>> defense secretary leon panetta and joint chiefs chairman jeff martin dempsey are on capitol hill to testify about defense spending. colin. ..

>> that's on sunday night at 9:00 p.m. on book tv this weekend on c-span2. >> defense secretary leon panetta says, automatic defense budget cuts set for next year would be a disaster and would, among other things, reduce health care for veterans. mr. panetta and joint chiefs chairman, general martin dempsey went before a senate appropriations subcommittee for two hours. [background noises] [background noises]

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[background noises] [background noises] [background noises] >> this morning i would like to welcome the hon. leon panetta secretary of defense and it general martin dempsey chairman of the joint chiefs of staff to testify on the administration budget request for 2013. gentleman, you assumed these positions during a very challenging moment in history. our economy, our country is

facing a budget deficit, and you have been tasked with significantly reducing the department of defense budget in an effort to curtail spending. reduced budgets, reductions come on an occasion when we are fighting a war in afghanistan and a counter-terrorism threats worldwide while at the same time the world is changing rapidly and the department defense -- defense is being called upon to respond from threats ranging from cyberspace to weapons procreation, rising falling instability in key regions such as we have witnessed in the arab spring. the reduced fiscal 2013 budget request totals 604 .5 a billion and that this sub study

overseas. this is a decrease of $28 billion over last year's enacted budget. the operations in afghanistan and iraq. however, over the next decade the budget control act sets for the department of defense, $4,807,000,000,000 less than what the department plans to spend. in order to red meat the new fiscal realities you have produced a defense strategy. moves from having a capability to fight two major theater boris , defeating a major adversary in one theater while denying aggression or applying unacceptable cts on the aggressor. in addition, the troops,

military focus with increased focus on the pacific and middle east region's. furthermore, the department institutionalized abilities to deal with what were once considered nontraditional or asymmetric threats such as increasing counter-terrorism capacity and answering cyber operations and encountering anti excess that's. most importantly, this tragedy rakers in administrations abroad and maintaining the residents of this force is a vital component of our national security. the defense strategy has not, however, taken into consideration another component of the budget control act known as sequestration. as you know, beginning on

january 2nd, 2013, if the deficit reduction agreement is not reached, dod will take its first increment of an across-the-board reduction of nearly $500 billion over the next ten years. sentiment, i look forward to having a candid dialogue this morning on this issue as well as others i have highlighted. we sincerely appreciate your service to our nation and the dedication and sacrifices made daily by the men and women of our armed services. we could not be more grateful for what those who wear our nation's uniform and those who supports and lead our military each and every day watching. the secretary-general, false

statements will be made part of the record, and i wish to now turn to the vice chairman for his opening remarks. >> mr. chairman, i am pleased to join you in welcoming our distinguished panel of witnesses this morning to review the president's budget request for the department of defense and to give us an overview of the needs and challenges facing our national security interest. we thank you very much for your willingness to serve in these important positions. they really are complex and could not be more important. we appreciate the dedication and years of experience that you bring to the challenge as well. we expect to have an obscenity today to find out some of the specific details that need to be brought to the attention of the senate.

think you very much. >> i thank you very much. may i now call upon the secretary. >> thank you, mr. chairman. senator cochran, members of the committee, it is a distinct privilege and honor to have the opportunity to appear before this subcommittee of appropriations. first and foremost, let me express my personal thanks to all of you for the support that you provide are men and women in uniform in the department. i have had the honor of working with many of you in other capacities i just want to thank you who -- thank you for your patriotism, providing very important service to this country, but from my point of you right now, providing the

support we absolutely need at the department of defense in order to keep this country say. i am here to discuss the president's budget request for fiscal year 2013. the i also want to comment as well on the problems associated with sequestration that faces us in january of 2013. i mentioned also some of the budgetary challenges that we still face in fiscal fy12 as a result of fuel costs and other contingencies that we are facing with regard to the fy13 budget request, this was a product of a very intensive strategy review that was conducted by senior military civilian leaders of the department under the advice and guidance of the president's.

the reasons for their review are clear to all of us. first and foremost, we are at a strategic turning point after ten years of war. and obviously, a time when there was substantial growth in the defense budget. but, second, we are now in a country that is facing very serious debt and deficit problems. congress did pass the budget control act of 2011 which imposes spending limits that reduced the defense base budget by 487 billion over the next decade. and i have always recognized based on my own background, having worked on budget issues the defense does have a role to play in trying to get our fiscal house in order. for that reason we looked at an opportunity to develop a new defense strategy for the future,

not to simply have to respond to the budget requirements that were here, but to do it in a way that would provide a strong defense for the country in the future. the defense strategy every -- we developed does reflect the fact that at the -- as we end the war in iraq and drawdown in afghanistan we are at turning point that would have required us, frankly, to make a strategic shift, probably under any circumstances. the problem is that, unlike tests drawdowns where the threats that we confronted reseeded after worse, the vietnam war, the fall of the soviet union, the problem is we continue to face a very serious security challenges in the world of today. we are still at war in afghanistan. we still confront terrorism, even though there has been significant damage to the leaders of terror groups in

somalia, yemen, north africa, continue to see the proliferation of weapons of mass destruction, continue to see threats from iran and north korea, turmoil in the middle east. we see them rising powers in asia that represent the challenge in terms of stability in that region as well, and there are growing concerns about cyber intrusion and attack. we have to meet all of these challenges and at the same time meet our responsibility to fiscal discipline. i don't think we have to choose between our national security and our fiscal -- physical security, but at the same time, and this is not an easy task, to build the force that we need for the future we develop strategic guidance that consists of five key elements that, the elements

that guided us in terms of the budget recommendations we made. a first of all, we know that the military will be smaller and leader in the future, but it must be at jal, flexible, quickly deployable, and it also has to be technologically advanced. second, because of the world we live in and where we confront some of the serious problems that face eskimo we have to rebalance our global posture and presence to emphasize the asia-pacific region and the middle east, the two areas where we confront the work -- the most serious challenges. third, we have to build for the rest of the world that we deal with, we have to of build innovative partnerships and strengthen key alliances and partnerships elsewhere so that we maintain a presence in latin america, africa, europe, and elsewhere.

fourth, we have to ensure that we have a force that can confront and to feed aggression from any adversary anytime anywhere. lastly, this cannot just be about cutting the budget. it also has to be about investments, investments in new technology and capability as well as our capacity to grow, death, and mobilize as needed. in shaping this strategy if we did not want to repeat the mistakes of the past. our goals were the following. number one, maintained the strongest military in the world. that is what we have no and want to have in the future. secondly, we do not want to hollow out the force where you maintain a large force, less spending, and the result is we we didn't anything at the defense department by our failure to be able to address the needs of that kind of force, and that was a mistake that has been made in the past.

we do not want to make that mistake again today or in the future. that means we have to take a balanced approach to budget cuts , look at every area of the budget and put everything on the table. it also means that we do not want to break faith with the truce -- troops in the family, particularly those that have been deployed time and time again. as a result of these efforts the departments, both military and civilian leaders strongly unified behind the recommendations that we presented, consistent with the budget control act. , in the next five years we will achieve savings of almost $260 billion with ten year savings of 4,807,000,000,000. the savings come from four areas, one, efficiencies, too, structure, pier, reforms, and lastly, compensation. efficiencies the yields about

one-quarter of the savings. on top of the 150 billion, we added another 60 billion, primarily from a streamlining support functions, consolidating 90 enterprises, refacing military construction programs consolidating inventory, and reducing service support contractors. as we reduce structure we also have a responsibility to be cost-efficient in terms of the force which is the reason why the recommendation has been to authorize another base realignment and closure process for 2013 and 15 someone has -- i realize some controversy of this project is. for the members and constituencies and yet we do need if we're going to bring the force down we have to find an effective way to achieve infrastructure savings.

efficiencies are not still not enough to achieve the necessary savings. budget reductions of this magnitude cost a half a million dollars require significant adjustments to structure, pier kermit investments, and composition. we achieve those in the context of the elements of the new strategy that i discussed. let me just walked through each of those. first, we are obviously have the force that is smaller and leaner, but it has to be more agile and technologically advanced. we knew that coming out of the war, the military would be smaller. to ensure an agile force, we made a conscious choice not to maintain more force structure that we could afford to properly trained and equipped. implementing structure reductions consistent with this new strategic guidance and will give us a total savings of about 50 billion over the next five years.

so, those recommendations are to gradually resize the active army, about 560,000 now and would bring that down over five years to 490,000. 70,000 reduction over that time. it is the force that would be flexible, and jal, ready, lethal , still maintaining 18 divisions, 65 per great comeback teams and 21 aviation brigades. we do the same with the marine corps. about 202,000 in the marine corps and would bring them down to 180,000 reduction of about 20,000. again, there was still remain dups strongest expeditionary force in the world and have 31 infantry battalions, artillery battalions, and 20 tactical air squadrons. we would also reduce and streamline the air forces, airlift fleet. in addition, the air force would

eliminate seven tactical air squadrons, but we still would retain a robust force of 54 combat coated fighter squadrons. the current bomber fleet would be maintained. we obviously have the joint strike fighter in production and we are also going to develop a new generation bomber that we look forward to in the future. we also have a fleet of 2705 strategic airlifters and three and 18c130 along with our tanker capabilities. the navy would require seven low priority navy cruisers. the reason they focus on that is because these have not been upgraded with ballistic missile defense capability. old command need repairs. that was an area that we decided to try to achieve savings. that would still maintain a force in the navy of 285 ships, 11 carriers, lines -- nine large

deck and did some the my 50 nuclear-powered attack submarines. we would achieve a naval number of about 300 ships by 2020. secondly, in rebalancing our global posture to emphasize asia/pacific and the middle east , we made clear that we have to protect capabilities needed to project power in asia pacific and in the middle east. to this and the budget, as i said, maintains the current bomber fleet, our aircraft carrier fleet, the big deck and tibias fleet, and it restores army and marine corporation force structure, particularly in the pacific. we are looking at -- we have already provided for a rotational deployment of marines in of estonia, looking at doing the same thing in the philippines. and the same thing is true with a strong presence in the middle

east. because of the threats in that region we have maintained a strong presence of troops strength in that area as well. we are building innovative partnerships and trying to strengthen our alliances throughout the world. the way that we are doing this is by developing this innovative rotational presence where troops will go into an area, exercise, provide guidance and assistance, develop alliances, develop the capabilities, and build key alliances and partnerships for the future. that is the message delivered to the pacific on this last trip, well received, delivered the same message to latin america, well received. these countries want to develop a capability, not a question of the united states going around basically exerting our own power in telling these countries we will defend them. they have to develop their abilities to be able to secure themselves for the future, and that is what this proposal

provides for. we ensure that we can confront in defeat aggression from any adversary anytime anywhere, and that, obviously, goes to the force structure that would sustain a military, the strongest in the world capable of quickly and decisively confronting aggression wherever and whenever necessary. in the 21st century, our adversaries are going to come at us using 21st century technology. that is the world we live in. we have to deal to respond with 21st century technology. so, we must invest. we must invest in space, cyberspace, long-range precision strikes, unmanned vehicles, special operations forces, the latest technologies to ensure that we can still confronted and defeated multiple adversaries. in the last areas, to protect

obviously and prioritize key investments and have the capacity to grow and adapt and mobilize, i talked about some of the areas we want to invest in. this budget provides almost $12 million of investment in science and technology. just under ten and a half and special operations forces, 4 billion in unmanned air systems command three and a half billion in cyber. the last point i would make is, we have got to maintain a strong reserve and national guard that can respond if we have to mobilize quickly. that has been a key to our ability to mobilize over the last ten years. after tell you, when you go out to the battlefield you cannot tell the difference between active duty. they're out there, fighting, developing greater experience and a great abilities. i don't want to lose that for the future. i want to be able to maintain that. an area that is extremely

important, fundamental to our strategy which is our people, but frankly the biggest strength we have in the united states. for all the weapons, technology, frankly, the men and women in uniform that are the strongest weapon we have for the future. and so we want to sustain the family assistance programs, programs for wounded warriors, basic support programs for troops and families. at the same time, i have to focus on savings in the compensation area, one that has grown by 90 percent. and, frankly, we have got to be able to find some cost constraints in that area. it is for that reason that when it came to military pay the provide pay raises, but we try to limit those pay raises in the out years in order to provide some limits. we also do the same thing with try care costs, and i recognize that is sensitive and controversial, but health care

cost us almost $50 billion a year as a defense budget i have to do something to control health care costs in the future. we have also looked at the idea of a retirement commission to look at retirement provisions for the future. you would like the grandfather benefits for those that are presently in the force, but we do need to achieve savings in this area as well for the future that is a package. this is not easy. it is tough, and we need your support. we need your partnership in trying to implement the strategy i know these cuts are painful, and the fact is the impact on all 50 states. there is no way that your contract by half a trillion dollars at the defense budget and not have impact on states. that is just a reality if you do it right. so, the key here is to try to do this in a way that relates to a defense strategy. that is important.

the committees that have marked of our budget in many ways have exempted the changes and we are appreciative but also of they have made changes that we are concerned about. some seek to reverse the decisions, ships and aircraft. my concern is that if these decisions are totally reversed then i have to find money somewhere in order to maintain which has me literally in a situation where i have to haul up the force and naval -- in order to be able to do that. we have to be able to retire what is aged and will we can achieve savings on. there have been some proposals to basically not provide for the measured and gradual reductions that we propose for the army and marine corps.

again, if i have a large force and don't have the money to maintain that large force i am going to wind up calling it out because i cannot provide training or equipment. that is why, if we are going to reduce the force cannot then i have got to be able to do it in a responsible way. the last point that i would make is with regard to overhead costs and military health care and compensation. again, i understand the concern about that, but if i suddenly wind up with the reductions in that area i have to reach some place to find the money to maintain those programs, and that, too, somebody is going to pay a price. there is no free lunch. every low priority program or cause that is retained we will have to be offset in higher priority investments in order to comply with budget control act. i recognize that there is no one in this committee that wants to haul up the force or weaken our defense structure, so i would strongly urge all of you to work

with us to reach a consensus about how we achieve our defense priorities, recognizing your concerns. our job is to responsibly respond to what this congress has mandated on a bipartisan basis with regard to reducing the defense budget. i need to have your help and support to do this in a manner that preserves the strongest military in the world. let me just say a few words about sequestration. obviously this is a great concern, the doubling -- i mean, this would result in the doubling of cuts, another 500 billion that would have to be cut through this formulaic approach that was designed into that process, and it would guarantee that we hollow of our forces and inflicted severe damage on our national defense. i think you all recognize that a sequester would be entirely unacceptable, and i really urge both sides to work together to

try to find the kind of comprehensive solution that would trigger sequester and try to do this way ahead of this potential disaster that we confront. i know members of this committee are committed to working together to stop sequester, and the want you to know that we are prepared to work with you to try to do what is necessary to avoid that crisis. that last point i've would make is on the fiscal year 2012. we have some additional needs that have developed during fiscal year 2012. just to summarize a few, with regard to food -- fuel costs, because of the increase in fuel costs we are facing almost another $3 billion with regard to that area. obviously if the price goes down it will provide some relief, but right now that is the number we are facing. we have also had the closure of

these ground lines in pakistan. the result of that is that it is very expensive because we are using that norton transit route in order to be a will to drive down our forces and also supply our forces. i think the amount is about $100 million per day, $100 million per month because of the closure. iron dome, a system we are trying to provide for the israelis is another cost that we would like to deal to provide. also, we have had to provide additional forces in the middle east because of the tensions in the gulf. and so because we have increased both our naval and land forces there, those are additional costs as well. we have someone budget needs that we would ask for your support. i will present to you a programming request. we hope to be able to work with you to resolve these issues in

the current fiscal year and do with the american people expect of all of us to be fiscally responsible in developing the force that we need, the force that can defend the country and defend our nation and support the men and women in uniform that are so important to the strongest military in the world. these last two weeks ahead the agenda to travel throughout asia-pacific. consulting with a lot of our key allies and partners, they are very receptive of the strategy we are proposing in our enthusiasm about our engagement in the region. i think -- i have been able to reassure our allies and partners that we have a strategy based approach from dealing with national-security. i have come from this institution of the congress. we have great respect for you and from this institution. i look forward to a partnership here to try to develop the approaches that are going to be

necessary if we are going to meet our responsibilities to national security and fiscal responsibility at the same time. thank you. >> the secretary, i think you for your testimony. i now call upon general -- >> thank-you, chairman, senator cochran, distinguished members of the committee. thank you for this opportunity to discuss the president's defense budget proposal for fiscal year 2013. this budget represents a responsible investment in our nation's security. it maintains our military's decisive edge and it sustains america's global lead. moreover, it keeps faith with the nation and the true source of our military strength which is, of course, america's sons and daughters who serve in uniform. i would like to open with a few words about them and their accomplishments. just this past year, our soldiers, say it -- sailors, airmen, marines further crippled

al qaeda -- al qaeda and brought to it and more than 20 years of operas in and around iraq and continued responsibility in afghanistan. they help to respect the libyan people from a regime to brutality, and they helped japan recover from a tragic natural -- national disaster. they also were professionally and quietly behind the scenes defending against cyber threats, sustaining our nuclear deterrent posture, and working with allies and partners around the globe to build capacity and prevent conflict. they did not just do it last year. they have been doing it year after year after year. our servicemen and women and they're families have persevered and prevailed. it is a genuine pleasure and honor to serve with each and every one of them. they remain a great source of pride for our nation. we need to keep faith with them just as they work to keep faith

with the nation. one way to do this is by making sure our defense budget is informed by a real strategy. we released a new defense strategy that reflects the lessons of war and anticipates a more competitive security environment in the future. it also acknowledges the realities of a new fiscal environment setting priorities for investment and establishes a strategic focus. this budget resources that strategy ensuring we retain our conventional overmatch while divesting capabilities not required in the active force or at all. it takes advantage of emerging give abilities, as the secretary said, such as special operating forces, intelligence, and cyber and restores versatility and readiness. an important stepping off point on our path toward the joint force that we assess we will need in 2020, a military that is always ready to provide options for the nascent.

keeping faith also means appropriate compensation for our troops. this budget proposes modest reform. however, it does not place the burden of budget cuts on the shoulders of our men and women in uniform. there are no freezes or reductions in pay, and there is no decrease in the quality of health care received by our active-duty members. that said, we cannot ignore some hard realities. we need practical reform to deal with escalating personnel costs, particularly in health care and must make our health care system more sustainable. otherwise we risk about the quality and continuity of care. we can assure its liability in ways that are fair and modest. lastly, keeping faith also means managing risk. to our interests and our institutions. to be sure we are assuming some risk, strategies and budgets the resource then have to accept some risk. that risk is not in what we can

do, but in how much and how often we can do it. this budget helps by investing in people and in the joint capabilities that we need most. we have achieved a balance in this budget. keep in mind, this is a budget for a joint force and should not be thought of as a set of separate service budgets that is, a comprehensive and carefully devised set of choices that reflect the right mix among structure, modernization, readiness, pay, and benefits. different choices will produce a different balance. so, will forgiving as well as we don't need or getting up on reforms that we do need, i only ask to make sure it is the right choice, not for our armed forces, but the nation. sequestration is absolutely certain set up in this balance leading to further reductions the potential cancellation of major weapons systems and the destruction of global operations.

we cannot yet say precisely how bad the damage would be, but it is clear that sequestration would resist hauling our forces and reducing military options available to the nation. we would go from being unquestionably powerful everywhere to being less visible globally and presenting less of an overmatched our adversaries. that would translate into a different deterrent calculus and potentially, therefore, increase the likelihood of conflict. in closing, i offer my sincere thanks to this committee and the entire congress of the united states. thank you for keeping our military strong. thank you for taking care of our military family, supporting those two surf, have served, and you will surf. and you share my pride. i look forward to your questions >> thank you very much, mr. secretary. your description of sequestration is a candid, but frightening one.

you have indicated that you would have reduced training at a time when you should be increasing training. it would mean deferral of maintenance of equipment, and it is getting pretty bad. you have purchases of aircraft, ships, but there is something else you did not mention, and i would like to have you comment on that. this is sequestration coupled with rejected discretionary defense spending could add 1% to the national unemployment rate from job losses in the government, military and private sector jobs within the defense industrial base. does that description makes sense? >> mr. chairman, i think that is the estimate that we have seen

in terms of the impact that we have. again, i'd just stress, the defense department is not a jobs program, but a program to defend the nation. clearly it would, that kind of sequestration cut across the board would have a serious impact on not only men and women in uniform, but on personnel and the contractors who serve the defense establishments. >> would you speak of deferral of maintenance of equipment and give us something, you know, on the -- >> let me have bob hill, are comptroller speak to that. >> well, mr. chairman, we have not done a detailed plan, but one of the options is cutbacks in depaul maintenance which would mean we would push out the abilities of ships or planes. we would try to do it in a

sensible manner, but it inevitably would delay some of the activities. i cannot give you details, but i think that is an almost inevitable result of sequestration. >> the weight the formula works, it takes a percentage across the board out of every area of the defense budget. it means that, you know, it is almost about 20 percent cut in a weapons system, a 20% cut with regard to training, equipment -- equipment. it would impact on every area of the defense budget. that is the way it was designed. it was designed as a need act, designed to be a disaster because the hope was because it is such a disaster that congress would respond and do what is right. so i am here to tell you, yes, it would be a disaster. >> now, the across-the-board

cuts as indicated in my you will not impact upon health programs, anything else. >> if the president has the authority, mr. chairman, to exempt military personnel he will have to decide whether he does that. if that were the case it would not affect military personnel and other accounts would have to be cut so that the total remains the same. it would affect our ability to pay health care in a separate account what gets said the share of its cad and we would face a serious problem of potentially not being able to pay all of our bills, for example. >> mr. chairman, can i add something to make it is important to also, to note that oco is now subjected to sequestration which would roughly be about $8 billion. of the 88 or so that we have

suggested, as the in the gulf region, but we have to fund that. that money will have to come to you for one reprogram activity to move money from base to cover war-related costs. that in combination with the potential freeze in manpower, and other words, exempting manpower needs a service chief, and i was a service chief, can only go back to about three places to my training, maintenance, and modernization. that is it. there is no magic. those three accounts will be subjected to all of the cuts mandated. >> one more point, mr. chairman. i would not look at reprogramming is a way to solve this problem. we have some legal limits on the amounts that we can we program, and we would not have the authority to offset all changes, at least not readily without some major changes. we could do some, but varied little flexibility if this goes into play or into effect.

this is currently designed. >> thank you very much. before i call upon my colleagues i would like to note, because of the good attendance we will have to limit the portion to five minutes. with that. >> mr. chairman, let me ask you, mr. secretary, what's your impression is of the need for amphibious ships. we have heard that the navy and marine corps has determined the minimum force of 33 into the is warships is the limit of acceptable risk in meeting the amphibious force requirements. what is your assessment of the risk that we are assuming with our current shipbuilding plant as proposed and requested for funding by the department.

>> i will ask general martin dempsey to comment as well. one of the things i am really trying to do is maintain our industrial base in the defense department. if we lose more shipyards, if i lose, you know, more of the industry that supports our defense department, it makes it very difficult to mobilize. and so my goal is to try to design a budget that maintains the shipyards that we have, that maintains the industrial base that supports our defense system. the reason they are important is because of the agility issue that i talked about because you're going to have a smaller force. these allow us to be as well, quickly deployable, able to move quickly if we have to. that is the reason that we want to maintain those as part of our defense structure.

>> and just at, senator, the number that you cited is based on the existing work plans and a particular phase in which the amphibious warship capabilities, what we are doing is a result of our defense strategy, opening up our plans to look at the assumptions made and to see if we can adjust the way we as test operations in order to mitigate that risk. at this point the, not and i are contend that budget proposal and the number of amphibious in that proposal are adequate to the task. it means he will have to adjust the way in which we conduct operations. >> well, their is a suggestion -- suggestion projects in inventory that will fall to 28 ships in fiscal year 2015.

i wondered, general, if this is below the level required by the department and whether or not this is an increase in the assumption of risk? to we need to devise that upper? what do you suggest we do when we review the requirements being submitted by the marine corps and the navy? >> what i would ask to do, senator, is take that question for the record because they're is a bit of it that would cross over into classified affirmation related to work plan. >> thank you, mr. chairman. >> thank you. thank you for being here i appreciate the chance we had to talk before the meeting. one thing i did not mention was that you are well aware of over

the last ten years we have depended more than ever. i appreciate what he said. and now we could never, like you , john dempsey come a time i visited areas where we are in combat, you don't see a difference which enactive guide and reserve. all of there doing their job, putting lives on the line. and i think your strategies echoed this reality as the last part of the defense review. as a result, many of us in congress. gramm and i are cochairs of the caucus. the air force presented a 2013 budget plan to disproportionately cut. i no there are going to be cuts, and we all understand that. but we are here, after your

least expensive manpower to save money, and that did not make a lot of sense, especially as manpower costs have to do with the defense budget, more, as you said. i don't know how you shrink them and maintain a ready and capable force. will the -- my question, the department of defense stick with its earlier strategy is to increase dependence, or is there an alternative? the air force budget does not appear to follow that. >> senator, you know, again, with the air force was asked to do was based on a new strategy. tried to develop the approach that provided a kind of multi mission support for the force.

as a result of that, made decisions with regard to some areas that could be reduced in order to achieve obviously a savings of we were required to achieve. i recognize the controversy involved here because it impacts on constituencies, and the guard . >> i'm afraid it impacts their readiness. that's my biggest concern. >> i and the san that. the active force, that is, they are ready to deploy quickly. what i suggested that we can work to provide some restoration i think as suggested putting some additional 130 back in place to try to assist some of these areas with regard to the impact that might be there. i -- let me just say for the record, i have fully prepared to

work with this committee and to work with the staff of this committee to try to see if there is no way to do this that to minimize the impact but at the same time hopefully achieve some of the necessary savings in order. >> and you have worked with senator gramm and i in the past on these issues. i know that we can again. another matter, he went into the budget. on the committee opposing the iraq war from the very start. but it was -- i opposed it because i did not think it was the right decision for our national security. now we are making -- basically ran that were on the credit card. how we are making decisions and address the national deficit is not just sequestration. and we voted earlier, the majority of us did, that

sequestration be only if we were unable to reach consensus. the understanding was we would put everything on the table. now we find people who are calling for more military action in other parts of the world. to send -- to save time did not want to consider any way of paying for it. what would be the impact of going to war again without committing to pay for that war? who -- with up-front taxes and so it would not be another iraq or afghanistan in the history of the country? >> rights. obviously if we repeated the mistake of not paying for the board that we decide to engage in, whatever that might be, the result would be that you would simply add more to the deficit and to the debt of this country for the future. you just put that burden on our kids for the future.

and, you know, look, i think we always have to be careful when you make the decision to put our men and women in uniform into harm's way. that is number one. number two, if that decision is made, for the sake of the country it is important that we recognize the cost that is involved and that, frankly, all of us bear some responsibility to pay those costs if we are willing to engage. >> thank you very much. >> thank you, mr. chairman. thank you for your service to all three of you. secretary panetta, since the end of the cold war, nato has grown from 16 to the 28 members. yet we know the threat of a soviet invasion in europe has virtually disappeared with only five alliance members spending the obligatory standard of 2 percent of the nation's gdp on defense and several countries, as we know, refused to

participate in combat assignments or limit what they will do. we are contributing 23 percent of the military construction for nato, which is approximately 254 million this year alone and did virtually the same amount of percentage of expenditures for operations of nato. my question is, are you looking at the nato alliance and determining if it is serving the cut -- function for which it was intended and if there was an effort by all the members or whether we are perhaps paying more than ou fair share for what we are getting in the turn -- return. >> senator, you have raised a legitimate concern here, you know, with regard to the best

possibility of nato nations to assume a greater responsibility for developing their capabilities and improving their defense posture. one of the things that came out of chicago in that nato meeting in chicago was developing a greater capabilities further nato with regard to missile defense, with regard to isr, with regard to other areas to try to ask them to assume greater responsibilities in those areas, but i also think, as i stated to my fellow defense ministers, we have great concerns because of the budget situation that faces many of those nations in europe. one of the dangers is that they will possibly go back to defense and see further savings, which i think would be dangerous. right now, for example, when it

comes to a major deployment, libya is a good example, we provided probably 60 percent of the support for the forces that went into libya. now, they tell me that if we were to engage that united states would have to pick up 80 percent of that responsibility. you know, that is not something really makes clear to those nations the responsibility that they have to be able to develop their own capability. so i think it is very important to continue to stress to those countries that they have to continue to invest in their basic security. there are some countries doing that, some countries that are investing well over 2 percent of their gdp and the defense budget. we commend them for that, but other countries have to recognize that the last thing that we need right now is for them to do further cuts in the defense budget because that will

put more of a burden on our shoulders in the future. >> let me just take germany as an example. germany is certainly going through hard times, and we understand. they're burden with regard to the rest of europe. but on our side, representing our interests, germany, and military construction germany contributes 7 percent to the infrastructure costs that we would make in their country as compared, for instance, to japan, which provides at least 40 and sometimes more%. germany has refused to contribute any resources into libya. afghanistan, they limit what they will do in the number of troops has been around 5,000. now, the army is planning this year, to spend 7 percent of its military construction budget in germany. that is on top of that nato

parts. it will be about 243 million this year to build land still, which is fine, a priority of ours. i am for that. the other half, 113 million, new school, elementary command has cool. now, obviously, if our troops are there we need to furnish schools that are good, but my question is, the troops that are there, are we overspending the military construction or the amount of troops that we have there? are we looking at the future on whether, in fact, it might be the rotational forces that you mentioned is more of the strategy in the pacific, maybe we would start doing that in germany and other places and get back on this enormous military construction cost. >> i will ask the general to comment on this as well.

we are doing exactly that, bringing to brigades home. one of the things we intend to do is emphasize more of the rotational presence we had and to be able to do exercises. we do have some important infrastructure. a very important to are applied to the middle east and the war zone, and that is the reason some of that is continuing. i think you are right. i think we have to increase our rotational deployment, ask them to make a greater contribution to the infrastructure needs to do this. at the same time, let me make very clear, the nato alliance is extremely important to our ability to deal with some of the challenges in the world. we cannot do it alone. we have to be able to have alliances like nato be able to work with us in confronting the many challenges that we face in the world. >> we are out of time, senator. ..

general dempsey, mr. hill. first of all we want to welcome you come and we want to thank you for your service.

you came to the house in 1976. we were a part of the bicentennial year and the way we're going to we were going to be here for the tricentennial. general dempsey, you graduated from west point just about the time secretary to another and i were starting in congress. but you represent close to 70 years of 35 years in each variety of tax of three civilian posts. so we thank you for george dedication and service to the country. mr. hill, in supporting our military, its commanders and the secretary of defense in the commander in chief, so we would thank the civilian work force. i want to raise some questions about new priorities and threats, acknowledging that

maryland is a strong military presence from the naval academy to walter reed naval bethesda to fort meade and reduce cyber command in aberdeen, for to do tricks. we are proud of the presence. and i want to to go to the issue of cyber. mr. secretary, you have sai publicly and even at the debriefing that you viewed cyber as a potential digital pearl harbor, and general dempsey coming you again at meetings and briefings and cyber exercise talked up the brakes. can you talk about what you mean when you say additional pearl harbor. do you feel that is you've indicated page six and your testimony, sir, do you have the right money and you also have the authorities that you need to do to protect? you have here in addition to the

appropriations of the share of senator inouye share of the intelligence committee coming you have one of the co-authors of lieberman collins, so we want to make sure that we don't have a digital pearl harbor. could you elaborate on what you meant. and in getting some things done and what would you say they did? general dempsey, i would like your comments as well. >> i appreciate the question. i think there has to be a greater sense of urgency with regards to the cyber potential model me now, but in the future. i think this is a obviously a rapidly developing area. the reality is that we are the targets of literally hundreds of thousands of attacks every day. it's not only in that the government but the private

sector. there are a lot of capabilities that are being developed in this area will and every concerned that the potential in cyber to be given to cripple our the power grid to be able to cripple our governor systems to be able to cripple our financial systems that represents the potential for another pearl harbor the kind of attack that we could beat the target of using cyber. for that reason it's very important that we do everything we can obviously to defend against that potential about defending our systems and their capabilities. i do think that authorities and the ability to try to not only -- it's not only in the defense

sector but the civilian sector that we have to improve this and i think that is the area and i think the lieberman collins bill is one that addresses that and we support the congress enacting that in order to try to facilitate that capability. >> i would just add, senator, we have seen the world go from distributed denial of services, overwhelming the website what to incredible intellectual theft and technology theft to now destructive cyber. it's in the open press and that has all happened in a matter of a few years one and it's changing rapidly, so to your question about the sense of urgency, i can't overstate my personal sense of urgency about that. second i would like to play along to the secretary and support of the pending

legislation that encourages information sharing and takes a good necessary but only first step and then third i will tell you on the issue of authority the president does have the authorities. what we need to develop our rules of engagement if he will because these occur at network speed. this isn't something where we can afford to convene a study after someone has knocked out the east coast power grid so we are working on that. >> i know my time is up but what you say is you feel there is enough money in the approach to meet the protection of dak mill which gives you heartburn and concern and the protection and as you develop rules of engagement, we have got the congress now to have a sense of urgency at developing the framework starting with lieberman collets protecting.

>> mabey let me sharpen not a bit. i don't have any intention that dhaka, would include your e-mail address. that's fine doing what you doing your own personal e-mail domain billion concerned about the defense industrial base and i am concerned about the critical infrastructure of the country. that is where we should focus our efforts. >> mr. chairman, i know my time is up. i have other questions related to military medicine and if i have one final tall ships coming into baltimore harbor as ancient ships come in we are saying goodbye to the hospital ship to conquer. i take no comfort in that. can you take a look at that and see if i can keep the comfort? >> thank you very much. >> thank you very much mr. chairman. mr. secretary general dempsey,

mr. chairman coming you recall your time in the house of representatives and chaired the house budget committee and i was one of your leal acolytes. you set the stage in our budget deliberations to reach a balanced budget which i am very proud of that achievement, and i know that it wasn't easy. i asked the committee staff to compare spending when our budget was in balance to where it is today in three categories using constant dollar swap with and here's what they came up with. in the discretionary spending there has been zero increases in spending. when it comes to an entitlement spending, there's been 30% increase in spending since we were in balance. with the budget we are proposing, the base budget, we are proposing for the department of defense, it would be a 73% increase over what we were spending and when we were in balance in constant dollars so. i might also say the

sequestration clearly it's hard may be too hard and too fast and the sequestration defense would end up with the same percentage of the gnp that it had when the budget was in balance. so my question to you is one to take a step back and go back to your history with the budget to. what is the ferre number for us when it comes to the defense of this country and security. i know we need every dollar it takes to be safe. but if we are going to cut back in health care and education to provide more money on the military side is that going to have an impact on the men and women who volunteer to serve in our military and whether they are qualified to serve? >> first, with regards to the defense budget, i do believe we have to play a role and the fact is that we are going to be cut in half a trillion dollars from

the defense budget over the next ten years. and this is part addition to sequestration. >> if you have sequestration to that you're looking at another chunk of the $500 billion on top of it. so i think it does have to play a role and at the same time i think we have a responsibility obviously to protect the strongest military in the world and help protect this country. on the larger issue, senator, you know this as well apply to, and i think every member of the committee knows it, you are dealing with a very serious deficit issue and the debt issue, he and you can't keep going back to the same well to try to resolve those issues. you can't keep going back to domestic spending and you can't keep going back to the discretionary side of the budget in order to solve a multi trillion dollar problem that faces this country. if you are serious about taking

this on, it's what we had to do frankly beginning in the ronald reagan administration, it's what we did in the bush administration, what we did in the clinton administration. if you're serious, you got to put everything on the table. you've got to look at mandatory spending come to got to look at revenues coming you also got to look at how you tap the domestic discretionary but you're not going to solve this problem of domestic discretionary budget. you're just not. >> when we brought the experts in to talk about the department of defense and where we might save money, the most startling testimony came when we asked about private contractors that work for the department of defense and the basic question is how many are there and the question was, we don't know. we really don't know. estimate somewhere coming you know, maybe government-wide some 7 million, there are 2 million federal employees to give you some context here and when you look at the dollar amounts were

being spent in the department of defense for contractors as opposed to the civilian work force at the department of defense and those in his uniform is substantially higher. for many of us, this outsourcing just became a passion and people start asking the most basic question if they are serving the nation well does it save us money? i noticed that you are in sourcing more bringing some jobs back into the department of defense, and in your earlier testimony you said you need to reduce the service were contractors. so it seems to me that there has been documented waste when it comes to the service contracts. when it comes to the contract for the big-ticket items i will tell you the cost overruns equal 12 solyndras. i haven't heard many press conferences on those. how much is built into your cost savings cuts when it comes to

this potential overspending on contractors and cost overruns on projects? >> obviously on the efficiency front this is an area of principal focus. we did 112 or 125 million last year and inefficiencies and. 150 billion last year with regards to those efficiencies and we are adding another 60 billion on top of that. a lot of that is aimed at trying to reduce the contractors to try to gain a greater efficiencies. look, i would be the last one to say that we can't find those savings in the defense department and that's what we did. but the goal is not simply to whack away at it without tying it to a strategy about what kind

of defense system do we need for the system to provide the country. as long as we have that strategy and can make sense out of how we achieve the savings, then we can achieve as i said the $500 billion in savings that we have been asked to do by the congress, and we can achieve and be more efficient in the future. but don't, don't think that defense alone is gwen to solve the bigger problem that you are facing in this congress and in the country. >> thank you very much mr. chairman. mr. secretary, welcome back. i have to issue as i want to cover with you. one, last november we had a short conversation about what all i was hoping to be perhaps the next step in breaking down the discrimination people disabilities in this country and that was allowing people with

disabilities to serve in our armed forces. we have a unique case of a young man had gone through the rotc in california and had done extremely well in all of the tests the was denied entry into the military because he was deaf perhaps having a pilot program bringing people into the military who could add to the defense of this country who would be exemplary employees but they might not be able to be the chairman of the joint chiefs of staff they might not be a pilot in the air force or other things that they can do a lot of other things. and so, since that time, i must tell you that we have had some problems with the department of defense and moving ahead on this. you have even requested, mr. secretary, a briefing on this from people down below, but

nothing is happening. i can tell you that my staff has tried to work on this since the first of this year. numerous phone calls and meetings have been canceled. we can never get any response on this about setting up such a pilot program until a couple of days ago we now have a meeting set up next week which is fine. i understand all that. i know that you are going to look at that. i just think this is one place where again, we've got to break down the barriers. there's a lot people with disabilities that want to serve their country and can serve in the air force, army, navy, marines, they might not be able to do exactly everything that people can do, but if they can do within their ability. they can provide a lot of support. and i would just ask you please, once again, take a look at this and set up a pilot program. if you can't do it, mr. secretary, if you can't do this, if something is prohibiting you from doing that

let me know and we will try a legislative approach on at. >> i appreciate your leadership on this issue. you have fled on this issue a long time during your career on the hill and i respect it. but more importantly, i agree and for that reason, you know, i think we can try to set up a pilot program. right now when we have wounded warriors of me tell you wounded warriors come out with new legs, new arms, and sometimes they are back at duty and they are doing the job and they are doing it well. if we can do it for a wounded warrior i think we can do out for others as well that can be part of this. >> some of these young people are coming through the school's right now who have a lot of abilities another is an issue i raised with you briefly in

afghanistan the part of defense has been involved in a program of spurring small businesses in afghanistan. obviously you get people off of the drug business and stuff. it is the convention 180 to about child labor. we asked you work with the department of labor on this to incorporate and use an ngo in terms of monitoring this and setting up an inspection system, an independent third-party inspection and verification system to make sure that no u.s. taxpayers' dollars are used to support businesses that.

we have had some progress in that. but as we tend now as we are going to turn that over to them we are not setting up amedori verification system and that bothers me. we are doing a pretty good job point out that we are handing it over in our agreement we are not making an agreement to make sure that they adhere to the independent third-party verification system. you have a lot on your plate mr. secretary talking about all the budgets and stuff like that. it's one of those areas where we can do a lot of good while also supporting an industry in afghanistan, and again, i would ask you to look at those contracts that we have to safeguard this verification in the third party verification system in afghanistan. >> we are aware of your concerns in this area. let me ask bob hill to accommodate on that.

>> i think you are referring to some in the business for stability operations, and they did do some delay trying to make sure that there were appropriate safeguards on child labor. it's a difficult area to work in a country that has different rules and standards. >> there is an afghan law. we just want them to adhere. >> i hear you come and they are aware of the concerns, and i think they have made some steps in the right direction but i promise you we will go back and make sure that we are doing all we can. >> just give me a point person to work with in your office down there because my staff i know pretty well and it needs to be done in terms of the verification system. >> that is the big sticking point. >> thank you mr. chairman. >> thank you come senator collins. >> thank you. first, let me thank my colleague from maryland for bringing up the very important issue of

cybersecurity. she along with senator feinstein, senator lieberman, senator rockefeller and i have been working very hard and agreed that it's absolutely critical that we set standards for the critical infrastructure and that that has such important consequences, and i very much appreciate the endorsement of our efforts that i heard this morning. i also appreciate, mr. secretary, your urging us to act sooner rather than later to avert what might be the disastrous consequences is the sequestration were allowed to go into effect i think would be a huge mistake for us to wait until the lame-duck that's too late and we do need to tackle the issue. and i think that it would help

if you provide us with even more detail coming and i know the armed services committee has asked for that. but me turn to another issue that refers to our priority. as i review the department of defense budget, i am very concerned that the shipbuilding account is significantly undervalued. ship building represents a mere 2.2% of the budget requested by the department of defense. 15 ships were eliminated or delayed outside of the five-year budget window, and just to put this in perspective, our country currently spends as much as interest payments on the national debt every month than we do for shipbuilding in the entire year will.

for the executive branch as a whole spends slightly more than of the equivalence of the entire shipbuilding budget $15 billion a year on federal agency travel and conferences. i know the administration is trying to address travel conference this book that really says something about our priorities. i am concerned that the combat commanders have testified repeatedly increasing the maritime domain in their areas of responsibility. i recently returned from a conference in southeast asia and i know secretary panetta did were over there as well and the aggressiveness of the south china sea and its maritime claims it's harassment vessels from the philippines for example

and to project power particularly with the pitch to the asia-pacific region cannot be overstated. so i am concerned that the budget projects only 285 ships by fiscal year 17 when every study might seem, whether it is within that department or outside of the department, independent reviews have said we need a minimum of between 300 to 315 ships. and the fact is that while our ships or are increasing and that ability, that still counts if you are going to try to project power. so i would ask you to address my

concern and how the department settled on 285 ships when virtually every study calls for 300 to 313. >> i appreciate the concerns that you've indicated. when i asked the navy to do and the navy chief to do is to make very certain that we have the ships we need to project the power we have to project in the pacific in the middle east and elsewhere to be able to do that effectively, and their recommendation is that based on, you know, the number of ships that are in line to come on, the ones that we are already producing that to do this in a way that meets our needs the 285

ship approach is a good baseline and we are ultimately going to move to 300 ships by 2020. we've maintained -- we are maintaining 11 carriers. we are going to maintain our destroyer and of the ki fleet with regards to the specific and obviously we are going to maintain a strong submarine force as well and i am convinced base on the navy chief recommendations. we can do this in a way that protects the strongly for the future. going back to those numbers to make sure that we are in the right place, because i share the same concern. if we are going to have a strong presence in the pacific and a strong presence in the middle east if got to have a navy that is able to project that, and right now i think everybody that i've talked to in our shop and

joint chiefs was his we've got the force we need to make that happen. >> senator, i know over time but i feel obligated to comment on this because i mentioned in my opening statement a budget we submitted is a joint budget. it's not the individual service budget. it's kind of bundled together. we work this as a joint team. we were faced with the act of $407 billion. so every service paid a bit of the bill. i will tell you the navy paid least of all because we prioritized the entry that you are talking about. but quantity counts in the air and on the land. >> thank you, mr. chairman. >> thank you very much mr. secretary. it's good to see you. i've known you for very long time. i was sitting here thinking your first appearance before the

intelligence committee when you became director of cia you're somewhat reserved i saw you at full volume in control and it's been quite an evolution. i might begin by thanking you for the help that you gave on our intelligence kodel it's very much appreciated by with like to see what i could talk with you a little bit about on the glock subject the four of us have an opportunity to spend time with the most impressive and one of the things that came up is the incident in november wouldn't and a camera were clear to me of the mistakes on both sides and

general amylin much to his credit has taken at least six or seven steps in to remedy some of the problems to enter the blocks it is my information pakistan wants most of all some announcements are made on our side, and i think mistakes are made on their side as well as i've looked into this yet the glock problem could be solved a day or so ago unless it was canceled so they are prepared to rather dramatically lower the cost. as we have discussed, and i think the position is the national security of this nation

is best served if we can develop a positive relationship with pakistan and both you and i and others could make a change in that direction if it is the new head of isi new and as well as some other things my question of you and i guess my lack of understanding is why there can't be some form of statement that in essence says if it is believed if there may on both sides and of course the united states apologizes for any mistakes that we made and we've taken steps to correct that and see that there will never happen again. >> center, i appreciate your concern coming and you understand these issues by virtue of your trench of the intelligence committee and the

feelings that we have had with pakistan and you are right. it's a complicated relationship it's also a necessary relationship by virtue of our security needs in that area. this is an issue that is still under negotiation that can continue with regards to how we can resolve this. the issue that you discussed is one of those areas general allen has made clear that mistakes were made and they were made on our site and they were also made on the pakistani side and that we express condolences for the mistakes that were made. we have made that clear and we will continue to make clear the mistakes the war made.

at this point they're asking not only for that but there are other elements of the negotiations that are also involved that have to be resolved. so, it isn't -- that alone isn't the only issue that is being discussed and that needs to be resolved in order to get them open. >> all right. thanks you for that answer to read do you believe that the afghan military will be fully ready to take over come 2014? >> i was just there in afghanistan on this last trip and had a chance to meet with the minister. every time i go there i get the opportunity to see the afghan army and improvements in terms of their operations.

there is no question right now they are at about 346,000. they're going to go to three and 52,000. they are way ahead of achieving the target they want to achieve. they are doing an incredible job in terms of maintaining security particularly in the transition areas that we've provided. they are improving the goal over the next two years. we will continue to train to assist them in their capabilities. i have to tell you that i am confident that we are going to be able to complete all of the transitions in the areas that we have as part of general allan's plan that we can do this because we have the afghan army in place but also because we continue to have i sat in place as well to be able to provide the support necessary so the combination of

an afghan army that's able to do the job plus the kind of enduring presence that we need to have their as well in order to assure the training and assistance continues i think that combination does make clear that they're going to be able to secure themselves at that point. >> i know my time is up. >> thank you. >> thank you mr. chairman. the two things i would like to raise in the time i had mr. secretary has the cia director you would have operational control over the bin laden raid of the senate intelligence committee senator feinstein. we've been alarmed it's fair to say with a recent state of leaks that have occurred we are working together in a bipartisan way to try to address this one

of the areas of concern is the combination of hollywood filmmakers with bin laden. it's been alleged one of the purchase of pence in that one of our uniform participants and that has been made public the question is whether what details have been shared about that. this comes on the heels of a series of devastating weeks that have compromised very sensitive operations put people's lives at risk from a devastating the negative consequences going forward working with sources etc. you are aware of all of that. i guess my question here is simply the will to put the defense relative to this hollywood situation involved that's why i would say chairman would agree we are looking at

every possible avenue to try to minimize and mitigate and eliminate these types of leaks is going to be helpful and it's one of the areas we are going to need to work within a comprehensive way of trying to get a handle on this. i'm really not asking you for, you know, details regarding all of this. we all love to go to see these hollywood movies. they are exciting and so forth, but to the extent information is shared relative to classified operations and personnel to make the movie a little more exciting and so forth and so on, so i think we want to make sure that each department, whether it's agency or whether it is the intelligence community or the department of defense is aware of the fact that you need to

thoroughly investigate all of this and put in place measures which will prevent this from happening in the future with your you want to comment on that or not i will give that to you. >> let me first say as a former director of the cia i deplore the unauthorized disclosures. >> i know you do. >> of classified information. i think that this is something that does have to be fully investigated and it has to be very clear that this is intolerable if we are going to try to protect the defense of the country we have to be able to protect those who are involved in clandestine operations. having said that i also want to make clear that no unauthorized disclosures were provided to the movie producers or anybody else. what we do have is an office at the pentagon that almost every

day deals with people that want to do something about, you know, either a movie or a book or an article or something and that the information they use is accurate and that we do a system with regards to the accuracy of that information. but, i can assure you i've asked that question in this instance nobody sustaining the information that was unauthorized. >> i hope you'll join us in a faeroe review of procedures just to make sure -- >> absolutely. >> general them succumbing you and i were in the same time frame and i do agree senator hutchinson with the global posture financial issues and raise legitimate questions of infrastructure and no kind of

money going to that. by the same token i would just like to get your take and make sure that we are not rebalancing too far. as you look across the start of terrorism and threats starting in pakistan and afghanistan coming across iran - if israel and. these require a rapid response and germany has been a place where we have facilities to house and trained in those people that can be that rapid response to emergency situations as well as some trust normal operations. have we gone too far or are we on the cusp of leading to much too fast and then when we also added the nado component in terms of our need to continue to

utilize and keep the organization to keep it alive and effective as a partner. former ambassador, i had 12 years of service and nato and i tend to see the world in many cases with of the north atlantic alliance and i think that is legitimate because it is the track record of this country that when we enter the conflict the first people that we turn to be partners with us in that regard are the members of the north atlantic and secondly we shouldn't discount the benefit of being there to also build partners to build their capacity and we did that in places where elsewhere and to double the makes it certain that we will always have to be even if there's political reluctance that's has to overcome to do that to dillinger of the allied

ground system which is a smart defense initiative i didn't mention the european phase didactic approach for the ballistic missile defense cooperation. we've gone through a nato command structure review it and shrunk the number of headquarters from about 12 to about six. notwithstanding the investment. >> i think you for your service and i think we have a vote so i will try to cover as much done as possible. if we do not change the sequestration to lemma before the election as the congress when can we expect the notices to hit. we made that decision but under the law with think that they have to do it 60 days.

smick anywhere from 60 to 90 days. >> 60 to 90 days before it takes effect. >> will you have to lay off any civilian employees as a result of sequestration? >> i suspect that if in fact it ultimately takes effect we are going to have to do the same thing. >> would you do the same thing before? >> i just want you to make it real. seems like the accomplishment that we've had in recent memory is to destroy the defense department in its critique by partisanship to undo this. so the sooner you can tell us about the number of jobs to be lost in that defense base i think the better for the contras as a whole focus. you are telling us about tricare that you have a budget problem. when is the last time the premiums have been adjusted for the entire force? >> 93. >> members of this committee, i

know we all of our retired military members and i hope to be 11 day. but isn't it unsustainable for you if we do not bring this program into some kind of a sustainable footprint you are having to compete with a retiree health care against modernization and against benefits for today's force against ability to fight and win a war is that correct? >> we are paying $50 billion now in the health care arena and if we don't control those costs is going to eat up other areas. >> you were telling the congress is unsustainable. you are having to the trees is between the retired health care cost and fighting this war. and i hope that we can find a way to be fair to their retired force but also to maintain a sustainable military budget. when it comes to the retirement you are talking what reshaping the retirement benefits in the future and not for people that exist today because if you

retire at 38 media that is something that we need to revisit. i want to be generous but i want it to be sustainable. that is the message to congress, right? your message about sequestration is fine doing my best to handle for granted 50 to 500 billion. if you want to double that you are going to destroy the best military that we've ever had. is that simply put? >> that's right what's been the historical average the last 45 years of gdp spend on a military it was three per cent. to date ranges to 5.7% in world war ii. the korean war was 8.25 to 18%. vietnam come 7.65 to 10.86 to me i would argue to my friends

you're right we are not going to get out of debt by lowering the military spending alone. on a limb all and for reforming the way that we spend money. costs plus contract seem to be a bad idea. do you agree? the longer it takes, the more you make. the more it costs, the longer it takes. you are looking at giving a fixed price contract for the future to become future weapons acquisition weren't everybody has skin in the game. go down that road and i applaud you tremendously for doing that. aid to pakistan do you consider the budget for the account ennis departments role in the world? >> yes. >> would you recommend to us to stop aid to pakistan right now? >> i would be very careful about, you know, just shutting it down. what i would do is look at conditions for what we expect them to do.

>> what about egypt? >> no, i would not. i think at this point in time -- >> could you and general deinze write me a letter recommending to the congress what we should do about the programs to the pakistani military to the pakistani government and the egyptian military and egyptian government the last thing i want to talk about to break briefly is this is something that just kind of light over everybody's head i think that there is april harbor in the making you're talking about shutting down a financial systems releasing chemicals from chemical plants, releasing water from the dams, shutting down power systems that could affect the survival of the nature of the nation what's the likelihood in the next five years and that one of these major events will occur. stambaugh coley can tell you -- >> is it high or low

probability? >> technologically the capability to paralyze this country -- >> is there a growing well to use that capability for our enemies? >> the more this technology develops, the more the will to potential use it. >> would use it is a high probably? >> there is a high risk. >> gentlemen, thank you. secretary leon panetta, you have mentioned that this budget needs to relate to the full defense strategy. we certainly understand that. with the asia and the pacific we think that alaska plays a large and significant role. we have historically but we think going into the future that that will actually accelerates there's been a proposal to move the squadron.

we have raised many questions on fortunately. it seems that there are many more questions that are being raised after we received some of the information from the air force we just got this that was assigned to look at the feasibility of this move. the concern that we have is in addition to the additional questions being raised you've got a situation where the other forces are impacted. you have mentioned that this budget needs to be a balance between the forces. we are looking at the impact to the guard which is the 160 if refueling and how it will be impacted if it is put to reduce. we look at the incredible army training that we have up north. it could be compromised. we've got some very serious housing issues that need to be

assessed. we are in a situation now that we are trying to get some concrete answers from the air force on this. we have determined that this proposal was going to cost $6.5 million which doesn't fall in line with the president's budget. the very direct question that i have to you, secretary panetta, general dempsey, is whether or not you will encourage the airforce to abandon this plan for the air force base in 2013. take the proposal led to the drawing board giving the thorough very comprehensive dating that it must have to ensure that in fact we are operating with a focus towards the asia pacific and this truly does reflect the new defense

strategy. >> i will have general dempsey respond to this as well. let me make clear that the air force was looking for obviously ways to save money because of the responsibility to respond to the budget control act and they felt that it was better to try to unify those. i just want you to know and i assure with your colleague as well and closing down i will send its a very important base for us. it's important in terms of the retooling and it's important in terms of the role that we want to be able to play with regards to the pacific. so nothing that is being recommended here in any way is intended to impact on idle some itself as a future base for the

air force. >> i will just have i know that you and senator begich or in contact with the air force. i won't commit to going back and talking on the other plan. i will commit you to go back and make sure i understand the plan better and then engage with you on it personally, you and senator begich. >> i do recognize that part of the proposed savings of the air force is looking to is demolishing several buildings. the replacement value is about $150 million, so it puts it in a situation where it would appear to be a back door concern of consideration if i can ask you to a very comprehensive review and work with us i will look forward to your conversation. mr. chairman, i think you and i will conclude my comment would just a direct appeal. the focus as we look at the infrastructure is very keen that

comes down to the human asset. i remain very troubled with a high level lot suicide that we are seeing with our military and also with our veteran population i think most are staggered to learn that we are seeing more due to suicide and we are actually out in the theater in afghanistan how we deal with this. reflects on how we are as a nation and our commitment to those that serve us. so i know that you are focused on that, but i felt compelled to raise it here. >> i think you for pointing that out. i am very concerned by the high rate of suicide talking with the service chiefs this year that concern and as a matter of fact highlighted fact they were seeing a higher rate in suicide that they had seen in the past, and what i asked all of them to do in the undersecretaries responsible for this is to immediately look at that situation and determine what has behind it, what's causing it and what can we do to make sure it

doesn't happen. >> thank you very much, senator murray. we will be leaving because there is a vote. stomachs before mr. chairman. i appreciate that mr. secretary i want to ms. schakowsky. i am alarmed by the suicide rate among the service members and our veterans new analysis is showing us that every day in 2012 with our service members committed suicide, and it's as you commented outpacing debt in order of population we know the federal and commits suicide every 80 minutes. every 80 minutes. i think we can all agree on two things. first of all our service members and families have risen to the challenge. they've done everything the country is asked of them throughout the war in iraq and afghanistan the return of the grateful mental and behavioral

conditions that are confronting a lot of our service members, loved ones and as we talked about resources in such extreme things as suicide. secretary panetta, our service members and veteran's resources without correct diagnosis. as you know, this has been a major problem for the soldiers in my home state of washington. at madigan today to over 100 soldiers and counting have had their correct ptsd diagnosis restored after being told they were exaggerating their symptoms lobbying and accused of stripping their duties. so understandably lot of our service members trust and confidence in the disability evaluation systems has been seriously shaken in the wake of these events. as you know, i've continually raised concern about the consistency and accuracy of behavioral health evaluations and diagnosis within the entire

disability evaluation system and i offered my recommendations on how to improve the system and as you also know, the army has taken some critically important steps forward beginning to address these concerns. the secretary has announced a sweeping comprehensive army why reduce behavioral health evaluations and diagnosis back to 2001 to correct the errors and make sure our service members get the care and services they need and deserve. but i wanted to ask you because this is not just an army evaluation system this is a joint department of defense va program covers all of a services, so i wanted to ask why the department hasn't taken the lead in evaluating and making improvements to the entire system. >> senator, we are. white asked is the ever service chiefs to implement the same approach that the army is ticking here. >> to go back in 2001.

and if they're all full when the lead now and we would be told the evaluation and progress of that. who is heading that up? >> the undersecretary for personnel and health care. that's the individual that you need to -- >> i would very much like to be kept informed as i am sure all of our members of congress would. it needs to be transparent and. we need to make sure people are accessing the system getting back of the media and the only way to do that is to be clear, open and honest with everyone. we didn't know that we were looking at all the other services and i would like more information to be informed on that as soon as possible how that is taking place and how what the timetable is and how that is going to occur. >> i appreciate your leadership on this, senator, and i am not satisfied either.

the misdiagnose this that took place, what is happening in this area between, you know, what we are doing everything we can to try to build a better system between the pentagon, department of defense and the va. but there are still huge gaps in terms of the differences as to how to approach these cases and diagnose the case is and how they deal with them and frankly that is a whole area that we have to do better on. >> i can't image of what it's like to talk to a soldier that was told he is ptsd, his family was working with them and when he went to the evaluation system he was told he was a lawyer or malingerer. he was taken out of it and then he went back in the civilian world not being treated. that is a horrendous offense. i in the chair of the veterans affairs committee, and i recently held a hearing on the joint disability evaluation system and i just have to tell

you i am really troubled by what i am hearing. enrollment is continuing, the number of service members cases, the goal is low, the amount of time it takes to provide benefits to a service member that is transitioning through the system has risen each year as we began this. in response to these problems we heard from the department of defense and the veterans affairs to get there about how five years after, five years after though walter reed scandal program was piloted they are just now beginning to map out the business process to find room for improvement. that is just unacceptable. the public all of us believed this was being taken head on that we were dealing with it and five years out on acceptable numbers that were seen. what are we giving it a little to reveal this five years into the program and the disability system is fundamentally flawed,

adversarial, disjointed. tell me what we are going to do. >> let me do this. secretaries shinseki and i have been meeting on a regular basis to try to do what we can to implement improvements and very frankly we are not satisfied either by the progress that is being made. part of this bureaucratic and part of it is the systems. >> a bureaucratic -- if you are in this system -- i see it every day. i am in charge of a very big bureaucracy and the fact is sometimes just the bureaucratic nature of the large departments presents it from being agile enough to respond and do what needs to be done, so a large part of this is just making sure that people are willing to operate out of the box and do what needs to be done to improve

the system's. but all i would offer to you is what secretary shinseki and i sit down with you and walk through the steps we are taking to try to see if we can shake the system. .. >> i totally appreciate you saying that to me, but sitting

down and talking is something we have been hearing for a long time. we need recommendations and we need to move forward and we need this to be a top priority at the pentagon, as we transition now out of afghanistan and this is not pointed get more simple. the complexities are now going back to review the behavioral health and ptsd cases, you have people who are in the system i now they're saying,, what is going to happen to me while you go back and review these people? are you going to put more personnel into effect, or are they going to take a backseat? this is complex and problematic, but it needs every single effort from top to bottom. >> listen, i share all of your frustrations, and my job is to make sure that we don't come here with more excuses, but we come production. >> and i truly appreciate a that comment come and i want to work with you. all my efforts are at your

disposal. we do a fantastic job of training our men and women to go into that emirates. we still common today, have not gotten this right after this warder and making sure that they transition back home. we have families and soldiers and airmen are out of service who are really stuck in a process they should not be stuck in. we have to get it right and it needs to be done now, and i will sit down with you the minute you tell me you are available. i want more than a meeting. >> okay. very good. >> all right. i believe senator shelby is on his way. i understand that senator shelby is on his way. we have a second form but i have to get back to work. i just ask for the demonstrations so that i can return from the second vote. i would appreciate it. i would put the committee into recess until senator shelby arrives. >> we are not going anywhere.

>> good. if you want to meet now, mr. secretary? [laughter] with that, this is in recess until senator shelby arrives. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations][inaud] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> in a few moments, deputy prime minister and liberal democrat leader nick clegg testifies before eight panel examining the relationship between british politicians and the media. in a little more than 2.5 hours, secretary of state hillary clinton on u.s. relations of india, including a news conference where she is asked about the continuing violence in syria. >> several live events to tell you about tomorrow morning. prime minister david cameron goes before the committee investigating connections between the british press and politicians. that is life, beginning at 5:00 a.m. eastern, here on c-span 2.

later, the senate finance committee will hear from health care committees about how they handle medicare payments to doctors. that is on c-span at 10:00 a.m. eastern. also at 10:00 a.m., on c-span 3, a hearing on the military implications of the law of the sea treaty. the senate foreign relations committee will hear from a panel that includes the chief of naval operations and the commandant of the coast guard. >> and has been 40 years since the watergate scandal began, and this weekend, c-span radio will rip air recorded conversation between president richard nixon and his staff concerning the break-in. >> there is no doubt that we have a cancer close to the presidency that is growing. it is growing daily. it is compounding. that will be clear as i

explained some of the details of why it is, basically because we are being blackmailed, too, people are going to start -- [inaudible] >> hear more of the nixon tapes this saturday. listen at 90.1 fm, nationwide, we are on xm channel 119, and streaming at c-span radio.org. >> deputy prime minister and liberal democrat leader nick clegg testified in london before a panel examining the relationships between british politicians and the media. he talked about the state of the media and his contacts with journalists before the 2010 election. this is 2.5 hours.

>> we would like to welcome the honorable nick clegg. [inaudible conversations] >> i solemnly swear that the evidence i shall give shall be the truth and nothing but the truth. >> mr. clegg, you kindly provided us with a witness statement signed and dated of april this year. >> yes. >> prime minister, thank you very much, indeed, for this statement. as i have said to all of your predecessors between us, i'm very i am very grateful for the work that has been  

>> the freedom of the press needs to be protected at all times at all costs. but it needs to be balanced. the risks of abuse of power, an this is not just in the press and media domain, but concentrations of power, when it unaccountably occurs, we need to find remedies and safeguards against that.

>> you deal with four specific areas, first of all, between p=litics and the media.p=p=p=p== i am going to invite you top=p== elaborate on each of those as@== they see fit. the first specific rubric is media influence over government policy, which is paragraph five section eight. >> the point here i am making i that the media, they are entirely entitled to hold str views and to seek to promote those views and to seek to persuade governments to adopt those. so, it provides a very

important corrective in the litical system. it the "daily mail", the guardian on tackling, when the media picks up, it has a very powerful and positive effect. the balance to strike, however, is to make sure that politician are not too weak kneed good especially in the face of pressure, which they don't agre with. pressure is one thing, intimidation is another. and i think it is very importan not just in the press, but th political class. the more the political class intimidated or giving in to pressure, it becomes itself a filling her. 

>> how you achieve that last objective? in other words, keeping on the right side of that careful line >> well, this is a 10 million-dollar question. the press code, the other code itself has very clear powerfu wording, saying that it is important to distinguish betwn fact, conjecture, and opinion i think it is fair to observe that that is not always readily recognizable. i personally cannot see any means by which you would cq regulate -- i think it is just  principle, which is stated.

the more the press abides by th code, the better. but i would be very wary  of going down a slippery slop trying to intrude from outside and trying to distinguish between fact and opinion. people are constantly, and i don't think they unravel them. >> but you are not suggesting that it is not a principle which e press should follow themselves are not follow? >> it is a stated principle in the code. >> of course, it is. although there are people that say various things about that, as you are probably aware. i entirely understand.

..  i mean, i think most people would view echoed as being exactly that, a code, not the sort of pick and choose menu of aspirations. so i really think it's impressive. out of this process, greater respect for the code that the press itself believes in, has

formed, drafted. at think that would be a good thing. i think it is a cul-de-sac. common conjecture could be fixed through some external route. >> there are no bright lines because your selection of fact, each one of which may be accurate, they made themselves lead to an inferential comment. the comment is different. >> yes, i think first off, th idea, there are such things as tax would speak in a sort of unalloyed form for themselves. not in any way affected by the way they are ordered, presented i don't believe the majorit the idea that believes this thing called pristine, which is

somehow, you know, -- can somehow be isolated from contex which is presented and perfectl accurate facts can be, nonetheless, presented in a form to make a wider, subjective points. >> and your second point starts with the relationship between the media and citizens. and there again, you stated in paragraph ten balance, and one needs to get the balance right. you said of the problems. i would now ask you to allow bring on those points, please. >> the point i made here is tha to get the balance right, beach will address within politicians and leader will always exist. usiness.com

>> the point is that you do not allow yourself to be swayed by e point of view or anot this is a view that i strongly believe in. that is clearly undermined wh you did, as i say, a relationship where party acts feels it owes it to the press group because it is supporting th party. e press have an incredibly valuable asset in their possession, which is the main liberties, which are unique. it is their ability in british public life to promote politicians in way that leads to an increased number of votes. that, after all, is the heart what it is all about. >> the megaphone that the press actually has, and can use to effect? >> yes, exactly. i guess my point is that us politicians -- we must be clear

to put this relationship into perspective. sometimes there has been a tendency in the past to say tabloids produce an editorial for a general election supporting this party, actually, it shows that the outlook is much smarter than that. and of course they increasingly derive their information from such a wide array of media  d different sources. this automaticity of support  ads to increase a vote. it is in the clinicald9d9d9d9d99 imagination.d!d1d!d!d!d!d! >> it sounds as if this is true, in paragraph 25, thed d(d(d(d(d(

relationship to remain skeptical at$( arms length within their undaries. how is that an appropriate relationship achievable and hieved? >> well, transparency is a majo component in all of this. the more the relationships flourish in the shadows, the less accountable by definition they are, so the more transparency, the more information there is in the public domain between interactions and politicians and the press. as i said earlier, any other vested interest in society. the better. that is why some of the steps have taken recently would change the ministerial code, such ther would be regular publications for the first time of interactions between people like me and editors and proprietors d so on. gnificant is the step forward

i actually think this inquiry itself, by signing such a spotlight, not just between the media and the press in this module, but before it the media and please, i think it will have quite a dramatic and lasting effect, which will lead to that greater skepticism of wariness, which i think is part of the whole relationship. the idea that politicians and the press should automaticallyd/ act, it is totally right, theyd/ should seek each other out.d'd'' it is just the d'manner in whic' they do so, and in d'the spiritn which they approach each other./ >> your thirdd/ point, in regar/ d- the media, it stays on yourd- second point. the point is thad-t the media,d/ often lobbyists, are in theird'/ own interests.d'd/d/d/d'd'd' in which you mean theird'd' commercial interests. can i asd'kd' ad/bout paragraph' terms ofd' addressing media standards.

>> of course.  did you feel, mr. clegg, tha specific lessons need to be arned from not? >> what i was referring to is the report, it did not recommen any structural underpinning or basis for the new recommendations that were made. cal cut later concluded that that was a mistake. in the sense that relying upon arrangements which are in the gift of the press, it is based on, you know, a flaw. you are asking in the best interest of things which go wrong, which i can't say th best interest of society, which is so immune to the normal standards of accountability when things go wrong.

it is an interesting characte it self regulation does not rk. >> it is populated by some very good people who try to do a vy od job into a very diligently but it is a relatively toothless operation. as i said, it is run by the people it is supposed to ho accountable. i'm sure we will cover this later, and i'm happy to enter into detail my reports on us. i think we are moving into a phase where we have given enoug opportunities to that pure self-regulation method to prove itself, and each time it seems to become proper. what do you replace it with within a way that does not better or hinder or trample upon the freedom of the press? >> in paragraphs eight through

16, you talk about your general point, which is corporate governance in impunity. >> you independently have elaborated upon it, impunity. could i ask you, please, to develop that point of corpora vernance, please, mr. clegg. >> what i am making is simply, it is a beggars belief that we now know, illegal activities appear to be taking place on enormous industrial scale. and the basic mechanisms of internal accountability and internal scrutiny, mainly the corporate governance of the individual newspapers and press groups concerned, it doesn't pick it up, or maybe it did and did nothing about it. i don't know.

it is a failure of corporate governance on quite a significant scale. sewhere, i suggest that if a journalist feels the need to do things, which are intrusive,  unusual in order to pursue a story, which is in the publ interest, i don't think we should be squeamish about that. i think it is right that investigative journalist will use methods to really get to th uth, which is actually bein hidden -- you have to get up to speed and trouble to get to it. we should never prevent urnalists from doing that the main thing in which they do that, it should be clearly understood by those who oversee eir work in the newspaper. at is an issue of corporate

governance. no, again, i think this is a challenge for the press, but  would've thought that when journalists take those steps, they shouldn't just be operat solo. in the shadows, there should some basic arrangements by whic people are aware of what they are doing and the chain of command, if you like, understand it what is being done for the right reasons. >> moving forward in your statement to question four, which is page 13802 paragraph 28. >> i would like to come back to that last point later, because it does raise an interesting question about where the balance should live between which

everyone agrees what is in the public interest. the approach of the state, when illegal behavior, by journalists, is trivial, that i topic which we discussed yesterday and i welcome your views. but we can come back to it later.  may i just say, i think it depends very heavily on understanding the definition  what is in the public interes i think if you are not clear about what the public interest is, and we have a rather uncl finition -- defined in different ways by different organizations, you know, i think that creates a potential for a lot of misunderstandings. >> i think you are absolutely right, and it is one of the reasons why i think it is very difficult to create hard law

that defines the situation and it is probably better to retain an element of flexibility, and that is where your point about appropriate internal controls, in my thinking, becomes much more important. to protect the journalists who are doing important work in the public interest. without allowing -- literally, a get out of jail free card, to those who are not, in truth, rking the public interest. t are simply prepared to dig around for stories that have no public interest at all. >> that's right. this is a corporate government like that. they could be wearing new regulatory mechanisms, it cou

help to sort of maintain the right sort of standards, statutory as they might be, in the day-to-day operation of those kinds of checks and balances. >> at the same time, one has to see how the criminal law interfaces with that. at some stage, possibly may hav the chance to get back to it. >> i'm sorry, the general elections, could you give us a vignette about the last general election and your experience. >> a vignette. [laughter] >> there was one good moment. it is out of the first television debate. the 22nd and 29th of april.

there was, as has been h,scribed, a spike in your poll- ratings.h. then there was coverage in some elements of the press, which were talked about to you. first of all, what was your v as to be objective reality of the spy, if i can put it in those terms. was it generally reflecting on the line of increasing support? >> and my view at the time -- i was fairly, sort of pragmatic. i was conscious of the fact fro the public's point of view, man people were really aware of who i was and what the liberal democrats were putting forward in the general election.

the widely watched television debates -- for the public, it was the fact that i was there saying stuff that was differe from david cameron and gordon brown. that had an effect at a time when the public was weary of th tgoing government and was not fully persuaded of the most prominent alternative. ere is an appetite for something different.  that extent, it was, i think not perhaps not surprising th when an alternative, something different was put forward, people responded to that. i have to say, that i never pressed it fortunes go up and down quite rapidly. it is a volatile business. you should never pin your hope

on one spike of one opinion poll. it tends not to work out, as indeed, it didn't then. as in the final result of!(!(!( election day, it fell short of the expectations, which were sort of hyped up around the time of that first television debate. >> there was one comment in the guardian on the 18th of april, three days after the first debate. this is under tab 30 in this bundle. this is evidence -- i think it s from 2002 and 2003. he made the point that your ric could block burdock and the media if you talk politics.  it indicates that his

assessment of your lack of proximity to the place, is that fair? >> you make a perfect point which is a statement of fact  the large part of the press, when i say the liberal democrats were a subject of indifference at best, and dilution at worst. he describes his experience tha is almost a specific sort of instruction to deride or ignore the liberal democrats. if that is what you are use in the liberal press, it must come as a shock. suddenly, these people are do -- doing this in an election campaign. that part of the press was very ferocious after that. as, from their point of view, were not going according to plan. if you place your bets in f of other parties, and suddenly,

there is an upstart party, if you like, intrudes upon the plan, you start lashing out bit. that's not exactly how i saw, i didn't find it surprising. that is the nature of politics, that is the nature of that alignment between particular parties and particular press groups, and if you have alignd yourself with one team, the blu team for the red team, and the yellow team comes in, you want to be able to play and do t by a time-honored fashion, no going after ideas, but going0 after the man, not the ball.c0c0 c0ain, that matches all through0 >> the backlash against youa0a00 following tha0e first debate, a0 c8 collected some of the mediac8

c9eces between tab 26 to 29, th9 daily mail express to thec?c?c? telegraph and the sun, paragrap 29,. >> pardon me? i suppose that you say they we not going to legislate for th fusion of comment in any event, this sort of thing is inevita and we just have to accept it. is that your view? >> look, the editorial of the sun on that day says that that is why the sun makes no apoloy for the repeating of this one. which has to be one of the worst productions in modern times. just because they made a spectacular and accurate production doesn't mean that i or any politician should seek to prevent them from making those predictions or issuing warn to leaders.

as you say, that is exactly wha editorials are about. that is about expressing personal opinion, and i would defend the right of any newspaper to express for severus and partial views to my dyinga99 a9eath.a9a9a9a9a9a9a9 they seem to be barking up thea9 wrong tree. a8t that is theira8 prerogative8 >> thank you.a;a;a;a;a;a;a;a; >> we move now to paragraph 62a9 of your witness statement.a7a7a3 pagea3 13180.a3a3a3a3a3a3a3 >> 13810.a3a3a3a3a3a3a3a3 >> we are at the general elections and the mediaa3a3a3a33 campaign.a1a1 can i ask yoa1ua3 to develop th1 points you are making theira7a77 about newspapers being valuable5

campaign tools. buta5a5 also, whether newspaper inely act in the public interest, as reflecting their constituency? >> the first point, do they actually affect campaigners in their own rights? yes, they do. often with great effect, an think to the benefit of the country at large. some of the campaigns i mentioned here, the daily mail' tstanding campaign on bringin the murders to justice, it was  great campaign. and entirely justified the guardians dogged campaign, if that is what you call it, do no take no for an answer and keep plugging away at this issue o phone hacking.

i suspect if they hadn't stuck to their guns, we would not be sitting here today. i have been very involved with a number of media outlets on the campaign to give retired worker soldiers the respect and suppor they deserve. my only point is, as a politician, you are quite right and you need to quite rightly need to be dispassionate about what campaigns you actually act upon in which you don't. if we get to a point where the intensity of the campaign turns rather successful, you know, that would not be right. again, i think it is one of t great virtues of our press, compared to insipid press cultures in other democracies, that we have these -- and i

really appreciate it, our readers appreciate a comment is something we should celebrate. >> are there any risks which he perceived? >> well, the risks, as i said earlier, it is simply the government, in particular, we have to be clear that they ar deciding things in the public interest. and for the benefit of the country as a whole. and not just in response to the loudest voices and the stronges campaigns in the press. that is, in a sense, stating th audience, stating the obvious - but i don't think it derestimates how powerful or organized focused, sustained ess campaign is. the overwhelming temptation for politicians to want to respond on the whole, because i think that will communicate something

positive to the public. as long as politicians remain objective, as much as they can,. and skeptical, but open to new ideas, i think it can be a you. may i move to a separate topic, áis is under question seven aná starts at paragraph 36. ( ( ( (( 13804, this is the issue of the- press engaging with media propriety exeter. in paragraph 86, you point out0) that the meetings were0)0)0)0)0) engagements on the three main territories. the formal meetings, informal, and other discussions. and so, you differentiate between those in your exhibit.

maybe look please add exhibit one, and start with page 13817. we are looking at meetings before the 26th of february 2008. as with others, is one -- as on scans the next four pages, yo e a range of editors and it i impossible, really, to pick out any patterns. >> yes, looking back on it, the interesting thing is that i actually feel that the regularity of my contact -- i was actually much more intense in opposition as it is in

government. if you are in that position ce you work in westminster and you say share the same space in westminster as journalists do. and college houses wander through that. you always have passing conversations with any member journalists. of course, -- there is considerably more. and so the nature of my interaction with proprietors, editors, and so on, it is as ch more formal, and i would say much more than sparing common now than when it was whe i was in opposition. not with the context and@(@h@h@h

intensity that position, necessarily, but it shifts thep( underlying difference to libera( democrats and the right.@-@,@,@, >> this is@, merely a point, wh$ doesn't apply to you, but under the column of what is discussed, the general issues, when we talk about the party conference, it0o is productive to have a whole list of topics to discuss on particular occasions. producing more information, and it might be routine routinely supplies or not. >> i think these meetings are whole lot less intriguing and surprising. i suspect the outside world -

lot of them are fairly humdrum. i suppose one could just in a telegraphic form, they are very relevant in a discussion. quickly, i do not remember the precise content of a huge numbe of these and actions. stretching back some years. >> particularly where you have not been asked we have been asked in regards to the formal system. in regards to the informality of some content. at significant times, do you have an observation on the idea of noting in two or three words, general topics, just so that actually you would be able to refer back and say no, actual we never talked about x order y >> i don't have a problem with

that at all. do have in common now, if i now need an editor or proprieto on my own, i will come as a routine measure, of course, if something is raised, which touches on official government business, a relay that to the officials in my private office. you know, there is not a great leap between that and just jotting down on a piece of paper, telling someone these are the things that were raised. these conversations are -- they distinguish as much as anything else by informality, humor, and gossip. there are two or three issues which are predominant. and that is the first t categories, which are very important. we understand that, and we don' want to do anything to minimize this sort of links which are part of, and you putting out

your message and them challenging you and holding you  account in whatever form of  language that you want to use. >> yes, yes. editors and proprietors have  unique ability to access politicians on their own, in a way that people of other domains, public, corporate, economic and the like, do not sometimes, beyond the politics, they will know points which are -- which, this comes back to some of the earlier conversations that you have out lobbyists on their own behalf -- their own interests d they want to communicate . but they are in a category of their own. they are doing that in a context of intimacy. that is not extended to anybo else. >> and that is part of the trouble.

>> that can be, yes. >> i had a number of conversations with editors and proprietors of news ganizations who were very hostile to the bskyb bid, quite understandably. rightly, they took the opportunity to say to me, we don't like you for its wide reasoning. they made it clear that this is process that has been dea with in its own sort of box, if you like, as it turned out, t sectors of the state over a period of time. nevertheless, i can't think of y other area where a commercial interest would be able to come to a senior politician and say, i don't think your government shoul ask her why because it harms th commercial interest. t the best antidote to that i that politicians, as i said earlier, they keep their

distance and referred the issue where it impinges on formal business to the formal government system.k'+'+'+'+'+'+' >> to particular lunches james+! murdoch andk! rebekah wade, tha' is page 1317.k#+#k#+#k#k#+# then there isk# another one jus! james murdoch, 16th of july -- 2009. it may be difficult to rememb t did he discuss issues such as the bbc license fee, for example? >> i can't pretend to remember. all of those meetings were, o course, i became leader in ever

2008. many of these people didn't know me from adam. in the first year or two, i was just glad to take the opportunity to explain who i was, what my ambitions were for my party. i simply don't remember.  vacation when you met with rupert murdoch, the 16th of december, 2009, you had dinne with rebekah brooks, was it the four of you? >> no, no, no. there were a lot of people there. i was at the very end of the table, where the children sit, so to speak. [laughter] and i didn't have interaction with rupert murdoch before the dinner.

>> i was an observer as much as anyone else. and the 30th of january, 2010, you had dinner with a group of people from the telegraph. did you find a better place tha the end of the table on medication? >> that was very much a sor series of meetings and lunches and dinners in the run-up to th general election. at you know, discussion was i regards to manifesto ideas, purely political and purely centered on me trying to persuade the telegraph, the paper which i never had any illusions would come anywhere close to endorsing me, nonetheless, they were going to give us a fair hearing. >> thank you in two months or

less on the 16th of march, 2010, he made a small addition to the original version of your exhibit, after the lunch with . murdoch and mr. brooks, there was a brief meeting with mr. murdoch and ms. brooks. i think meeting is a quite ambitious noun. my recollection was as i was leaving, was in the building, and i exchanged very few sentences with them up perfectly civilized, amicable greeting in a court order corridor in the building where the lunch was being held. >> and the first is the smaller

meetings and phone calls 13820. how many of these would be one to one without and adviser their? >> i think a fair number of them. these are not really patented. sometimes an adviser would say en, sometimes not, he would usually be decided spontaneously, partly depending on my judgment of the what th was would perform. there is not really any rule. i'm afraid i just don't recollect it but a fair number of these would've been meetings where i would've met and met predicted individuals on down, one to one. a meeting with paul baker on

ly 22, 2010, was that one to one? >> yes, it was the only time i t mr. baker. i remember distinctly that i made an attempt in the case for electoral reform, and he explained to me his concerns about the bskyb bid, which had been announced before, and i think we made his little impression on each other is on both points. >> the telegraph race with me about their reservations about the bed, and to be fair, mr. daker, i know you can't

comment on this and you are not in charge of this, this is a quasi- decision being based onk! per business at the time.c!c!c!! >> on thec! 17th of august, 201 mr. harlan, rebekah brooks, and james murdoch. did you get, as it were, words on the other side, or not to th best of your recollection? >> no, i don't. i remember distinctly having -- it must've been very much in th air at the time. about when we, as a government, would hold hold a referendum. i remember that being discussed a number of times.

besides that, it was close to m heart, and i was keen to take every opportunity that to put case for change. in the event, it back, i do, remember -- that was lunch, i do not remember the big coming up in the lunch at all.c+c+c+c+c+c+ >> impression is, and youc)c)c)) confirmedc) this, that since be) inc) government, there have bee) meetings with editors andk)k)k proprietors, and simplicity are since last year, -- >> there was a phase where i remember, and i'm sure -- i'm

sure this was reflected. there was a phase where i was proactively in the run up unt may of last year. i was ultimately trying to interest people in the press. in the case for a change to the electoral system. that may be reflected in this+ electoral system, that sort ofk+ subsided ak+ bit.k#k#k#k#k#k#k## >> in paragraph 39 of yourk)k)k) statement,k) you deal generally) this is page 13085, with the contents of these discussions.k) without light to any particular- event, you focus on generalk/k//

policy issues and concerns of the readers, rather than on media policy.k/k/ so,k/k/ for that, the commercial issues that arise.k!k!k!k!k!k!k! >> yes, as we move forward toj!! paragraphj! 41, we move ontoj)j) mr. michel.k)k)k)k)j)j)j)j)j) you explain that matching opposition formally, tell us about that. >> mr. michel and i first met each other many years ago. well before i ventured into british politics. a decade or more ago come he wa working for a centerleft think

tank. that's when i first came across them, and then across him fro time to time, our paths would cross, and so, i very much  him well before he was employd in his current capacity, and i knew him socially as well. >> you haven't seen him since september 2010, and you have no discussed the bskyb bid withi >> no, we did not discuss bskyb bids. as it happens, since the general election in may, 2010, and my social contact with him, the very rare occasion, indeed. that was one deal where we both invited someone we both know in)

september 2010.i)i)i)i)i)i)i-i- >> thank you.i-i-i- paragraph 47, now, please,k)k)k) k). clegg.k)k)k)k)k)k)k) the extent to which political support by the media for ank)k)) individual policy is discussed with such interactions -- youk!! makek! it clear that the topic ! certainlyk% lives as far as youe concerned. this is the last sentence.k)k)k) it isk) only in relation to newspapers that share your parties liberal values. is that right? >> well, i can give you an example. before the last general election, you know, i never onc entertained for a millisecond that the "daily mail" or the su or the daily telegraph would come out in support of the

liberal democrats. but that did not mean that i felt it was a waste of time to try to seek to explain what my plans were, for the party, so that if it was an editorial stance, nonetheless in their coverage, they would give us a fair hearing. and i would still do that today with other newspapers, i felt that we were flush on the convergence will of the issue, which i hoped would lead to explicit form of endorsement. which, happily did occur. as i said in my written idence, i don't think one should get overly hung up -- it is not the right word, but i di not know if i should devote a undue focus on the week of a general election. i think that shifts many vote one way or the