comfortable center line in what it is their want their government to do and what it is they accept their government doing. it is that practical consensus that's fostered such powerful continue continuity between two vastly different presidents, george w. bush, and barack obama when it comes to this conflict. the most important continuity. both have said we are at war. both have side we are at war with al-qaeda and its affiliates. i was watching president obama's inauguration, and carefully looking for signals with regard to this very fundmental thing, and he actually said we are a nation at war.

that was somewhat satisfying for someone from my background and point of view. it's not definitive. nobody argued we're at war in iraq or afghanistan. i wanted evidence he believed that we were at war with the groups that attacked us on september 11th. ..

he would use law enforcement authorities but he would not limit himself just to law enforcement authorities. he would actually use his authority sounds commander-in-chief to wage war against a foreign enemy. i'm sure you all remember in 2009 after just a few weeks in office president obama was awarded the nobel peace prize. by and large i thought it was awarded because he wasn't president bush and the europeans wanted to confirm that fact. [laughter] do we recall his acceptance speech in scandinavia? do you recall the scene? i do. i watched carefully. you have the president at the podium here and he's reading his speech, and the camera shot is coming from here, okay? so we are seeing kind of the back of the president, and then you are seeing the nobel committee and ought of the dignitaries that have been

inflated. and it's a remarkable scene. i've actually tested this on the other folks who remember the way that we do so it's not just me wishing the circumstance. as the president is giving his speech, you look at officials expression of the people who have just given him the nobel prize and looked as if every one of them had been run over by of -- a bus. they had the most somber look on their face because president obama was giving them a lecture on just war fury and house from time to time it was his responsibility to use force to protect america and americans. i was invited to the german embassy in the spring of 2007, so i've been director of cia for about a year. the ambassador was the german ambassador. i'd like to explain this.

the germans were in that chair of the european union back in europe. so as a matter of courtesy, the german ambassador wrote to the two about every two weeks had the other ambassadors to the united states from the other states of the european union over for lunch. okay? germans in the chair, ambassadors from america, from the e.u. states over for lunch. he would then have an american coming in and be the lunchtime entertainment. the american-led come and give the lunchtime talk. i'm not sure who else was there. i would expect the secretary of state was invited, secretary defense. and the central intelligence agency. so i get invited and say okay, i've got a representative from every country in the european union. what makes an interesting speech? i've got it. let's talk about reconditions,

interrogations'. so i did. [laughter] and i began the conversation -- i had a great staff at the cia. you are blessed as a people with the talent and morality of the folks in your service and i had a wonderful stuff and great speeches. was rear i would let anybody go with almost irresistible temptation to fool around with someone else's and i would make changes, but this was so important. an awful lot of it i wrote, and i remember page two or page three of the speech, you know, about midway through lunch and about two dozen people in the room and i said to make sure we are all clear here, let me tell you what i believe what my government believes, and what i believe my nation believes, and then give the foresight.

i said no. one, we are a nation at war. number two, we are at war with al qaeda and its affiliates. free, this war is global in scope. number four, i can only fulfil my responsibility to the citizens in the public by taking this fight to that any me wherever he may be. war, al qaeda, global, take the fight. there was not another nation represented in that room who agreed with any of those four sentences. now, i'm not saying they didn't believe it for themselves. they didn't. i'm telling you they didn't think was legitimate for us to believe that. and yet, we had two presidents, the american congress and the american court system in a sense synnott to all four of those sentences. there was a fellow that died in

september of 2009. he was killed by navy seals in somalia. he was the chief of operations for al-shabaab, which was the al qaeda affiliate in the horn of africa. navy seals approached his convoy of helicopters. the seal did not dismount. according to the press accounts, he made no attempt to capture. the seals were ripped from the helicopters, destroyed the vehicles, landed long enough to innocence get enough of him and make sure the dna would prove they got the right to die and then flew back to the carrier. i am going to hazard to you the judgment that there is not an intelligence service in western europe who would have given us the intelligence to do what i just told you we did if they knew that as we were going to do. because of this fundamental

disagreement that we believe we are totally legitimate and conducting a target of killing outside of internationally recognized the jitters of combat -- theater of combat. let's go to may, the death of bin laden. you all know the story, right? you are familiar. we followed the network and build that up over years. the core year led him to leon panetta and building up the case to get the president enough confidence about getting too close to the target that he actually scare the target away. the president in the face of somewhat ambiguous information has to make a decision. we decide to go, helicopters go, the first black hawk crashes, and they go and stormed the house and killed one of the

couriers and depending on what version you are following now, the one that got to the white house right afterwards or the one that appears to be married in this new book by this navy seal in any event the should bin laden some of them they radio geronimo enemy killed in action. an event that we all celebrate it. somewhat satisfying for all of us, particularly satisfying for the folks in the american intelligence and special operations communities who've been following him for a decade. but just forgive me, let me read from that tape. let me describe it for you and slightly different ways. a hard heavily armed agent of the government see an unarmed

man offering no visible resistance, shot and killed him. an unarmed man wanted in the american judicial system for crimes against the united states if you do not believe we are not war, you've got to read it according to the narrative. only if you believe we are not war bdy you understand that with the debt is a perfectly legitimate action, and it was coming and it is. i am in no way suggesting it was not but you understand what i'm trying to say. there is an underpinning here. we are at war. and so with all these continuities between the very different human beings, president bush and obama. we are not war. targeted killings have continued. in fact, if you look at the statistics, targeted killings have increased under president obama.

renditions, that is the extrajudicial movement of the suspected terrorists from place h. please be -- a and place b. it's the same under president bush as it was under president clinton. powerful continuity. guantanamo, i know president obama said shortly after taking office he's going to close guantanamo, but he did not. and why didn't he? he didn't because of a bipartisan political consensus in congress supported by public opinion that he shouldn't close it. back to continuity because we americans have kind of agreed on the courses of action. indefinite detention. eric holder wanted to try khalid sheikh mohammed, the architect of 9/11 in new york. that didn't work. it's been tried by the metric commission which will get to in

a minute in guantanamo. when attorney general holder was asked what if khalid sheikh mohammed is acquitted in the article 3 court in new york coming and the attorney general said we will get you to hold him any way as an enemy, and to become -- combatant. as i said, the scene as his predecessor. it's powerful continuity. state secrets. the bush administration was criticized for invoking the state secrets argument when many of the things i just described for you have been contested in the american court system. and the bush administration in my eyes tightly said we can't argue about that in court because a what we feel things that are still protecting americans. despite the campaign based upon a very powerful promise of transparency, president obama -- and again in my view quite

correctly -- used the state secrets argument and a variety of cord as much as president bush. i am personally grateful for president obama using the state secret argument to stop some of the court proceedings but i am amazed and some of these courts. [laughter] the one in which i am most personally is something called what president bush called the terrorist surveillance program, which "the new york times" calls a domestic surveillance program. i am seeing a few people nodding. this is about intercepting messages in the united states that we believe were affiliated with al qaeda. a big expos say in "the new york times" in december of 2005. pulitzer prize for the authors in the times piece. let's talk a little bit about

that. this terrorist surveillance program. and naturally in life and something i'm trying to describe for you. remember i said foreign and domestic law enforcement intelligence and i have an enemy here in the scene? the 9/11 commission recognized that. the 9/11 commission actually criticized my agency, nsa for being timid when it came to trying to intercept terrorist communications, particularly the terrorist communications that might involve u.s. persons, in other words communications at the one in here in the united states. remember i told you on the 9/11 we began to fight the war and we've got to play defense? as director of the nsa you have a fair amount of authority.

you can kind of dial things a little bit, get more aggressive. you can't be haphazard about this, you certainly have to tell congress, but you have the authority. guess what did about 11:00 in the morning on september 11th? if i had the authority to ratchet up, i ratcheted it up. i called george tenet remember the of the committee, also the house intelligence committee said i'm ratcheting up. george comegys ratcheting it up, getting a bit more aggressive, getting high probability we would intercept those kind of messages the would tell us about the next attack. so i tell them george this, george calls me i was with some of the president and vice president. i told them what you are doing. george was making a joke.

she said i told them and you're going to jail, mike. the president and vice president says okay we will bail them out. [laughter] george was saying i was being more aggressive, and i was doing it within my authority. he was then asked can he do anything more? so george calls me and says mike sign with the president and vice president and they said that's great, but can you do anything more? and i said george, not within my current authority, i can't read and george said what could you do if you have more authority? i will get back to you. i called up with my people and we decided there were some things we can do but i would need more authorization. it wasn't inherent as the director of the nsa. weook it to the president

committed the president, using article to authorities as commander-in-chief, remember we are a nation at war against an opposing force, congress already passed the aumf, the authorization of military force as close to the declaration of war as we would never get in modern america, and the president has commander in chief then said okay, mike, you leave these things out. i think these are good. i want you to do them and i am authorizing you to do them as commander-in-chief and here is the attorney general. he signed off on all of the authority to do that. i went back -- i went back to fort meade and i took this question to my lawyers. on the framework we are talking about, remember, a new kind of threat, what kind of structure. how do you adapt to the new reality? and i went to my three top lawyers so i wouldn't get a group answer and all three of

them said we believe the president has the authority to authorize you to do this. we believe the president's come as commander in chief, can authorize you to intercept the communications we are describing. operationally i can't go into details, but fundamentally, higher probability, you're going to intercept the communications, one end of watch might be in the united states related to the al qaeda threat. "the new york times" blue that story as i said in december of 2005. there are subplots for those of you that follow this. remember this is at to the attorney-general ashcroft's hospital room and the gw in march of 2004 and held on solis and indycar and bob morris pushing back and the deputy attorney general on one of the cards asked the question. in any way, this was incredibly contentious, incredibly

contentious. was it legal? you bet. the court ruled on this twice and one of the rulings from the appellate court is called in reseal we give it the president has inherent constitutional authority to conduct electronic surveillance without a warrant for a foreign intelligence purpose. so, politically this is a nuclear detonation going on in d.c.. okay. sorry, that is a long buildup. we are going to fast forward. we are now in 2008. congress in 2008 is about to amend the fisa act, for intelligence surveillance act, it governs everything i'm describing to you here. there are debates. senator obama opposes the law but later changes his mind and

votes for the amendment to the fisa act. the fisa act not only legitimate did everything president bush had told -- almost everything president bush had told me to do under the article to authorities as commander-in-chief, but in fact gave the national security agency a great deal more authority to do these kind of things. sorry, that is a long involved segue to come back to the point as contentious as the was, as bitter as the fighting law in 2005, when the story broke, legislation was passed three years later model the legitimate expenses. why? because frankly i think we've got powerful agreement that we have to do things differently.

i made the point of the continuity between the 33rd and 34th president. obviously there are differences, the most primary difference. president obama became president in one promised to close guantanamo is something he was not able to do but he also closed down the cia black sites where we held the al qaeda senior leadership for interrogation under special rules by president bush. that is a long and contentious argument and honest men differ as to the wisdom. clearly i was comfortable with it because for two or three years we've maintained the sites of the we had to people in them as i thought a necessary tool in the fight against al qaeda.

president obama on generate 22nd directed that we close the black sites and also directed that all interrogations' would be done in accordance with the army's annual, not in accordance with some of the techniques that the cia had approved. if you go to cia.gov in your leisure time and go to the public affairs side and the messages to the workforce january 22nd, 2009, landstuhl director. you can see my notes to the work force reflecting president obama's executive order. but i said to the work force was president obama has given us exactly what we need. president obama has given us clear lines within which he wants us to operate. these are different from the lines we had before.

the requirement is that the lines are clear. and we will be as aggressive and successful inside the meat locks as we were inside the old. so as director, has a sense to the elected commander in chief, i was supportive. but intellectually, personally, i was supportive. what we need from the president is clear guidance. that's true. that remains true, and i meant what i just said. but i never expected that we would actually get out as a nation of the detention business. i would defy you to think if anyone that we have captured and held outside of iraq, afghanistan since january, 2009. we had given up detaining people

for those of the following closely there is one caught between yemen and solely a cut on the u.s. navy ship for about six weeks. other than him, i knew of no other example. and much of our intelligence comes from detainee's. this is the one this continuity between the 33rd and 34th president. we have made it so politically dangerous and legally difficult that we don't catch anyone anymore. we take another option. we tell them. i don't oppose that. this is opposing the force and i wasn't sitting in the record my last two years as the director because i only put two additional people in guantanamo in 2007 and in 2008.

but we are losing the opportunity to interrogate and to learn about our enemy because i really do think we has a whole, not just the president, not just the cia -- this is the one area we have not worked out the consensus, and so we will not capture and detain and hold anyone that we are not convinced we can put into an article precourt that we cannot put into detention which is a fair cry from of the geneva convention and the lobby of the armed conflict and the logic of the nation at war suggests we should do. and so, if i am looking forward, in the truth and lending i'm an adviser on the romney campaign, not an advocate, all right, if we are looking forward i

actually expect there's going to be some continuity between president romney and his predecessor, too if that were to come to pass. i think a lot of these things that carried over from 43 to 44 would carry over to 45. the one additional one might be that we actually look for ways to capture and detain people without needing to be csis miami at the crime scene in order to create the predicate for the criminal case in the article 3 court. i could envision someone considering coming and please don't read this as the governor's intent, i can actually envision someone's saying we could put a couple more people in guantanamo because we are a nation at war, and we do have the right to detain enemy combatants. so as i told you bottomline up front, amazing continuity. we are still arguing about this

one thing that by and large we are kind of okay. the targeted killing a program, the one i said most of our european allies dislike, 72% of you think that's a good idea. they try to get 72% of americans to agree on anything. and 72% are the strong supporters of that effort. let me give you a final point before we open up to questions and answers. okay? by the way, you just had a 39 year military officer talk to you for more than 40 minutes without a powerpoint slide. [applause] but if i had that slide come here is why i need it, and since i don't have it i'm going to do hand puppets, okay? if this is what we're doing now, everything i justice told you, the renditions, killings, the

indefinite to detentions, military commissions and so on a, if this is what we are doing now, most of the things we used to worry about are up here. 9/11, up here. what i'm saying is what we are doing now is stopping this kind of stuff. 9/11, the airliner plot, east africa and the cease of here -- embassies of here. the united kingdom, the reason you can't take your after shave in the check point. what al qaeda really wants to do is the mass casualty attack against the target, and because of this, 11 years of this, i mean intelligence officer and i never say never, but it's really hard to imagine how they would pull this off. so what we see now?

we are seeing some stuff down here. we are seeing that at down the road if we look at it from christmas day, 2009. remember? we are seeing azazi to explosives on the subway system. we see the drive -- drive by in little rock arkansas and we see major assan. you see but i am trying to describe? secretary napolitano of homeland security probably wouldn't put it the way i would put it but what i am going to tell you now i think is a very fair assessment of what she has said publicly. future al qaeda attacks against america are going to be less well organized, less complex, less likely to succeed, less lethal if they do succeed because of this, because of

hayden's left arm. they are going to be less likely. .. because i can move it. i can push it down. i can actually work to make this less likely than it is today.

but the question i have for you is, what of your privacy? what of your convenience? what of your commerce do you want to give up? as i push the arl down. i'm not a free agent here. i'm your servant. you have to give me some guidance. candidly how much do you want to take off as you go through the line in the airport? what we need as a nation going forward is to continuation of the very tough, sometimes overly bitter conversation we've had to get us here. do you want us to get more likely to do this? or are you willing to live with that? and if you've willing to live with that and frankly, if you ask me my personal view, i kind of am, if you're willing to live with that, we kind of metaphorically have to shake hands. okay? because if we say no, this is about as far as i want

you to go to guaranty my security. you have done new and creative things and i'm broadly comfortable with most of them. probably some in the room are not but you get the point. i'm saying i can do more but you have to let me know. no. we're kind of cool. leave it where it is. patriot act is far enough. okay. then you have to have the understanding that when bad things happen, bad things happen. no one did anything wrong in terms of the people defending you, okay? nothing's broke. it is just the natural consequence of balancing a free society's liberty with its security. that's where we've been. we've worked a lot of it out. we still have some homework assignments and that's why i came to kind of share that with you because only an informed citizenry can inform the government where it is you want your security services to be as we go

forward in a world that is still quite dangerous. and with that, let me stop and i would be happy to take any questions i may have generated. [applause] >> good afternoon, sir. my name is christina and i'm a master's student at the gerald r. ford school of public policy. thank you for being here. i'm going to read the first question from the audience. there have been reports that al qaeda units have been operating along the side the free syrian army in the free syria conflict. given the u.s. was discretely supporting the fsa how do the u.s. and allies avoid supporting al qaeda. >> everyone hear the question? try it again. >> okay. there have been reports that al qaeda units have been operating alongside the free

syrian army in the syrian conflict. given that the u.s. has been discretely supporting the fsa, how does the u.s. and allies avoid supporting al qaeda? >> okay. syria, al qaeda, growing in strength, you want to support the opposition to assad. now part of that opposition appears to be al qaeda, what are you to do? this is the kind of question that makes me delighted i'm out of government, okay? this really is a problem from hell. what you have in syria now, i will be very efficient, just a moment's background. what you have in syria now is the opposition against the assad regime playing out on cell phone videos and you and i are watching it every night. all right? and the popular image of that is the oppressed against the oppressor. and that's true. but there's another storyline and this is where intelligence comes in, telling the policymaker it is not just what you're seeing. it is not just oppressor and oppressed.

this is sunni a la white. this is it sunni and sectarian and there are other groups, who have not yet voted or part of the opposition. in fact they kind of trend toward the assad regime because it is the devil they know. until the other groups vote, okay, oppressed and oppressor as true as it is isn't the defining narrative. it is sunni alawite. al qaeda sunni. this is an absolute magnet drawing al qaeda into this fight against the alawites who are an offshoot of shia islam. the longer this goes in my view, the more the al qaeda character of the opposition grows. which is a really dark picture. which then would suggest to you, well, then we've got to act more quickly before this become as real al qaeda-flavored movement. but i already told you it is not just oppressor and

oppressed. it is sectarian. you can't to get involved in another sectarian conflict? it is quite a dilemma. the scenario you laid out is correct though. al qaeda is there and al qaeda will grow in strength. it will naturally grow in strength. these guys are prepared to die. these guys are prepared to kill. if you're fighting someone that is your oppressor and somebody says i'm ready to die and ready to goat killed, they will hug them and not ask too many questions. the longer this goes i fear that will be more the reality. >> my name is sudari also from the ford school. thank you for being here today. the next question is as u.s. fighting groups not wearing uniforms or insignia and do not honor geneva our response includes attacking targets alongside noncombatants especially when the cia uses drone strikes. are we not irreparably damaging geneva. what could that mean for war

in the future. >> it is impossible to comment on specific operations. let me couch my answer. i'm just talking about technology, all right? we're not doing the specific operations by specific agencies and in specific parts of the world. but as an airman, remember, 39 years in the air force, the drone, the uav, the drone is popular term. we use rpv we think there is pilot. remotely pilotted vehicle. it gives you an unblinking stare at the target. this is not a fast-moving f 15 or f-16 at 400 norths that -- knots that has to make a decision in matter of seconds to engage or not engage. an rpv over a target can be there for hours, if not days and can give you almost a god's eye view of the circumstances. are you sure that's who you believe it is? how are they behaving? are there any nonmilitary

age males there? are there any females there? when was the last time you saw females there? when was the last time you saw nonmilitary aged males there? if we were to attack this, what weapons would you recommend? why wouldn't you use a smaller weapon? what if you used the weapon coming in from the northeast as opposed to the southwest? give me the probability of death or injury coming this way as opposed to that way? do you see what i'm trying to describe for you? it gives you the opportunity to be almost exquisite in your precision. and so, i think in one sense i'm kind of rejecting the premise of the question that the use of rpvs, uavs is kind of collateral damage engine. in fact it is quite the opposite. it actually gives you the opportunity to be, to incredibly high standard to avoid collateral damage. >> given that the war on

al qaeda has focused in recent time on pakistan and the diplomatic difficulties that have ensued, what do you think is the future the strategic partnership between america and pakistan? most pakistanis are concluding that the defenses are now -- difference are now irreconcilable. >> the question is about u.s.-pakistani relations. this is something we worked on a lot. the current chief of army staff was my counter part. he was head of the pakistani intelligence service for most of my time as director of cia. a wonderful man, wonderful officer, all right? as you might imagine i went to islamabad more than once during my time as director because this is a very important relationship, a very important country. i would go to, i would go to islamabad for a variety of reasons and i would generally fly with a c-17. we had a little comfort pod in there, so you had airline chairs even though it was a transport aircraft and they

would give me briefing books like that. and i would, all 17 hours in route. we would talk to general kayani or his successor. hold that thought. what constitutes pakistan? what's the glue? what's the fundamental glue that keeps pakistan together? you and me? we're together because of an idea frankly. it is not blood. i'm looking out here. it is clearly not blood, right? not even history. it is belief in political principle. you get to be one of us by agreeing with that by raising my right hand and. what make as german? it is in that case kind of blood. you could be individual of turkish descent, third generation in germany still be a turk. you could be a german living in the middle of the crimea

in the 19th century you could be a german. i understand what makes a german. what makes a pakistani. i come up with two things. it is not india. and islam. look i don't mean to make light of this and i'm oversimplifying this. let me beg forgiveness to begin but there's a point to be made here. it is not india and it is islam. back to my c-1, right. my stack of binders. i'm mastering the case. we land in islamabad. i go to rawalpindi. i talk to general kayani. no matter what is in the books, fundamentally what i'm trying to convince general kayani or his successor, remember what country is pakistan, fundamentals. i'm trying to convince him of two things. one. quit obsessing about the indians. two, let's you and me talk about making war on this particularly virulent slice

of islam. that's a really hard conversation, don't you think? so fundamentally that, i mean, this is really basic. this is almost primal. it gets in the way of creating a constructive relationship with pakistanis. it is just hard work. by the way, i hope you understand, i'm not blaming anybody. okay? it is just the nature of reality at this moment. >> what effect will sequestration, if it actually occurs, have on our defense capability? >> sequestration, what effect will it have on our defense capability? secretary panetta said catastrophic. i agree with secretary panetta. this is half trillion over 10 years. the department of defense is eating half a trillion. fundamentally in a fairly orderly way, now, it probably can eat some more cuts but it can't digest them the way sequestration

says to digest them. which is, take every account and take a 11% out of it. okay. imagine your own household account, okay. you got less money. okay. but no, no, you can't juggle the money. just take 11% out of everything you have. you know what happens if you're 11% short on your mortgage? that's kind of what sequestration does to the department of defense. okay? >> if we're at war with al qaeda and its associates how will we know when we have won and what will it signify? >> okay. you see, i had notes here. you saw me going back occasionally, make sure i wasn't wandering too far and right here, this is the last page, all right? how do i know i'm done? [laughter]

that is a really good question. that was going to be the one after my left arm thing, okay? i used too much of your time and i wanted to leave more space for that. so i'm happy that someone brought that up. you know the real answer is? i don't know. and that's a really good question. it is a question you should continue ask folks like me, maybe not necessarily retired folks like me but people still doing kind of what it was i was doing. how do i know that we're safe enough that it is time for us to shift out of that, we are at war model, and go back to more traditional ways of keeping us, keeping us safe? that's based upon an intelligence judgment. it's based upon our judgment with regard to the resilience of al qaeda and the reach of al qaeda. let me add an additional thought. this is americans talking to americans, okay? do you know the degree of political courage that would be required of a national leader to say, i think we're

done, we're going to scale back on this thing? i mean, that's, that's way up there in the real hard to do box. okay? because, you make yourself, frankly politically vulnerable. and therefore, if we ever get to that point, it really will have to be based upon a national, bipartisan consensus. it can't be, if i stop doing this i got an exposed right flank because it will always be an exposed right sflang, okay? so back to the point i was just trying to express to you. it has to be the product of very sincere dialogue among people. it is kind of the left arm thing. hayden, i want you to raise your left arm this time. i know i'm increasing the odds but we're shaking on it. we understand. we're all in agreement. that is fundamentally what that question is. and we are not at that point in my judgment. that point will come some day and we will have to have the courage to address it.

>> what are other departments in our government doing in a way on a diplomatic level on al qaeda? is there anyone to deal with? >> what other departments of our government doing to deal with al qaeda and are there other ways to deal with it? i'm going to take that question and run it about the 20 degrees right here and just kind of answer the question i wish that question was, okay? [laughter] you had me talking about targeted killings and renditions and guantanamo and saying hey, that's not going to happen, we're really safe, all right? what i'm describing for you here is that in dealing with today's threat, in dealing with that human being is convinced he wants to do you harm, your government's really good, and it really is, okay? we have really kept the republic safe. we kept it so safe, and this is the dark side, they often

don't come at us. they come at other people now. they don't come here. that's a by-product, not intended but it is a reality. but we have kept you safe. in american military terms we would call that the close fight. that's the one we're fighting today. that is about the guy who already convinced he is going to come to kill you. there is a deep fight here. the deep fight is about the production rate of people who are going to come try to kill you in six, 12, 18 or 24 months. and as successful as we've been on the close fight, not so good on the deep fight. now we, we did this in the cold war, remember? man, we had large armies in europe. the ambassador knows about this. we were defending the folder gap in germany. best army. defending the best scenery, bavaria. okay? while we held the soviets, we also had this deep

idealogical conflict with them, did we not? and we won that one. now whatever it is you think of communism, you know, i think it is a pretty bad theory of history let alone a bad theory of government. you can not argue that communism is a western philosophy. it was written by a german in a library in london. and so in the cold war, while we're kind of holding in the close fight we're, we're scrumming it up here in the deep fight idealogically and we've got authenticity. this is about a western philosophy. now fast forward to this war. we're doing real well in the close battle. these guys want to kill us. we're stopping them. the production rate though back here is fundamentally about one of the world's great mon owe theisms. fundamentally it is about islam and what it really means. and, we don't have a lot of

authenticity in that thing. i know, i know. we're multicultural society but fundamentally, we have european and african roots and we're judeo-christian in our outlook. it is very hard for to us get seriously involved in a dispute out here about the meaning of the koran or the hadif and telling the huma, general body of believers they should belief something different. in fact we make it worse if we engage in that fight. for 10 years we got buptkus out here. we're not doing much. 18 months ago something happened. this fruit merchant set himself on fire in tunisia. and you had this wave of protests and revolution in tunisia, libya, egypt, bahrain, syria, yemen. the heartland of al qaeda and al qaeda was absolutely irrelevant to it.

doesn't mean al qaeda won't exploit it but it was irrelevant to the movement. and what was tis movement about? this movement was about responsive government, responsible government, transparent government. the rule of law. democracy, voting -- wait a minute. wait. we know something about this stuff. as disruptive as the arab awakening has been, as, in the near term in midterm caused us some serious diplomatic and maybe even counterterrorism challenges, over the longer term it has created a new dialogue in this deep fight, a dialogue about which we have genuine legitimacy and can offer views. so in my personal view for the first time we actually can engage in this deeper idealogical conflict in a way that which never have

before. so at the end of the day, what that means is, other elements of the american government, besides your intelligence and security services, besides the department of defense and the cia, need to get into this, diplomaticly, politically, economically, in order, and again it is not ours to control. not ours to shape but at least foster, a positive movement out here about which we never had an opportunity for the first nine years of this war. >> general this will be the last question. >> okay. >> how does the new phenomenon of home-grown terrorism fit into the enemy combatant, noncombatant categories? >> that is a great question. a lot of these were home broken. -- homegrown. shahzad, times square, homegrown, u.s. citizens. not even green card. u.s. citizens. major hassan, u.s. military

officer. i guess the first thing i point out to you, is this problem is not zero, all right? this homegrown, self-radicalized issue is not zero but whatever the number is it is much smaller than it is in many other countries in the west. we do not share the kind of problem, for example, that the british have with their population. why is that? because your cia is better? no. it is that way because of who we are. we are an immigrant people. we are far more accepting of immigrant groups. we're fairly well practiced at a simulation. average islamic income in the united states of america is above the national average. so there is no reason to despair about this but there will be issues. this is where we're at war or is this a law enforcement problem really becomes

sharp-edged. in my personnal -- personal view, it would be incredibly rare case where u.s. -- i need to be careful here. where american citizen doing something within the united states, triggers the we are at war approach as opposed to law enforcement approach. i try not to be absolute here because i can't imagine all future circumstances, all right? but here are my sense is and that balance, okay, that going in position, this is a job for fbi, not cia. okay? this is a job for the michigan state police, not the department of defense. okay. by the way, by and large most of the information we knew, okay, we knew about umar farouk abdulmutallab, the guy coming into detroit was all foreign derived. i think it was mistake to mirandize him in 50 minutes

because our base of him is foreign intelligence. to me the right entry point was, enemy combatant, nation at war, deal with it that way. on the other hand if someone is discovered and prevented in an attack in the united states by the fbi the roots of that information are law enforcement derived. the going in position is we ought to treat this as a law enforcement problem and enter this into the american court system. i suppose if we stayed her long enough we could think of exceptions but in broad measure my sense is that is how we should deal with it. i hope made it worth your while coming here this afternoon. i hope you have left with more questions than you had when you came in. that was my intent. and thank you very much for the opportunity. and, go air force. [applause]

>> live coverage at the top of the hour from the brookings institution hosting a discussion on national defense issues and the 2012 presidential election begins at 1:00 p.m. eastern on our companion network c-span3, followed by a second event at brookings looking how the war on terrorism will play in the 2012 campaign starting at 3:30 eastern. >> taking a look at the capitol today on a mild day in washington, d.c., as members from both chambers of congress return after five weeks of summer recess. the senate's going to gavel in at 2:00. they will take up a judicial nomination at 5:00 for the southern district of iowa and a vote on that nomination scheduled for 5:30. later this week we could see veterans jobs programs. you can watch the senate live right here on c-span2. the house will also return today. several bills on the calendar there, including legislation to deal with mortgage and flood insurance. you can watch the house live,

starting at 2:00 on c-span. let c-span know what you think congress should be working on as they return for just two weeks before the next break. weigh in on our facebook page. facebook.com/c-span. to join the conversation and we may get some of your comments on the air today. tonight we turn to technology and telecom issues on "the communicators". you can watch that at 8:00 p.m. eastern. that is here on c-span2. all though there was a drop in the unemployment rate and more than 95,000 jobs were added last month a former chief economist in the clinton administration says the labor market remains weak. lawrence katz was part of this next panel that focused on programs to spur job growth and improvements that might be needed. and this part of the panel is about an hour. >> good morning everyone. i would like to welcome you to the american enterprise institute. my name is steven davis.

i'm a visiting scholar at aei and deputy dean of faculty at university ever chicago booth school of business. this may be a time to rethink the effectiveness of job training programs. housing bust and financial crisis hit american workers hard and it is obvious to everybody that the economy and labor market have yet to fully recover but there are other reasons of concern about the american worker, reasons that predate the financial crisis. let me just mention two. the share of working age americans with a job has been on a downward slide since 2000. in fact the rate of employment today is at about the same levels as it was in the 1970s, late 1970s and early 1980s. that despite an enormous influx of women into the workforce in the intervening time period. these declines in the employment rate are concentrated among less educated workers. second, real wage growth has been disappointingly slow for among american workers for at least the past 12

years. so these facts that i have very briefly sketched do not add up to a picture of strength. instead what they suggest is that millions of wokers lack jobs and the kinds of skills that lead to good jobs. and it's, the shortage of jobs and skills is a source of considerable hardship for many individuals and their families. the shortage of qualified workers also presents a challenge to many businesses. indeed i think the shortage of jobs and skills hurts us all because it means that many of our fellow citizens contribute less to the economic vitality our nation than they could. so given these observations government job training programs seem like a very natural policy response. in fact, the federal government currently supports more than 40 job training and employment assistance programs. there was a handout there which hope you had a chance to pick up on the way in that gets some basic information about these

programs. unnorth natalie appears -- unfortunately it appears many job training programs have limited value. in addition few programs undergo the type of systemic evaluation required to assess performance and judge what works and what doesn't. perhaps most troubling, it seems that the current system has no effective means of shifting resources from less successful programs and practices to more successful ones. in short, the system is ripe for reforms designed to improve the effectiveness of government-supported job training programs. so that brings me to today's program. we have asassembled a truly stellar lineup of speakers. they bring a tremendous wealth of experience and expertise related to job training, public policy, and labor economics. i'm very eager to hear their perperspectives and insights. without further adieu, let me turn the microphone, to kevin hassett, director of

economic policy studies at the american enterprise institute. he will be our moderate for the first session. >> thanks a lot, steve. welcome everybody. i think today's jobs report showed that 96,000 jobs were added in august and, more or less, reveals that the labor market is about as we thought it was yesterday, that it is very weak. there are, increasing number of discouraged worker, increasing number of discouraged workers in the labor force and unemployment rate blipped down a little bit but it was really because the labor force declined, that that is a public policy challenge that is of the highest order because of the deep recession we have had. we have a large amount of long-term unemployment people that are separated from the workforce very hard to reconnect. and, i think that it is also an area of public policy that is ripe for bipartisanship. . ..

professor of economics at harvard university and a research associate at the national bureau of economic research. his research focuses on issues and economics at the economics of social problems. he's also a very well known to the people here in washington because he served as the chief economist of the labor department in 1993 and '94. larry is going to talk about the

best practices in job training programs and give us some perspective on what we know about what can work. the discussion is larry holzer who joined the public policy institute as professor of public policy in the fall of 2000. he served as associate dean from 2004 to 2006 and was the acting dean and the fall of 2006. he's currently a senior research affiliate at the urban institute, a senior chellie of the national poverty center at the university of michigan and national fellow of the program on equality and social policy at harvard university where the list is long and at the brookings institution and research affiliate at the institute for research on poverty at the university of wisconsin madison. the fact that hillary has so many associations reveals really that he is a trusted source for information on this important topic and that many people turn to him when they are thinking about the hard problems in labor

economics. with that i will handoff to lardy who will begin with about a 25 minute presentation about the best practices and then harry will discuss for about ten minutes and double the 20 minutes or so for general conversation before we take a first break. larry? >> thank you. delighted to be here. we have a wonderful group of true experts on the job training programs will be following me and speaking today, so i will try to give a bit of a broad overview of the challenges of job training programs face and then some quick lessons i think of best practices and lessons from experience with evaluating programs and with knowledge of individual behavior that may differ somewhat from standard economic models and the psychology of individuals who

end up in training programs to try to think about our current system and how it might be redesigned. and why they brought knowledge of labor economics and worked very heavily in job training programs to decades ago in the clinton administration in some sense i will try to give this bigger picture because i'm not a true expert on the details of all of the programs today. i just play one on tv. the way i would like to think about it is in order to think about the issues concerning training and placement programs, try to improve the skills and labor force prospects and job prospects of people who've lost jobs, people entering the labour market and people who are struggling to make the middle class and come they are what i but say the four major u.s. job challenges that affect the

context in which training and unemployment programs operate as well as the education system and that will affect how one should think about designing them. the first is as kevin just said we continue to be in the weekly lamarca. the overhang of the crisis in the great recession is still with us. there was a major negative shock to the economy. we still have the above and 8% employment rate. we still have a huge macroeconomics cyclical problem of the week hiring endeavor demand -- aggregate demand and we need more job creation and that's important to keep in mind in thinking about job training, education and employment programs can do. they are not by themselves going to solve, you know, the problems of the financial systems, the problems the debt overhang and the cutbacks of the state and local governments.

so the macroeconomy will matter and it's going to matter and how effective the programs are going to be. second, even if we could feed macroeconomic problems go away

that if you have a long-term job used to be an autoworker and construction worker was coming back isn't going to look exactly like that and they are going to need help and that is an important place job training and employment programs can helping in facilitating. second, imagine that we actually had and had the great recession or financial crisis, so we didn't have the overhang of the long-term unemployed. we didn't have a whole generation of young people who entered a week labor market and haven't gotten those initial experiences. we were sort of back to 2007. as steve davis said it didn't look so great in 2007. the period of 2000 to 2007 was a modest recession that very little recovery and employment was falling. wages were not doing very well, and even if you go back before 2000 there was a brief period in the 90's of why we shared

prosperity and a strong labor markets but we have decades of rising inequality and shifts in labor demand away from jobs in places like manufacturing, away from what our traditional middle school jobs whether it was using the middle manager clerical worker so there were large structural labor market problems that existed even before the great recession in which education and training are very important parts with rising demand for certain skills and supply of skills not keeping pace. imagine the last 30 years have gone very differently, and we have actually expanded access to education. we had revitalized american businesses and left things in many different ways and we haven't had the rise in inequality and structural changes. we would still be left even in the world that exists with very strong labor markets without persistent changes of the

quality they are still an important role. there are structural changes going on all the time. certain industries are rising. other ones are falling. people losing jobs have difficulties connecting in new places and meet new skills even in a well functioning labor market that is operating at full employment, young workers from disadvantaged families need help getting the first step in the market in skills comes of the job-training programs are going to be important even in the world with very strong labor markets. succumb to reiterate, the first challenge that we face is that we are not in this world of full employment and no structural change or overhang of long-term unemployment, we actually have a large macroeconomic problem that remains, and that's important for thinking about the job training programs in several senses. first, you know, if there are

not any jobs out there the first job training program by itself might have a little effect of the firms deciding to hire people because the skills they were looking for even in the weak economy, but the first order one needs advanced. the second people who are coming for the training program have been employed and into the labour market or in some sense risky hires to most of the employers. they are the type of people who at the end of the queue when employers have a large line of people replying to jobs and the ability to choose more experienced people with stronger connections and skills with exactly matched so every type of training program in employment program faces more difficulties in the weekly brackett because employers are not just -- you can now show you want for the characters and skills but it's difficult to get in the front door in that situation. the third reason why training programs, the microenvironment really matters and we need to work there to make fees' more

effective is what is known in the training program evaluation literature as displacement effect or spillover effects. this is if you have a really good program that helps people love with employers the the number of jobs is quite limited all you might be doing is playing a game of musical chairs. the person who gets this training spot for this job search assistance program help filling out their resume may get a job and this place someone like them and it turns out we actually are starting to know something about this process. in a remarkable recent study not done in the united states but done in france which is a modern labor market where it think there are some lessons by bruno and several coauthors they actually convince the french government to do something that i hope we can convince our government to do which was experiment the widespread employment services program and to try to look at what the

overall effect on the labour market or by not just randomizing whether an individual got access to the program but braking of france and to 200 sort of different geographic areas labor markets and in some areas providing 100% of the people access to sort of employment services in some areas 50%, some areas 75% come some areas 25%. if you do that randomly on average, you can then ask if you are in an area where lots of other people got this program does that have a negative effect on you if you did and what is it less effective and what they found this in the tight labor markets when there's for employment of their basically the programs really help people get into jobs more quickly and they tend to expand total employment but when the labor markets or week has the united states many parts of the united states today it really is largely the game of musical chairs. one person getting a job just makes another person have a more

difficult time, so in thinking about the types of programs, things that help people more quickly moved into a job are very beneficial when employment is expanding and once we get things out there. mauney its human capital and training longer-term things to make a dent in the problems and change the calculus for the firms in the weekly lamarca like we have today, and that ought to be an important issue in thinking about the directions to go. second, as i noted, we have the overhang of the long-term unemployed which is going to be very important in thinking about what we need to do with job training programs and the second round of the great recession that we are currently facing we have an overhang of people got lost their jobs and then we have a remarkably weak labor market for young people so the millman plan agreed among individuals 16 to 24 is about as high as we have seen that and one of the important things to note is that

the first several years in the labor market are extremely important for people's career. there's a lot of things that look like turning, people moving from job to job, but that is actually often a purposeful approach to finding a good match, finding a job that provides training and career most young people go through multiple jobs with about a third of all of the earnings growth in one's lifetime happens in the first four or five years in the labour market. we've now had five really bad years. we have a whole cohort of young people who've entered the job market not just with high unemployment but a job market that has become increasingly what you might call sclerotic which is in the high functioning labor market, not only is there a net hiring but there's a lot of churning. one person gets opportunities to find a better job that's opens their job for someone else to find out is a good match.

the one thing we've seen in every session of the aftermath is the workers are scared to quit their jobs because there aren't many opportunities with a lot of the useful productive churn that gets people into the right jobs that are a huge part of productivity growth and the lifecycle wage growth. so in thinking about the remnants of the great recession, what i would like to say is there are two very important factors to bring in and thinking of the job training programs. they are tremendous human costs to lose in the long term job, so for experienced workers this overhang of high unemployment is a very serious problem and even when the economy recovers, we go to the 1980's recovered after a very deep recession in the early 80's we now have three decades of data since the early 80's on which we have seen without a strong training and employment which we didn't have in the 1980's one doesn't see people becoming whole who lost

high-wage jobs even decades later one sees people on lower trajectory and also sees large social consequences, health effects that seem to be correlated with fees' and come losses and the stress of losing a job, spillover effects on to their kids. there's a wide range of increase in research that persisted job loss leads to stress in the family comes to family instability to problems with kids in school that affect the next generation so there is a very important issue of trying to make cool and improve the opportunities even if we get a stronger macroeconomy going to people that lost their jobs in the second coming young people who started a weak labor market also seem to have persistent negative effects on their outcomes, so we are going to need to take real action to create those opportunities to move from job to job to improve the education to give young people a chance to move in. the other thing that happens in a very deep recessions and we

cleaver markets is young people make decisions that often have permanent scarring effects in the labour market, particularly getting involved in crime. one interesting open research question is that that has not happened very much in this great recession in the early period. we have been lucky in the sense that crime rates have continued falling and the arrest rates for young people so that is an open question. something that has been going on in the social fabric among all of the negativity of the great recession that it's not showing up in some ways dysfunctional behavior that we have often seen in the past down terms and that is a hopeful sign that if we have this sort of education and training program and the stronger recovery we may have less persistent negative effects on things like the scarring effect and permanent effect of getting a criminal record that we have seen in the past. one other point i wanted to make before getting into the details of the job-training program is just tell big is this macroeconomic problem with

long-term unemployment that we still face. if you wanted to get back to where we were before the recession hit, which i think is unrealistic because we are already on the downward trend in the labor force participation, we would actually need -- we are about 4 million jobs, 5 million jobs below where we were at the end of 2007 but that is a great understatement because population does grow. we need about 11 million jobs, which at the 100,000 even 150,000, 200,000 is going to take many years so we will continue to have a large macroproblem even if you think the decline in the labour force participation that we have seen as a permanent effect picking up some longer run changes in things we would still need more than 5 million jobs cause of the context of today's labour market is one where we are going to need a lot of macroexpansion in order to make job training programs and education programs

more effective. the final point to give the context of the importance of this is not only do we have the problems of long-term unemployment and young people having difficulty in the labour market today but we have seen three decades of the rising and call the, grooving return to education, hollowing out of the middle, the college premium is twice as high today as it was in 1980. the traditional model jobs for the lower part of college and for the higher part of them on college population have been disappearing for decades. so any training program is going to need to take the reality that improving skills over the long term, not just reshuffling the reemployment services by itself is going to be a very important factor. and these are just some basic facts on the growing of what we've sometimes called the polarization of the growing

demand. sophie's show you basically what happened to employment in the 70's and 80's we had a sort of monotonic the rising inequality of labor demand, upgrading of the skill demand throughout. that is what the blue line shows you. the red line shows the last couple decades it is the middle age distribution where we have seen very weak growth. the middle of the skill distribution so these are the lower half of jobs for people with some college and the upper half of jobs for them on college workers, high-paying manufacturing jobs, construction jobs recently, middle management jobs, and that doesn't mean if you look at that middle that there isn't going to be a new middle but it's hard to recreate the jobs that in the 1970's and 80's were middle class jobs is unlikely to be a good strategy. the training is going to need to grow in the sectors, the different types of health technicians, the parks of manufacturing that still have

important jobs. almost all of these little skilled jobs require post secondary training. serious vocational as well as serious general skills, and there certainly is a vision of a new broad middle class, but it's not going to look like 1970's and 80's manufacturing jobs. there will be a strong manufacturing sector but it's not going to have employment levels. it's going to look more like kraft individual sort of smaller businesses working on teams giving people a set of skills where employers are looking for things and where there's a potential for growing and moving across jobs can be very important. this just shows you a highlight that these trends, the middle part of occupations continued declining even in the great recession. so what can we do? what have been the lessons? kuran will lead it to the leading experts in the rest of the presentation to go into

details but there are several lessons that we've learned from several decades of evaluating the training programs. seriously using their rigorous random assignment experiments when possible, and a strong on experimental methods when possible. the first is that programs that integrate what employers are naturally looking for and seeing in the needs going forward that have serious training and that sort of try to confine that seem to be more promising. the programs that provide are not driven by guidance from what employers are looking for. they have a very general set of skills without a lot of guidance in the labor market, and we are increasingly seeing this as we are evaluating different types of training programs that certain ones seem to be showing up with persistent large games in particular one that i've looked a fair amount about is what was known as the sector employment initiative evaluated

by public-private ventures in the recent evaluation, and these programs basically have an employer involvement, they are examples of these are working in information technology, things like becoming the help desk person for a lot of corporations there's a wonderful organization in the bronx that i visited that is first-rate training for people to get an i.t. whether it is to become a microsoft certified or apple certified these programs combine finding what are shortages that employers are looking for that are reasonable and maybe six months or a year of training could get you up to entry level jobs with some growth. they provide not only training, but the work in placement following up with their workers and in developing jobs and finding out what is the curriculum that employers are finding for example traditional desktops are declining living

into mobile becomes important in giving the workers the skills to continue, with life skills training to know how to go into an interview in other areas, so integrated programs linking employers and organizations and community colleges often have seen in the employment initiative we are seeing 15, 20, 25% earnings for a couple years. they've been working in the health care jobs to have a number of different programs in a wide range of community groups in texas and san antonio and milwaukee and manufacturing training so that is one best practice model. they are doing a good job of evaluating the longer-term books of the number of the employment issues. so the mixture of programs with serious training and in every media racing to be a promising

direction. we see long-term gains again have a mixture of context of training in the workplace even if it's not that you intend to do exactly that job. the other remarkable one is the career academy evaluation started in the 90's and continuing over 50 years by drmc with academic work with part of the day part of the week being spent income textual learning with an employer whether working with the help technician and allowed come at a manufacturing point getting the sense what you are learning in school has real value in the workplace it generates returns not necessarily if you work in the health lab and hospital lab becoming a technician and becoming a technician what you're seeing in school and in the workplace and getting you a set of certified skills even eight or ten years of receiving 50 or 20% in particular young

men from disadvantaged backgrounds in the combines real training with a link to employers and the sense of what are things that are growing. >> there is a evidence of the job corps at least for several horizons and moving people from very disadvantaged backgrounds into a strong intensive program residential environment can greatly affect things and reduce their involvement in crime and at least for three years or so substantial effects in the labor market outcome in the intensive program with a lot of integrity aspects. the interesting said the devaluations that i see tells us that there's a very important role for training and education and not just other sets of social services is the contrast for one evaluation i've been involved in which is run as the moving to opportunity and

another one is the jobs plus done. essentially, these are long-term evaluations of the random assignment experiments and moving to the opportunity is a long-term experiment to look at if you can change people's neighborhood in fireman's and get people out of the poorest areas disadvantaged families into the more middle class neighborhoods with stronger job availability can you affect their labor market outcomes and the outcomes by getting them closer to where the jobs are in getting them social connections but not doing anything directly to change the training and the skills saying if they are in that area they will then find them and media of their kids are a slightly different group of peers lady will get a better education. it turns out moving to opportunity is a great social policy for improving people's health and improving people's safety, raising the wellbeing, getting people out of the most dangerous high poverty areas have huge social benefits, but it is not a ways -- it does not overcome their generational lack

of skills, lack of connection in the market without something directly added on. no economic impact from a huge social and health impacts but even huge changes for 15 years in the environment without better schools, without better connections to sort of trend in education. you need that in the. jobs plus on the other hand worked with people in the housing units, changed the financial incentive for getting a job in the tax rate and provide training in eight and ten years out it didn't have the health and social effects of getting people safe but it actually started moving people out of poverty and in the long run what we are learning is tremendous changes in the environment matter for kids health and giving them the ability to thrive but without improving their parents skills and improving their education and job opportunities treacly, not just -- it's going to be very tough, so whenever you think about family structure, neighborhood, other sources of social problems, the education and the training should be

central if we are going to affect disadvantage american's problems. what i want to conclude is the one other area where i think i can say something that maybe a little different than you will hear from the detailed evaluations which is we have moved in recent decades it started in the clinton administration with a number of moves to set up the one-stop centers of the workforce investment act away from a sort of a government monopoly version to the training center and there were basically told this is the training program you go into to one that is much more driven by individual choice. with its individual training accounts we try to come up with a plan and a market of different providers and a voucher programs. in some level that has many wonderful properties of allowing people to have choice information if you have well-informed actors operating repeatedly in this market and a

good information about what's going on. it has a lot of potential to operate well and not just of the poorly functioned monopoly. on the other hand, if you have people that have in the same way medical system having choice may not always work that great if you have no clue what you're doing not everyone goes out every weekend abies a job-training program. losing your job is a pretty stressful activity doesn't put you in the best sense for being the best shot for in the world having long-term disadvantage because you don't have the connections it doesn't meet you there are a lot of people that can make profits providing what made not be the best training program in the world they could get short-term results and in many cases we have evaluated the government training programs even with private providers on the short term targets so what we are going to need to do as we move in this direction with a lot of potential was to be realistic about the market's provide and work on

experimenting with how to make the market work better and there are a number of interesting cases. one, the work advancement support center evaluation working on integrating different social services in the one-stop centers and it's showing a little bit when you combine that with serious inflammation that tends to training some impacts of earnings and something we are going to hear later on how you can try to improve the structure of the intermediaries in the individual training account with more structured, and i think we are learning that having the market trunnion to be more paternalistic in getting people guidance rather than just saying here's the information about and make a choice may be important in making these markets work, trying to help them, and the other mechanism i want to talk about, we need to provide better information, there is a lot of evidence now from the randomized trials whether it is school choice or choosing a medicare

part b prescription drug plan, just throwing people out in the market with hundreds of alternatives and not very easy information about which one to take is a recipe for just picking the things that advertise the first one on bill list. giving people better user friendly information and guidance doing it can have a bigger impact. we've seen that in the school choice evaluations and medical health plans places and we are starting to see that in the evaluations in job training. the other place we can go is trying to create a market for intermediaries themselves. right now we have a lot of profit opportunities in providing the training programs. we have a lot of government based intermediaries that don't have a lot of financial incentives to do well to the and you could imagine randomly assigning people who show up in to the one-stop center that have the need for training and employment services to the providers to could be

nonprofits, they could be for profit, and paying them basically on the basis of not providing the training services but hooking up people with services with its employment training, a wage subsidy and paying them on the multiple year outcomes of moving in the jobs increasing earnings, and this is not just a pipe dream setting up the market for the intermediaries, it is a number of states experimenting with this welfare to work and we have evidence that can work a. a number of european companies we think of as being behind. in france the dee-tal-ya risch and i told you about using private providers and long-term incentives to get them to create these. germany has done similar things. so, on a am very skeptical of having a market where we using our traditional government sort of ways of evaluating programs on the short term incentives and targets. i think we need to sort of create a better market and

financial incentives for the intermediaries to experiment and find the best training program. and the one final piece i just want to put in is one missing piece as we think about going forward, and this is where i want to conclude we don't have a lot of evidence but there is logic even the best training programs in the world and the reemployment services all been sort of getting your resume isn't going to make up for the huge early losses in the permanent long one job where you have specific sort of capital things. right now we have a system that pays your money to search for the job and then a sort of runs out if you find a job in the unemployment insurance we sort of help you get skills. but for many workers, even with, you know, improved skills there are many years in which the income is going to be very far below. and there is also very important problem which called retrospective rate of

unemployment. even as the economy improves, a lot of people look back at their previous job and the changing economy command of their identity in view of themselves is an income they used to have in their former whether it was a steel jobs or construction job, and trying to reduce the sticker price shock of taking a new job with training opportunities and moving into it and some of the losing ability to pay your mortgage by using part of our social insurance, and not just paying people while they are out of work but supplementing their income, something called wage loss insurance ought to be seriously on the table. at least for the older workers who we don't think training programs are going to make whole committee and we have a huge overhang. we could have done a little bit of experimenting in a very difficult to get assistance, but i think that is an important area. we don't have a lot of evidence on its effectiveness, but the logic of this ecology of job loss, the persistence of the earnings lost suggested thinking about a social safety net going

forward using things in the same way we use the income tax credit to supplement the workers rather than just, you know, paying people on the transfer payments to be out of work, thinking about things that help people that have been dislocated and paid into the social insurance system i think should be an important item on the table. >> thanks very much. now over to harry. >> thank you very much. first of all, thanks to kevin and steve and the american enterprise institute for organizing today's event and for including me. well, larry katz has done his usual excellent job and amount of information packed into 20, 25 minutes, outlining the major challenges the the u.s. labor market faces. it is a daunting list of challenges. certainly for the short and medium-term. and the long term as well. and then outlining in the sort of employment and training

universe what seems to work and what we know based on research evidence and there is little for me to disagree with any of that. so, what i want to do is make one set of general comments about the market analysis. what does it look like calling for word i think has implications for what we do on the work force side and then make policy comments. i'm going to focus a little less on the employment training programs funded by the department of labor read and focus a little bit more on the higher ed a community college which i think is becoming more important player in this whole world, and what problems as well. so come on the lieberman it is, course i agree completely with leary that we have a large jobs deficit in the united states and the degree to be true for some time. that is the biggest chunk of the increase of unemployment above where it stood in 2007. a shortage of the aggregate demand.

however as larry e. and steve pointed out the aggregate demand is not you're only determinant of the job creation and job growth. if you compare with the cycle to the 1990's to the business cycle of the last decade the 2000, 2007 cycle the labor market and job creation were weaker at every stage for every percentage point of gdp growth job creation was weaker in that decade and we have the sense that is still going on among other forces were causing that from the aggregate demand they might be in peeving the speed of the recovery and they might be there in a big way when we get out of the aggregate demand problem may be by the end of the decade or so. i don't think they have a good handle on those big differences. we believe it has something to do with technology and the globalization of the fact that effective work force in the world has may be doubled and

magnitude of china and india and plus the technology making it more effectively available in the u.s.. we don't know if it is clinton last. none of us saw the 90's boom coming so we don't know what look like the next decade. some of us will pessimistic but i want to temper that with a different comment really have a hunch but not a lot of data. i have a hunch that there is a chunk of employers who are on the margin when it comes to job creation. they may create jobs for the main not create jobs at any point in time and certainly today and there are several margins. if there's a job creation that's the question of how many jobs and with the mix of the jobs is going to be and what is and the the organization of the work place that generates high yen or low-end jobs and some of the middle skilled jobs that remain important in the labor market even though the change.

they have to decide where they want these jobs to be created with riggins in the u.s. or overseas and which global vehicle local market makes sense for them so a lot of margins they operate on and fred factors will affect those decisions but one factor that is relevant to the conversation is the quality of the skills and indeed the quality of the educational work force system and creating those skills. i have one anecdote case study. it was a front-page article in "the washington post" a couple of days ago. the seamen's corporation built a plant for gas turbine engines last year in north carolina to employ some 900 workers will come close to 900 workers and i've heard of besio to look all over the world because of plant it -- veldt it anywhere and the baltic in carolina. they wouldn't build it until they made a deal with the university of north carolina branches to generate a steady stream of trained engineers and skilled technicians and when

that was in place they built the plant. i think there might be many employers, i don't know how many. it's hard to quantify the margin like this if the had more confidence in the ability of the work force system to create sculptures and workers maybe they would have invested more in the middle skilled jobs that are so important to larry talked about. if you compare american and west german players from a german employers have more confidence that non-college graduates have strong technical skills, strong analytical skills therefore they might create a different mix of jobs so job creation both the quantity of jobs created and the quality of jobs and this doesn't take away from the argument we have a can see a problem. that's also true that job creation on the quality and quantity, quality is partly interdependent in the skills of american workers and economists to believe supply and demand interact with each other in the market but that is an important

piece i think when we talk about the jobs that are and what the interdependence looks like and what it will take to have great confidence in the skulls of the workers going forward. where do we switched to talk of the world of education and training and let me take a step back. larry talked about specific model programs. let's look at what those systems if you can even call them that look like in the u.s.. we focus all lot on the the part of labor funded training programs. the primary tool for that right now is the investment act and for that it was seta in the 80's and 90's. that's a lot less important. i think it's important to maintain it simply because it is shrunken to a tiny shell of its former self. if you compare the funding around 19 eda for the title one services which are the important

streams for the metal workers and dislocated u.s. workers based on the labor department numbers i've seen in real terms the funding has shrunk by about 75% and relative to gdp it's shrunk by 90%. i don't think the evidence -- we don't have a lot of evidence to date. we have some on experimental evidence to get experimental evidence that i've seen doesn't justify 90% cuts in programs. of course there are other programs in the report that we see every four or five years on the 46 or 47 programs. you have all of them together and that comes to about $18 billion that is about .1% of gdp relative to the other industrial countries that is a very small amount to spend on what we call the active labor market programs. so, and most of those other programs are very small and target very specific populations. the inference that we have all of this overlapping list of

expenditure and think is actually not accurate when we look carefully at those programs but there's not a lot of their right now. that doesn't mean we haven't been spending public money on the job training because while the labor department perkins has been shrinking, higher education and community colleges are growing quite dramatically both publicly and private expenditures on community colleges and in fact the community college has become the effective job training in the united states and the magnitude twerps the efforts. if you look at the labor market analysis that larry had. those are the skills that they are working for and that they compensate all the lee brard, so it makes sense that we focus a lot more on how your head and not on the traditional forms of job training. but there are some problems here, too. in the united states we spend a lot of people to call agenda very large fraction of them

don't finish anything. they don't emerge with any of the credentials even a certificate that does get rewarded in the labor market. and that is especially true for the disadvantaged population is that larry talked about. people with pell grants and the adult workers that have made in this located but might be working part time the rates are all very low and that identifies a lot of the ways of resources in that system. even when they do manage to complete the credential that is often not in the area above three words are very strong. in the degree that you are talking about a lot of people don't end up for various reasons in the areas where there is strong labor market rewards. a lot of different reasons for that. the lack of good preparation coming out and other things. i want to argue that part of the palm is a disconnect between the labor market services funded by

the ll and the higher education system service funded by the the part of education and at state and local level. there's a disconnect between the two. in washington we call them decile systems don't interact very well with each other. there is a lot of evidence in that non-completion or the wrong completion. most students go to community college and get no career counseling whatsoever and operate with very little labor market information on what is out there and what is reworded. maybe they wouldn't change the tuition so much but in some cases we would. the institutions don't have a great incentive to be responsive to the labor market. during the period phone line and attend a lot of the displaced workers in the community college thing, the jobs of the health care system and the health technology. you heard and it does all of the country people were getting into the class and they would be filled if you oversubscribed them so you talk to the community college administrators

and they say why don't you expand this class is. we know that the economy still demands that one. and a lot of them are very honest and they say we can't afford to do it. we get the same subsidy from the state no matter what people enrolled in. the same subsidy no matter what the condition of the courses are expensive. the instructors of all expensive, they could find is more expensive, they provide that kind of vocational training for those middle school jobs, so the incentives are not often there for the institutions to respond and the employers are just skeptical about all of this. rightly or wrongly have a great deal of skepticism about the public work force system and the public education system, so i think at this estimate will not just the individual we of the work force system where those two sides are working better with each other and both are more responsive for the labor market and there's ways of accomplishing that. we saw a few ideas and i think my time will be just about up.

so, how would you create an education work for system to gather more responsive to the konar? first of all the things we need to return to the high quality career and technical the education in both high schools and community colleges. larry talked about the career academies' which is a terrific model and the evidence is very, very strong. there are other good models to like the different his ship models and things like that. we are not even talking about but not even close which did attract people away. we are talking of high quality care education that those people for post secondary but also for the labor arquette as well and we should be talking more of how to improve the quality of the education to be the second coming mediation is a disaster we send a lot of people to college who are not well prepared so stick them in these classes and the have to pass algebra one before they can get to the real stuff to carry out. but there or not it is required

on the job they want to do they still have to pass it and millions of people get stuck in the remedial classes and the never emerged from that. i call them promising models of what works in this area. one of them is the model in the state of washington. one of them is the bridge program at the la guardia college in new york it's actually integrated even with the job training or labor market information and instruction on the different kinds of jobs larry talked about context of learning and i'd think it is a strong record of providing that kind of context motivates the workers and anyone to focus on what they really want to become so the remediation can be improved in the labor market. sir, people go to the community college and need some kind of labor market services of the type often funded by rea. vast majority of people go to

college and never set foot in the once office suite 3,000 offices around the country. the scene to provide a lot of the services in the council to be cost-effective and yet most students in the community college system never get the council the need to get it one way or the other. the need the co location of the offices. somehow the services have to be provided and there is the important role. they need to be based on the labor market data. the quality of the labor market data either the real time or the recent drop market data at a recent level was getting much better and we can incorporate that into the counseling people get. we need to make the institutions more responsive and to make some how these funding streams a little more responsive. >> i think they've written about and performance measures are poorly designed they don't often lead to the behavior once. people start screaming and lower

their standards. nevertheless this is something we need to think about. we need to engage employers more with community colleges and these efforts. the programs that are promising and involve that kind of provider and employer interaction. the good news is that in the past decade's 30 some states try to move in that direction to make the work force systems more sector role of nature and in fact the partnerships between the community colleges and the industry associations with doing all that. some of that is actually good news to a couple of quick caveat and then i'm done. it's hard to but i'm talking about. this doesn't get done making this kind of systemic institutional change it takes a lot of time so to identify the mize small models like jttf and some of the others replicating them on a large scale was hard to do with what works and what doesn't you highlighted in the 1990's as a great example of a sort of sectorial replication effort as a failure by most

people. it's hard to take those models and nurture them and build systems are not them. second there is a tension between the general and specific training. leary and i both argue is targeting the training to growing sectors and occupations is generally a good idea but you can go too far in that direction. in the dynamic world where the labor demand is today may not be the leader demand of tomorrow and people need a body of general skills but how you manage that can take years to set up partnerships. that is how we set them up and it might have moved on to something else. we have to worry about creating a system that reflects to meet that kind of dynamism and one size doesn't fit all. not everybody is going to make it in a model programs that larry out light and not devotees into a community college and it's important to have the prevoyance like rea funding other kinds of training and other services for the people in the community colleges and people with more labor market efficiencies and barriers that need a more intensive limited kind of training.

so, that is my view of some of the challenges that we face in this area coming and i assure the panelists coming up will have all the answers on that. thank you very much. >> before i open it up i have a couple questions for you. first these are meant to be kind of satellite questions because of the subsequent panels will be digging into the details more. you mentioned a lot of experiments that seem to of been pretty effective. i wonder if you can describe where the experiments come from. we have a system of designing experiments to run that makes sense or are they all kind of one of that really happened and to we think about building a structure of experimentation so that we do a lot more experiments or are we just fine with all the ones we need to and we know which things work and we should just start building those programs? >> do you want to take a shot? >> i didn't hear that much because we are going to talk

about that in a little bit. but it is a mixture. some of it is good policy making by people in the department of labor and at hhs and hafed and wanting new things as well as ongoing programs to have a rigorous evaluation of what is working. some of them are one of foundations that have an idea in its head and fonds and organization by mdrc or who mathematica that we haven't been systematics is sometimes it comes in the legislation. as we've done a lot of welfare work program quite important because in fact, in the family support act and the late 1980's, senator daniel patrick moynihan put in the the secretary of the hhs could give the labor experiment to see basically evaluated them using the random assignments, so we have done this in the legislation. the moving opportunity program that i did was actually an

outcome of the drought making a rights of 1992 when the congress and the urbanville put in a small amount of money for the record as the dalia regions of programs to help the inner city youth, but it's tended to be more of the haphazard basis when a certain issue comes up like a riot or specific reform and we would be much better off in the department of labor tried this by having an office of sorts of evaluating programs trying to systematically do this, a certain share of the budget goes in to rebut what i worry in the current budget environment and absolutely haven't done all the experiments we need to do, things like wage insurance we haven't experimented with exactly how to replicate some of these employment programs we are just starting to look at. it ought to be a part of the ongoing systems the we ration access to programs of the time which sets you up. many states have a ton of education because of all of this tree all of our knowledge of the

charter schools come from the knowledge the smart states and school districts set up things that saved it is over subscribed you have to use the lottery, and then there's actually interesting work in education going on, for example, you take the lessons. we have 100 charter school evaluations going on in new york that have gone on in boston and places. what if you look at the aspect of charter schools that are successful versus not worth the job training programs that are successful or not and then design a new intervention of the sample that uses those elements to see if it replicates. so what we need is a system that says whether their specific things work and then use it essentially to but because the mechanism experiments to actually understand. all of those were having one great person who decided in the east to do a bunch of free employment bonus and insurance and job search experiments. when i came into the planned demonstration in 1993, those

experiments have been done in the ronald reagan administration, but they haven't gone anywhere. we actually have a great interest and needed a funding stream to convince the congressional budget office to expend the unemployment insurance and the recession's end needed to buy some votes and use the evidence from these random experiments to actually put in the changes a lot and the job search assistance so i think it shouldn't be so haphazard. we should systematic evaluation spot in the programs and setting up things like intermediaries that are randomly assigned to have the response of the set you up exactly for learning about what is working and what is not.

am i all day in washington,

d.c.. members from both chambers return today after a five week break summer recess. the senate is going to dabble in just a couple minutes and take up the judicial nomination today at 5 p.m. eastern. that is in the southern district of iowa and a vote on that nomination is scheduled for 5:30 today. later this week we could see the veteran's job programs to get up in the senate and watch the senate life kuran c-span2. the house also back in today. several bills on the calendar and put in legislation to deal with more deutsch and flood insurance. you can watch the house starting in just a minute as well on our companion network, c-span. let us know what you think the congress should be working on as the kick return for these next two weeks before the next break. you can weigh in on the facebook page facebook.com/cspan join the conversation and may get some of your comments on the air today.

the presiding officer: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. eternal god, your presence fills us with reverential awe, for we find delight in your commands. even in darkness, your light dawns for those who love you. and so lord, as we begin the

next phase of the work of the senate, give us greater confidence in the power of your providential purposes. remind our lawmakers that the hearts of governmental leaders are in your hands, yielding to the wisdom of your sovereign will. help us, lord, to get to know you and love you so we can serve you as we should. we pray in your mighty name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible,

with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c., september 10, 2012. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable richard blumenthal, a senator from the state of connecticut, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: mr. president, i welcome everyone back, staff, of course, and the presiding officer. i hope you all had a restful and productive one, and i look forward to this work period which will be very short and compact, and i hope we can accomplish a few things. mr. president, i want to take just a minute and talk about congressman ryan's math,

polarized math, his arithmetic. it is very interesting. he said he ran a marathon and a marathon is 22 miles long. being questioned by the press he said he ran that in about two hours and 15 minutes. that's pretty fast. i'd like to take a minute and apply the ryan math to my marathon times. i'll just pick one marathon time. i ran the boston marathon. and using the ryan math, my time would not have been a world's record, but within minutes -- minutes -- of a world record. i could have made the olympic team. using ryan math, i would have been superb. well, ryan math doesn't work in marathons because you know what, mr. president, you can always

check someone's math and his math doesn't work for running a marathon or anything else. the ryan math doesn't work with his budgets t. doesn't work with medicare. it doesn't work with his tax plan. it doesn't work with anything that he's suggested and opined about. no more than his little assertion that i guess he thought no one would check it out. races people run, they keep records. all my marathons, they've kept records. so as much as i would like to have the ryan math apply to my marathons, it doesn't work. mr. president, the senate is going to resume its work in a few minutes on the heels of the two conventions that we had, one in florida and one in north carolina. the republicans used their virtually fact-free convention

to showcase survival of the richest of our economic policies. democrats took a different approach. i'm sure we all had our favorites. but, mr. president, i thought congressman cleber's speech was terrific. i don't know how many got to see that. but it was great. he was up there, he was marring. it was -- he was marching and it was outstanding. then governor granholm from michigan, it was so good as she explained to everyone about jobs, about why detroit should not have gone bankrupt. i thought joe biden's speech was typical for joe biden. it was wonderful. i just admired him so much. i served with him for a quarter of a century. what a good man; he's contributed such valuable service to his country. we all saw when they were talking about his life story,

and we saw when his son introduce him, the tears coming from his eyes. the president and mrs. obama's message was very, very clear. they did so well. mr. president, in charlotte, democrats presented americans with a clear, honest assessment with the challenges we face as a nation. a concrete plan to overcome these problems that we have. but we do it together. that's why president obama has seen a significant rise in the polls since that convention and all those speeches. not just his, but all of them. even republicans' skewed rasmussen poll had him ahead by five points. we present americans with a clear choice as well. it wasn't a choice between two candidates or two parties. it was a choice between two visions: the romney vision and the vision that we certainly think was pronounced at that

convention, the obama vision. visions about america's future. the republican vision returns to the failed economic policies brought as to the great recession. it would return us to eight years of the bush wars and rumors of wars, massive debt, everything unpaid for. we don't want to go back to that. we can't go back to that. and it would further tilt the playing field in favor of those who already have every advantage. every advantage. millionaires and billionaires, they already have an advantage. we don't need to give them any more. president obama, on the other hand, presented a vision of america where every person has a shot at success. every person. an america with fairness replaces favoritism. his policies led to 30 straight months of private-sector job growth. would we like more? of course we would. i met this morning, mr. president, with harold

shineberger, general president of the firefighters. he's been working in the fields of firefighters. he started out as a firefighter. interesting, mr. president, he as a boy lived before he was old enough to be a firefighter, his father died and he actually lived in a firehouse by himself with the rest of the firefighters. that's where he got the idea that that's what he wanted to do for his life's work, and he has dedicated so much to making america a better place. but, mr. president, we've had, in our conversation with him, we're approaching a million people who have been laid off in the public sector. i'm sure it's happened in connecticut. it's happened in nevada, every place. mr. president, we thought that we had a way of solving that problem. you'll recall -- you voted, i voted, where we thought we should do this to stop the layoffs of firefighters, police officers and teachers and we would pay for it.

no more debt. we would pay for it by having .3% surtax on people making more than $1 million a year. the presiding officer will remember that. every republican voted against public employees. every republican. .3% it would have taken to take care of all of that. so i enjoyed my conversation with mr. shineberger. we lament the fact that all these public employs have been laid off -- all these public employees have been laid off and we've got to get back to where we can have the public sector where people can handle. they're so overworked. in nevada we have too few firefighters, too few police officers, teachers have been laid off. that's a shame. mr. president, we've had 30 straight months of private-sector job growth. too bad the numbers aren't more than 4.5 million, but that's where they are. we lost 8 million jobs in the

bush years. we've gained more than half of them back. we're making progress. wish we could do better; everyone acknowledges that. there's more work to be done. too many americans are still hurting. president obama has a plan to put more than a million people back to work next year. his plan will create jobs for the middle class, not just profits for the c.e.o.'s. mr. president, we all want profits for these companies. that's good. but we also want to make sure that there's a fair program out there and we do something to stop the middle class from being squeezed so hard. the c.e.o.'s, a lot of them are doing extremely well. good; i'm happy. but, mr. president, the dow is up more than 6,000 points since president obama took office. 6,000 points. meanwhile, mitt romney has failed to offer a single concrete idea to create

good-paying jobs for american workers. i watched part of an interview of congressman ryan today. it was a replay from yesterday. i think he was on abc with george stephanopoulos. all i could see was the back of stephanopoulos' head but i think that's who it was. they're going on saying they want to close these tax loopholes. so romney's been asked, ryan's been asked: what loopholes do you want to close? they will not say. it's part of their fictitious math, because see, when they start talking about how fast they run a marathon or holes they want to plug, they have to actually give facts. they refuse to do that. do they want to get rid of charitable donations? do they want to get rid of the deduction for buying a home? they will not say so. obviously why, they're afraid to. so they give you this ryan math, the romney math that just doesn't add up.

it's no surprise that governor romney has failed to offer a single proposal to create a good-paying job, but that's no surprise. after all, he belongs to the same republican party that has put partisan politics ahead of creating jobs for almost four years now. in fact, some would say six years. we've never had such obstruction in the history of the country, nothing even close, mr. president. in the six years we've had the majority here in the senate, almost six years, we have had to file cloture 380 times. there were times when in a congress you would file cloture a hand full of times. ten times. 380 times in less than six years. it's the same republican party whose leader has said his number-one goal is to defeat president obama. not create jobs for the american

people. , private sector or public sector. we've been rolling up our sleeves, working with teachers, firefighters, police, construction workers back on the jobs. construction workers. for every $1 billion we spend as a federal government for infrastructure, 47,500 high-paying jobs. and other lower-paying jobs spin off of it. these are not government jobs. we don't send a truck out that says u.s. federal government on it to do this work. this money goes to the private sector to create jobs. while we've been working to try to create jobs, republicans have been throwing up their hands, or worse, standing in the way of progress. our number-one goal was to get our economy back on track. i repeat, the republicans' number-one goal is to defeat

president obama. what a shame. but, mr. president, we're resolute in our commitment to restoring the economy. that's why we propose the veterans job corps act, a measure that fulfills our promise to the brave men and women who dedicated 11 years of their lives to making our lives safer. president obama kept his promise to end the war in iraq and wind down the war in afghanistan. the war in iraq is over. and each year about 200,000 service members join the civilian workforce. that is the way it is right now. as this new generation of veterans returns home ready to work, it's our job to make sure they have the opportunity to work, to succeed. a bill that's now before the senate, veterans job corps act, will invest in returning service members, easing the sometimes difficult transition, back to civilian life with training

programs. the measure will also offer priority hiring for veterans who want to become first responders, as we've talked already: firefighters, police officers, e.m. it's and create jobs for veterans restoring forests, parks, coasts, public lands. these are really good jobs. these are really important jobs. mr. president, we have tried this once before, and we were really struggling as a country during the great depression. we had the work progress administration, we had the civilian conservation corps. in my little town of searchlight, nevada, there are numerous projects that were developed by these individuals during the great depression. they would fix up watering holes, put in windmills, build walkways, do these things and many of them are still in existence. so i commend the senior senator

from florida, senator bill nelson, and the junior senator from montana, senator jon tester, for their work on this legislation. unfortunately, we once again face republican obstruction. i repeat, mr. president, something i said a few minutes ago. since we took control of the senate in 2006, 2007, republicans have mounted an unprecedented 380 filibusters. this is outrageous. this obstruction exceeds anything ever seen before in the senate. and this is not using yom-ryan math. these -- romney-ryan math. these are valid numbers. by comparison, in lyndon johnson's six years as majority leader, -- i could ask everyone here to take a guess as to how many filibusters he had to -- how many filibusters he had to

overcome. remember, these were the years that he was president, you had the civil rights stuff going on, all kinds of problems. everyone would fail the test. he had to overcome one filibuster. so i hope our republican colleagues will join us tomorrow as we vote to advance this measure. it's too bad we have had to have -- file cloture on moving to proceed to this bill. the heroes who fought for their country overseas shouldn't have to fight for a job once they get home. tomorrow also marks the 11th anniversary of the september 11 terrorist attacks. the date is a reminder that through more than a decade of war, the bravery and dedication of american armed forces have never wavered, and it's a reminder that our commitment to those fine young men and women should never waiver either.

mr. president, i move to proceed to calendar numbered 476, s. 3457. the presiding officer: the clerk will report. the clerk: motion to proceed to calendar numbered 476, s. 3457, a bill to require the secretary of veterans affairs to establish a veterans job corps, and for other purposes. mr. reid: mr. president, at 5:00 p.m. today, the senate will proceed to executive session to consider the nomination of stephanie marie rose to be a united states district judge for the southern district of iowa, with 30 minutes of debate equally divided and controlled. at 5:30, there will be a roll call vote on confirmation of the rose nomination. i now ask unanimous consent that there be a moment of silence at 4:55 today, 4:55 p.m. today for the 40th anniversary of the munich olympics massacre. the presiding officer: without objection. mr. reid: would the chair announce the business of the day? the presiding officer: under the previous order, the leadership time is reserved. under the previous order, senators are permitted to speak

up to ten minutes each. mr. reid: i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. kyl: mr. president. the presiding officer: the presiding officer: the senator from arizona. mr. kyl: i ask unanimous consent further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. kyl: i'd like to speak about two claims made at the recent democratic convention that believe require a rops. obviously the republican convention went first so they didn't have an opportunity to respond to everything said but there are two things that were claimed that just aren't true. the first is that republican policies caused the economic recession so that in the democrats' view electing dwof go romney would simply return to those same allegedly failed policies. second, it was said by several spokesmen on the democratic side there were new big or new ideas coming out of the republican convention, so that you might as well give president obama another four years in office. and i'd like to respond to both

of those claims. first, president obama and his supporters would like americans to believe that the so-called bush tax cuts, deficits, and deregular -- deregulation caused the great recession. those are the republican policies that got us into the mess. they say. the facts show this is not true. as james pethakukas of the american enterprise institute asks, if the 2001 and 2003 tax cuts caused the great recession, why does president obama want to keep most of them? and why did he sign a two-year extension of those tax cuts a year and a half ago? that's a good question. obama supporters also claim that huge deficits resulting from these 2001 and 2003 tax bills caused the recession, but here

are the facts, according to the congressional budget office, nonpartisan. the 2001 and 2003 tax relief has only been responsible for 16% of the swing from surplus to deficit that they had estimated. and if you look at the upper incomes relief only, that relief makes up just 4% of the swing. so it is impossible to say that the tax cuts on the rich caused the recession. the maximum that the congressional budget office can identify is potentially 4%. and it's also important to note that since the c.b.o. doesn't take into account the pro-growth effect of marginal tax rate reductions which all economists agree with, these numbers are even likely smaller than 4%.

over that same period of time, new spending -- this is the real problem -- and interest on that spending were 12 times as responsible as the upper incomee tax reductions. the real culprit is not reducing the tax rate on americans, especially those in the wealthier brackets but the new spending that the federal government engaged in. that's the cause of the deficits. and that did have an impact eventually on our ability to recover from the great recession. one other note on this, the rich people even though their tax rates were cut ended up paying a far bigger percentage of taxes after the bush tax cuts. the upper bracket eers paid according to -- earners paid according to c.b.o. in 2008 and 2009, the years for which they

have figure, the top 20% of taxpayers paid 90% of income taxes. 94% of income taxes. before the bush tax cuts, before 2001, that same top 20% paid only 81%. so the tax cuts in the upper income tax brackets resulted in an increase in the amount, total dollar amount of taxes paid by the upper-income people from 81% to 94%. so you can't even make the argument that it was less fair. if anything, the upper-income folks obviously paid a lot more, 94% of all the taxes, all of the income taxes paid. now, if deficits are the problem that the democrats are talking about, then president obama would clearly make the problem worse. as he notes and i'm noting, the

recent obama budget would add $6.4 trillion more to the federal deficit over the next decade leaving debt as a share of the economy stuck around 76% of g.d.p. versus 37% prerecession, end of quote. think about it. the obama budget leaves us with 76% debt as a share of g.d.p. as opposed to 37% before the recession. so if debt and deficits are a problem, it's far worse under president obama's budget than before. but again, it turns out that's not really what caused the great recession. nor was it the third item that has been pointed to, that's deregulation. deregulation under president bush did not cause the problem. as pethakukas writes,

glass-steagall ended in the clinton administration and studies have found no changes by the bush s.e.c. contributed to the financial crisis end of quote. glas steagall used to regulate how banks made investments. that. that law was repealed during the clinton administration. the bush s.e.c., that stands for securities and exchange commission, and there are rules changes in every administration for the s.e.c., he is making the points there is no evidence that any particular rule change in the s.e.c. had anything to do with the financial crisis. so it wasn't the tax cuts, it wasn't the deficit, and it wasn't deregulation. what did cause the recession? a.e.i.'s peter wallisson has put it this way. -- quote -- "the financial crisis was the result of government housing policy. fannie mae and freddie mac were the implementers of a

substantial portion of the government housing policy. i would noald republicans in congress tried to reform fannie anded fromy but we were opposed -- freddy but we were opposed in the house and senate including then-senator barack obama. most experts will agree that the biggest reason for the collapse that occurred after 2006 was the housing market. the sale of all of these mortgages that weren't worth the paper they were written on and when that paper was all added together, bundled together and sold in big chunks to investors, and they found out that their investment wasn't worth what they had paid for it, you had a crash. and you had several people on wall street that went bankrupt result of that crash. that's the reality. the bottom line is there is no republican policy that caused the recession. so it's bogus for the president to keep saying that governor romney would return to us the --

quote -- "same failed policies." the second claim is that there were new big republican ideas to come out of the g.o.p. convention. and i submit that that claim reveals just how radical the obama team's economic policies are. it is true that governor romney's ideas for economic recovery are not new, but they are big. in fact, his faith in the american people and the free enterprise system are a very big idea. not new, but tried and tested as the basis for creating the wealthiest nation ever on earth. capitalism and free markets have lifted the standard of living for more people around the world than any government program or any other system. planned economies compare very poorly to the prehe free enterprise system of america.

as margaret thatcher famously observed the problem with socialism is that eventually you run out of other people's money. yes, a key theme of republican convention was freedom, opportunity, and earned success. americans did build our own success. to the extent that government provided any infrastructure along the way, it was paid for by taxes that americans paid on what they earned because of their success. and yes, this is in contrast to the theme of the democratic convention that our success comes from the collectiv embodied mostly in government so the bigger the government, the better. the bottom line is this: returning to free market principles and pro-growth policies will move us forward. continued reliance on more spending, higher taxes, and bigger government will not solve

our problems. mr. president, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

mr. harkin: mr. president? the presiding officer: the senator from iowa. mr. harkin: mr. president, i ask that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. harkin: mr. president, as many of my colleagues know, i've been a strong and enthusiastic advocate of stephanie rose to serve as a district court judge in iowa's southern judicial district. i was honored to recommend to

the president that he nominate this outstanding attorney and today i encourage my colleagues to vote for her confirmation when the vote occurs later this afternoon. let me begin by first thanking senator leahy and his staff for their hard work in advancing miss rose's nomination. i also want to thank my senior colleague from iowa, senator grassley, for his invaluable support and assistance. for all the years that we have served together here in the senate -- which now goes on i think 20, 27 years now -- senator grassley and i have cooperated in a spirit of goodwill on judicial nominations in our state. i am proud that we are continuing iowa's fine tradition regarding judicial selections. i can honestly say that senator grassley has never opposed one of my selectees; i have never opposed one of his, even when there's been a different president in the white house,

depending upon the party that's in control of the congress. i think we have both been very judicious, if i might use that word, in our selection of people for the bench, i say both on behalf of senator grassley and i think myself. and so therefore we have worked together in this very close spirit of cooperation. i also want to thank senator grassley's staff, in particular jeremy parris, ted lehman, and senator grassley's chief of staff, david young, for their help and support in advancing the nomination. on my staff, i want to thank my chief of staff, brian alberg, dan goldberg, derek miller and pam smith, all who have worked very hard to make sure that we had a -- a -- a thorough interview process, a thorough vetting of the candidates and to make sure that we got to the point today where her vote will

be coming up later this afternoon. mr. president, stephanie rose possesses an abundance of the personal and professional qualities that we expect from those that we consider to take on the profound responsibilities of a federal judge. she is a superb attorney and among jurists, prosecutors and the defense bar, she has a reputation as someone who is unfailingly fair and ethical and who possesses exceptional legal ability, intellect, integrity, and judgment. as charles larson, the former united states attorney for 9 northern districthenorthern disr president george w. bush, wrote to the judiciary committee that miss rote -- quote -- "has all the requisite abilities and traits to serve all litigants of the southern district of iowa in the manner expected of a federal judge. miss rose would be a distinguished member of the judiciary." miss rose was born in topeka,

kansas, moved to mason city, iowa, when she was four. both of her parents were public school teachers. she and her husband rob have two children, kyl and missy. miss rose has two sisters, one of whom was adopted after come to the family as a foster child. one of five foster children her parents welcomed into their home. after graduating from mason city high school, miss rose earned her bachelor's degree with honors from the university of iowa in just three years. then she earned her doctoral of jurisprudence from the university of iowa college of law in just two years, graduating in the top 5% of her class. she could easily have commanded a big salary with a top law fi firm. instead she opted for public service and long hours as a federal prosecutor working to uphold the rule of law, mak makg our neighborhoods safer and advancing the cause of justice. and i might add that she served as a federal prosecutor under

district attorneys appointed both by democratic presidents and republican presidents. in 2009, the senate unanimously confirmed miss rose to become u.s. attorney in the northern district of iowa, having previously served 12 years as an assistant u.s. attorney. even before becoming u.s. attorney, she was lead counsel in 260 felony cases and made 34 oral arguments before the eighth circuit. she received a national award from the department of justice for her work in prosecuting the largest unlawful internet pharmacy case in the united states. as u.s. attorney, miss rose has helped make iowa and our nation safer, reduced violent crime and gang violence, and promoted civil rights. in addition, she has the distinction of serving on the attorney general's advisory committee. it is no surprise that the

american bar association gave miss rose a unanimous well qualified rating, the highest rating by the american bar association. finally, mr. president, i want to comment on the historic nature of her confirmation. miss rose was the first woman to be confirmed as u.s. attorney in iowa's northern district. and when confirmed later today, she will be the first woman confirmed as a u.s. court judge in iowa's southern district. miss rose is a person of truly outstanding intellect, integrity and character. she's exceptionally well qualified to serve as united states district judge for the southern district of iowa. i urge all of my colleagues to support her nomination. mr. president, i ask unanimous consent that courtney zinner and jessica cullen be granted floor privileges for the duration of today's proceedings.

the presiding officer: without objection. mr. harkin: mr. president, i yield the floor and note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

quorum call:

quorum call:

the presiding officer: the senator from georgia. a senator: is the senate in a quorum call? the presiding officer: yes, we are. mr. isakson: i ask the quorum call be vitiated. the presiding officer: without objection. mr. isakson: i ask to address the senate as if in morning

business. the presiding officer: without objection. mr. isakson: let me ask unanimous consent to introduce a seven-page eulogy that appeared in the marietta daily journal on sunday of this week and have it incorporated as a part of the record. the presiding officer: without objection. mr. isakson: the reason i want to submit the eulogy is it is a poignant yule just of many of the accomplishments of one of my very best close friends, otis brumby jr. i could read all those accomplishments if i wanted to, but there are times we are called to offer eulogies on the floor of the senate because we have to, the times we do it because it's appropriate, the times we do it for great past leaders of our state, but on rare occasions such as today we do it for someone we have tremendous respect, love and compassion. so to otis brumby jr.'s life, as daughters, his son-in-law heath and his son oaties brumby iii my love and compassion goes

out to them. and i'll return to marietta, georgia to be part of the memorial service honoring otis brumby. i thought it would be better to talk about the otis brumby that i knew rather than one the newspapers are writing about. he was to me the epitome of a journalist, a father, a friend, a husband. otis brumby jr. got his start in some ways on the floor of the united states senate because in the late 1950's, his father arranged for him to page for richard b. russell who was the master of the senate for lyndon johnson when he was leader, later vice president and finally president. otis brumby learned a lot in this chamber and on this floor and he's told me a lot about what it was like before the cameras were here in the good old days when there was automatic rawdry and friendship among members of the senate. he told me about the difficult days of the civil rights eer particularly as a son of the south what it meant to him. he came back though to georgia

after graduating from high school went to suwannee, a law student at the university of georgia, headed to his passion the law but he didn't make it. instead he made it to the marietta, georgia journal as a cub reporter. at the age of 67 he started being a floor manager for the paper, assistant publisher, offering expertise at the a young age. at 29 he came up with a unique concept. he said people would like to see their cirdz's pictures in the paper. they'd like to have stories about their sports victories. have lots of pictures, stories, but just to me, not owl the folderol that might go with it. he started neighbor newspapers and created 27 neighborhood newspapers, all 27 weeklies. so successful when gannett decided to do a national paper called "usa today" they sent a team of investigators for seven days to the mir yeta daily

journal to investigate their template, the way they public their paper. and frankly, a lot will give -- for credit to the "usa today" goes to the balil brillians of that 29-year-old reporter who later became the publisher of that newspaper. otis brumby died last week of prostate cancer and the effects of prostate cancer. he suffered for two years and that's been a tragedy. but the tragedy for all of us is he's gone because he's left a mark on our community and our state that can't be easily replaced. alalthough an affinity he never served. when called on for appointments he took them as board of education chairman for the marietta public school system. a wealthy man because of his success, otis brumby never sent his children to private schools bawrs he believed the public schools needed to be the best and sent his children there was a role model and did he and

there were superstars with dwh in academics or athletics and their father otis supported those public school systems as a leader, a mentor and a board member. to marietta, georgia, otis brumby was about everything. he was his conscience, its benefactor, and from time to time he was its protagonist would he would promote discord to come up with a right decision. i can tell us as a politician when he wrote about you and you heard you were in the paper the first thing did you was grab the newspaper. as a column he wrote called "around town" appeared every saturday morning in the newspaper, a pretty thin part of the paper but a one-page discourse on what politicians of the county were up to. and on saturday morning every politician in marietta, georgia and cob county, georgia, got their, they didn't want to see what the football score was, they wanted to see what otis brumby said about the previous

week. he was the conscience of the politicians in the community, he was the leader and benefactor of the community, he made it a much, much better place. otis was not a republican. nor was ademocrat. he was if anything a populist but he had a fiscally conservative bent to it. unlike a lot who commentator, he put his money in his mouth was. he wrote checks to politicians and the people in the united states senate. there wasn't a party bent to them but always a fiscally conservative bent. i will tell you in the 1970's when i inquiries ran for cofs in cobb county we didn't have republicans. i ran as a republican because i was a fiscal conservative. everybody told me i was crazy. they were right. i got beat. but otis talked about the campaign and the things he tried to do. he propped me up long enough to get a chance to stand on my own two begs legs. he would knock me down from time

to time and i deserved it but he gave us a chance, gave everybody a chance. he was one of those jiewrnltist who would comment on what you did but give you the strength to do what's right. wednesday morning i'm going to the funeral of a dear friend. i miss him already. i love he and his family and all they've done for me, all they've done for my community and all they've done more my country. so as one of those rare times when we come to the floor to eulogize, this time for me it's personal. we've lost a son, a journalist, we have lost a patriot and i've lost a best friend. may god bless otis brumby and his family and his grandchildren and our community. i yield back my time. the presiding officer: the senator from north dakota. mr. conrad: i've been listening to our colleague, the senator from georgia who is one of the

real gentlemen of this body and i listened to his warm words about his friend who has passed and, you know, sometimes what people say about others is a better reflection on them than on who they're describing and in many ways i thought that about what senator isakson was just saying because what he just said about his friend, any one of us here in the senate could say about him. because he is a gentleman. and i very much was moved by the words of my friend, and we thank you for all you do to make this a better place. mr. president, i've come here on different business to talk about the budget circumstance that we're in, to try to answer the question that we have heard asked in recent days, are we better off now than we were four

years ago. i believe the answer to that question is very clear. but i think to answer the question we have to take ourselves back four years and remember the conditions that we faced then. i will never forget as long as i live being called to an urgent meeting in the capitol late one evening in september of 2008. i was the last one to arrive, and there were assembled the leaders, republican and democrat of the house and the senate, the chairman of the federal reserve and the secretary of the treasury of the bush administration. and the secretary of the treasury and the chairman of the federal reserve quickly told us that they were going to take over the giant insurer a.i.g. the next morning. they weren't there to ask our approval or seek our support. they were there to tell us what they were doing. and they told us that if they did not do it, they believed we

would have a financial collapse within days. mr. president, this was september of 2008. barack obama was not the president of the united states. george w. bush was the president of the united states. and we were on the brink of financial collapse, according to the description of his own secretary of the treasury. mr. president, let's remember what the economy was doing in the fourth quarter of 2008. the economy was shrinking at a rate of over 8%. in fact, it was shrinking at a rate of almost 9%. in the first month of 2009 -- the last month of the bush administration -- we lost 800,000 jobs in one month. so when people say, "are we better off today than we were then?" well, just as a factual matter,

there really can be no dispute. we are dramatically better off today than we were four years ago. four years ago, we were on the brink of financial collapse. four years ago, the economy was shrinking at a rate of almost 9% and we were losing 800,000 jobs a month. now, those are facts. they cannot be disputed. today we are growing -- not as fast as we'd like. jobs are being created -- not as fast as we would like. but that is a dramatic improvement over four years ago. and let's remember, the housing market was in crisis. home building and sales were plummeting. there were record foreclosures. the financial market crisis threatened global economic collapse. that was four years ago. anybody that wonders can go back and read the headlines

themselves because, mr. president, those were grim days. i also remember like it was yesterday being part of the group that was given a responsibility to negotiate the tarp, the troubled asset relief program. and i remember being in this complex late on a saturday nig night, again with the secretary of the treasury of the bush administration, and his telling us if we did not come up with a solution by 5:00 sunday night, the asian markets would open and they would collapse and our markets would open the next day and they would collapse. so when people ask the question, "are we better off today than we were four years ago?" as a factual matter, there really is

no question. none. we are dramatically better off. mr. president, the other thing we should keep in mind is what happens after a severe financial crisis like the one we faced four years ago. dr. carmen reinhart from the peter peterson institute for international economics, and her husband, dr. vincent reinhart of the american enterprise institute, which, by the way, is a pretty conservative place, have done an analysis and here's what they've found. after a severe financial crisis like the one we suffered four years ago, economic recoveries are shallower and take much longer. here is the quote from their analysis. "real per capita g.d.p. growth rates are significantly lower during the decade following severe financial crises. in the ten-year window following severe financial crises, unemployment rates are significantly higher than in the

decade that preceded the crisis." mr. president, that's what we had in 2008. and again, barack obama was not the president of the united states. george w. bush was president of the united states and we had a severe financial crisis. we were on the brink of financial collapse. it takes a long time to dig out from a disaster of that magnitude. mr. president, two of the most distinguished economists in the country, one of whom, by the way, advised john mccain in his most recent presidential race, the other, who is deputy chairman of the federal reserve, did an analysis of what would have happened without the federal response, what would have happened in terms of jobs, and here's what they've found. with the federal response, we got 8 million jobs that we would not have had otherwise. in other words, if there had

been no federal response, the red line is what would have happened to jobs. the green line is what happened as a result of federal action. eight million fewer jobs lost than if there had been no federal response. again, this is work that was done by allen blinder, former vice chairman of the federal reserve, and mark zandi, who was one of the economic advisors to john mccain in the last presidential race. mr. president, so when we go back to this question, "are we better off now than we were four years ago?" i think the answer is unequivocally yes, we are dramatically better off than we were four years ago. now, if you're one of the people who is still unemployed, you don't feel better off. i understand that. that's dreadful. that is painful.

and it's painful in every way. not only does it hurt in the pocketbook, but much more than that, it hurts the way you feel about yourself. it hurts the way you feel about your role in your family. and so we've got lots of work to do. but if we're going to be honest with people about comparing where we are today and where we were four years ago, there really can be no serious question about the answer to that question. here the economy in fourth quarter of 2008 -- that's the last quarter of the bush administration -- was shrinking at a rate of almost 9%. now the economy is growing at a rate of 1.7% for the most recent quarter. now, is that good? no. would we like it to be stronger? absolutely. but is this better than almost any other developed country in the world? yes.

all of europe is in recession. they're actually -- their economies are shrinking, all of europe. japan is not doing as well as we are doing. so when we look around the world and compare ourselves, you know, the united states by comparison is doing remarkably well given the depth of the financial crisis that we experienced. mr. president, not only is it true in economic growth, it is true in terms of private-sector jobs. again, the last full month -- the last month of the bush administration, this economy lost over 800,000 jobs in one month. the most recent month in the united states, we gained 103,000 jobs. that is a turnaround of over 900,000 jobs in a month. that is a dramatic improvement.

mr. president, and if we look at the stock market, we can answer that question as well. are we better off now than we were four years ago? well, this shows the stock market in march of 2009 hit its low of 6,547, the low during this period. look where it is today -- more than double what it was four years ago. so again, if we're seriously asking the question, are we better off than we were four years ago, in terms of economic growth, yes; in terms of job creation, yes; in terms of the stock market, yes; in terms of economic performance, yes. mr. president, i've also heard my colleagues on the other side say at the convention that just concluded there's been no budget here for three years. well, there's been no budget

resolution, but there is a budget law that was passed called the budget ctrol act. and a law is much stronger than any resolution. a resolution is purely a congressional document, never goes to the president for his signature. a law obviously has to go to the president for his signature, so when they say there's been no budget passed, there's been no budget resolution passed, but instead congress passed the budget control act, and look what it said in the budget control act. look at what it said. "the aloe educations, aggregates and spending levels set in subsection (b) (1) shall apply in the senate in the same manner as for a concurrent resolution on the budget for fiscal year 2012." that same language is repeated in the next paragraph.

"the ahe although indications, adegree gaults and levels set in subsection nb)(2) shall apply in the the shah in the same manner as for a concurrent resolution on the budget for fiscal year 2013." i would say to you, a budget is a limitation on spending. the budget control act contained very clear limitations on spending for 2012 and 2013. so when our friends say there's been no budget passed by this body, oh, yes there has. there is a been a budget passed for 2012, one for 2013. instead of a resolution, it was done in a law. now, what we don't have is a long-term plan, a ten-year plan. that's what we really need. but, you know, it's pretty clear, both sides are not ready

yet -- and perhaps won't be until we've had this election -- to sit down and agree to the kind of ten-year plan that we so desperately need. mr. president, the budget control act represented the largest deficit-reduction package in the history of the united states. how can that be? well, because it contained $900 billion in discretionary savings over ten years, and it included the so-called sequester that we hear so much about that added another $1.2 trillion of spending cuts over the next ten years. for a total of $2.1 trillion in spending cuts. that is the largest deficit-reduction package that we've ever passed. so again when people say, there's no budget, there's been no action taken, it's not accurate.

it's not accurate. the budget control act operates in the same way as a budget resolution, and it is a law -- not a resolution, that's purely a congressional document that never goes to the president. the congressional budget control act went to the president for his signature and cut $1.2 trillion in spending. now, people might not like it. a lot of things i don't like about it, certainly the sequester. the fact is, this is now law. and it cuts $2.1 trillion. that still leaves us with the problem of beer borrowing 40 cents of every -- of we're borrowing 40 cents of every dollar we spend. so we've got to add a package on top of the budget control act. we've got to do movement i would prefer strongly to do another at least $3 trillion. i had a he like it have -- i tried to convince the

bowles-simpson commission to do a package of $5 trillion of deficit reduction. actually, i tried to persuade them to do a package of $5.6 trillion of deficit reduction, because we could balance the budget if we do a package that large. and, you know, people who are on the commission will tell you, i tried repeatedly to convince my colleagues to go big, let's do a package that will really balance the budget. and we could do it. it is not that hard. you know, i think people get it in their head that this is some impossible task. i told them, let's talk about a 6% solution. if we would do 6% more re revene than current law provides and 6% less spending, we'd balance the budget. now, i actually would argue for more waiting on the spending cut side of the ledger than on the revenue side. but i do this for illustrative purposes to indicate we can't don't 6%?

come on. we can't do 6%? sure we can. the occupant of the chair, the governor of west virginia in his previous life and politics, i tell you, he didn't have any trouble making tough decisions, and i'll bet you, you reduced spending a lot more than 6%. and, you know, you survived. you're here. you're respected. you know, we can do this. hey, we've done much tougher things than this in the past. mr. president, i just hope that colleagues think about this carefully. this claret i chart is so import because it looks at the spending and revenue lines of the federal government going back to 1950. 60 years of our economic history on one little chart. the red line is the spending line. the green line is the revenue

line. and look what it shows. we got to in 2010 an all-time high in spending for the last 60 years. taking out the effect of inflation so we've got an even steven comparison, and we were at a 60-year high in spending, not surprisings given the dimensions of the financial crisis that we faced. but at the same time we were at a 60-year low in revenue. you got record spending and record low revenue, you got record deficits and record additions to the debt and that's exactly what was happening to us. now, we've seen some improvement in the last few years. spend something down as a share of g.d.p. ref mew is up arrevenue is up a. we still have a big chasm. in the midst of all this comes

representative ryan and his pl plan. i would say to those who might be attracted to his plan, be careful what you wish for. be careful what you wish for. because, first of all, the ryan plan does not balance the budget -- if ever, if ever -- until 2 2040. and it only balances in 2040 because of certain assumptions he told the congressional budget office to make about his plan and the revenue contained in it. i personally don't think it ever balances. i don't believe it ever balances. and it is absolutely an unbalanced plan. all of the deficit reduction is on the spending side. he actually digs the revenue hole much deeper, extends all the bush era tax cuts and then adds hundreds of billions of

dollars of more tax cuts primarily to the most fortunate among us. $1 trillion for the wealthiest. he gives those with average income of over $1 million an average tax cut of $265,000 a year. somebody sitting out there saying, how is that possible? a person earning $1 million a year probably doesn't pay much more than $265,000. how can they, on average be getting a $265,000 tax cut? this is the average for everybody over $1 million. so this includes people making $1 billion a year. and there are a fortunate few who make $1 billion a year. so if you take everybody over $1 million and you average the tax cut they get under the ryan plan, it is over $265,000 a year. he has $2.9 trillion in health care cuts. so, first of all, he spend

extends all the bush-era tax cuts and then adds hundreds of billions of tax cuts for those who are the most fortunate and to make up for it, he has $2.9 trillion in health care cuts -- not million, not billion ... trillion. he shifts medicare to vouchers and he block grants medicaid and cuts medicaid drastically. mr. president, who benefits from medicaid? well, low-income people, disabled people, but also a lot of middle-income people in this country benefit from medicaid because their folks are in nursing homes, and they have spent down their assets, and the only way they can stay in the nursing home is that medicaid picks up the tab. there are hundreds of thousands of families in america -- middle-class families -- who've benefited from medicaid because

that's what's paid the nurse being home bills for their relatives, their mom, their dad, for grandpa, their grandma. that's the truth. the ryan budget also dray matter economy cuts the safety net, increases the uninsured by more than 30 million people. going to increase the number of uninsured by 30 million. well, if you're not uninsured, why should you care? i'll tell you why you should caimplecare. because if they aren't paid for by insurance, they are going to be paid for by all the rest of us. because the hard reality of how the health care system works in america is this: if you're in a car accident, you don't have insurance, and you're taken to the hornghts you're --e hospital, you're treated. if you don't have insurance to treat it and you don't have resources to pay for it guess who pays for it? all the rest of us pay for it. that's why it's absolutely in our interest to have as many

people insured as is possible. it's not just a nice thing to do. it's a smart thing to do. because, you know, one of the things we found out, about a third of the people who don't have insurance can afford it. they can afford it. they just choose not to have it because they know if something drastic happens to them, all the rest of us are going to pay. mr. president, there's also large cuts in the ryan budget for education, for energy, for infrastructure, building roads, bridges, highways, and the rest. those things undermine the economic -- the engines of economic growth. so i don't think that's the way to go. so, we look at the ryan budget plan on revenue. here's what we find. provides $1 trillion in tax cuts for the wealthiest among you gives millionaires an average tax cut of more than $265,000. does not contribute one dime of

revenue to destruction and the revenues -- deficit reduction and the revenues reach 18.% of g.d.p. by 2022. how long does that matter? -- why does that matter? because the last five times we've balanced, the rave knew has been 19.6%, 19.%, 20.6%, so, hey, if we're going to be serious about this cat, we're going to have to cut spending, reform entitlements, also have to have to raise some revenue, hopefully not in a way that hurts economic growth because we think we've tuned found ways of doing it. but the ryan testimony plan i've got to say -- but the ryan tax plan i've got to say i don't believe adds up. first of all, he says we should reduce individual tax rates to just two -- one at 10% and one at 25%.

right now the top rate is 35%. if you reduce that rate to 25% and you have only one other rate of 10%, that package costs $2.5 trillion over the next ten years. so instead of filling in the hole, you dig the hole deeper. then you puts the top corporate rate at 25%. again, that is a significant reduction from the top corporate rate today. that costs another $1 trillion. then he repeals the alternative minimum tax. that costs another $670 billion. then he repeals all the ref levies in the health care reform. another $350 billion. then he allows the stimulus provisions to expire from the recovery act. that's another $210 billion. so before he starts filling in the hole, he's dug the hole deeper by almost $4.5 trillion.

and he says, he's going to offset all of that with individual base broadening and corporate base broadening. the problem with that is, if you do the math, you can do this, you can do this -- we're spending about $1. ^ 2 trillion a year in tax expenditures. so over ten years it is about $15 trillion. with inflation. so you could come up with this $4.5 trillion, but what would you have to do in order to do it? almost every objective observer has said you'd have to raise taxes on the middle class, because he says this is going to be somehow in the romney plan, revenue-neutral. i don't know the ryan plan ever claimed to be revenue-neutral. but if you're going to pay for

this, how are you going to do it? what if the exemptions and the exclusions, are you going to reduce the mortgage interest exemption? are you going to reduce the health care tax exclusion? because those do affect middle-class people. let's be honest. let's be straight. so there's no way that congressman ryan's plan does all the things he claims for it and not raising taxes on the middle class. when he gets to a revenue level of 18.7% and says that's an historic average, that's true. the problem with that is we've never balanced the budget going back to 1969 with that amount of revenue. the five times we've balanced since 1969 -- that's 43 years ago -- revenue's been at 19.7, 19.9, 19.8, 20.6, 19.5.

so just getting back to the historic average, i don't think it's going to be enough. if we're looking at what it has taken to actually balance the budget in our history, we can see you got to be very close to 20%. and, by the way, these levels of revenue were before the baby-boom generation. and the baby-boom generation, that's not a forecast. that's not a prediction. those people have been born. they're alive today, and they are going to be eligible for social security and medicare. and so you know, if we're going to be honest with ourselves and honest with the american people, i don't think what congressman ryan's talking about really adds up. if we look at his budget on health care, we see $2.9 trillion in health care cuts. as i indicated, he repealed health care reform.

and i hear a lot and i hear it in my state, let's repeal health care reform. why not? why not? because the congressional budget office tells us if you repeal it, you add over $1 trillion to the debt. you add over $1 trillion to the debt. and you deny coverage to 30 million people that would otherwise have it. mr. president, his plan also ends the effort to promote quality over quantity of care, reopens the prescription drug doughnut hole that raises costs to seniors by $4,200, allows insurance companies to drop coverage when you get sick. it ends the provision allowing young adults to stay on their parents' plan until the age of 26. it shifts medicare to vouchers in 2023 and includes after that

an aggressive cap on payments that most analysts have said would dramatically increase what medicare beneficiaries would have to pay for their own health care. currently medicare pays 75% of the cost. the beneficiary pays 25%. if the ryan plan were adopted, the original ryan plan, he has subsequently put out other plans, but his original plan would have stood that on its head. he would have medicare beneficiaries paying the substantial majority of the cost. instead of medicare beneficiaries paying 25%, he'd have them paying 68% of the cost. medicare beneficiaries. now, i've got a brother that's gravely ill in the hospital. medicare eligible.

i can tell you he's getting phenomenal care, very costly. i tell you it would break our family. if we had to pay 68% of the cost instead of 25%, it would break our family. and we're a middle-class family. i'm talking about the extended family. so, you know, these things have real consequences. anybody that thinks these are just, you know, political statements and they don't affect people's lives, oh yes they do. they have a profound effect on people's lives. in the ryan plan, block grants medicaid shifts the cost to seniors, children, disabled and states. mr. president, i really don't think that's the path america has in mind.

look, i like paul ryan. i agree with him that we're on an unsustainable course. i was on the bowles-simpson commission with him. but unlike him, i was one of the 11 that supported the recommendation of bowles-simpson. and of the 11 of us who did, five were democrats, five republicans and one independent; about as bipartisan as you can get. there were 18 commissioners. we had to get 14 to get the recommendations to a vote here in the congress. we got 11. that's 60% of the membership voted "yes." five democrats, five republicans, one independent. paul ryan was part bowles-simpson. he voted "no" because it wasn't just the way he wanted. you know what? it wasn't just the way i wanted.

i hated things in almost every page of that report, but as i told my staff the only thing worse than being for it would be being against it. because it would have got us back on track. it would have lowered our deficit and debt by $4 trillion, and done it with revenue and spending cuts and reform of entitlements. maybe not as much in any one of those areas as i would do, but it would have made a profound difference in the economic future of this country. perhaps the most striking thing to me in all the speeches at the republican convention was the claim by congressman ryan, the attack on president obama for supporting $716 billion in medicare savings.

why did i -- why was i so taken aback by that? because i've read congressman ryan's own budget. his budget has precisely that same level of medicare savings that he now politically attacks president barack obama for supporting. boy, you see what former president clinton said? he said that takes real brass to attack somebody for something you have done. congressman ryan, you know, i mean, when you give a speech, a measure of speech before tens of people listening and you attack the president for supporting $716 in medicare savings and you've got the exact same savings in your budget, shame on you. shame on you.

mr. president, the catholic bishops reviewed the ryan budget and here's what they said. they said it fails the moral test. these are catholic bishops of america. they got issues with the president too; i understand that. i understand that. but this is what they said about the ryan budget. they said it fails the moral test. the nation's catholic bishops reiterated their demand that the federal budget protect the poor and said the g.o.p. measure fails to meet these moral criteria. mr. president, i think they got that right. here's what a former reagan economic advisor said about the ryan budget. this is bruce bartlett, former reagan administration economic advisor. this is what he said about the ryan budget. again, this is a former

president reagan economic advisor. here's what he said about the ryan budget: distributionally, the ryan plan is a monstrosity. the rich would receive huge tax cuts while the social safety net would be shredded to pay for them. even as an opening bid to begin budget negotiations with the democrats, the ryan plan cannot be taken seriously. it is less of a wish list than a fairy tale, utterly disconnected from the real world, backed up by make-believe numbers and unreasonable assumptions. ryan's plan isn't even an act of courage. it's just pandering to the tea party. a real act of courage would have been for him to admit as all serious budget apblgts -- analysts know that revenue would have to rise 19% above g.d.p.

he's telling the truth, mr. bartlett. as painful as it is, he's telling the truth. mr. president, when we go to the question, are we better off than we were four years ago? let's remember where we were four years ago. we were on the brink of financial collapse. republican policies led the united states to the brink of financial collapse. they can't rewrite history. we know what happened. we tried their experiment. it didn't work. now, things have improved. not as much as we would like and there's much more work to be done. but i trust in the judgment of the american people. i don't think they've forgotten. i certainly haven't forgotten. i will never forget where their policies took us in the fall of

2008. we were on the brink of financial collapse. let's not repeat that failed experiment. i thank the chair and yield the floor. i notice the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

the presiding officer: the senator from new york. mrs. gillibrand: i ask unanimous consent that the quorum call be vitiated. the presiding officer: without objection. the senate will now observe a moment of silence for the 40th anniversary of the munich olympics massacre.

[the senate is observing a moment of silence] [the senate is observing a moment of silence] [the senate is observing a moment of silence] mrs. gillibrand: mr. president? the presiding officer: the senator from new york. mrs. gillibrand: i stand here today with my colleagues to observe one minute of silence on the first day of session since the passage of the 40th anniversary of the 1972 munich olympic terrorist attack which killed 11 athletes and coaches from the israeli olympic team. prior to the extraordinary

summer games in london where so many of our athletes excelled and made our country so proud, the senate passed a bipartisan resolution that i authored with senator rubio. with this resolution, which was supported by more than 30 of our colleagues, the senate called on the international olympics committee to hold a moment of silence in london to honor these 11 slain israeli olympians. it's regrettable that they chose not to. today, here in the senate, in this body, we right that wrong. the munich tragedy was an outrageous attack against innocent athletes and against the unifying spirit of the olympics. observing a moment of silence at the 2012 olympic games' opening ceremony when the world attention was focused on this symbol of international cooperation and peace, it would have sent such a powerful message of unity in our fight

against terrorism. on september 5, 1972, a palestinian terrorist group called black september broke into the munich olympic village, killed an israeli athlete and coach, and took nine other athletes and coaches hostage. a german police officer was killed and nine hostages were murdered during a rescue attempt. in observing this minute of silence, as in our resolution, we commemorate the 40th anniversary of the 1972 munich olympic terrorist attack, remembering those who lost their lives and reject and repudiate terrorism. as antithetical to the olympic goal of peaceful competition. mr. durbin: mr. president? the presiding officer: the senator from illinois. mr. durbin: i want to thank the senator from new york and

senator rubio for calling attention to this sad anniversary, the 40th anniversary of the killing of the israeli participants in the munich olympics. having just witnessed, as the senator from new york noted, the spectacular olympics that were staged in london and realizing how the olympics started as a way to transcend national differences and to create an olympic global spirit, it was especially heart breaking what happened in munich. we followed it in those early days of television. it was being reported on by some of the sports announcers who were actually at the olympics themselves, and it was hard to believe as the hostages were being taken that they would all be killed before it was over. i sincerely hope that we in the world will learn a lesson from this tragedy, a lesson that violence begets violence, that we need to bring an end to this sort of terrorist activity, stand together in that olympic global spirit. my thanks to senators gillibrand and rubio for their efforts to