in january of 2009, it was chairman schapiro and it's her excellent judgment that those appointments are evenly divided, two of her appointments were by republican presidents and two by democrats. chairman schapiro's talent for understanding and reconciling different sides of complex issues has been vitally important as we work to become more agile and effective during one of the most exciting and demanding -- and demanding moments in the agency's history. under her leadership, the agency has improved performance virtually across-the-board,

increased communications with financial markets, stakeholders of all times and won broad support from elected and political leaders on both ends of pennsylvania avenue. since her return, the agency has brought not only a record number of enforcement cases but a very significant number of actions involving highly complex and sophisticated market practices and products and transactions including many, many arising out of the financial crisis. she's launched a national examination program that combines more effective organization and tactics with computer algorithms that identify and rank risk, thus, allowing us to more effectively target examinations and thus protect investors. embraced the opportunities for investor protection and market stability offered by dodd-frank, working around-the-clock in cross-agency teams to implement an unprecedented rule-making agenda. address the market structure issues raised by the may 6th

2010 crash and pulled in aging infrastructure into the 21st century. overseen significant improvements in management and operations, improvements that allow the sec to devote an ever higher percentage of its budget and staff to its core functions. and inspired a new energy, an enthusiasm for a historic and important institution. chairman schapiro treats public service as a calling and acceptance her responsibilities to markets and to investors not as a burden but as an opportunity and an ongoing search for opportunity to better protect investors and more effectively affect stabilized markets in ways that make our financial system the pillar of our growing economy. she knows her job isn't about numbers, it's about people. about creating opportunities for investors and entrepreneurs and building a more prosperous country for us all. ladies and gentlemen, please join me in welcoming someone with whom it is an honor and a

pleasure to serve sec chairman mary schapiro. [applause] >> thank you so much, rob. that was overwhelming and i'm not sure deserved at all but i am very, very appreciative. it's a pleasure for me to be here this morning. i look forward to this conference every year as an opportunity to give a state of the sec exposition, reviewing our recent activities and how we've evolve and how the changes we've made will benefit the markets we regulate and the investors we protect. 20 years ago when i first served as an sec commissioner, the financial world was a very different place. the dow was itching toward the 3000 mark, derivatives were barely a blip on the radar, a portable macintosh was 16 pounds and all you could do on a cell phone was talk.

for most of the sec staff the biggest market disruption in living memory was the black monday crash of 1987, a near cataclysmic experience to be sure but one that paled in comparison to the crisis of 2008. so when president obama asked me to return and serve as chairman, i knew the agency would be challenged on a level at which no sec had been challenged before. challenged to restore confidence in markets that had nearly self-destructed, challenged to address risks that could jump from market to market like wildfire insin rateing each turn and challenged to prove that the agency could and would step up to play its role aggressively and effectively. given the scope of the financial crisis and the fallout from the madoff scandal, it was no surprise that some were calling for the agency to be disbanded.

but the investing public and policymakers understood the importance of our mission, to protect investors and ensure the integrity of our markets. and the men and women of the sec were eager to meet those challenges head on. and that was no surprise to me. from my earlier years with the sec, i knew well that the individuals who serve are a dedicated and talented team able and eager to rise to the occasion. i knew we'd come through and i'm pleased with how we've come. and i would like to ask anyone who works for the sec or who has previously worked for the sec to please stand and be recognized. [applause] >> thank you for your service. our commitment to evolve helped to draw the consensus inside and

outside the sec that the better solution was not to shutter the agency was to strengthen. to have more efficient action from us and for us to embrace needed reforms and better adjust to the new world in which we were operating. and that's what the sec team set out to do. we redesigned the sec, investing in technology and human capital and significantly improving operations. we put in place a new operating strategy, rooted in an entrepreneurial attitude and a collaborative approach. and we immediately began to execute on an agenda that would better protect investors and reduce the chances of another systemic shock wave. i knew as we found our footing after the financial crisis and began implementing the strategy, that every move would be watched by many eyes. what i didn't realize was that the sec's energetic response to the challenges we faced would lift the agency's profile to

heights rarely seen since the days of joe kennedy and the new deal. but i welcome the attention. it gives rise to needed debate about important issues and challenges us to be our very best. but i sometimes worry that the tendency of observers to focus on individual rules or discreet actions distracts them from the big picture. .. that allowed us to make the very most of our funds.

when i returned to the sec i saw how much the staff was being asked to do and how little they were being given to do it. although the agency experienced a brief period of funding growth following sarbanes-oxley the budget failed to keep up with up nation in the years leading up to the financial crisis. despite continued growth in the markets, the number of employees actually fell and with oversight, examination and enforcement stretched to the limit operations and i-t needs were put on the back burner. investments in new i-t fell by half. during my term we've been fortunate to experience a modest funding turn around. increases that we were determined to invest strategically. we want not just to grow but to grow more efficient as well. growing in ways that would expand capacity faster than the budget numbers were rising. we've broadened our hiring approach, searching for recruits with financial

industry background and specialized experience. we now have traders, asset managers, academics and quants on staff in addition to attorneys, economists and accountants giving us greater insight to the technology and practices that drive today's financial markets. we increased the training budget to more than double what it was in 2009, helping staff to keep pace with changes in the market. we significantly upgraded our case management system, overworked attorneys and paralegals can now take advantage of vastly improved research capabilities. we're deploying an agenciwide e-discovery tool that will expand our ability to parse evidence and drill down on key subjects. perhaps our most reported i-t investment is our new system for handling thousands of tips, complaints, and referrals we receive each other. an ongoing series of upgrades is allowing us to

better triage the information we receive as well as compare the data more effectively, opening new investigations, routing appropriate tips to existing investigations, or discovering emerging trends that we need to be watching. together with these wise invests we have also been finding ways to improve agency operations. within the various divisions and offices we created managing executive positions to handle important support areas. freeing legal examination, and other professionals to focus their skills on mission critical work. we're outsourcing responsibilities like leasing and financial management reporting to other agencies, focusing on core strengths and deploying people and resources accordingly. and we're implementing a number of management recommendations resulting from the dodd-frank mandated study of agency operations. after three years of intense effort the sec is simply a sounder agency on a fundamental level.

deploying people and technology more effectively and maximizing the impact of our limited resources. it's all part of an effort to be more effective for years to come but it should not suggest in any way that our work is done. parallel to our investments in people and tools we began to put in place a new approach. we wanted to be more entrepreneural, moving to diminish or head off threats within the markets, trusting our teams to recognize these threats and move rapidly, without the need for top-down guidance in every case. this approach has flourished. while we don't have time to discuss every office and division, i would like to offer a few examples of how it is improving our efforts. one place to look is the division of corporation finance which has rob said is run by sec speaks co-chair meredith cross which has been particularly aggressive in enhancing its structure and focus. in the last year they established a new groups to

concentrate closely on three systematically critical facets of the financial world. the largest financial institutions, structured finance products and capital markets trend. these offices are helping insure that investors have clear information about items that could, without the sunlight of disclosure, turn into malignant trend or dangerous practices. in addition the disclosure teams have been proacting specific disclosure issues which have potentially significant consequences. they have prompted companies to provide critical information about the potential financial impact of repate trieighting cash from overseas. they have raised questions whether companies are properly disclosing their litigation contingencies and they have worked with our enforcement, accounting and international units to combat and uptick in problems with reverse mergers by stepping up scrutiny of related filings. they have taken a lead in providing companies guidance

how existing disclosure rules apply to emerging and fast-changing market realities issuing guidance where possible before inadequate or outdated disclosure practices harm investors. the staff issued guidance regarding the way financial services firms should disclose share exposure to european sovereign debt in time for these firms to use it when they prepare their annual reports, helping to provide investors with adequate granular financial information even as that situation remains very fluid. and the staff issued guidance regarding company's obligations to disclose material cybersecurity risks and attacks, clearly an area of growing concern to investors. additionally in reviewing the most recent wave of ipos, they quickly stopped problematic revenue recognition practices and they halted the use of misleading non-gaap measures before these practices prevalent during the tech bubble of the '90s could take root again.

similarly disclosure teams acted swiftly when the right of investors have their day in court was threatened by objecting to a mandatory arbitration provision that was included in the governing documents connected with the company's ipo the results of these changes aren't always eye-catching but we are convinced that increased focus on systematically significant market sectors is a necessary shift in a post-crisis world. we know that our proactive efforts to provide guidance proved helpful to many companies as they grapple with disclosure issues and we believe based on our own review of disclosure statements that investors are getting information that is both more complete and more relevant than in the past. perhaps the areas in which changes in organization and approach have been most apparent are in our enforcement and examination units. in both new leadership has managed significant organizational changes and just as important, encouraged an aggressive and

proactive approach. over the last two years, oc has put in place a new national examination program. the program has brought changes in the way examination teams are assembled. oc precisely manages examiner skill with each challenges that examination office and examination materials are standardized. working wit the risk, financial and strategy information this national exam program greatly, expands the use of risk based targeting. better targeting and more effective examinations are paying off. over the last two years, 42% of the exams have identified significant findings, up by a third since 2009. and over that same period the percentage of exams resulting in referrals to enforcement has risen by half from 10 to 15%. one such referral involved a fund which had come into our sites precisely because of our risk-based targeting

efforts. during the resulting examination the fund admitted to an error in their trading algorithm which they previously failed to report. a failure that cost investors more than $200 million. thanks to the work of the exam team and enforcement staff, the fund agreed to a settlement returning all the money to wronged investors almost before they knew they had been wronged and paying a $25 million penalty. meanwhile the enforcement division led by today's either co-chair, rob khuzami, revamped its operations putting additional talented attorneys back on the front lines, creating specialized units and streamlining procedures. these reforms are already producing record results and while i won't steal all of rob's thunder, last year the sec brought a record 735 enforcement actions including some of the most complex cases we've ever worked on. and we obtained orders for $2.8 billion in penalties

and disgorgements. of course what is most satisfying for all of us is that last year we returned more than $2 billion to wronged investors. if congress agrees with my request to raise the cap on what we can obtain, we would have the ability and appropriate cases to return even larger sums to wronged investors. in the area of financial crisis-related cases we filed charges against nearly 100 individuals and entities, actions against goldman sachs, citigroup, jpmorgan, and top executives at countrywide, fannie mae and freddie mac and more than half of the individuals charged were ceo's, cfos or other senior officers. of course it should come as no surprise there are more cases to come. this division also realized significant gains from its aberrational performance inquiry, another colab tiff effort, one which uses quantitative analytics to

search for hedge fund advisors whose claimed returns are unusual enough to raise a red flag. in december as result of one of aberrational performance sweeps we charged four hedge fund advisors for inflating returns overvaluing assets and other actions that materially misled and harmed investors. oc enforcement are working together through different analytic initiatives to target various types of misconduct and these initiatives will again be particularly important to our efforts to detect fraud before complaints are received. and one can clearly draw direct lines between enforcement's earlier restructuring and its current results. for instance, one unit created during the reorganization, asset management unit, okay took the time to survey a group of first that were actively communicating through social media. in the process they learned about the various approaches firms were using, getting a

sense of those that were legitimate and those that might not be. shortly thereafter staff member who was familiar with the survey noticed something irregular in the operation of an illinois-based investment advisor. in short order, the ensuing investigation uncovered fact that the advisor was offering more than $500 billion in fictitious securities through various social media web sites, garnering significant attention from multiple potential buyers. again the agency acted before investors were harmed. we sued the advisor last month and effectively halted the fraud. but rather than just stopping there, enforcement teamed up with oc, the investment management division and our investor education office and on the same day that we shut down the fraud we released two publications. one that will help investors recognize, avoid and report similar scams. and another that will help investment advisors keep their communications in compliance.

it's hard to quantify the results of efforts like these, to know how much savings won't be poured into fraudulent offerings, or what tips might arise from the publications but we think this is important and that this aggressive, and coordinated approach is yielding superior results across the age a -- agency and will continue to do so going forward. yet another priority in recent years is rededicating ourselves to our investor protection mission. an important task if we were to bolster the confidence so necessary for our markets to thrive. that meant strengthening the regulatory structure and pulling back the veil that covered portions of the financial system. that is why even before dodd-frank we set out to address the resiliency of money market fund to insist upon meaningful information regarding municipal securities and to require more information from investment advisors among many other initiatives. with the passage of

dodd-frank, our responsibilities have expanded dramatically. i'm proud of the across the board progress we're making against these mandates. of the more than 90 mandatory rule-making provisions the sec has proposed or adopted rules for more than 3/4 of them. not to mention a number of rules stemming from the dozens of other provisions that different give us discretionary making rule authority. we completed 12 studies called for by congress. we could talk for hours about dodd-frank but let me touch on a few highlights. in the area of corporate governance we finalized rules concerning shareholder approval of executive compensation and golden parachute arrangements. led by the division of investment management we adopted new rules that already resulted in a approximately 1200 hedge fund and other priced fund advisors registering with the sec. and we've established a whistle-blower program that is already providing the agency with hundreds of

higher-quality tips, helping us to avoid investigatory dead ends and at the same time, prodding companies to enhance their own internal compliance programs. in another area response to the meltdown of the mortgage-backed securities market, the sec has proposed rules that will protect investors by increasing dramatically investor visibility into assets underlying all types of abf, requiring securitizers in conjunction with our banking colleagues to keep skin in the game, giving them incentive to double-check originators underwriting practices and changing the practices of the ratings agencies who missed ratings of mortgages of billion of dollars of mortgaged-back securitieses were kerosene on kindling. next up final proposals to essentially build from the ground up a new regulatory regime for over-the-counter derivatives. the otc structure of derivatives market long presented a risk to the financial system.

in october of 1993, i addressed a symposium for the foundation for research in international banking and finance about the potential problems. and at that time i said nothing will interrupt the progress of the derivatives market more abruptly than a financial crisis perceived to be caused or exacerbated by unregulated activity in those markets. back then of course the notional value of interest rate and currency swaps was $4.7 trillion which seemed like an extraordinary figure. i was concerned that this potentially useful financial innovation might present significant systemic risk for various reasons including opacity of the derivatives market, weak or nonexistent capital margin clearing and settlement requirements and the concentration of derivatives transactions among a relatively small number of institutions. and while others shared those concerns in 2000

congress specifically excluded most derivatives transaction from regulation. by mid 2008, as reper discussions of the mortgage-backed securities collapse were echoing through the the financial system the notional value of the derivatives market had increased from that extraordinary $4.7 trillion, more than 100 fold to $700 trillion. title 7 of dodd-frank addresses the challenges presented by the otc derivatives market that are underscored by the events of 2008 by bringing these markets into the daylight. the sec is working with the cftc to write rules that strengthen the stability of our financial system, by increasing centralized clearing of swaps and insuring that margin and capital requirements reflect the true risks of these products. improving transparency to regulators and to the public by shedding light on a opaque exposures and assisting in developing more robust price discovery

mechanisms. and increasing investor protection by enhancing security-based swap transaction disclosure mitigating conflicts of interest and improving our ability to police these markets. it is my hope that in the near term we'll complete the last remaining proposals regarding capital margin segregation and record-keeping requirements. but we are already beginning to transition to the adoption phase. as a first step, i expect the commission soon to finalize rules that define who will be covered by the new regulatory regime and next, what will constitute a security-based swap. finalizing these definitions will be a foundational step. defining the scope of the new regulatory regime and letting market participants know their current activities will subject them to the substantive requirements we'll be adopting in the coming year. beyond this, the commission staff is continuing to develop a plan for exactly how the rules will be put into effect. the plan should establish an

appropriate timeline and sequence for implementation and will avoid a disruptive and costly big bang approach. and at all stages of implementation those subject to the new regulatory requirements will be given adequate time to comply. while some issues are stand alone concerns certain issues in title 7 cut across the entirety of our implementation. among the most important given the global nature of the derivatives market is the international impact of our rules. we are working very hard to coordinate them with our foreign counterparts to help achieve consistency among approaches to derivatives regulation and there has been significant progress on the international level. our cross-border approach must strike a balance between sufficient domestic regulatory oversight and the realities of a global marketplace. a one-size fits all approach is neither feasible nor desirable. in the near term the commission intend to address

the most salient international issues in a single proposal. this will give interested parties including international regulators an opportunity to consider as an integrated whole our approach to cross-border transactions and the registration and regulation of foreign entities engaged in such transactions with u.s. parties. despite the breadth of dodd-frank there are other gaps in the regulatory system that threaten investors that we're working to address. one high-profile area of interest is money market funds. as you know when the prime reserve primary fund broke the buck in 2008 it set off a run so serious that the federal government was forced to step in and guaranty a multitrillion dollar industry. it was a shock that reverberated across the market and compelled us to take action and so two years ago we adopted regulations making the mix of

investments these fund can hold more liquid and less risky. but at that time i said we needed to do more. and that is because money market funds remain susceptible to runs and to a sudden deterioration in quality of holdings. we need to move forward with concrete ideas to address these structural risks. now we spent a lots of time and outreach reviewing many possible approaches. there are two serious options we're considering for addressing this core structural weakness. first, float the net asset value. and second, impose capital requirements combined with limitations or fees on redemptions. it is hard to miss the hue and cry being raised by the industry against either of these approaches but the fact is investors have been given a false sense of security by money market fund sponsor support and the one-time treasury guaranty. funds remain vulnerable to the reality that a single money market fund breaking of the buck could trigger a

broad and destablizing run. should that happen, the government will not have the tools it had in 2008. then treasury used exchange stabilization fund to stop the run. the congress eliminated that option when it passed the tarp legislation. today the money market fund industry and by extension the short-term credit market is working without a net. to the extent there's a deadline it's the pressures we should feel from living on borrowed time. we have been incredibly deliberate about this the president's working group report on reform options was issued in october 2010. we've had extensive public comment and hundreds of meetings. we held a roundtable with the financial stability oversight council on money market funds and system risks last may. time for us to take the next step. finally, we're working to improve the sec's capacity to regulate and investigate. and so another major

initiative is the consolidated audit trail. standardizing reporting across-trading platforms would seem to be a very obvious move, serving investors on two levels. aiding in the investigation of suspicious trading activities, insider trading and market manipulation and allowing more rapid and accurate reconstruction of unusual market events. the complexity of the undertaking however has necessitated a detailed and extended rule-making process. including the thoughtful review of the many comments received since we first proposed the system's creation. the contours of the regulation are being finalized. and will be considered by the full commission. but regardless of the details, the broader result must be a mechanism that gives the agency the ability to rapidly reconstruct trading something that simply does not exist today. in addition, while the initial proposal will be for an audit trail tracking orders and trades in the

equity markets, i believe the system should eventually be expanded to include fixed income, futures and other markets. it's important we get a structure in place sooner rather than later so that the heavy lifting of working through the technical nuances of the system can begin. we expect to adopt a final rule in the months ahead and after that, i anticipate that the ex-changes and finra will be required to submit a detailed blueprint which in turn would be subject to public comment and a separate commission approval. i'm proud to have the opportunity to work at the sec doing an exceedingly productive period throughout our history. the agency accomplished much and we're on the verge of further critically important rule-makings that will strengthen the structure of the financial markets and enhance the sec's ability to oversee those markets and pursue investor's interests however just as important as cumulative effect of these accomplishments, are

improvements in the culture, management approach and attitude of the agency as an institution and the staff who make it work. improvements at all regulatory agencies should undergo and will allow the sec to continue to function at a high level in years ahead. no one can predict what challenges will arise, what new threats to market stability will emerge, what fraudsters and manipulators will try down the road but whatever does happen the sec is now materially better able to enforce the law and to identify and manage threats. the burst of activity isn't just a result of circumstances. a reaction to the financial crisis. it's an indication that the sec is evolving in step with rapidly changing markets. it's been a busy time but there are a lot of proud people who, even as we finish what is on our plates today, are looking ahead to an equally productive future. thank you. [applause]

>> thank you. >> congress returns today from its week-long presidents' day recess and the senate begins its session at 2:00 eastern with annual reading of president george washington's farewell address. later this afternoon consideration of a judicial nomination for new york state. we'll have live coverage of the senate here on c-span2. >> republican presidential candidate rick santorum is spending the day campaigning in michigan and c-span3 will have live coverage of his campaign stop at the heritage christian academy later tonight in kalamazoo. that is at 7:30 eastern. two former high-ranking u.s. military officials say a strike against iran will not get the regime to stop its nuclear program. retired general james cartwright and admiral

william fallon took part in one hour discussion hosted by the center for strategic and international studies. >> good evening. welcome to the center for strategic and international studies. thank you for being here. i'm andrew schwartz, seen senior vice president for externalnal relation. thanks for coming out and schaeffer school of journalism at texas christian university. today we lost a couple, great, great journalists. i wanted to remember them, anthony shdid had a relationship with csis. anthony's cousin worked here as a young man. just left to go to business school. there is a great, great essay at csi s.org by our middle east program director, who is a friend ever anthony's for 20 years. i urge all of you to watch it. this will also be tweeted

live tonight. csis underscore org with the hash sign. sheave fear series. with that i give to bob schieffer. >> thank you, and drew. welcome back on tcu and journalism school there at csi s boy, do we have a good one today. we try to stay on top of the news because we're right on top of it because we're going to talk to today iran. what could be done about it, what should be done about it, what does the future hold there. jim cartwright, united states marine corps retired. holds the csis harold brown chair in defense policy studies. he served as commander u.s. strategic command before being nominated and appointed as the 8th vice chairman of the joint chiefs of staff. served a four-year tenure as the nation's second highest military officer across two presidential administrations. admiral william fallon on my

right, former commander of the u.s. central command has served as the commander of u.s. pacific command, the u.s. fleet forces command and the u.s. atlantic command. and down here, general david sanger, who knows a whole lot about everything. he is the chief washington correspondent for "the new york times." one of the newspaper's senior writers. for those of you tweeting he really isn't a general. [laughing] i forget in this day of the internet there are no jokes. [laughter] in more than 25 years at the paper he has reported from new york, tokyo and washington. he is author of the book, the inheritance, the world obama confronts and the challenges of american power. if you haven't seen his by line alot lately because he is in the process of writing another book. david, let's start off, give you a little plug here. what is the new book going to be about?

. . >> if president obama called you, and you were still on active duty saying what do i do about? what would you tell him? [laughter] >> i'll start with the easy

question. give us a run down on where you think things are now. >> yeah, my concern with iran, you know, if you were to get one of those telephone calls, is that we have, as a nation, for several administrations now, embarked on a negotiating diplomatic approach along with the delaying strategy to try to direct them to have the opportunity to a diplomatic solution to war. there are those around the world and certainly in the united states who believe that clock is ticking and starting to run out of time, and so what are the logical next steps you want to worry about and think your way through, not necessarily because you'd execute them, and so the thought process of several presidents now have said not op my watch, no way will we allow that to happen.

what's that mean? we said that about korea too. what's that mean? how do you want to handle that do you do something more provocative to slow this down? along the lines of a military strike? what woulded implications be? what would be the counter be, ect., and think your way through that. is there nor negotiating in terms of delaying strategies that would be more successful and fruitful and because the iranians get a vote in this, and if they decide they want to announce they are moving in this way, what are the implications of something like that. you have to worry about ten years of war, a country that -- a world in financial discourse so to speak and challenged. the likelihood of strategy that would deny the iranians as

probably a strategy that requires an invasion and change of administrations in iran. the likelihood that's going to occur in the same year you get a new chinese government, a new united states whatever, and, you know, that stacks up hard on an act on our part or an invasion type activity. those are the things on the table. the likelihood that something in the year of this year occurring that would challenge that, i think, is pretty high. >> admiral, let me ask you, how close do you think iran is to achieving are meaningful nuclear capability? >> short answer, i don't know. i don't know that many people outside of iran really know. there's a lot of opinion out

there, and, you know, exactly what their intentions are, how far they've gone, whether they would actually -- if they had the means of weaponnizing some nuclear capability, and, i mean, right now by them keeping things am ambiguous, i think that's fairly clever, particularly if the real intention is to proceed, but what really strikes me now is, again, we're reaching this country -- cresendo of talks. it's like the old war movies, black and white, beating the drums in the gally, and the chant goes on. certainly not helpful at all. there's a lot of balls in the air. i think general cartwright kicked off a better dozen of them here, and all of these things make this extremely complex. the sound bite that we see in

the media would make it seemingly simple. it's not at all. what i think about is this that go back to a coup of of -- couple of fundamentals and one is the regime that's been in place now for several decades and the united states has had virtually no dialogue. there's been talk. there's been a couple starts and a few let's go have a discussion, but there's really never been any really meaningful dialogue since the revolution. there's a pretty nasty history here, which is there, and getting anything started in terms of diplomatic log -- dialogue is a challenge. the regime with its particulars of longevity of the fact that u.s. is the arch enemy and getting support to demonize the u.s. makes it all of more

challenging. >> david, what do you -- what do you -- tell us where you think this is right now. are they close? way are your sources? i know you've done a tremendous amount of work on this. >> you can do a lot of work on this, and, you know, the teacher you get into it, the more uncertain you become of exactly the question that you've asked. how far? admiral allen had it right when he said that ambiguity is really the iranian's big friend here right now because in many ways, having either a capability or a near capability is as useful to them or perhaps more useful to them than actually what you think that they actually had a weapon, they know what happens if they use it in an explicit way against israel, the united states, other targets, and so i think that's unlikely. what, i think, if they are interested in a weapon, they would be interested in the influence it gives them in the regionings and they would get

that influence or almost as much of that influence by having the world know they have a capability to build a weapon in a matter of weeks or months, and it keeps them within the nuclear nonproliferation treaty and keeps the u.s. intelligence agencies able to say, as they said as recently as this past week, that there's still no evidence that the iranians, the supreme leader made a political decision to go ahead with a weapon. well, why would you make a political decision to go ahead with a weapon when you could get many of the same benefits and be just short of a weapon? i think all sides here have learned as general cartwright said, the lessons of north korea, and on the one hand, the lessons of north korea was for the united states is you can keep saying we won't tolerate it, but one day the country conducts a test, and you don't have a choice. that's where we are with north korea. iranians look at north korea and

say, you know, maybe testing it is a step too far. >> yeah. and so what exactly did they test and what they have is still an open issue, but the business of drawing red lines is a challenge seems to me, and so you craw a red line -- draw a red line, and then someone is perceived to have crossed it. now what do you do? and this is a challenge for the the -- [inaudible] >> leon panetta says there is a red line. when he says that, what do you all interpret that to mean? what's the red line right now that he's talking about? >> i don't profess to get inside of his head, but, you know, i think that they are, you know, i agree with admiral fallen that it's difficult to draw a red line here with the lack of inside knowledge that we have, and so in any mind right now, i think what the administration is saying is that if there is any

kind of evidence that there is weaponnization going on, any external signature to the effect, or if the iaea inspectors are thrown out, not allowed to return, those are steps that are overt and could be used as red lines. whether that's what they use or not, i don't know, but those are overt steps you could actually see and draw a line against them. >> this is not something i know a great deal about, but correct me if i'm wrong, is what iran seems to be moving towards is something like this situation you have in japan where they don't have a nuclear weapon, but they could build one in very short order. >> well -- ? is that what -- >> there's a fuel cycle that takes you to an enrichment activity. that enrichment activity gets cut off at a very low

percentage. what the iranians have done now is go to the next higher percentage under the guys potentially realistically so for using research, medical research. that's a halfway step to weaponization technology. the steps are understood. taking it to the next level may take a little time, but the basic technology is now understood by the iranians. >> and so we have these sanctions, and iran says they now want to talk. does that mean the sanctions are working? >> i'm not sure that those two statements get connected, but the sanctions are having an effect, i think there's little doubt they are having a significant effect on the country. >> what would be the effects, admiral? >> the -- their ability to

conduct business. i mean, i felt for sometime some of the more effective -- if you're going to try to put somebody in irons, getting their pocketbook is usually how they pay attention. that appears to be the case now. i saw a lot of evidence, and, david, you may have more than this than i see in the economics sphere. it's extremely getting very, very difficult for them to do simple things like food imports because they can't pay for them and nobody will deal and their currency is not worth much now. >> why did they say what they said, that they want to talk? >> somebody said something, and who knows. there's a history of people saying thing, and then there's a distinct lack of follow-up or things that back up that speech. who knows. maybe the supreme leaders, the guy that most likely is going to

be making the decisions and calling the shots here, and i think that one of the additional challenges that we have in this country is understanding how they make decisions. you know, whose got influence in what areas, and how do they go through whatever steps they need to reach a decision that's rational. >> okay. >> there's been sanctions that the u.s. put on iran in the past six years, but these in the last six months got their attention. why is that? the first thing is it's aimed at their -- how they clear revenue for their oil sales. for the first time, we are even indirectly going after the oil revenue. the result is that their currency has fallen in value against the dollar by half. that's panicking a lot of people who have been in the currency

itself. it makes it very difficult for them to sell oil in dollars, and so they begin to think about trade agreements and barter agreements, back and forth. then you have to ask the question, can sanctions alone lead the iranians to come to the conclusion that the nuclear program just isn't worth it? on this you get differing opinions. you get some people in the administration who made the case to me that, look, the iranians always say we will never give in to pressure until that magic day when they give into pressure. you get others who say, you know, the sanctions may weaken the regime, and it's hold on power, but in the end, it's not likely to reverse the nuclear program because the nuclear program is popular even among the opposition parties. you have to ask the question are you really -- what are you really accomplishing? >> i think there are lots of examples of sanctions around the world.

we had this for many decades, and north korea, not exactly enjoying free trade agreements with folks, and i think in recent weeks and months, there have been a number of things that are beginning to add up here that are starting off to be really getting to these people, and so countries that were flaunting the embargoes in the past and the sageses are now -- sanctions are now beginning to come into line. i think it's very, very difficult for these guys to know to actually get things done. whether that's enough, i don't know. >> yeah. my sense is all of that is accurate. what you don't know at the end is which way is it going to go? convince them not to proceed or gal galvanize them to proceed, and that's the unknown here. >> is there anything we can do short of military action to convince them it is not a good idea to build a nuclear weapon

shah is that just something that's to have respect and so forth? >> i'm not sure that they've decided yet, or at least that the leader has decided yet. the likelihood there's a single act that will all of the sudden flip the switch is probably pretty low. it could be the stack up of several activities, the sanction, their ability to do business globally now, the loss of their ability to work with their both their airline and their shipping lines and get safe harbor and refueling rights and things like that. all of these things could, you know, stack up in a way that convinces them, but you have the same problem to take action. are you actually going to steal their resolve to do this or delay for a few years and get back in negotiation?

the likelihood, i think, or at least my thought process, is it's more likely to galvanize their thought process. you have the libya example. this is the country we got to agree to abandon their nuclear aspirations, and then we replaced the leadership. that's not a good precedent for the iranians to be looking at. >> would you add anything? either one of you? >> well, there has been a middle range option for the obama administration. the president saying he wanted to open up negotiations. he did a broadcast on the iranian new year to the iranian people, and i think there's a lot of debate among iranians how sincere he was. the wikileaks say he working on different versions assuming the diplomacy doesn't work, and there's other things happening to the iranians in increasing paces. there's been five scientists

assassinated. it's widely believed, no one proved, but that it's the work of israeli intelligence, but maybe it's not. you've seen the missile plant blow up spontaneously. we had missile plants blow up here, too, so could have been accidental, but it raises suspicion. you saw the net virus, a computer worm that ended up hitting them for awhile slowing down the ability to produce. i think this all comes back to the question that general cartwright rises which is when the iranians see this, does it re-double their determination to move out ahead, or does it make them think that this is not worth it? i have not seen any evidence yet that it's really slowed the program. if you just grasp the amount of

enrichment activity that we know about, you know, there's ups and downs, particularly after the computer worm hit them, but fundamentally, it's a steady up. >> let me just ask you whether it's the right thing to do, israel seems to be drawing the line in the sand on this. how credible is their posture towards iran? i guess what i would say is do they have the capability to take out iran's ability to build a nuclear weapon if they decided to do that? >> no, they can slow it down. they can delay it. some people estimate two to five years, but that does not take away the intellectual capital, does not take away the ability of the iranians to then proliferate the site in any certain way, and so, no.

you're not going to do that with a kinetic attack. it's a delaying attack, not a changed tactic. >> do you agree with that, admiral? >> yes. >> why? >> folks who have taken historical events like the iraq, the possibly strikes syria here a couple years ago, and they acted, had resolve, took care of the problem, went away, but this is a very different issue here. this is not a pinpoint single target, one strike, and it's over. they have been pretty clever about distributing stuff. as general cartwright indicated in the opening statement, to really take care of the problem ky netically or militarily, that's going to require some people and quite a few in the country, which is not likely to come. >> you can do air strikes which

seem to have debate, and then what happens? >> just an example, is it spread out over a wide area, is it deep? why is it such a hard thing to do militarily? >> well thrks is part of the -- well, this is part of the calculation of red lines, and most of their activity occurred at one site which is somewhat underground, but certainly strikeble, but they have over the past two or three years talked about alternative sites. we know of one that's pretty well understood which is deep enough underground, and when you get to the point to franchise out the fuel cycle and distribute it around the country and have an understanding of the enrichment process, the number of places to port that far exceed our knowledge of very

discovering them all. again, you're not going to kill the capital to just rebuild the center fuses someplace else and carry on. it's a will issue then at that point, and if they have the will to do it, then they will produce. >> what happens if they decide to do this, admiral? >> well -- [laughter] >> launch a strike? military action? >> the guess is the united states would advise against that, but israel does not always take that advice. >> governments do what they do, what they proceed to be in their best interest, or if they feel they are backed in, maybe their least obnoxious choice given the options, and so, you know, they make a strike at something, very difficult, i think, because of the level of effort likely to be

required given what we think we understand, and i'm not plugged into every detail anymore, but there are a lot of targets. this is not a one-time shot. it's going to take a fair amount of work, and so if one decides to lash out and take a whack at something, could probably inflict some damage, but then what happens? well -- >> what do we do then? do we find out, get the call, planes in the air, and this is what we're doing, naught we'd let you know about it. obviously, neither of you are in the government now, but what would you think the u.s. reaction would be, general? >> well, that's a real con numb drum. if they are in the air, there's not likely much we're going to be able to do with whatever targets they have. at that point, then, the government is faced -- our government -- is faced with do you dise vow it? do you say it's a bad idea?

do you kind of passively watch it happen or do you aggressively join in? that's the round of things you might be able to do. which one you do is probably a decision that's more likely to occur in proximate with their launch, and in other words, the situation will dictate probably what the art of the possible is. being ready for that and the forces postured in such a way that you have choice, is the thing they are most concerned about right now. >> i think the by-extension given at least the iranian rhetoric to date would link israel and the u.s. almost no matter what happens, and so we have to be prepared to protect our forces and people for whatever might happen. there's a couple thoughts here. one, we have an awful lot of things in common with israel. we're often portrayed as yes,

no, yes, no, but we share a lot in this region, not the least of which is trying to get to some long term state of better stability, and so we will certainly cooperate, i think, to the max extent that we can. we'll certainly share intelligence because we think that any weaponization of this capability in iran is not in either of our best interests, and at the end of the day, you try to deal with this it might result in the sunrise rather than something ugly that you never know where it's going to go. >> well, the issue of how the united states respond if they moved ahead is one the bush administration took up in 2008 when the israelis came to the administration, with bombs, and for the refueling capability that they would need to be able to do this more effectively, and

they were turned down by the bush administration, and when you go into the memoirs, you discover there was an active debate inside the administration on that issue, but one of the questions that came up was if in open air space, the most direct way in, the time the united states still controls, would the u.s. try to stop them? i think the answer they came to was probably not. the bigger concern is not just what happens to the day, and as master's degree mirl fallon said it's if the u.s. and israel work together on sharing intelligence, and then the question is does the u.s. get sucked into whatever happens that follows? i've only seen the classified war gaming of this, one down in grokings, one at harvard, and every scenario i've seen of these, the u.s. does get sucked

in sooner or later because somebody tries to close the strait of hormuz or an iranian captain takes a pot shot at american ship, and then you're off to the race, and i think that's the big concern that the administration has. >> turkey's foreign minister spoke here at csis earlier this month saying military action against iran would be a disaster that could complicate developments in the middle east at the crucial juncture. as a nato ally, does turkey stand complicated on iran or just speaking reflecting reality? >> my sense is reflecting reality, and certainly, as he perceives it, and certainly that, and i was going to go back to the output of the equation versus the input. yes, there's a strike, and, you

know, the economic side of this will be no matter how effective or ineffective the strike is will be significant, both in the revenue side of the oil activities, but then globally in the instability that that'll cause in the markets, and so that's a piece of it that i'm sure turkey is concerned about, and at a minimum, and then they lie on an obvious path two and from israel to iran, and they have a neighbor, iran, who is going to be there or lash out. there's an area in the region that's at stake here far beyond that. >> just, i -- no one that i'm aware of thinks there's any real positive outcome of a military strike or some kind of conflict, no telling what the iranians think, but one has a hard time

conjuring up positives out of this, and so what's that mean for us? that seems to me this is one of these -- you never know what instrument actually gets the job done in these situations, and you never know how things stack up because you're not in their heads, and they are, as we kind of lurch down the road here. seems to me that we ought to be doing a couple things. one, making very clear that we are trying to come up with some kind of a negotiated end to the weaponization drive if that's what they are about, and it's bigger than that. it's the whole region. there needs to be stability, but at the same time, we're not going to just stand by. we're certainly not going to stand by if they decide to whack at us for some reason or decide to close the strait or any of

those things. it's not going to happen. they are not good outcome, and therefore -- there may be other things too. it seems to me if you look down the road at these, and you "what if" this, so what if iran turns out to come out one day and say, hey, guess what? we've got one. whether they do or not, what, you know, where do we go? other countries with nuclear weapons right now, and it seems to me one thing we might consider here is some kind of a declaratory policy by which we make very clear, publicly, that the use of a nuclear weapon against ourselves or allies would not only not be tolerated, but get a response in kind. we've done this before. we've had these arrangements. they are not done little lightly, and this is a very

touchy region with a lot of moving parts, but that might be yet another thing we might want to consider as options. >> you mentioned the strait of hormuz. general dempsey told me on "face the nation" that, in fact, the iranians could close the strait of hormuz. he added maybe not for very long, but they could do it. how long do you think, or do you think they have the ability to do that? >> certainly, i've looked at this in the past. [laughter] >> oh, figured you might have. [laughter] >> i remember something about it. [laughter] so there's a lot of factors here, and what's the posture at the time? what's their posture? i think general dempsey's got it exactly right. they might, but probably not for long, no, and then again, 24 is one of the these things where you better be careful if you

instigate this because you may not like it. this is not a threat, but they are limited capability when all is said and done. >> the thing to be concerned about, we would be very sensitive to the posture we put our forces in, but there's not a whole lot of comparison between what they have and what we could bring to bear if we needed to. >> do they have the ability -- we talk about iran posing a threat to the united states, do they, in fact, pose a threat to the united states? could they have the ability to deliver a weapon? a warhead to this country? they don't; right? >> not in a normal sense, a ballistic missile, they are working for the technology in the fuel cycle dude -- to do that, and the more worry roar -- worrisome activity is one or two

weapons, but it's worry some that the weapon or technology could be proliferated to somebody who is anonymous and brings something like that to the world and whether they take it there or just say it's in city x, do the following. the so-called blackmail approach is more worrisome and the likelihood of the iran they -- of attacking the united states at home is low. the closing the straits, you know, people argue that's equally detrimental to iran, but remember what we just put them through with the financial sanctions and everything else. the question is when does their call cue louse come to the point and say one way or the other is the name of the game. that's the worrisome side of the

activity, and i think we generally average about 14 ships and 17 million barrels a day through the strait, and so if that's the case, that's about 20% of what happens every day in oil, and so just a few days is a pretty significant activity to deny us, and so, you know, these are the things you have to sit down and work through, and like admiral fallon said, wear not in their head. we don't know how they look at these problems, you know, and so it's difficult to say this is what i'm going to do and this is what they're going to do. >> this is a different situation for israel, and that's that this thing is super heated or seems to be getting that way, and they can range, and if they had those weapons. >> it's been the past two weeks, you've seen two israeli officials, one of senior military official and then the finance ministry yesterday, and they make the claim they have

the ability to reach the united states with a missile within five years or so. maybe they are right and maybe they are not and usually these things take longer than one would think, but it was interesting that the israelis felt it necessary to say this publicly because i read that as trying to get them to move in the obama administration from a general threat to one specific to the united states, perhaps in hopes that that would change the way the u.s. dealt with the issue. i don't think that that will succeed, but it is interesting, and i think that when general cartwright says one of the concerns is it comes in unconventionally, and this is why you saw declaratory policy against north korea and where the first nuclear tests said it was not the most successful test they've seen, issued a declaratory policy that said if we find your material any place around the world, err --

we're going to treat that as a district -- direct attack, and have not seen that kind of policy issued yet from iran. >> let's take questions from the audience. yeah, right here. right there. you were the firsthand up. >> wouldn't a change of regime and syria sort of be a better policy because syria, if iran lost syria, and we have to secure the wmd, there has wmd in syria. wouldn't that be a loss of faith for ahmadinejad and therefore for his terrorist activities in the middle east and elsewhere? >> who'd like to take that? >> i'll start, and we'll let anybody jump in. it would have an effect to say that you can tell now what that effect would be and how quickly

it manifests itself is difficult. it's this on how many things go together, the blind man approaching the cliff. you don't know quite where the cliff is and where it changes. syria is clearly important to important. clearly important to iran, and that regime is clearly important to iran, but what the effect would be and over time how that would manifest itself is not clear. >> admiral, anything to add in >> no, a few countries standing tall or short with syria these days, and iran happens to be one of the few. >> john, did you have a question? >> i want to take david's notion that maybe iran was a

screwdriver away from having a bomb and would be successful for a long time doing that versus there's an israeli attack and there's involving us, but if those are two possible scenarios, what does the middle east look like in five years time if that's where we are? either the iranians move towards having some sort of ambiguous weapons capability in five years time, or there is an israeli strike that somehow involves us and whatever secondary things come from that, where is the middle east then? taking general cartwright's notion that you can slow down a bomb, but you can't stop one forever. >> yeah. well, the first scenario which is the ambiguity. you already see a number of states in the region thinking about ambiguous capability of their own.

a few years ago as the iranian capability rose, you saw the gulf cooperation counsel announce they were interested in uranium, and, of course, just for peaceful power production purposes, but they wanted to make it clear they could also get the capability going. it's not clear they made very much progress on this. the one to watch, most clearly, is saudi arabia, which is, again, from wikileaks the king who said cut off the head of the snake. it was his advice to the united states, and the king of bahrain has had similarly subtle advice. presumably, they could go out and buy a capability from pakistan, from some other place. whether or not buying a full capability or just try to assemble the component parts and

the iranians knew, too, they were a screwdriver away, i think that could be a likelihood. hard to predict what middle east looks like after an israeli strike looks like six months after much less five years. i don't know how much the reason would readjust to normal if ewe call anything in the region normal five years out, but when you talk to israeli officials about this saying you only delay the capability as general cartwright side, their answer, and maybe it's bra bravado, two or three years, that's two or three years, and if need be, we'll go back and do it again. it's a mowing the lawn approach to the issue. [laughter] i'm doubtful that they actually could do this multiple times. >> right here. >> thank you.

just, if you could elaborate on something touched upon before, namely that the iranian internal opposition looks favor my at a nuclear -- favorably at a nuclear program, is your sense, gentlemen, that should there be one day real regime change internally generated in iran, the mullahs are out and there is more secular opposition force coming in, that we deal exactly with the same situation? in other words, still having leadership, mew las or no mullahs or going back in the guidelines of the nbt or compliance, ect., ect.. what's your sense? >> good question. what do you think? >> i'm not sure about some of the data here. what i've seen is significant

support within the population for their ability or being able to have a domestic capability, not weapons, not bombs. i think that's, again, there's a lot of fuzziness here. let's be more precise. i have not seen anything at thawl that would tell me the general situation is to have a nuclear weapon. i think the reality is that time is running against the regime in tehran, and so they can play this game of am ambiguity, and maybe they are stalling to build a capability, but if they get the capability again, they will have to be in a box where if they try to use it, it's game over quickly. what does that get them? meanwhile, it plays out and the israelis probably continue to be nervous, and, you know, they are going to do what they do.

there's a lot happening in this region. as the sanctions begin to bite and the oil spigots are tight, and they start scrambling. in iraq, for example, their outputs been pretty much stagnated for years. there are a lot of oil experts working inside that country now to change that around, and the potential is huge. the other countries, the uea working hard on a pipeline to by pass the strait, and there's another pipeline going the other way, on, and on and own. meanwhile, inside iran, times are getting tougher pretty clearly, and so, you know, it seems to me that in their call

-- calculous, time is not on their side. they have to do something other than just yakking, and that doesn't mean they are going to blow something up. if you think about the consequences, that's a pretty tough thing to chew. >> general? >> just real quickly. i mean, i can't guess what's going to happen in five years, but i think the trend here is that the intellectuals create a nuclear weapon is out there, and this problem we're experiencing right now with north korea and iran is not, even if you take the two out of equation is not going away from the world. it's just with the proliferation of knowledge out there and engineering, this is not -- think of this activity like we thought about it in the 50s when we did the eisenhower build up and those things that they are going to make this weapon. there's no reason to do that. there's no reason to go to the

icbm deliveries and things lake that. there's no reason for that, and that kind of knowledge is out there, and so this is not a problem that we solve by having iran change their mind. it's a problem we solve as a global community. >> the bigger proliferation. >> yeah. >> yes, ma'am? >> thank you, barbara slavin from the at atlantic county. what's the ramifications of iran with a nuke? does that affect the u.s. left willingness to keep the strait open to traffic? even if they get a nuke or two, that's not necessarily going to do anything for them? how do we convince israel an iran with nuclear weapons is not an existential threat to israel, a weapon they would use against them, and it would be suicidal for them to do that it seems. >> we're not going to -- the

israelis convince themselves what they want to do, and it'll be based on their perception of how they see the situation. again, with nuclear weapons, we -- i would expect make it very clear that if these things were used, that's probably one of the last things the leaders would get to do, and that's -- so we have a lot of -- a lot of interests, and so to other countries, and one of these things, in my view, the tide running against these guys now, is that there's a lot of other things going on in the world. i mean, just stop for a second and roll the clock back nine months or so, and it seems to me that for six or nine months, we've been worried about iran. why? other things are going on. the arab spring, just in the region. i mean, just about everybody's

attention went to other things. we're in the height season right now. must be slow. baseball season has not gup yet or something. [laughter] >> let me just ask you both this question. you're both lifetime in the military and know what's going on in the military community. you know what military people are thinking. is there any school of thought amongst the military that we ought to take military action that this thing poses such a danger that if we find out they have a nuclear weapon, we have to go in there and attack and take them out? >> that's a difficult question because if the leadership tells us to go, it doesn't malter what we think. >> of course. [laughter] i understand that, and that's why i'm trying to get at this question. i'm trying to find out what the military thinking is before the political decision has to be made. >> as a former military person? >> yes, sir. [laughter] >> i don't see any -- i mean, i don't see any use in going in. it will be --

>> you know anybody who does? i guess that's what i'm saying. >> fox might, i don't know. [laughter] >> there's an inverse proportion to those who had experience in what really happens in wars and what happened with those that have an awful lot to say about it, so it's not -- certainly not a preferred option, not anything that anybody who has a real sense of what happens in these conflicts would wish to have happen. sometimes you can force situations, but it's not one you want to. >> people you've talked to? >> certainly among -- i've never interviewed any american current or former military officials who have an opinion different from what you heard here. in fact, what many say is they believe other methods, whether it is sanctions or covert action or whatever, could probably buy

even more time than military action. that said, the israeli view of this, at least from the israeli officials that i've talked to in recent times is that unless iranians believe there is a significant military option, then they have no leverage, have no leverage elsewhere, and so there's a dilemma where they have to talk up the military option and have a real credible military option if they hope to gain leverage and not to use t. the american's concern is while they happily build that up, this administration's concern is there's a good chance the israelis would go off and use it if iran enters what defense minister barack calls the zone of immunity, which the center is buried so deep or spread out so far, they believe there's no way

that military action would make a difference. >> okay. back to the back here. or right there. that's right. you're up. go ahead. >> cameron lucy. i'd like to come back to the rhetoric and reading signals points made a few minutes ago. history's full of examples of misreadings, and radicalized political discourse. what can we do to ratchet the rhetoric down to gun flapping as admiral fox put it? >> shut up. [laughter] actually, i think i read last week that the comment was made with mr. benjamin netanyahu, exactly those words. i mean, just turn it off. we -- how do we get people to understand our intentions is often a challenge when there's

preson seifed -- preson seifed notions and 30-40 years of bad history here. consistent, getting support from friends and allies in the region is helpful. having a demonstrated capability. i was never one to like to brag on our terrific people and what they can do, but we can sure demonstrate, and we have demonstrated our capability. shouldn't be an issue, but we don't have to keep hyping it up. >> we've been talking about does israel have the capability to do this. do we have the capability? i mean, if we -- >> to? >> a few years ago, nuclear weapons, we would -- >> you mean to stop it? >> yeah. >> oh, no. i mean, if they have all the intent, all the weapons in the world are not going to change that. >> well, yeah. because -- >> the weight is there and they just built it back. >> okay.

over here, yes. >> hi, thank you. i'm nathan markiewicz. my concern is course of diplomacy requires force. the problem is on the one hand debates of policy are important for democracy, but the iranian strike maybe passes a threshold that the iranians start to feel the pressure. is it possible that even having the discussion publicly is actually limiting the options and might even increase the likelihood that people think we have to make an attack? >> we're not -- my two cents would be that, you know, certainly possible that that's the case, but i don't know contactually what's in our head anymore that what we know it in their head, and that ambiguity works in our favor. you build the adversary up to be

10 feet tall because you have to. you don't want to take the risk of underestimating an adversary, and so it's not like lie that it's going to diminish the threat of a strike, but i think following on the same thread is that while you want to tone down the rhetoric, you want to try to make sure and work hard to have an official channel that is really open for dialogue so that the ambiguity rests, and whether you believe the guy on the other side of the table or not is another issuings but at least there's a dialogue and official channel always available so when something goes awry, whether it's in the gulf between shipping or some other way, that there's clearly a way to diffuse it as soon as possible. the iranians have aptly demonstrated a good ability to manage escalation.

they stay below a threshold that would reciprocate a counter attack. >> just to add -- >> sure. >> if i could with what general cartwright said. it's important that at the end of the day, these are people, 70 million of them. they have aspirations and desires and there needs to be for demonstrated cooperation and a willingness to walk away from things that are detrimental to the region, that there's something there, and so having some light at the end of the tunnel, not closing the options, but hey, we're willing to have you play a role in the region. you got a lot of capability, a lot of smart people, a lot of things to be helpful if you decided to be cooperative in your dealings with your neighbors. >> they about how the iranians feel about this.

their view is that they have indicated in many moments over the last decade an openness to talk to the united states. in 2001, after 9/11, an unrequited offer faxed into the state department in 2003, and another one what it meant, never went anywhere in the bush administration. again, at one point in the discussions with the europeans when the the iranians would only enrich what their needs were for energy, which would have put is spin on it, and they believe every one of these options has been ignored, and that's what president obama tried to reverse with his early outreach to them. the problem is the outreach happened just a few months before the elections in june 2009 put down with such force,

kind of froze all the discussion, and it's never really recovered from that. >> all right. this lady has a question. >> thank you, what you discuss the role of china in the big picture, and what that effect influence the u.s. policy and our u.s. national interest in the asia pacific and also in the indian ocean. thank you. >> good question. let's go around the board here, and that'll be the last question. >> yeah, i mean i think what you are asking is, you know, the chinese obviously needs to feel that they need and are customers to the oil production and the other agreements that go on, and

so they are in a very difficult position of how do they support not having a weapon be developed and not undermind their need for the energy resources that they are buying there, and trying to do the calculation of cost benefit right now as with other contraries, and see this as a diplomatic solution to the activity, probably even if it included a nuclear capability, whether it's for energy or more. if that gets fore closed, then they have a very hard decision, and then they have to think their way through that, and to the extent they go someplace else for the energy, that puts pressure in the south pacific. >> admiral? >> yeah, they clearly have their need for energy sources very high on their list. they have another issue, too, and that's the adversity or

aversion to activity by that could be meddlesome with internal affairs so they certainly want to maintain the status quo inside of china and one of the things that's clearly very unsettling to them is to see this utilizing of the population, and so if they see or perceive that people are ganging up to instigate similar trouble in iran, iran, today, maybe tomorrow, who knows, but i think that's a drag, a break on activity moving forward to get china to be cooperative and helpful. if china decided to get oil somewhere else, that would be a huge additional turn of the screws here with iran.

whether they are ready to do that or not i think it probably up in the air. >> sum it up for us. >> the obama administration in 2009-2010 came up with alternative energy supplies for china. they talked to the saudis, other suppliers, and of course, iraq now with its getting up production, libya as it comes back in. it's not clear that any of that is really going to wean of the chinese now seeing a great opportunity because i think they bleaf that the iranians are going to have to sell their oil at a significant discount given the sanctions, and so a lot of the behind the scenes diplomacy, and you saw this happen when ping was here last week to get the chinese not to buy the oil that the u.s. and the european allies cut off elsewhere, and that is going to be the big struggle of the next few months.

>> one thought here, and i'll shut up. [laughter] there's different ways to approach this. one is to grab the alleged trowel by the neck, which is kind of taking their rhetorical screams today and do it that way. another is to look around and see how many other tools you can bring to bear. things are changing. there's more options. the more things we can do with with other countries to help out with their economic needs and availability of natural gas, a lot of things in play here, and emphasizing those things as things that could be helpful in the situation rather than just we're going to beat them or not, they're going to blow it up or not, seems to me that would be more useful for us. >> gentlemen, thank you so much. and thank you on behalf the csis and tcu. [applause] >> the senate's about to gavel

in. senators begin the day with the annual reading of george washington's farewell address. a freshman senator usually reads the short speech, and this year it's first term new jersey democrat gene shaheen. the senate is expected to continue work on highway and transit programs and hair rereid is negotiating with other senators over amendments to the bill, and the house is also in today for debate on a bill dealing with property rights. this week, they'll take up a bill to repeal the minimum standards required for-private colleges and universities to get federal funding. the presiding officer: the senate will come to order. the chaplain dr. barry black will lead the senate in prayer.

the chaplain: today i will pray george washington's prayer for america exactly as it appears in the chapel at valley forge. let us pray. almighty god: we make our earnest prayer that thou wilt keep the united states in thy holy protection, that thou wilt incline the hearts of the citizens to cultivate a spirit of subordination and obedience to the government, and entertain a brotherly affection and love for one another and for their fellow citizens of the united states at large. and finally that thou wilt most graciously be pleased to dispose

us all to do justice, to love mercy and to demean ourselves with that charity, humility, and pacific temper of mind which were the characteristics of the divine author of our blessed religion, and without a humble imitation of whose example in these things, we can never hope to be a happy nation. grant our supplication, we beseech thee, through jesus christ our lord. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america, and to the republic

for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington, d.c., february 27, 2012. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable richard blumenthal, a senator from the state of connecticut, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. the presiding officer: the majority leader. mr. reid: following leader remarks, senator shaheen will be recognized to deliver washington's farewell address. this is the 150th anniversary of that tradition. and we are very pleased that senator shaheen is going to do

this. no one could be more exemplary of his service than her. following the address, the senate will be in morning business until 4:30 p.m. today. at 4:30 p.m. the senate will proceed to executive session to consider the nomination of margo brodie to be united states district judge for the eastern district of new york. at 5:30 the senate will vote on confirmation of the brodie nomination. i ask consent following the vote and resumption of legislative session the senate be in morning business for up to an hour with the time equally divided and controlled by pryor and alexander or their designees. the presiding officer: without objection. mr. reid: mr. president, last week nevada lost a great statesman, and i lost a friend and a mentor. william raggio was the longest serving state senator in nevada history. he died last week while

traveling in australia. my heart is with his wife dale, children lisaly and tracy and my thoughts go to mark the son that bill lost in 2004. his six grandchildren and they have a great grandchild. i hope it's some small comfort to know all nevada mourns the loss of this very effective, fine nevada citizen. he was a second generation nevadan, born and raised in reno, nevada. senator randolph townsend said and i quote bill was a part of the fabric of the city, and that was true. he lived to serve. in addition to four decades of service in the state legislature, he volunteered in the armed forces in world war ii, the war ended before he graduated from officer training school. when he finished his service he attended university of nevada and then went to law school in california. he continue his service in the

united states marine corps as a united states reservist. he was a district attorney of washoe county, that's the reno metropolitan area, for 18 years. including three terms before he became a state legislator. he was president of the national dees association. he rooted out corruption wherever he served. there was nothing more corrupt in his mind than in the minds of all nevadans than an illegal brothel. now, that illegal brothel went on by virtue of being able to pass out money to people for a long time. bill as d.a. picked a fight with him and that fight is legend. bill got the last word. comforti spent 22 months in prison for trying to bribe bill raggio and in 1965 bill to get

the last word had the local authorities declare that facility a nuisance and burn it down. he was there watching the fire as it destroyed the place. in 1972 bill brought his integrity to the statehouse as a member of the nevada state senate. for 38 years there wasn't a piece of piece of legislation that passed the nevada legislature that didn't have his imprint on it in some way. he worked to help pass thousands of different pieces of legislation. he was an expert in the process. nobody knew how to craft a budget better than bill raggio. he was a republican. he was never afraid to work with democratic members even though he was republican leader for several terms. here's what he said recently. and i quote, "i think the

present leadership of the republican party is a little too radical and has been taken over by what i think is a radical element." that's the end of that quote. he went on to say in an interview after he decided to retire, "the party has to reshape itself or it won't win general elections down the road" -- end of quote. that's bill raggio speaking as we all should speak, not as a republican but as a nevadan and an mesh. american. it's no surprise to see an outpouring of grief at his passing, of democrats and republicans. no one has loved the state more or has been a more -- had a more passionate desire to make things better for the people who live here, set speaker john osiguero. there if there was a mount rushmore of nevada politics, bill's image would be carved there. that's what republican governor

brian sandoval said. he also said nevada has lost a great patriarch. mr. president, i would ask unanimous consent that i be allowed to enter into the record one, two, three, four -- four pages of statements made by nevada elected and appointive officials and just citizens of nevada without the world of bill raggio. the presiding officer: without objection. mr. reid: he really believed in doing what's right nor for nevada, even when it wasn't right for his political party. i admired him and respected him. i respected him even when he i disagreed and that happened. we agreed far more than we disagreed.

i can remember the first time i met him. the person i worked for had worked as a deputy district attorney for bill raggio. and he came to visit me in my office, our old office, and he was always very funny, a very, very articulate, and somebody i admired and as i indicated was my mentor but i can remember his being in that office as if it were ten minutes ago. upon his retirement last year bill told a local reporter nobody is irreplaceable. you'll see. and it seems once again bill and i disagree. no one can replace bill raggio. the mark he left on nevada politics could never be erased but his powerful political voice and his true personal friendship will be missed.

mr. president, senator raggio was an effective legislator in part because of his willingness to cooperate with those with whom he disagreed. it would serve this chamber well to emulate his bipartisan approach. we have great deal to accomplish this work period. we need to consider postal reform legislation. it's mandatory we do that. we have a pressing cybersecurity piece of legislation that the pentagon says is the most important thing we can do for our country. we have a clear a backlog of judicial nominees that threatens the effectiveness of our court system but first we must complete one of the most important tasks facing our economy, rebuilding our nation's crumbling infrastructure. today we'll resume progress on the transportation bill that will put two million americans back to work rebuilding roads, bridges, and trains and their tracks. the house is also consider transportation legislation and i was glad to see the house

republicans have moved away from that extreme proposal that they were considering just a few weeks ago. they're going to now try to pass something similar to power bipartisan legislation. this is bipartisan legislation, mr. president. too much res. on our success to let us be bogged down by bipartisanship. president dwight eisenhower, a republican, was the original champion of infrastructure investment half a century ago. he said "only strength can cooperate. weakness can only beg." end of quote. he was right, it takes strength to work together but working together also makes us strong. i look forward to working with my colleagues on both sides to make our economy strong. mr. president, we have five weeks during this work period. we have a lot to do. i hope we can work together to get it done. would the chair announce now the business of the day. the presiding officer: under the previous order, the leadership time is reserved.

pursuant to the order of the senate of january 24, 1901, as amended by the order of february 14, twowf --, 201312, the senator from new hampshire, mrs. shaheen, will now read washington's farewell address. mrs. shaheen: washington's farewell address to the people of the united states. friends and fellow citizens: the period for a new election of a citizen to administer the executive government of the united states being not far distant, and the time actually arrived when your thoughts must

be employed in designating the person who is to be clothed with that important trust, it appears to me proper, especially as it may conduce to a more distinct expression of the public voice, that i should now apprise you of the resolution i have formed to decline being considered among the number of those out of whom a choice is to be made. i beg you, at the same time, to do me the justice to be assured that this resolution has not been taken without a strict regard to all the considerations appertaining to the relation which binds a dutiful citizen to his country; and that in withdrawing the tender of service, which silence in my situation might imply, i am influenced by no diminution of zeal for your future interest, no deficiency of grateful respect for your past kindness, but am supported by a full conviction that the step is compatible with both. the acceptance of and continuance hitherto in the

office to which your suffrages have twice called me have been a uniform sacrifice of inclination to the opinion of duty and to a deference for what appeared to be your desire. i constantly hoped that it would have been much earlier in my power, consistently with motives which i was not at liberty to disregard, to return to that retirement from which i had been reluctantly drawn. the strength of my inclination to do this previous to the last election had even led to the preparation of an address to declare it to you; but mature reflection on the then-perplexed and critical posture of our affairs with foreign nations, and the unanimous advice of persons entitled to my confidence, impelled me to abandon the idea. i rejoice that the state of your concerns, external as well as internal, no longer renders the pursuit of inclination incompatible with the sentiment

of duty or propriety and am persuaded, whatever partiality may be retained for my services, that in the present circumstances of our country you will not disapprove my determination to retire. the impressions with which i first undertook the arduous trust were explained on the proper occasion. in the discharge of this trust, i will only say that i have, with good intentions, contributed toward the organization and administration of the government the best exertions of which a very fallible judgment was capable. not unconscious in the outset of the inferiority of my qualifications, experience in my own eyes, perhaps still more in the eyes of others, has strengthened the motives to diffidence of myself; and every day the increasing weight of years admonishes me more and more that the shade of retirement is as necessary to me as it will be welcome. satisfied that if any circumstances have given

peculiar value to my services they were temporary, i have the consolation to believe that while choice and prudence invite me to quit the political scene, patriotism does not forbid it. in looking forward to the moment which is intended to terminate the career of my political life, my feelings do not permit me to suspend the deep acknowledgment of that debt of gratitude which i owe to my beloved country for the many honors it has conferred upon me; still more for the steadfast confidence with which it has supported me; and for the opportunities i have thence enjoyed of manifesting my inviolable attachment by services faithful and persevering, though in usefulness unequal to my zeal. if benefits have resulted to our country from these services, let it always be remembered to your praise, and as an instructive example in our annals, that under circumstances in which the

passions, agitated in every direction, were liable to mislead -- amidst appearances sometimes dubious, vicissitudes of fortune often discouraging, in situations in which, not infrequently, want of success has countenanced the spirit of criticism -- the constancy of your support was the essential prop of the efforts and a guaranty of the plans by which they were effected. profoundly penetrated with this idea, i shall carry it with me to my grave as a strong incitement to unceasing vows that heaven may continue to you the choicest tokens of its beneficence; that your union and brotherly affection may be perpetual; that the free constitution, which is the work of your hands, may be sacredly maintained; that its administration in every department may be stamped with wisdom and virtue; that, in fine, the happiness of the people of these states, under the auspices of liberty, may be

made complete by so careful a preservation and so prudent a use of this blessing as will acquire to then the glory of recommending it to the applause, the affection, and adoption of every nation which is yet a stranger to it. here, perhaps, i ought to stop. but a solicitude for your welfare, which cannot end but with my life, and the apprehension of danger natural to that solicitude urge me, on an occasion like the present, to offer to your solemn contemplation and to recommend to your frequent review some sentiments which are the result of much reflection, of no inconsiderable observation, and which appear to me all important to the permanency of your felicity as a people. these will be offered to you with the more freedom, as you can only see in them the disinterested warnings of a parting friend who can possibly have no personal motive to bias his counsel.

nor can i forget, as an encouragement to it, your indulgent reception of my sentiments on a former and not dissimilar occasion. interwoven as is the love of liberty with every ligament of your hearts, no recommendation of mine is necessary to fortify or confirm the attachment. the unity of government, which constitutes you one people, is also now dear to you. it is justly so; for it is a main pillar in the edifice of your real independence, the support of your tranquillity at home, your peace abroad, of your safety, of your prosperity, of that very liberty which you so highly prize. but as it is easy to foresee that from different causes and from different quarters much pains will be taken, many artifices employed, to weaken in your minds the conviction of

this truth -- as this is the point in your political fortress against which the batteries of internal and external enemies will be most constantly and actively (though often covertly and insidiously) directed -- it is of infinite moment that you should properly estimate the immense value of your national union to your collective and individual happiness; that you should cherish a cordial, habitual, and immovable attachment to it; accustoming yourselves to think and speak of it as of the palladium of your political safety and prosperity; watching for its preservation with jealous anxiety; discountenancing whatever may suggest even a suspicion that it can in any event be abandoned; and indignantly frowning upon the first dawning of every attempt to alienate any portion of our country from the rest or to enfeeble the sacred ties which now link together the various parts.

for this you have every inducement of sympathy and interest. citizens -- by birth or choice -- of a common country, that country has a right to concentrate your affections. the name of american, which belongs to you in your national capacity, must always exalt the just pride of patriotism more than any appellation derived from local discriminations. with slight shades of difference, you have the same religion, manners, habits, and political principles. you have, in a common cause, fought and triumphed together. the independence and liberty you possess are the work of joint councils and joint efforts, of common dangers, sufferings, and successes. but these considerations, however powerfully they address themselves to your sensibility, are greatly outweighed by those

which apply more immediately to your interest. here every portion of our country finds the most commanding motives for carefully guarding and preserving the union of the whole. the north, in an unrestrained intercourse with the south, protected by the equal laws of a common government, finds in the productions of the latter great additional resources of maritime and commercial enterprise and precious materials of manufacturing industry. the south, in the same intercourse, benefiting by the same agency of the north, sees its agriculture grow and its commerce expand. turning partly into its own channels the seamen of the north, it finds its particular navigation invigorated; and while it contributes in different ways to nourish and increase the general mass of the national navigation, it looks forward to the protection of a maritime strength to which itself is

unequally adapted. the east, in a like intercourse with the west, already finds, and in the progressive improvement of interior communications by land and water will more and more find, a valuable vent for the commodities which it brings from abroad or manufactures at home. the west derives from the east supplies requisite to its growth and comfort, and what is perhaps of still greater consequence, it must of necessity owe the secure enjoyment of indispensable outlets for its own productions to the weight, influence, and the future maritime strength of the atlantic side of the union, directed by an indissoluble community of interest as one nation. any other tenure by which the west can hold this essential advantage, whether derived from its own separate strength or from an apostate and unnatural

connection with any foreign power, must be intrinsically precarious. while, then, every part of our country thus feels an immediate and particular interest in union, all the parts combined cannot fail to find in the united mass of means and efforts greater strength, greater resource, proportionably greater security from external danger, a less frequent interruption of their peace by foreign nations, and, what is of inestimable value, they must derive from union an exemption from those broils and wars between themselves which so frequently afflict neighboring countries not tied together by the same governments, which their own rivalships alone would be sufficient to produce, but which opposite foreign alliances, attachments, and intrigues would stimulate and embitter. hence, likewise, they will avoid the necessity of those

overgrown military establishments which, under any form of government, are inauspicious to liberty and which are to be regarded as particularly hostile to republican liberty. in this sense, it is that your union ought to be considered as a main prop of your liberty and that the love of the one ought to endear to you the preservation of the other. these considerations speak a persuasive language to every reflecting and virtuous mind and exhibit the continuance of the union as a primary object of patriotic desire. is there a doubt whether a common government can embrace so large a sphere? let experience solve it. to listen to mere speculation in such a case were criminal. we are authorized to hope that a proper organization of the whole, with the auxiliary agency of governments for the respective subdivisions, will afford a happy issue to the

experiment. it is well worth a fair and full experiment. with such powerful and obvious motives to union affecting all parts of our country, while experience shall not have demonstrated its impracticability, there will always be reason to distrust the patriotism of those who, in any quarter, may endeavor to weaken its hands. in contemplating the causes which may disturb our union, it occurs as matter of serious concern that any ground should have been furnished for characterizing parties by geographical discriminations -- northern and southern, atlantic and western -- whence designing men may endeavor to excite a belief that there is a real difference of local interests and views. one of the expedients of party to acquire influence within particular districts is to

misrepresent the opinions and aims of other districts. you cannot shield yourselves too much against the jealousies and heartburnings which spring from these misrepresentations; they tend to render alien to each other those who ought to be bound together by fraternal affection. the inhabitants of our western country have lately had a useful lesson on this head. they have seen in the negotiation by the executive and in the unanimous ratification by the senate of the treaty with spain, and in the universal satisfaction at that event throughout the united states, a decisive proof how unfounded were the suspicions propagated among them of a policy in the general government and in the atlantic states unfriendly to their interests in regard to the mississippi. they have been witnesses to the formation of two treaties -- that with great britain and that with spain -- which secure

to them everything they could desire in respect to our foreign relations toward confirming their prosperity. will it not be their wisdom to rely for the preservation of these advantages on the union by which they were procured? will they not henceforth be deaf to those advisors, if such there are, who would sever them from their brethren and connect them with aliens? to the efficacy and permanency of your union, a government for the whole is indispensable. no alliances, however strict, between the parts can be an adequate substitute. they must inevitably experience the infractions and interruptions which all alliances in all times have experienced. sensible of this momentous truth, you have improved upon your first essay by the adoption of a constitution of

government, better calculated than your former, for an intimate union and for the efficacious management of your common concerns. this government, the offspring of our own choice, uninfluenced and unawed, adopted upon full investigation and mature deliberation completely free in its principles, in the distribution of its powers, uniting security with energy, and containing within itself a provision for its own amendment, has a just claim to your confidence and your support. respect for its authority, compliance with its laws, acquiescence in its measures, are duties enjoined by the fundamental maxims of true liberty. the basis of our political systems is the right of the people to make and to alter their constitutions of government. but the constitution which at any time exists, till changed

by an explicit and authentic act of the whole people, is sacredly obligatory upon all. the very idea of the power and the right of the people to establish government presupposes the duty of every individual to obey the established government. all obstructions to the execution of the laws, all combinations and associations, under whatever plausible character, with the real design to direct, control, counteract, or awe the regular deliberation and action of the constituted authorities, are destructive of this fundamental principle and of fatal tendency. they serve to organize faction; to give it an artificial and extraordinary force; to put in the place of the delegated will of the nation the will of a party, often a small but artful and enterprising minority of

the community; and, according to the alternate triumphs of different parties, to make the public administration the mirror of the ill-concerted and incongruous projects of faction rather than the organ of consistent and wholesome plans digested by common counsels and modified by mutual interests. however combinations or associations of the above description may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion. toward the preservation of your government and the permanency of your present happy state, it

is requisite not only that you steadily discountenance irregular oppositions to its acknowledged authority, but also that you resist with care the spirit of innovation upon its principles, however specious the pretexts. one method of assault may be to effect, in the forms of the constitution, alterations which will impair the energy of the system and, thus, to undermine what cannot be directly overthrown. in all the changes to which you may be invited, remember that time and habit are at least as necessary to fix the true character of governments as of other human institutions; that experience is the surest standard by which to test the real tendency of the existing constitution of a country; that facility in changes upon the credit of mere hypothesis and opinion exposes to perpetual change from the endless variety of hypothesis and opinion; and remember especially, that for

the efficient management of your common interests in a country so extensive as ours, a government of as much vigor as is consistent with the perfect security of liberty is indispensable. liberty itself will find in such a government, with powers properly distributed and adjusted, its surest guardian. it is, indeed, little else than a name where the government is too feeble to withstand the enterprises of faction, to confine each member of the society within the limits prescribed by the laws, and to maintain all in the secure and tranquil enjoyment of the rights of person and property. i have already intimated to you the danger of parties in the state with particular reference to the founding of them on geographical discriminations. let me now take a more comprehensive view and warn you in the most solemn manner against the baneful effects of the spirit of party generally.

this spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the human mind. it exists under different shapes in all governments, more or less stifled, controlled, or repressed; but in those of the popular form, it is seen in its greatest rankness and is truly their worst enemy. the alternate domination of one faction over another, sharpened by the spirit of revenge natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. but this leads at length to a more formal and permanent despotism. the disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual; and, sooner or later, the chief of some prevailing faction, more able

or more fortunate than his competitors, turns this disposition to the purpose of his own elevation on the ruins of public liberty. without looking forward to an extremity of this kind (which nevertheless ought not to be entirely out of sight), the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it. it serves always to distract the public councils and enfeeble the public administration. it agitates the community with ill-founded jealousies and false alarms; kindles the animosity of one part against another; foments occasionally riot and insurrection. it opens the door to foreign influence and corruption, which find a facilitated access to the government itself through the channels of party passion. thus, the policy and the will of one country are subjected to the policy and will of another.

there is an opinion that parties in free countries are useful checks upon the administration of the government and serve to keep alive the spirit of liberty. this, within certain limits, is probably true; and in governments of a monarchial cast, patriotism may look with indulgence, if not with favor, upon the spirit of party. but in those of the popular character, in governments purely elective, it is a spirit not to be encouraged. from their natural tendency, it is certain there will always be enough of that spirit for every salutary purpose; and there being constant danger of excess, the effort ought to be, by force of public opinion, to mitigate and assuage it. a fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest instead of warming, it should consume.

it is important, likewise, that the habits of thinking in a free country should inspire caution in those entrusted with its administration to confine themselves within their respective constitutional spheres, avoiding in the exercise of the powers of one department to encroach upon another. the spirit of encroachment tends to consolidate the powers of all the departments in one and, thus, to create, whatever the form of government, a real despotism. a just estimate of that love of power and proneness to abuse it, which predominates in the human heart, is sufficient to satisfy us of the truth of this position. the necessity of reciprocal checks in the exercise of political power, by dividing and distributing it into different depositories and constituting each the guardian of the public weal against invasions by the others, has

been evinced by experiments ancient and modern, some of them in our country and under our own eyes. to preserve them must be as necessary as to institute them. if, in the opinion of the people, the distribution or modification of the constitutional powers be in any particular wrong, let it be corrected by an amendment in the way which the constitution designates. but let there be no change by usurpation; for though this, in one instance, may be the instrument of good, it is the customary weapon by which free governments are destroyed. the precedent must always greatly overbalance in permanent evil any partial or transient benefit which the use can at any time yield. of all the dispositions and

habits which lead to political prosperity, religion and morality are indispensable supports. in vain would that man claim the tribute of patriotism who should labor to subvert these great pillars of human happiness -- these firmest props of the duties of men and citizens. the mere politician, equally with the pious man, ought to respect and to cherish them. a volume could not trace all their connections with private and public felicity. let it simply be asked, where is the security for property, for reputation, for life, if the sense of religious obligation desert the oaths which are the instruments of investigation in courts of justice? and let us with caution indulge the supposition that morality can be maintained without religion. whatever may be conceded to the influence of refined education on minds of peculiar structure,

reason and experience both forbid us to expect that national morality can prevail in exclusion of religious principle. it is substantially true that virtue or morality is a necessary spring of popular government. the rule, indeed, extends with more or less force to every species of free government. who that is a sincere friend to it can look with indifference upon attempts to shake the foundation of the fabric? promote, then, as an object of primary importance, institutions for the general diffusion of knowledge. in proportion as the structure of a government gives force to public opinion, it is essential that public opinion should be enlightened. as a very important source of strength and security, cherish public credit. one method of preserving it is to use it as sparingly as

possible, avoiding occasions of expense by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it; avoiding, likewise the accumulation of debt, not only by shunning occasions of expense but by vigorous exertions in time of peace to discharge the debts which unavoidable wars have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear. the execution of these maxims belongs to your representatives; but it is necessary that public opinion should cooperate. to facilitate to them the performance of their duty, it is essential that you should practically bear in mind that toward the payment of debts there must be revenue; that to

have revenue there must be taxes; that no taxes can be devised which are not more or less inconvenient and unpleasant; that the intrinsic embarrassment inseparable from the selection of the proper objects (which is always a choice of difficulties) ought to be a decisive motive for a candid construction of the conduct of the government in making it and for a spirit of acquiescence in the measures for obtaining revenue, which the public exigencies may at any time dictate. observe good faith and justice toward all nations. cultivate peace and harmony with all. religion and morality enjoin this conduct. and can it be that good policy does not equally enjoin it? it will be worthy of a free, enlightened, and, at no distant period, a great nation to give to mankind the magnanimous and too novel example of a people always

guided by an exalted justice and benevolence. who can doubt that in the course of time and things the fruits of such a plan would richly repay any temporary advantages which might be lost by a steady adherence to it? can it be that providence has not connected the permanent felicity of a nation with its virtue? the experiment, at least, is recommended by every sentiment which ennobles human nature. alas! is it rendered impossible by its vices? in the execution of such a plan, nothing is more essential than that permanent, inveterate antipathies against particular nations and passionate attachments for others should be excluded, and that in place of them, just and amicable feelings toward all should be cultivated. the nation which indulges toward another an habitual hatred or an habitual fondness is, in some degree, a slave.

it is a slave to its animosity or to its affection, either of which is sufficient to lead it astray from its duty and its interest. antipathy in one nation against another disposes each more readily to offer insult and injury, to lay hold of slight causes of umbrage, and to be haughty and intractable when accidental or trifling occasions of dispute occur. hence frequent collisions, obstinate, envenomed, and bloody contests. the nation prompted by ill will and resentment sometimes impels to war the government, contrary to the best calculations of policy. the government sometimes participates in the national propensity and adopts through passion what reason would reject. at other times it makes the animosity of the nation subservient to projects of hostility, instigated by pride,

ambition, and other sinister and pernicious motives. the peace often, sometimes perhaps the liberty, of nations has been the victim. so, likewise, a passionate attachment of one nation for another produces a variety of evils. sympathy for the favorite nation, facilitating the illusion of an imaginary common interest in cases where no real common interest exists, and infusing into one the enmities of the other, betrays the former into a participation in the quarrels and wars of the latter without adequate inducement or justification. it leads also to concessions to the favorite nation of privileges denied to others, which is apt doubly to injure the nation making the concessions by unnecessarily parting with what ought to

have been retained and by exciting jealousy, ill will, and a disposition to retaliate in the parties from whom equal privileges are withheld; and it gives to ambitious, corrupted, or deluded citizens (who devote themselves to the favorite nation) facility to betray or sacrifice the interests of their own country without odium, sometimes even with popularity, gilding with the appearances of a virtuous sense of obligation, a commendable deference for public opinion, or a laudable zeal for public good the base or foolish compliances of ambition, corruption, or infatuation. as avenues to foreign influence in innumerable ways, such attachments are particularly alarming to the truly enlightened and independent patriot. how many opportunities do they afford to tamper with domestic factions, to practice the arts of seduction, to mislead

public opinion, to influence or awe the public councils! such an attachment of a small or weak toward a great and powerful nation dooms the former to be the satellite of the latter. against the insidious wiles of foreign influence (i conjure you to believe me, fellow citizens) the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. but that jealousy, to be useful, must be impartial, else it becomes the instrument of the very influence to be avoided instead of a defense against it. excessive partiality for one foreign nation and excessive dislike of another cause those whom they actuate to see danger only on one side and serve to veil and even second the arts of influence on the other.

real patriots, who may resist the intrigues of the favorite, are liable to become suspected and odious, while its tools and dupes usurp the applause and confidence of the people to surrender their interests. the great rule of conduct for us in regard to foreign nations is in extending our commercial relations, to have with them as little political connection as possible. so far as we have already formed engagements, let them be fulfilled with perfect good faith. here let us stop. europe has a set of primary interests, which to us have none or a very remote relation. hence, she must be engaged in frequent controversies, the causes of which are essentially foreign to our concerns. hence, therefore, it must be unwise in us to implicate ourselves by artificial ties in the ordinary vicissitudes of her politics or the ordinary

combinations and collisions of her friendships or enmities. our detached and distant situation invites and enables us to pursue a different course. if we remain one people under an efficient government, the period is not far off when we may defy material injury from external annoyance; when we may take such an attitude as will cause the neutrality we may at any time resolve upon to be scrupulously respected; when belligerent nations, under the impossibility of making acquisitions upon us, will not lightly hazard the giving us provocation; when we may choose peace or war, as our interest, guided by justice, shall counsel. why forego the advantages of so peculiar a situation? why quit our own to stand upon foreign ground? why, by interweaving our destiny with that of any part

of europe, entangle our peace and prosperity in the toils of european ambition, rivalship, interest, humor, or caprice? it is our true policy to steer clear of permanent alliances with any portion of the foreign world, so far, i mean, as we are now at liberty to do it; for let me not be understood as capable of patronizing infidelity to existing engagements. i hold the maxim no less applicable to public than to private affairs that honesty is always the best policy. i repeat, therefore, let those engagements be observed in their genuine sense. but, in my opinion, it is unnecessary and would be unwise to extend them. taking care always to keep ourselves by suitable establishments on a respectable defensive posture, we may safely trust to temporary alliances for extraordinary emergencies.

harmony and a liberal intercourse with all nations are recommended by policy, humanity, and interest. but even our commercial policy should hold an equal and impartial hand, neither seeking nor granting exclusive favors or preferences; consulting the natural course of things; diffusing and diversifying by gentle means the streams of commerce, but forcing nothing; establishing with powers so disposed, in order to give trade a stable course, to define the rights of our merchants, and to enable the government to support them, conventional rules of intercourse, the best that present circumstances and mutual opinion will permit, but temporary and liable to be, from time to time, abandoned or varied as experience and circumstances shall dictate; constantly keeping in view that

it is folly in one nation to look for disinterested favors from another; that it must pay with a portion of its independence for whatever it may accept under that character; that, by such acceptance, it may place itself in the condition of having given equivalents for nominal favors and yet of being reproached with ingratitude for not giving more. there can be no greater error than to expect or calculate upon real favors from nation to nation. it is an illusion which experience must cure, which a just pride ought to discard. in offering to you, my countrymen, these counsels of an old and affectionate friend, i dare not hope they will make the strong and lasting impression i could wish -- that they will control the usual current of the passions or prevent our nation from running the course which has hitherto marked the destiny of nations. but if i may even flatter myself that they may be

productive of some partial benefit, some occasional good -- that they may now and then recur to moderate the fury of party spirit, to warn against the mischiefs of foreign intrigue, to guard against the impostures of pretended patriotism -- this hope will be a full recompense for the solicitude for your welfare by which they have been dictated. how far in the discharge of my official duties i have been guided by the principles which have been delineated the public records and other evidences of my conduct must witness to you and to the world. to myself, the assurance of my own conscience is that i have at least believed myself to be guided by them. in relation to the still-subsisting war in europe, my proclamation of the 22nd of april, 1793, is the index to my plan. sanctioned by your approving voice and by that of your

representatives in both houses of congress, the spirit of that measure has continually governed me, uninfluenced by any attempts to deter or divert me from it. after deliberate examination, with the aid of the best lights i could obtain, i was well satisfied that our country, under all the circumstances of the case, had a right to take, and was bound in duty and interest to take, a neutral position. having taken it, i determined, as far as should depend upon me, to maintain it with moderation, perseverance, and firmness. the considerations which respect the right to hold this conduct it is not necessary on this occasion to detail. i will only observe that, according to my understanding of the matter, that right, so far from being denied by any of the belligerent powers, has been virtually admitted by all. the duty of holding a neutral conduct may be inferred,

without anything more, from the obligation which justice and humanity impose on every nation, in cases in which it is free to act, to maintain inviolate the relations of peace and amity toward other nations. the inducements of interest for observing that conduct will best be referred to your own reflections and experience. with me, a predominant motive has been to endeavor to gain time to our country to settle and mature its yet recent institutions and to progress, without interruption, to that degree of strength and consistency which is necessary to give it, humanly speaking, the command of its own fortunes. though in reviewing the incidents of my administration i am unconscious of intentional error, i am nevertheless too sensible of my defects not to think it probable that i may have committed many errors. whatever they may be, i

fervently beseech the almighty to avert or mitigate the evils to which they may tend. i shall also carry with me the hope that my country will never cease to view them with indulgence and that, after 45 years of my life dedicated to its service with an upright zeal, the faults of incompetent abilities will be consigned to oblivion, as myself must soon be to the mansions of rest. relying on its kindness in this, as in other things, and actuated by that fervent love toward it, which is so natural to a man who views in it the native soil of himself and his progenitors for several generations, i anticipate with pleasing expectation that retreat in which i promise myself to realize, without alloy, the sweet enjoyment of partaking in the midst of my fellow citizens the benign influence of good laws under a free government -- the ever-favorite object of my

heart, and the happy reward, as i trust, of our mutual cares, labors, and dangers. george washington. united states. 17th september, 1796. i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

the presiding officer: the senator from alaska.

ms. murkowski: i request the proceedings under the quorum call be dispensed with. the presiding officer: under the previous order the senate will be in morning business until 4:30 p.m. with senators permitted to speak for up to 10 minutes each. ms. murkowski: thank you, mr. president. i rise today to speak about what people all across the country are talking about, and that's the high price of energy, what people are paying at the pump. i just returned from a week in alaska. it's fair to say that in a state like ours that is as rich as we are with energy wealth, we're being killed by energy right now when it comes to prices. so i wanted to comment on some of the statements that the president made over the weekend and friday when he spoke about energy to the country. and i have to tell you, i was pleased to hear the president say that he is joining us in an all-of the above approach to energy. that's good news, certainly something i have been saying

ever since i arrived here in the senate. it is about domestic production, it is about efficiencies and conservation and about renewables. that's good. we heard the president say that we need to be doing more with oil and gas, you're not going to find any disagreement with me. wind and solar, biofuels, efficiencies, this is all good. but the problem we're seeing, mr. president, is the words coming from president obama are not matching the actions when it comes to what we can be doing with our own domestic production in this country. and i'll speak specifically to oil and gas. the actions coming out of the administration whether through this budget or through some of the other proposals pushing for higher taxes, higher royalties on the industry, when we think about what goes on with -- with the oil and gas leases in the gulf, we have certainly seen the impacts slow down there.

up in alaska, we have been pushing, pushing aggressively for four years now to get the o.c.s. leases advanced to exploration with shell, not only four years in the process but billions of dollars into a process. we're getting closer, but we are not there yet. with the national petroleum reserve alaska, an area designated by the congress to explore for production activity, took almost two years to get a bridge across the cd-5, an area where we have an opportunity to continue our exploration. but two years to get a simple permit for a bridge. we all know that anwar has been locked up for decades now, incredibly wealthy potential there. look at the decision on the keystone x.l. pipeline coming out of this administration. when it comes to -- to other

areas that are supposedly in all the above, nuclear, as much as we might have hoped this was enjoying a renaissance, we've seen the decision on the shutdown of yucca mountain from this administration, the issues as they relate to access to uranium in certain parts of the country. the rhetoric is not necessarily matching what we're seeing coming out of the administration. this is what is so disturbing to a person like me who comes from an area where we have so much to give, so much to offer. the president in his words said there are no quick fixes to this problem. and i agree. i absolutely agree. and that's why instead of focusing on what could be perceived a quick fix like releasing oil from the strategic petroleum reserve, we need to be focusing on the long-term solutions. i keep going back to 1995 when the house and the senate passed

anwar. it was vetoed by the president shortly thereafter. prices at the pump back then were $1.07. today it's $3.65. think about where we would be, mr. president, if that action had not been vetoed. if the alaska pipeline which is now less than half filled were at full capacity coming with oil -- with oil coming out of anwar. mr. president, a colleague of ours from new york just why yesterday sent a letter to secretary clinton asking her to pressure saudi arabia to pump more oil, and in his -- in his letter to the secretary, he says i urge the state department to work with the government of saudi arabia to increase its oil production as they are currently producing well under their capacity. well, our pipeline, mr. president, is certainly well upped capacity at

600,000 barrels a day. when we were pushing it through at full tilt, we were over two million barrels a day. that's exactly with the senator from new york has asked saudi arabia to step up to do. we could be doing it from this country with our people, gaining access to our resources. and we're not doing that. now, the president says that the republican plan is -- is just to drill, drill, drill and he says we hear this every year. why do we hear this every year? because it is part of the solution. it's not the whole solution. but it is part of the solution. in addition to conservation, efficiency, renewables, and other areas of our domestic production. but drilling, drilling, mr. president, is part of the solution. it shouldn't just be part of the rhetoric here. the president says, and by agree, the american people are not stupid on this. they know that we're not just going to be able to snap our

fingers and have oil coming out of anwar, or having oil come out of the o.c.s. they know that it takes a while. they know that in some cases it might take decades to come. so why, mr. president, would we not start now? if we had started in 1995, think about where we would have been. he says there are no short-term silver bullets. once again, i agree. but there is a long silver bullet in alaska and that's our trans-alaska pipeline that has been producing oil -- or moving oil for 30 years now for this country. that silver bullet could be filled up and it would be helping this country. just as we're asking for help from saudi arabia. now, the statement that i think most upset me, most upset me

this weekend was the statement that the president made when he said some politicians see this -- this being higher oil prices -- as a political opportunity, and he repeated a quote that republicans are licking their chops and stated only in politics do people root for bad news. well, mr. president, the people of my state are not rooting for bad news when it comes to higher energy prices, and i will tell you, i'm a little offended by the president's statement. i would invite him to come to alaska, spend a week with me, go to where i was last saturday up in fairbanks. where people are paying $4.29 for their home heating fuel. my sister pays over a thousand dollars a month for home heating fuel to fill her tanks. she lives within 20 minutes of the trans-alaska pipeline. you can see it. you can drive by it. this line that is half full.

and it's -- again, it's not because we're running out of resources, it's because we've been locked out of anwar, delayed on npra, o.c.s. we're waiting on, certainly plenty of leases out there but it's getting the permits out of this administration that has been holding us back from doing more, from doing more to help the people of alaska and to help the people of this country. last month, i was out in bethel -- in southwest alaska. there was a native elder who came to a little gathering that we had. he's from eke, alaska. he was telling me he pays $7.46 for home heating fuel in the village of eke. that's how you stay warm. when i was there if january, the average temperature for that month was about 20 degrees below zero. he says he has to buy his fuel ten gallons at a time because that's all he can afford. when he doesn't have any more

money, he goes out looking for firewood for he and his wife. this gentleman as i said, is an elder, probably 70 years old, but this is how he is living. this high-energy prices had for him are not an opportunity. go up to nome. all eyes of the nation were on nome several weeks back when the coast guard cutter was -- was escorting the russian fuel tanker, to get to nome who provide fuel for the community of nome and the surrounding villages because the winter ice had come in and the winter barge had not been able to make it in with the fuel. when i was in nome, that -- that afternoon, the prices for gas at the pump were $5.43, price for diesel was $5.99, but it was projected if they weren't able to fill up their tanks they would see the prices go up to over $9 a gallon. think about what that does does

to -- to just your ability to live. thankfully, thankfully, the coast guard and the fine men and women were able to see that that community and the villages were taken care of. i was in yakatat on wednesday, a few community that is not accessible by road as most of our communities aren't, but there in yakatat they're paying 54 cents a kill kilowatt hour fr energy. 54 cents. that is -- that is for the businesses, the homes actually get a subsidy from the state of alaska of 30 cents a kilowatt hour. but the small grocery store that we went to visit paid $10,000 for their energy prices in january alone. $10,000 a month for a small, little grocery store. they're paying $5.19 a gallon

right now but it's going up with the next fuel barge that comes in. alaskans in villages that rely on diesel for their power can pay betwee between 40% and 45% r income for their energy costs. compare that to the rest of the country, where you're looking at somewhere between% an -- betwee% and 6% of your income going towards energy. we're paying almost 50% in some of our villages. so, mr. president, i don't view high oil prices as a political opportunity and neither do my constituents. what we view as an opportunity is the resource that our state holds but resource that we continue to be denied access t to -- to -- to that opportunity. we just learned just late last week the usgs has come back with an estimate that the shale oil in alaska will come close to

2 billion barrels of oil. anwr's mean estimate is about 10.6 billion barrels of oil. o.c.s., we anticipate over 26 billion barrels of oil. mr. president, we have the resources, we have the ability to access the resources and do so in an environmentally safe way. this needs to be part of all of the -- part of all-of-the-above sliew in addition to everything that we do -- solution, in addition to everything that we do with renewables, in addition to our efficiencies and conservation. but we must be doing more domestically. alaska holds the opportunity but, again, i would agree with the president, there is no short-term fix for this, but if we don't get started today, there is not going to be a tomorrow for communities like yakatat and eke and bethel and fairbanks. we've got to get started today, mr. president. i thank you, and i yield the floor.

mr. kyl: mr. president? the presiding officer: the senator from arizona. mr. kyl: let me commend my colleague from alaska, who's seeing this battle of the high price of gasoline firsthand in a state that could contribute greatly to the country's solution to the problem if the president and the administration would but let it. i was led on a trip by her father several years ago to the northern part of alaska, where there are huge untapped reserves that could literally, if they had been allowed to be sent to the lower 48 at that time, could have significantly ameliorated the problem that we have today. so i appreciate her comments on that and i know we'll be talking more about it. mr. president, president obama has ignited a national debate about the meaning of fairness and american values. in his campaign narrative,

"fairness" means greater redistribution of income by the federal government and expanding government control over the economy represents what he calls "renewaa renewal of american va. he argues that income unequality is the defining issue of our time, his words. and that it prevents many americans from enjoying their right to pursue happiness. well, while the president cloaks his rhetoric in the language of liberty and often misconstrues quotations from presidents lincoln and reagan in the process, his interpretations of key american concepts and values are shallow, materialistic, and distortive of the true american dream. we don't need more government interventionist and redistributionist policies which reduce freedom in order to achieve greater measures of fairness and to pursue happiness. having the government arbitrarily decide how much money should be taken from

person "a" and given to person "b" is not fair in any sense of the word. nor does it make americans happier. indeed, even though america has become a much wealthier country during the last few decades and average income is higher, studies show that happiness levels have remained unchanged. in 1992, for example, 30% of americans described themselves as happy. in 2004, 31% of americans described themselves that way. that's because, contrary to what president obama suggests, the key determinant of lasting anticipatanticipate -- lasting s and satisfaction is not income. rather, it is what american enterprise institute president arthur brooks calls earned success. people are happiest when they have earned their income, whatever the level. when the government tries to take all of the trouble out of life by taking care of our every

need, it makes earned success that much harder to achieve. in his 2010 book "the battle," brooks describes the connection between earned success and happiness -- and i quote -- "earned success gives people a sense of meaning about their lives and meaning also is key to human flourishing. it reassure us that what we do -- assures us that what we do in life is of significance and value for ourselves and those around us. to truly flourish, we need to know that the ways in which we occupy our waking hours are not based on mere pursuit of pleasure or money or any other superficial goal. we need to know that our endeavors have a deeper purpos purpose." earned success is attained not simply through one's vocation but also through raising children, donating time to charitable or religious causes, and cultivating strong relationships with family and

friends. that's why successful parents and more religious people tend to be very happy. the earned success that comes from doing a job also explains why self-made millionaires and billionaires continue to work hard after they've earned their fortunes. these people are driven by the satisfaction that comes from creating, innovating, and solving problems. in many cases, they are making products or providing services that improve our quality of life. they are not content merely to rest on their laurels and enjoy their wealth. they want to continue experiencing the pride and satisfaction that comes from earned success. the importance of earned success also explains why people who win the lottery usually wind up depressed when they discover that the excitement of being rich and buying things wears off fast. the same is true of recipients of other sources of unearned income. studies show that welfare

programs do not make people happier. we need them to help some people to subsist, but they don't yield true happiness or satisfaction because the money is not earned. so if earned success is the path to happiness, public policies should be geared toward promoting opportunity and freedom for everyone. no economic system does more to promote earned success and freedom than free market capitalism. a social scientist charles murray writes in his new book, "coming apart," -- quote -- "all the good things in life require freedom, and the only way that freedom is meaningful. freedom to act in all arenas of life coupled with responsibility for the consequences for those actions." that a true free market system, everyone is guaranteed equal rights and opportunities under the law. all individuals and institutions play by the same rules and the government acts primarily as a

neutral umpire, not a redistributor of income or a venture capitalist. property rights are upheld, contracts are enforced and hard work is rewarded. and as brooks points out, free enterprise is the only economic system that addresses the root causes of poverty by enlarging the economic pie rather than allowing government officials and bureaucrats to decide how to slice the existing one. the president's concept of fairness is different from what most believe. i recently read an anecdote that helps illustrate the fundamental disagreement about the dirches difference between fair and earned. two siblings are fighting about who gets the last cookie. brother says that he should get it because his sister already has two and that's not fair. sister responds that she helped make the cookies so she earned it. the brother believes it's fair

to equalize rewards regardless of effort. the sister believes in meritr meritro -- that forced equality is unfair. those of white house believe in the ultimate fairness of the free market -- those of us who believe in the ultimate fairness of the free market subscribe to the meritocratic fairness. she earned it. free market capitalism is the most fair system in the world and the most moral. it is premised on voluntary transactions which make both sides happy by meeting their needs. unfortunately, the past few years have shown us what unfair economic policies look like. when the government picks winners and losers in the marketplace, it's being unfair. when it rewards certain companies or industries for ideological reasons while effectively punishing and demonizing others, it's being unfair. that's called crony capitalism. when it shapes a corporate

bailout to favor organized labor over secured debt holders, as the obama administration did in the chrysler bailout, it's being unfair. when it plays venture capitalist and gives a taxpayer-funded $545 million loan guarantee to a doomed company like solyndra, it's being unfair. when it makes the tax code even more complex and even more tilted in favor of special interests, it's being unfair. and when it adopts financial regulations that institutionalize too-big-to-fail, putting taxpayers on the hook, it's being unfair. i could go on but you get the point. does anyone really think america's economic system is fairer today than it was in january 2009? is it fair that after the first three years of the obama administration, the poor are poorer, the poverty rate is rising, the middle class is losing income and 5.5 million fewer americans have jobs today

than in 2007? is it fair that the three counties with the highest median family incomes happen to be located in the washington, d.c. area? and, finally, is it fair that the wealthiest 1% of americans are constantly being attacked by the president even though they now pay nearly 40% of all federal income taxes? and the richest 10% pay two-thirds of all federal taxes. well, these are some of the questions that steven moore recently posed in the "wall street journal." if the president wants to continue claiming that his policies are fostering economic fairness and ignoring the virtues of the free enterprise system, then let the debate begin. mr. president, i notice the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call: quorum call:

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a senator: mr. president? the presiding officer: the senator from pennsylvania. mr. casey: mr. president, i ask that the quorum call be vitiated. the presiding officer: without objection. mr. casey: mr. president, thank you very much. i rise today on this afternoon to honor william h. gray iii as i have every year since my election to the united states senate, starting back in january of 2007.

i've come to the floor at this time of year in commemoration of black history month. this year we're privileged to honor a man who is outstanding accomplishments are of vital importance to african-americans but as well to all of america. for his entire life, bill gray has been a minister and a shepherd for his congregation, his constituents, historically black colleges and universities, and to all americans in need of a stronger voice. i've known bill gray for a quarter of a century, and i know his life's work is a testament to a single principle, one that has infused all of his work at the bright hope baptist church in philadelphia, as a member and leader in congress, and with the united negro college fund. bill believes in the principle of a -- quote -- "whole

ministry." that the church must tend to all the needs of its entire congregation. bill grew up learning that the ministry was not just something that you did on sunday morning, but rather the action you took in the streets, on issues ranging from housing to economic justice to excellence in education. bill has called his position as pastor of the bright hope baptist church the most important job he's ever had, one that cultivated the skills and priorities that have shaped his life's work today. and today i'm proud to share some of the achievements that have resulted from bill gray's dedication to a whole ministry. bill grew up in a family of educators and ministers who taught him the value of both professions to empower others. he was born in the state of louisiana to parents who were both educators.

his father was president of two historically black colleges, florida normal and industrial college and florida agricultural and mechanical school. his mother was a high school teacher and served as dean of southern university in baton rouge, louisiana when bill was eight years old his grandfather passed away and the family moved from louisiana back to philadelphia, pennsylvania. there in philadelphia, bill's father assumed his own father's position as pastor of the bright hope baptist church in north philadelphia, and bill cemented his roots in that community. he has spoken of the powerful impact of these years, moving from a region where jim-crow laws reigned to a large northern city where his family had ties to other clergy and community leaders. because of de facto segregation

in housing at the time, north philadelphia was the neighborhood with african-americans from all walks of life, including many role models for the young bill gray. hobson rentals across the street was the leader of the elks. cecil b. moore, future member of the city council and head of the black naacp of philadelphia, lived two doors down from bill's family at the time. other neighbors include the renowned architect, frederick messiah and sadie alexander, the first woman of any race to obtain a ph.d. in economics in the united states of america. and of course dr. martin luther king jr. at that time was a frequent visitor to bill gray's home, as were dr. king's parents who were close family friends of bill gray's family. both the elder and younger king

as well as other ministers influenced bill's understanding of the -- quote -- "whole ministry" and encouraged his education and career as a minister. bill graduated from simon gratz high school and went to franklin and marshal college. when bill considered leaving franklin and marshal before graduation to join civil rights protests in the south, dr. king encouraged him to stay in school and to hone the skills necessary to continue that struggle later in life. this idea of education as a key to african-american advancement would guide bill for the rest of his life. bill graduated from franklin and marshal and in 1966 obtained a master's degree in did i have sreupbty and in 1970 a master's degree in theology from princeton theological seminary. while at drew, bill's talents were recognized by the union

baptist church in montclair, new jersey, and he was later chosen to be a pastor there as well. the king family presided over the installation ceremony. in his first parish, bill gray worked to serve a whole community, advocating aggressively for the needs of his congregation and the community's most vulnerable members. as the city of montclair undertook urban renewal, he helped to form a development corporation to ensure that relocation resulted in safe, decent housing for his parishioners around their neighbors. this issue of housing hit bill gray personally. when he tried to rent an apartment while studying at princeton and was told the unit was unavailable, he sensed immediately that it was because of his race, and he found a friend who was white who volunteered to go to the apartment, look at the apartment at which point the landlord said in fact it was open. bill filed a lawsuit and for the

first time sought damages for the psychological impact of discrimination. while the monetary award was small, his victory in the suit set precedent that those who discriminate based on race can be held liable for monetary damages. in 1971, bill married andrea dash with whom he raised three sons: william iv, justin and andrew. in 1972 bill's father died unexpectedly and tragically and the congregation at bright hope baptist church called on bill to return home as the new pastor. bill was reluctant to come back as the preacher's son but two church elections finally convinced him to return and he became the third generation of his family to serve as pastor of bright hope. under his leadership, the congregation quickly grew to over 4,000 souls. bill also taught as a professor

at jersey city state college from 1968 to 1969, saint peter's college in jersey city from 1970 to 1974, montclair state college from 1970 to 1972 and rutgers university in 1971. he also continued his important advocacy on fair access to housing and he cofounded the philadelphia mortgage plan to help low-income individuals obtain homes. this dedication to helping his community and concern about their welfare led him back to the political world. in 1976 bill ran an underdog campaign that challenged congressman robert nicks a longtime congressional incumbent. despite a close defeat in 1976 bill launched another campaign in 1978 and earned nomination and election to congress. the u.s. house of representatives provided another pulpit from which bill could pursue his whole ministry, and

he did not squander the opportunity. he said -- and i quote -- "if you can pastor a black baptist church, maneuvering in congress is easy. it's nothing compared to the choir, the usher board, the deacon board. you run a volunteer organization, and you run it on persuasion." despite his lack of previous formal political experience after winning the 1978 primary election, bill started working in congress to persuade other members of congress from his party to support him in committee elections. through dogged determination, thoughtful strategy and clear explanation of his goals, bill earned himself the freshman seat on the policy and steering committee which sets committee assignments for the party and influences policy. this established him as a rising star and a friend to many other incoming members of congress

whom he helped plan desirable committee slots. bill obtained seats on the following committees: the district of columbia committee, the budget committee, the foreign affairs committee, and later a seat on the appropriations committee. the joint committee on deficit reduction, and the house administration committee. leaders of the congressional black caucus elected bill gray as its secretary and in his second term he served as the caucus' vice chairman. in congress he acquired a reputation as a thoughtful, honest and effective leader in a diverse party, often building surprising alliances as he maintained his commitment to budgets that provided for the neediest americans. bill rose quickly to the ranks of leadership during his 12 years in congress. in 1985 he assumed the chairmanship of the budget committee, just six years after the time he was elected. just a few years later he was

elected to chair his party's house caucus. then in 1978, he -- 1989 he became the house majority whip, the third-ranking leadership position in the united states house of representatives. while serving in congress, bill remained an active minister, tightly connected with his district in philadelphia through his actions and the issues for which he fought. i just happened to be a constituent of bill's in 1982 and 1983 when i was serving in north philadelphia. i know that at that time he returned to bright hope baptist church twice a month to preach and in congress supported the programs upon which his constituents and his congregation relied. in a time of concern about fiscal discipline, bill believed that compassionate spending was also critical and said that -- quote -- "a balanced budget is good for the country, the poor, and the affluent alike." he said, "i seek a budget that

doesn't sacrifice programs for the poor and minorities, one that is fair and equitable." he produced budgets in line with his priorities, challenging opponents to produce spending cuts that did not hit the most vulnerable. on the foreign affairs committee, bill championed aid for africa and sponsored a bill to provide aid to african villages as well as appropriations to ensure minority-owned business participation in african aid programs. bill took a strong and early stand against the ethiopian government and its role in making a famine worse. he was also a prominent critic of the south african apartheid regime. in 1991, bill gray made a bold transition to minister in a new way on a topic of paramount importance to him, his family and others. of course that topic was higher education. he said at the time, and i'm

quoting, that woodrow wilson used to say -- quote -- "my constituency is the next generation." unquote. and then bill goes on to say, and, you know, that's why i left congress, because my constituency really is the next generation, unquote. he accepted the position as president and c.e.o. of the united negro college fund, the so-called uncf. a philanthropic organization that helps more than 60,000 -- let me say that again -- 60,000 minority students each year to obtain a higher education. the united negro college fund not only manages 400 scholarship and intern ship programs which again 10,000 students but also provides operating funds for 38 historically black colleges and universities. tuition at these colleges

average 30% less than tuition at similar universities. bill gray has said that he wanted to support historically black colleges and universities during a period when black students were choosing to attend a wider range of colleges. during bill's 12 years as president and c.e.o. of the united negro college fund, his success in supporting these institutions was unprecedented, and that's an understatement. bill sought innovative ways to attract new investment and increased existing funding. by the time he left the united negro college fund 12 years later, bill and his team had raised more than $1.54 billion. to put this in context, uncf had raised a total of $3.3 billion in its 67-year history. he found new ways to solicit donations, increase the amount of in-kind contributions and

solicited from previously untapped foundations and individuals. in 1999, bill gray secured a $1 billion grant if the bill and melinda gates foundation to advance minority students' access to higher education in the science, math, engineering and education fields. this grant created the gates millennium scholarship program and marked the largest philanthropic donation in the history of higher education in the united states of america. bill's success at the united negro college fund put higher education within reach and ensured brighter futures for thousands of students across america. we know and those who know him know that bill gray has never rested and he is never satisfied with just one job at a time. while leading the united negro college fund, he was asked by president clinton in 1994 to lead the efforts to restore

democracy in haiti. his work there earned him the medal of honor from the president of haiti. after leaving the fund in the year 2004, bill started gray global strategies incorporated and has served as a director on multiple corporate boards, including dell, j.p. morgan chase and pfizer. he has also served as vice chairman for the pew commission on children in foster care and has served on the united states holocaust memorial council. he is currently chairman of gray global strategies, a worldwide business consulting and government affairs strategies firm. bill gray has said that he's always -- quote -- "been taught by my folk, parents, grandparents, that service is a sort of rent you pay for the space you occupy, and so what i have tried to do is direct my life toward service based on

faith and commitment and social justice." unquote. well said by a great leader, bill gray. in the senate today, we express our gratitude for the excellent work of reverend bill gray, congressman bill gray, and you could add a few other titles as well. we express that gratitude for his -- quote -- "whole ministry, a commitment that has touched literally millions of men, women and children across the world. his vision and achievements have reached far beyond the walls of his church and the capitol where we stand today. we honor him on behalf of the bright hope baptist church, the united states congress, historic ally black colleges and universities and many, many more people around the world. we commend bill gray today, want to congratulate him. we look forward to seeing him with us today. mr. president, i would yield the floor and note the absence of a

quorum. the presiding officer: the clerk will call the roll. quorum call: quorum call:

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