>> any thoughts on the future of child advocacy? >> i was one of the people who started the children's act here in washington, d.c. i know the impact that it has, positive impact it has on child victims of crime or the decision to eliminate this funding was a difficult one. deficit issues, restoring fiscal sustainability were all the consideration. the office of justice programs as i talk to them after i spoke to you has come up with ways in which they think they can prioritize some grantmaking and

training to help in that regard. but i'm just going, i think that if we look at the budget for the next year, that given what we get from the advocacy centers and the relatively small amount that is involved, that this has to be a part of the, you know, i'm not satisfied with where we are now with what -- i think that was a mistake. >> i certainly look forward to working with you as a member of the budget committee. i think all of us to recognize that we have forced far too many of the cuts we've made in the last two years just in the narrow area of having significant negative impact on things like criminal justice, strengthening our communities, investment infrastructure, r&d, education. i look forward to finding a broader solution and a i'm grateful for your services, thank you. >> thank you. >> senator grassley.

>> [inaudible]. >> senator blumenthal. >> good morning, attorney general holder. thank you for being a. thank you for your leadership of the department of justice, an area that is so important, voting rights, doma, and other areas that are critical to the future of justice in this country. and i want to thank both you and the president for your leadership on gun violence prevention, and particularly his and your personal commitment to the people of newtown who are still grieving and hurting, and your personal involvement in trying to ease those continuing drama that still affects them as recent as yesterday and our telephone conversation. and i want to focus for the moment on gun violence prevention. as a law enforcement professional, not just as attorney general, but one who

has been a judge and prosecutor, this whole idea of better enforcement of existing laws is one we both agree ought to be the goal, and it always is for any prosecutor. and yet enforcement of some of these laws is impeded by gaps in those laws, such as the absence of akron checks on firearms, which now in able about 40% of all firearm purchases to go without any check whatsoever. you would agree with that, wouldn't you? >> yet. there are loopholes. has become to describe them, that make the enforcement of existing laws extremely difficult and render those existing laws not nearly as effective as they might otherwise be. >> and those laws now prohibit purchases of firearms by categories of people, convicted felons, fugitives, drug addicts

and abusers, and domestic violence abusers. purchases on firearms and ammunition, both firearms and ammunition. right now there's no background check as to purchases of ammunition, none whatsoever. and as a matter of common sense as well as law enforcement professionalism, i think you would agree that those laws are better enforced with the background checks as to ammunition purchases. would you agree? >> yes, i think, i'd like to discuss this with you some more. might only, one of the concerns i have is resource concern. you know, i think theoretically what your talking about makes a lot of sense. i don't mean to diminish it, it's more than theoretically. i think would have a very real positive impact.

my only concern is the system, potentially being overburdened and making sure that we would have the resources to do that. >> and just by way of background, you know, i've asked two of the u.s. attorneys who have been active and aggressive enforcers of these laws, u.s. attorney, whether these laws can't be enforced effectively without background checks on ammunition. and to quote both of us, without a background check now, do you have any effective way of enforcing that law, the prohibition on ammunition purchases. his answer, no. so when you were asked on my colleagues why aren't you more aggressively enforcing these laws, why do we have more prosecution? the very simple answer is, that there's no real way to enforce

these bands on ammunition purchases or firearms purchases unless there are background checks. and i understand and recognize and sympathize with your point about resources, but it forces about these kind violence prevention loss to keep ammunition and are on the offensive criminals we need to strengthen and bolster that system so that we make these laws something more than just a charade and feel good set of words on a statute. >> you're absolutely right and that's part of a comprehensive plan that the president, the administration has proposed to devote more resources to make greater use of the nics system to extend to make the resources they will so can be used in a way to support existing laws. because those people constantly say you've got to enforce the laws. don't necessarily always give us the tools to enforce those very laws. >> exactly. and i want to again thank you

and the president for that commitment on resources it can also say that as the major proponent of the background check provision for ammunition, i'm looking for ways to modify this proposal so as to perhaps make it voluntary and give licensed dealers to access that they need to the system. as you know right now, they are barred from checking. they see somebody come in, a potential adam lanza, who is buying hundreds of rounds of .232 caliber ammunition, they have nowhere checking whether he is a drug abuser, a domestic abuser, a convicted felon, a fugitive, anyone it is prohibitive categories. they simply are at a loss for basic information to try to protect the public. the best intention can't help them help you enforce the law. so i'm hoping that we can work

together on this provision. i repeat, i am sympathetic to the resource issue. if it were my city alone, those resources would be available right now, and if you -- >> let's see if we can work something out and so that you have that ability. >> ninety. let me move to another subject, and i really appreciate your answers on that one. wrongful foreclosures. among particularly military mortgage holders. there have been recent reports, most recently just a few days ago in "the new york times," 700 members of the military had homes seized and other borrowers who are current on their mortgage payments also homes seized. those in property fictions --

improper fictions dwarfing the numbers that were previously known. a sign of a larger problem. a sign that the recent settlement may have been based on incorrect, perhaps untruthful information. on my view, under either the rico statute or wrongful, improper statements under federal law, punishable criminally. i'd like your commitment again to work with me and others here on the possibility of an investigation, based on those disclosures, that undermine the good faith in fairness of the settlement and the governments involvement in. >> i'll make that commitment. when we look at what i saw there, it was, with regard to service them is, i did a tape i think last week was something that is for veterans to make them aware of fraud, more basic

fraud that too often goes unreported by them for a whole variety of reasons to try to encourage them to share information up the chain of command, and also to make sure that there is a mechanism so that from the defense department to the justice department, we are made aware of trends that might exist along the lines the ones you were describing. and then we will become involved. i will work with you on that. >> thank you. one final area that i think is, should be of interest to you, sexual assault in the military. >> yes. >> is prosecuted and punished under its own system, and yet it is a predatory criminal act that, in my view, should be punished with a severity and aggressiveness that is lacking right now. and as a member of the armed services committee, i am seeking

to help increase the completeness and fairness of this system, to protect the men and women from sexual assault. sometimes the most severe sexual assault imaginable. and you have resources, a perspective, personal as a prosecutor, obviously the best prosecutors and investigative agents in the whole country, and i would again respectfully ask your commitment that you will help us on the armed service committee with your expertise and your commitment to fairness and aggressive prosecution of these laws. >> yes. obviously, those are primarily the responsibility of the defense department. secretary panetta certainly focused attention on the. i expect secretary hagel will as well. to the extent we at the justice department can help in a that effort we want to do all that we can. you know, i think about the

young people who put their lives on the line in service to our nation from young women in particular, and look at the numbers that gc repeatedly year after year, and that's an extremely disturbing thing to think that you volunteer for your nation, and as a result of that you become the victim of a sexual assault. and that is simply, that's simply not acceptable. >> and i want to make clear that my asking for your assistance is not to in any way disparage or denigrate the good faith and efforts of secretary hagel and the joint chiefs and all of the military leadership to making this system work better. they are in my view thoroughly committed to that goal. thank you. >> i would note, and it's been my experience since he's been attorney general, called attorney general holder on any issue, we be able to conduct

almost immediately. and i do appreciate that. i appreciate the senators have come here today. i realize we are under arranges snow condition. i think it's up to half an inch now. [laughter] i commented to somebody, of course a senator from minnesota or senator grassley, real snow is -- i had a weather report at home when they said -- and ms. barr will remove it is, but we had a weather report was we expect a dusting of snow of no more than five or six inches but in other news today. of course, five or six inches down here, they would be interrupting a presidential press conference. senator grassley, one more question and then we will wrap up. >> this won't take seven minutes. [inaudible] >> i didn't run over seven

minutes likely that several people to run over three minutes. okay. on the issue of bank prosecution, i'm concerned that we have the mentality of too big to jails in the financial sector of spreading from fraud cases to terrorist financing and money laundering cases. and eyesight hsbc. so i think we're on a slippery slope. so than that's background for this question. i don't have a recollection of doj prosecuting any high profile financial criminal convictions in either companies or individuals. assistant general attorney general breuer said that one reason why doj has not brought these prosecutions is that it reaches out to quote unquote experts, to see what effect the prosecution would have on a financial market.

so than on gender 29, senator brown and i requested details on who these so-called experts are. so far we've not received any information. maybe you're going to, but why have we not yet been provided the names of the experts that doj consoles with as we requested on january 29? because we need to find out why we aren't having these high profile cases. and i've got one follow-up, so maybe you can answer that quickly. >> we did not, as i understand, retain experts outside of the government in making determination with what hsbc. if we could just put that aside for a minute though, the concern you have raise raised is one thi think usher, i'm not talking the hsbc now. that may be not be appropriate, but i'm concerned that the size of some of these institutions become so large that it has become difficult for us to

prosecute them, when we are hit with indications that if we do prosecute come if we do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. and i think that is a function of the fact that some of these institutions have become too large. again, i'm not talking about hsbc. this is just a more general. i think it has an influence, impact on our ability to bring resolutions that i think would be more appropriate. and i think that is something that we, you, all need to consider. the concern that you raises ugly one that i share. >> well then, do you believe that the investment bankers who were repackaging and selling bad mortgages as aaa rated weren't committing a criminal fraud, or is it a case of just not being

aggressive and effective enough to actually have the information to prove that they did something fraudulent and criminal? >> i think we looked at those kind of cases and i think we have been a probably a grassy. these are not easy cases necessary to make. you sometimes look at these cases and you see that things were done wrong and then the question is whether or not they were illegal. and i think that the people in the criminal division, the people in our youth attorney's office, southern district of new york, for instance, have been i think as aggressive as they could be, brought cases where we think we could have brought them. i know that in some instances that has not been a satisfying answer to people, but we have as i've said as aggressive as i think we could have been. >> could you constitutionally jail a ceo of a major corporation, you'll send a pretty wide signal to stop a lot

of activity that people think they can get away with. thank you very much. >> your absolute right, senator. the greatest deterrent effect is not the prosecution of a corporation all that is important. the greatest deterrent effect is to prosecute the individual in the corporation was responsible for the decisions. we have done that in the ubs matter that we brought, when we tried to do that whenever we can. but the point you make is a good one. >> thank you. i'm going to appreciate you being here. i will probably see you at the signing of the leahy-crapo violence against women act more. we had to leave out procedure reasons the few pieces that are important to law enforcement. and i hope you will work with us as we move forward because that would complete the whole legislation. one, it would protect but it would also have law enforcement

have a better chance of prosecuting people who have shown violence against women. >> mr. chairman, thank you for your leadership on that. i just want to comment. >> you were there every step of the way, and the fact that we were able to get a strong bipartisan house, and i know the senator from minnesota talked a lot of people on the other side of the aisle. and it was nice to actually have senators do things together on both sides of the aisle, and the country is better off for it. we stand in recess. spent we want to see those memos. we the public of the right to know how mesa police have been killed and where. we want to know why you are lying strike so we can kill people on the basis of suspicious activity only. and what about secondary strikes that have killed rescue workers? we just came back from pakistan.

we met families who lost their loved ones. innocent people. 176 children who have been killed by our drone strike. how can you say that illegal? what about on the al-awlaki rex a 16 year-old from denver, a u.s. citizen killed in a drone strike. was the high level operative or was it mistake works if it's a mistake, who is going to pay for that mistake? attorney general holder, we have the right to get answers to this. not just to people in congress but we the public because you are doing the drone killings in our names. >> three out of four americans killed in mistake, you've admitted. three out of four americans killed by mistake. >> is it true the cia is counting every military age male killed by a drone strike was is that true? it was reported in the new york times on may 29, 2012. senator feinstein said she was unaware. >> is that legal -- as a

combatant? what would happen if another country decided to do that here in united states? the president we are setting is for a world of chaos. because of the hearing is over we the public finally get to say something. because of your hearing we cannot even hold up our signs above our shoulders. a professional hearing that is unprofessional government programs. [inaudible] >> is that a professional program lacks. >> stop testifying killer drone strikes. >> we are making more enemies. we are opening places like saudi arabia that is just going to blowback against us. this program as a national

security threat and we are the citizens are speaking up for national security because our government is not doing anything to make us secure. in fact, you are making us more hated around the world which is going to be more attacks against us. >> targeted assassinations is not what this country stands for. this is an outrage against the way our way of life. >> it's time to get some oversight in these hearings. the committee needs to do real oversight. we can have access to the public, documents written by the attorney general's office. how are they supposed to do any kind of oversight? >> senator leahy said he was disappointed. why does me issue a subpoena? >> and attorney general said -- [inaudible] who is keeping these

memos from the committees that are supposed to do oversight? is the cia more important than the president? >> they prove that pressure works and not pressure doesn't work. for more than a year they asked for these memos to the administration didn't give them. then when they said they're going to hold off brennan's confirmation the administration handed over the memo. senator leahy once the memo, he has to issue a subpoena. >> we need the memos now. >> we the public need to see these military our want to know why after four years this administration has said it's going to be the most transparent administration has been given -- [inaudible] the information they need. and we the public, we want to see these memos. and it's more than just the memos. we want to see how they are justified by the fact they can kill not only americans, but non-americans. what happened to the children

when they're killed by the drone strikes? were those all mistakes? what we acknowledge those mistakes? will somebody be held accountable for those mistakes? those mistakes will continue. especially we want to know why the cia has the right to use lethal drones pick the cia is not a military organization. it's a civilian organization but it should have the authority to use lethal weapons like drones. >> and i'd like to ask senator lindsey graham about this killing americans sitting at a café, which he seems to condone. senator lindsey graham was one of the torture memo proponents now is a proponent for the assassins known for killing now american citizens, he said. so we got a lot to hold the congress accountable for, not doing things, not providing transparency, not shutting down the government to get after these memos. i mean, there are ways to go after, getting the memos. finally, finally.

>> [inaudible] >> senator feinstein said after the bringing hearing, politico was saying she was unaware of reports that the cia was counting military age males as militants when they were killed by drone strikes. six months after this was reported by "the new york times." on may 29, 2012. six months. senator feinstein. chairs intelligence community unaware of all the reported in a new times on a major exposé on drone strikes. >> an area that is part of her official responsibility. >> are we supposed to be -- [inaudible] >> thank you for allowing us to exercise our first amendment. >> you're welcome. >> thank you.

>> attorney general eric holder responded to senator rand paul's questions about the use of u.s. drones in a letter. the attorney general wrote -- >> now we would get some we action from the white house. >> the white house is talking to his office about the way to

resolve some of the concerns over use of drones on american soil. are those conversations taking place? does the president had an opinion on whether or not he has the constitutional authority to use of drones against american citizens on u.s. soil? and under which circumstances? >> well, i would say that, of course, the white house is in touch with senator paulsen staff, and that's true what senator paul said, but let's -- let's back up a little bit. first of all, this debate has nothing to do with the john brennan. senator paul himsel penn's hills much yesterday, and as you know, mr. brennan was voted out of the intelligence community by a wide bipartisan margin. and he should be promptly concerned that the country needs a cia director and there's wide agreement that john brennan is eminently qualified to lead the cia. as i said, he should be confirmed immediately. senator paul has raised questions about the president's

authority to use lethal force within the united states, which john brennan and the attorney general have both answered. today, senator paul raised an additional question and the attorney general has answered it. to be crystal clear, i want to be critical about what senator paul is now asking. i'm going to read directly from the attorney general's letter of today. you sent a letter responding to this question. it was transmitted to senator paul within the last half-hour or so, and here is from the letter. quote, does the president have the authority to use a weaponize drone to kill an american not engaged in combat on american soil? the answer is no. the answer to that question is no. and that is a letter that was signed by the attorney general and was submitted to senator paul in his office. now -- >> [inaudible] as to when those drones could be used? would that be a 9/11 or pearl

harbor style -- >> i think we'll step back and say, the issues of technology has nothing to do with the legal matters that we are discussing. the president has not and would not use drone strikes against american citizens on american soil. on the broader question, the legal authorities that exist to use the legal force are bound by and constrained by the law and the constitution. the issue here isn't the technology. the method does not change the law. the president sworn an oath to uphold the constitution and is bound by the law, whether the -- the law and the constitution applies in the same way. and again that's why think there's been a great deal of confusion about the technology here, when the technology is irrelevant to what the law and the constitution says. and the president is bound by the constitution, bound by the laws, and is sworn to uphold them. >> when you say he would never,

you're saying that there are no circumstances. because i thought -- >> again, -- [talking over each other] you can make sort of wild hypothetical but that, they don't change the law. a distorted the case the president, part of his oath, ma to uphold the constitution is want to protect the united states. and in an event like an attack like pearl harbor or an attack like 9/11, obviously the president has the constitutional authority to take action to prevent those kinds of attacks. that has nothing to do with the technology used to prevent those attacks. there is no distinction in the law or the constitution with regard, in terms of the authorities vested in the president, or the congress for that matter, when it comes to the methods used to enforce the law. >> [inaudible] >> you would have to ask senator

paul. i mean, i think -- spink the original language. which would be necessary and appropriate for the president to authorize or use lethal force. did that muddy the water? .. >> quite categorical and clear. the question that senator paul asked, because the president have the authority to use a

weaponized drone to kill an american not engaged in combat on american soil, the answer to that e question is, no. >> now senators john mccain and lindsay graham on the senate floor talking about wednesday's nearly 13-hour filibuster. senator rand paul questioned the hypothetical use of a u.s. drone strike of a u.s. citizen on u.s. soil. this is 40 minutes. >> mr. president, i'd like to quote from this morning's editorial in "the wall street journal" entitled "rand paul's drone rant." and i'd like to read for the edification of my colleagues the editorial that was in "the wall street journal" this morning. a credible media outlet. "the wall street journal" reads,

quote: give rand paul credit for theatrical timing. as a snowstorm descended on washington, the kentucky republican's old-fashioned filibuster wednesday filled the attention void on twitter and cable tv. if only his reasoning matched the showmanship. shortly before noon senator paul began a talking filly bust wither against john brennan's nomination to lead the cia. the tactic is rarely used in the senate and was last seen in 2010. but senator paul said a, quote, alarm, unquote, had to be sounded about the threat to americans from their own government. he promised to speak, quote, until the president says, no, he will not kill you at a café. he meant by military drone. he was apparently serious, though his argument isn't. senator paul written the white house to inquire about the possibility of a drone strike

against a u.s. citizen on american soil. attorney general eric holder replied that the u.s. hasn't and, quote, has no intention to bomb any specific territory. drones are limited to the remotest area of conflict zones like pakistan and yemen. but as a hypothetical constitutional matter, mr. holder acknowledged the president can authorize the use of lethal military force within u.s. territory. this shocked senator paul who invoked the constitution and miranda rights under current u.s. policy, mr. paul mused on the floor jane fonda could have been legally killed by a hellfire missile during her tour of communist hanoi in 1972. a group of noncombatants sitting in public view in houston may soon be pulverized.

he declared. calm down, senator. mr. holder is right. even if he doesn't, plain the law very well -- explain the law very well, the u.s. government cannot randomly target american citizens on u.s. soil or anywhere else. i repeat that. the u.s. government cannot randomly target american citizens on u.s. soil or anywhere else. what it can do under the laws of war is target an enemy combatant anywhere at any time including on u.s. soil. this includes a u.s. senate -- citizen who is also an enemy combat about the. the president designates such combatant if he belongs to an entity, a government say or a terrorist network like al-qaeda. that has taken up arms against the united states as part of an internationally recognized armed

conflict. that does not include hanoi jane. such a conflict exists between the u.s. and al-qaeda. so mr. holder is right that the u.s. could have a target -- could have targeted, say, u.s. citizen anwar al-awlaki had he continued to love -- to live in virginia. the u.s. killed him in yemen before he could kill more americans. but under the law al-awlaki was no different than the nazis who came ashore on long island in world war ii and were captured and executed. the country needs more senators who care about liberty. but if mr. paul wants to be taken seriously, he needs to do more than pull political stunts that fire up impressionable libertarian kids in their college dorms. he needs to know what he's talking about. well, mr. president, i watched some of that, quote, debate,

unquote yesterday. i saw colleagues of mine who know better come to the floor and voice this same concern which is totally unfounded. i must say that the use of jane fonda's name does evoke certain memories with me, and i must say that she is not my favorite american. but i also believe that as odious as it was, ms. fonda acted within her constitutional rights. and to somehow say that someone who disagrees with american policy and even may demonstrate against it is somehow a member of an organization which makes that individual an enemy combatant is simply false. it is simply false.

now, mr. president, i believe that we need to visit this whole issue of the use of drones, who uses them, whether the cia should become their own air force, what the oversight is, what the legal and political foundations for this kind of conflict needs to be reviewed. and the foundation rests mostly on laws designed for another task that government lawyers have interpreted without public scrutiny to meet new challenges outside the surveillance context. congress as a body has not debated or approved the means or ends of secret warfare because secret sur sail lance rather than u.s. military detention are central to the new warfare. we need to know there are no

viable plaintiffs to test the government's authority in court. in short, executive branch decisions since 2001 have led the nation to a new type of war against new enemies on a new battlefield without enough focused national debate. deliberate congressional approval or real judiciary review. we probably need a new framework statute akin to the national security act of 1947 where the series of intelligent reforms made after watergate or even the 2001 authorization of force. to describe -- to define the scope of the new war, the authorities and limitations on presidential power and forms of review of the president's actions. i'm quoting from a article by jack goldsmith that was in "the washington post" on february 5th, 2013. "u.s. needs a rulebook for secret warfare." but i don't think we should have any doubt that there are people

both within the united states of america and outside of it who are members of terrorist organizations that want to repeat 9/11. all of us thank god there's not been a repeat of 9/11. most of the experts i know will say that there's been a certain amount of luck -- element of luck, but a small element but still an element of luck such as the underwear bomber and others that have prevented a devastating attack on the united states. but to somehow, to somehow allege or infer that the president of the united states is going to kill somebody like jane fonda or someone who disagrees with the policies is a stretch of imagination which is, frankly, ridiculous. ridiculous. so i don't disagree that we need more debate, more discussion and, frankly, probably more

legislation to make sure that america does protect the rights of all of our citizens, to make sure at the same time that if someone is an enbmy combatant -- enemy combatant, that enemy combatant has nowhere to hide. not in a café, not anywhere. but to say that somehow that even though we would try to take that person -- to say that we would hit them in a café with a hellfire missile, first of all, there are no drones with hellfire missiles anywhere near. they're over in places like yemen and afghanistan and other places in the world. so we've done a, i think, a disservice to a lot of americans by making them believe that somehow they're in danger from their government. they're not. but we are in danger, we are in danger from a dead -- dead

candidated, longstanding, easily replaceable leadershippenmy that is hell bent on our destruction. and this leads us to having to do things that perhaps we haven't had to do in other more conventional wars. and i don't believe that anwar al-awlaki should have been protected anywhere in the world. but that doesn't mean that they're going to take him out with a hellfire missile. it means that we're going to use our best intelligence to apprehend and to debrief these people so that we can gain the necessary intelligence to bring them all to justice. so, mr. president, all i can is that i don't think that what happened yesterday is helpful to the american people. we need a discussion, as i said,

about exactly how we are going to address this new form of almost interminable warfare which is very different from anything we've face inside the past. but somehow to allege that the united states of america, our government, would drop a drone hellfire missile on jane fonda, that is, that brings the conversation from a serious discussion about u.s. policy to the realm of the ridiculous. i'd also like to add an additional note, mr. president. about 42%, as i am told, of the members of this senate are here for six years or less. every time a majority party is in power, they become frustrated with the exercise of the minority of their rights here or in the senate. -- here in the senate.

and back some years ago there was going to be, we were going to eliminate when republicans, this side of the aisle was in the majority, we were going to eliminate the ability to call for 60 votes for judges. we -- confirmation of judges. we were able to put that aside. there was another effort just at the beginning of this senate to do away with 60 votes and back down to 51 which, in my view, would have destroyed the senate. a lot of us -- a group of us worked very hard for a long time to come up with some compromises that would allow the senate to move more rapidly but at the same time -- and efficiently, but at the same time preserve the 60-vote majority requirement on some pieces of legislation. what we saw yesterday, what we saw yesterday is going to give ammunition to those critics who say that the rules of the senate

are being abused. i hope that my colleagues on this side of the aisle will take that in consideration. i note the presence of the senator from south carolina. senator from south carolina, as many of our colleagues know, is a lawyer. he has been a military lawyer in the air force reserve for some, over 20 years. if there's anyone in the united states senate that knows about this issue from a legal, technical standpoint, i would ask it is -- it is my colleague from south carolina. i would ask my colleague from south carolina, is there any way that the president of the united states could just randomly attack with a drone or a hellfire missile someone without that person being designated an enemy combatant? and i don't think, as much as i hate to say it, that that applies to jane fonda. [laughter] >> well, thank you. that's a very good question. it's been a very lively debate. senator paul's got a lot of passion, and that's a great

thing. he can have all the passion he wants. this is an important issue, we should be talking about it. i welcome a reasoned discussion. but to my republican colleagues, i don't remember any of you coming down here suggesting that president bush was going to kill anybody with a drone, you know? i don't even remember the harshest critics of president bush on the democratic side, they had a drone program back then. so what is it? all of a sudden that this drone program has gotten every republican so spun up? what are we up to here? i think president obama has, in many ways he's been a very failed president. i think his executive orders overstep. i think he's intruded into the congressional lean ma by executive order. i think obama carries a nightmare. there's a thousand examples of a fail presidency. but there's also some agreement. people are astonished that president obama, senator

mccain, is doing many of the things that president bush did. i'm not astoundished, i congratulate him for having the good judgment to understand we're at war. and to my party, i'm a bit disappointed that you no longer apparently think we're at war. not senator paul. he's a man to himself. he has a view that i don't think is a republican view, i think it's a legitimately-held libertarian view. you've got to remember senator paul was the one senator who voted against a resolution that said the policy of the united states will not be to contain a nuclear-capable iran. it was 90-1. to his credit, he felt like that would be provocative, and it may lead to a military conflict. he would rather have a nuclear-capable iran than use military force. and he said so, to his credit. 90 of us thought, well, we would like not to have a military conflict with iran, but we're

not going to coin -- contain a nuclear-capable iran, senator mccain, because it's impossible. the sunni arab states would want a nuclear weapon, and most of us believe that they would share the technology with the terrorists that would wind up attacking israel or the united states. it's not so much our fear of a misis sill coming from iran, i fear if they got a nuclear weapon or nuclear technology, they would give it to some terrorist organization like they gave ieds to shia militia in iraq to kill america. and they would wreak havoc on the world. so we don't believe in containing, letting them have it and trying to contain it, pause we believe their association with terrorism is too long and too deep. that's too dangerous for israel, too dangerous for us. but senator paul, to his credit, was okay with that. i just disagree with him. now, as to what he's saying

about the drone program, he has come our way some, and i want to appreciate that. before he had some doubt in his mind as to whether or not we should have killed anwar al-awlaki in gemmen, an american citizen -- yemen, an american citizen who was one of the military leaders of al-qaeda in yemen who had been involved in planning terrorist attacks against u.s. forces throughout the region. president obama was of informed true the military -- through the military intelligence community channels of anwar al-awlaki's existence, all the videos he made supporting jihad and killing americans, and he as commander in chief designated this person as an enemy combatant. mr. president, you did what you had the authority to do, and i congratulate you for making that informed decision and the process to get on this target list is very rigorous. i think sometimes almost too rigorous. but now, apparently, senator paul says it's okay to kill him

because we have a photo of him with an rpg on his shoulder or. he's moved the ball. he's saying now that he wants this president to tell him that he will not use a drone to kill an american citizen sitting in a café having a cup of coffee. who is not a combatant. i find the question offensive. as much as i disagree with president obama, much as i support past presidents, i do not believe that question deserves an answer. because as senator mccain said, this president is not going to use a drone against a noncombatant sitting in a café anywhere in the united states, nor will future presidents because if they do, they will have committed an act of murder. noncome bat about thes under the law of -- noncombatants under

the law of war are protected, not subject to being killed randomly. so to suggest that the president won't answer that question somehow legitimizes that the drone program is going to result in being used against anybody in this room having a cup of coffee, to me, cheapens the debate and is something not worthy of -- >> could i ask my colleague a question, especially on that subject? a lot of our friends, particularly senator paul and others, pride themselves on their strict add here is to the constitution -- adherence to the constitution and the decisions of the united states supreme court. >> right. >> isn't it true that as a result of an attack on long island during world war ii that american citizen, among others, was captured and hung on american soil, and the united states supreme court upheld that

execution because that individual was an enemy combatant? is that established without a doubt? >> well, there is -- >> the fact that these are enemy combatants and no matter where they are, they are subject to the form of justice as the terrorist in world war ii was? >> it's been a long-held concept in american jurisprudence that when an american citizen sides with the enemies of our nation, they can be held, captured and treated as an enemy combatant. they have committed an act of war against our country, not a common crime. so in world war ii you had german saboteurs land in long island. they had been planning in and training in germany to blow up a lot of infrastructure, and sop of -- some of it, i think, was in chicago. so they had this fairly

elaborate plan to acing tack us. they came out of a submarine, they landed in long island, and the idea was to have american citizens sympathetic to the nazi cause of german origin, most of them, to meet them and provide them shelter and comfort. well, the sei back -- the fbi back then broke that plot up, they were arrested and found guilty, and a couple of them were executed. now, there's been a case in the war on terror where an american citizen was captured in afghanistan. our supreme court reaffirmed the proposition that we can hold one of our own as an enemy combatant when they align themselves with the forces against this country. this congress right after the september september 11th attacks designated authorization to use military force against al-qaeda and affiliated groups. so the congress has given every president since 9/11 the authority to use military force

against al-qaeda and affiliated groups, and american citizens like anwar al-awlaki, the guy, hamdi, that was captured in afghanistan, have been treated as enemy combatants. and if president obama does that, he's doing nothing new or novel. what would be novel is for us to say that if a terrorist cell came to the united states, an al-qaeda cell was operating in the united states, that's a common crime, and the law of war doesn't apply. it would be the most perverse situation in the world for the congress to say that the united states itself is a terrorist safe haven when it comes to legal rights. that we can blow you up with a drone overseas, we can capture you in afghanistan, put you -- hold you under the law of war, but be there's a or terrorist cell operating in the united states, somehow you're a common criminal, we read you you're miranda rights, and i'll just add this one thing to get

senator mccain's thought. i hope you realize hypothetically there are patriot missile batteries all over washington that could interdict an airplane coming to attack this capitol or the white house or other vital government facilities. i hope you understand, senator mccain's a fighter pilot, that there are f-15 and f-16th on three to five-man alert all up and down the east coast. and if there is a vessel coming into the united states where a plane's been hijacked or a ship's been hijacked loaded with munitions or the threat is real that they're about to attack us, i hope all of us would agree using military force in that situation is not only lawful under the authorization to use nail force, it's within the inherent authority of the commander in chief to protect us all. >> and should not be construed

as an authority to kill somebody in a café. >> it should be construed as a reasonable ability to defend the homeland against a real threat. and the question is, do you feel threatened anymore? i do. i think al-qaeda's alive and well. and to all those who have been fighting this war for a very long time, multiple tours in iraq and afghanistan, you've tried to keep the war over there so out doesn't come here. to the failed plots that have been broken up by the cia and fbi, god bless you. we've got to be right every time. they only have to be right once. and if you hi the homeland is not -- if you think the homeland is not in the desire of al-qaeda, it is absolutely on the top of their list. and they're recruiting american citizens to their cause. and unfortunately, a few will probably go over to their side. thank god it will be just a few. but to take this debate into the absurd is what i object to.

we can have reasonable disagreements about the regulatory nature of the drone program should it be under the department of defense, what kind of oversight congress should have. i hi that's a really good discussion, and i'd like to work senator durbin and others to craft some -- you know, the detainee treatment act was where congress got involved with the executive branch to come up with a way to better handle the detainee issue. i believe there's one commander in chief, not 535. and i believe this commanderrer in chief of and all future commander in of chiefs are unique in our constitution and have an indispensable role to play when it comes to protecting the homeland. and if we have 535 commander in chiefs, then we're going to be less safe. and if you turn over military decisions to courts, then you've done, i think, the ultimate harm to our nation. you've of criminalized the war, and i don't think our judiciary wants that. so as much as i disdegree with president obama. -- disagree

with president obama, i think you have been responsible in the use of the drone program overseas, i think you've been fair, thorough in your analysis. i'd like to make it more transparent, i'd like to have more oversight. as to the accusation being leveled against you that be you don't somehow -- if you don't somehow answer this question we're to assume you're going to use a drone or your administration or future administrations would to kill somebody who's a noncombatant, no intelligence to suggest they're an enemy combatant sitting in a café by a hellfire missile s i think really awful. and i have just one final thought. if there is an al-qaeda operative, u.s. citizen, who is helping the al-qaeda cause in a calf today in the united states -- café in the united states, we don't want the to blow up the café. we want to go in there and grab the person for intelligence purposes. the reason we're using drones in afghanistan and pakistan, we don't have any military presence along the tribal border.

the reason we're having to use drones is we can't capture people. the preference is to capture them, not to kill them. but there are certain areas where they operate that the only way we can get to them is through a drone strike. and i would say this -- >> and could i just say to my friend, there is scenarios where there could be an extreme situation where it is a direct threat. we could draw many scenarios; a bomb-laden, explosive-laid aren vehicle headed for the nuclear power plant. the president of the united states may have to use any asset that the president has in order to prevent an impending catastrophic attack on the united states of america. and that is not without -- that is within the realm of possible she scenarios. so to somehow say that we would kill people in cafés and, therefore, drone strikes should never be used under any

circumstances, i believe, is a distortion of the realities of the threats we face. as we are speaking, there are people who are plotting to attack the united states of america. we know that. and at the same time, we are ready -- as you said -- to discuss, debate and frame legislation which brings us up-to-date with the new kind of war that we are in. but to somehow have a debate and a discussion that we would have killed jane fonda is, because, in my view -- does, in my view, a disservice to the debate and constitution that needs to be conducted. >> and that's a very good point. i look forward to a discussion about how to deal with the drone program. it's just a tactical weapon. it is a air platform without a pilot. now f there -- if there is a trk going toward a nuclear base or nuclear power plant, we've got a lot of assets to interdict that

truck. maybe you don't need the f-16. but i guarantee if there's a hijacked aircraft coming to the capitol that the president of the united states would be well in his rights to order the patriot missile battery to shoot that plane down or to have an f-16 shoot it down. and we're ready for that, by the way. and i would just sutting one thing. the -- suggest one thing. the number of americans in the united states killed by drones is zero. the number of americans killed in the united states by al-qaeda is 2,958. the reason it's not two million or two hundred million is because they can't get the weapons to kill that many of us. the only reason it's 2,958 is because their weapons of choice couldn't kill more. their next weapon of choice is not going to be a hijacked airplane, i fear. it's going to be some nuclear technology or chemical weapon, a

weapon of mass destruction. that's why we have to be on our guard. and when you capture someone who's associated with al-qaeda, the best thing is to hold them for interrogation purposes, because we found bin laden not through torture, my friend. we found bin laden through a decade of putting the puzzle together. and senator durbin, senator mccain, both of you were very, i think, effective advocates that we have to live within our values and that when we capture somebody, we're going to hold them under the law of war. we're going to exploit intelligence, but we're going to do it within the laws we signed up to like the geneva convention, the convention against torture. so to my friends on this side of the aisle -- >> [inaudible] >> absolutely. >> i'd like to just briefly thank my colleagues on the other side of the aisle. it was 12 hours ago when i was standing right here in a lonely voice among others who were

discussing this issue, bringing up the points that you raised. the first is the drone is a weapon. there are many weapons that can deliver lethal force. we should view this as an issue of lethal force, not an issue of drones per se although it may raise some particular questions in application. it is largely a question of lethal force. the second question has been raised by the senator, both senators. what if the fourth airplane had not been brought down by the passenger? s? what if that plane were headed for this capitol building and all other planes had been landed across america under orders of our government, and we knew this plane was the fourth plane in control of the terrorists. what authority did president bush have as commander in chief at that moment? i don't think anyone would question he had the authority to use lethal force to stop the terrorists from using that plane as a fourth weapon against the united states. and i don't think, there was no

debate last night about that particular point. this notion, and i'm glad that this point has been raised, that we are somehow going to use drones to kill people sipping coffee in cafés is ludicrous. as absurd. it goes beyond the obvious. we need those people. bringing those people into our control giving us more information. and secondly, i mean, for goodness sakes, the collateral damage of manager that brutish -- of something that brutish would be awful of. so i thank you for putting it boo perspective. i think attorney general holder could have been more artful in his language yesterday, and even senator cruz acknowledged he said it would be unconstitutional to use this kind of lethal force if there wasn't an imminent threat pending against the united states. >> could i say quickly, an imminent threat. >> yes. >> now, we may have to do a little better job of defining that, but to say imminent threat

would then translate into killing somebody in a café is not a mature debate or discussion. >> if i could add, let me tell you about imminent threat in military law. in iraq you had disabled terrorists, insurgents. and there was a big debate in the marine corps because under military law when a lawful combatant, a person in uniform, has been disabled and doesn't present an imminent threat, you don't have the ability to shoot them, okay? the terrorists in iraq put ieds on wounded privilege rents, unlawful enemy combatants. so the marine corps wrestled very long and hard with the rules of engagement. if you come upon somebody who was wounded, apparently was

disabled, under what circumstances could you use lethal force because they may be booby trapped? to the marine corps' credit, they came up with a balance between who we are -- we just don't shoot even our enemies who are helpless and wounded -- and the ability for force protection. here's what i would say about the circumstance in question. the process of determining who a enemy combatant is has always been a military process. it's not a congressional debate. our committees do not get a list of names and we make a vote on whether or not we think they're an enemy combatant. courts don't have trials over who an enemy combatant is. if there's a question about enemy combatant status under the yes peeve of v.a. convention, you're entitled to a single hearing officer, and that's all. in world war ii there were a lot of people captured in german group form who claimed they were made to wear the uniform by the germans, and all of them had a hearing on the battlefield by a

single officer. it has been long held in military law that it is a military decision, not a judicial or leapttive decision, to determine the enemy of the nation. so president obama has really taken this far beyond what it was envisioned. this administration has a very elaborate process to determine who should be determined to be an enemy combatant. i think it's thorough, i think it has many checks and balances. and as much as i disagree with this president on many issues, i would never dream of taking that right away from him because he is the same person, the commander in chief, whoever he or she may be in the future that we give the authority the to order american citizens in battle where they may die. he has the authority to pick up a phone, senator mccain, and say you will launch today. and you may not come pack. i can't imagine a congress who is okay with the authority to order an american citizen in battle. we don't want to take that away from him, i hope.

that's uncomfortable with the same person determining who the enemy we face may be. as to american citizens, here's the law: if you collaborate with l al-qaeda or their affiliates and you're engaged in helping the enemy, you're subject to being captured or killed under the law of war. what is an imminent threat? the day that you associate yourself with al-qaeda and become part of their team, everywhere you go and everything you do presents a threat to the country. so why do we shoot people walking down a road in pakistan? they don't have a weapon, there's no military person in front of them that's threatened. the logic is that once you join al-qaeda, you're a de facto imminent threat because the organization you're supporting is a threat. so for someone to suggest we've

got to let them walk down the road, go pick up a gun and head toward our soldiers before you can shoot them is not very healthy for the soldier they're trying to kill, and it would be a total distortion of law as it exists. back here at home, and i'll conclude -- >> if the senator would allow me one last comment -- >> sure. >> and i thank you for this statement on the floor from both of my colleagues. the judiciary committee, subcommittee on constitution, is going to have a hearing on this issue of drones. and there are legitimate questions to be raised and answered. and i might add that my conversations with the president, he welcomes this. he has invited us to come up with a legal architecture to make certain it is consistent with existing precedent in military law and other court cases as well as our constitution. and i think that is a healthy environment for us to have this hearing and invite all points of view and try to come up with a reasonable conclusion. >> with could not welcome that more. it worked with the detainee treatment act.

i just think it's the right way to go. >> if i can make one unanimous consent request before i leave. i thank my colleagues. madam president, be the approval of the majority/minority leaders i ask unanimous consent for these requests to be agreed to and print inside the record. >> without objection. >> mr. president, i think that concludes to our discussion, but i would agree with the senator from illinois and my colleague from south carolina. we need hearings, we need to discuss how we conduct in this, the united states in what appears to be for all intents and purposes an intermin able conflict that we're in, and we have to adjust to it. but that conversation should not be talking about drones killing jane fonda and people in cafés. it should be all about what authority and what checks and balances should exist in order to make it a most effective

ability to combat an enemy that we know will be with us for a long time. >> just have two minutes to wrap up, i will. to my fellow citizens, the chance of you being killed by a drone because you go to a tea party rally or moveon.org rally or any other political rally or you're just chatting on the internet quietly at home by your government through the use of a drone is zero. under this administration and future administrations. and if that day ever happened, the president of the united states or whoever ordered such attack would have committed murder and would be tried. i don't worry about that. here's what i worry about, that al-qaeda who's killed 2,958 of us is going to add to the total

be we let our guard down -- if we let our guard down. and i will do everything in my power to protect this president who i disagree with a lot and future presidents from having an ill-informed congress take over the legitimate authority under the constitution and the laws of this land to be the commander in chief on behalf of all of us. as to any american citizen thinking about joining up with al-qaeda at home or abroad, you better think twice. because here's what's going to come your way. if we can capture you, we will. you will be, you will be interrogated, you will go before a federal judge, and one day you'll go before a court. and you will have a lot of legal rights, but if you're found guilty, woe be unto you.

and here's another possibility. if you join with these thugs and these nuts to attack your homeland and if we have no ability to capture you, we will kill you. and we will do it because you made us. and the process of determining whether or not you have joined al-qaeda is not going to be some federal court trial, it's not going to be a committee meeting in the congress. because if we put those conditions on our ability to defend ourselves, we cannot act in realtime. bottom line, ladies and gentlemen, i think we're at war. i think we're at war with an enemy who would kill us all be they could -- if they could, and every war america's been in we've recognized the difference between fighting crime and fighting a war. and if you believe as i do we're at war, those who aid our

enemies are not going to be treated as if they robbed a liquor store. they're going to be treated as the military threat they are. >> madam president, i thank my colleagues, and i also thank the senator from illinois for his engagement. and in chosing, i'd like to congratulate my friend from south carolina for his really best behavior last night at dinner. he was on his best manners, and everyone was very impressed. i yield the floorment -- floor. >> up next on c-span2, a discussion on the implementation of the affordable care act by states. and this morning attorney general eric holder will be among those participating at a consumer protection summit. live coverage gets started at 9:30 eastern. >> one with of the things that an early american wife was taught to do, she supported her husband's career usually through

entertaining. dolly was both socially adept and politically savvy. so she could structure her entertainments in such a way that she could lobby for her husband under or the guise of entertaining. she also thought it was very important to create a setting in the white house almost like a stage for the performance of her husband and the conduct of politics and diplomacy. >> first lady dolly madison. we'll follow her journey from a young quaker widow into the wife of the third or u.s. president, james madison. we'll include your phone calls, facebook comments and tweets on dolly madison monday at 9 eastern on c-span and c-span3. also on c-span radio and c-span.org. >> now, a discussion on health care policy and the federal budget. panelists give their thoughts on what needs to be done by states and the federal government to implement the affordable care

act. the forum was part of a conference hosted by the university of miami business school in coral gables, florida. >> this entire conference includes some of the foremost experts in all areas of health care. and our first panel this morning is no exception. it gives me great honor to introduce the speakers to you. for the next hour or so, we will be discussing the politics, policy and federal all um applications -- budget implications of health care refollow. we would like to start by thanking the two sponsors, i have it is a and u-health. your support is greatly appreciated. as for our speakers and moderator, their complete bios can be found in your program, and they're really a truly dynamic group of experts. first, we welcome dr. mark mcclellan. enter and sign in, please. [laughter]

mr. mccell mcclellan, senior director for health care reform as well as the leonard d. of shaffer chair to help policy studies at the institution. mr. mcclellan has a distinguished record in public service and academic research. he is a former cms administerrer and a former fda commissioner. he also served as a member of president's council of economic advisers, senior director for health care policy at the white house. previously he served in the clinton administration as deputy -- sorry, deputy assistant secretary of the treasury for economic policy. he holds his md and mpa degrees from harvard and his doctorate in economics from mit. underachiever. [laughter] next, please welcome chris jennings who spent nearly 30 years as a health policy expert for congress, the white house and the private sector. he currently serves as president of the jennings policy strategies, a nationally respected health care consulting

firm that specializes in the development and implementation of policies designed to secure higher quality, more affordable health care for all americans. mr. jennings is a former senior health care adviser to president bill clinton. during his eight years with the white house, he worked on the implementation of the children's health insurance program, the health insurance portability and accountability act and a host of major medicare reforms. he also served as senior adviser to first lady hillary clinton during her work on the health security act. he has served as a senior health care adviser to four presidential campaigns. in addition to his consulting work, he currently provides strategic guidance to organizations regarding the implementation of the affordable care act. after graduating from the other university, miami university of ohio, he received a fellowship to work for senator john glenn in washington, and he went on to work for three senators. thank you and welcome. and finally, our distinguished

moderator. patrick geraghty is chairman of the board and ceo for florida blue which serves seven million members. prior to joining florida blue he was president and ceo of blue cross and blue shield of minnesota where he also served on the company's board of trustees and on its foundation board. he has also served in senior leadership positions with horizon blue cross and blue shield in new jersey as well as for health care teams' management and marketing operations. he's a frequent speaker on a range of health care topics including the impact of payment reform strategies, innovation in health care and prevention and wellness. he's a graduate of colgate university as well as several health policy and executive management programs from the harvard university school of public health and the wharton school at the university of pennsylvania. thank you. welcome to each of you. pat, it's all yours. >> thank you, penny.

[applause] thank you, penny. and normally i sit in one of of those chairs, so i'm really excited about today's program. i get to ask some questions after each of these gentlemen make their opening remarks. so let's get right to it. chris, would you, please, make the first comments? >> well, good morning. am i on? good morning. well, pat, it's always a pleasure to be with you and your work with florida blue and your efforts to make health reform truly work. mark and i go way, way back. i've never heard most people don't know that he was, did work with the clinton administration before working for george w. bush which is more of a reflection of the clinton clearance process than -- [laughter] donna, i mean, what can you say about donna? i learned a long time ago to say

yes right away because you'll eventually surrender to her entreaty anyway, so why prolong the inevitable? i will see i've never seen you give up all your chips. [laughter] before i start i do have to congratulate those of you who are hurricanes fans. i turned on the tv recently certain that i saw some scoring typo. [laughter] you were ahead beating dukes by 30 points -- beating duke by 30 points. [applause] and then the game ended, and suddenly i thought i saw my son rushing to court who, by the way, is the u student from the true miami university. and then you just beat your archrival, florida state, where my father got his doctorate. so anyway, 2013 is already turning out to be a very, very

lucky year for you. and with that in mind, i kind of hate to tempt faith with this presentation. i having instructed to thoroughly but also semicoherently review the political policy and budgetary implementation of the health care reform in about ten minutes or less. [laughter] hey, no problem. [laughter] listen, notwithstanding my crack about mark, he and i do get a along quite well. i worked for eight years for a president that the republicans in the house impeached. people forget though these days. and he worked for a president that the democrats in the house fantasized about impeaching. [laughter] and in recent year, though, we have worked together at the bipartisan policy center with its founders, senator daschle, senator dole can, senator baker and senator mitchell, and you're going to hear from senator daschle later today, and we all

are attempting to show current elected leaders what civility and compromise is all about. okay, so we have some work to do. i will give a quick shameless plug. we are working together again on a cost containment and value purchasing initiative that we hope to get out by march with senator daschle, senator frist, senator.com mini and former cbo director rivlin. so let me kick off our discussion. i'm going to quickly give you ten observations, very quick ones, why the d.c. political environment makes achieving new legislative reforms really hugely challenging. and yet while health care reform will move ahead regardless of today's initial congressional gridlock. first, we have to acknowledge that political polarization and the split government dominates the budget and health care reform debates in washington. and, yes, it is true, it is worse than ever, and i think

senator daschle will talk about that. the republicans are more worried about challenges from the right, so when you're running, you have to worry more about losing your feet from a challenge from the farther right than the center, and democrats are becoming more progressive or liberal as a group. and this makes legislating compromise quite, quite difficult. so that's the first challenge. secondly, the budget and tax cliff debates and resolutions to those debates or there standoffs are both removing pressures for bigger deal and increasing partisan divisions. and i want to just mention, um, after the elections decisions were made to lock in higher taxes for higher income and are tape the bush tax cuts -- retain the bush tax cuts for everyone else. and also the congress decides to at least momentarily not allow the debt -- the nation to go into default, and they did

extend the debt limit, and you may have read in the paper they just did that through later on this year. and these strategic accommodations by both sides, really, but by republicans in particular have decreased the desire for the type of balanced deal that the president says he wants. republicans oppose more taxes, dedemocrats won't sign off on a large deal without matching revenue. and, therefore, it seems almost more out of reach than ever. and i will tell you most of us in washington in 2012 would have projected that 2013 for historical reasons really was the year where you could see more compromise and consensus because it's right after a president gets reelected, and it's a time when a second-term president, sometimes historically a time when you can see big things get done. but i have to tell you, it's harder than many of us expected. third, there is a growing belief more that, by more mainstream economists and even more

centrist democrats that excessive bum cuts could -- budget cuts could harm economic growth. and this is a very important new development too. there's just more and more con season us in this area -- cop census in this area. now, i have to underscore, while inefficient health care spending is not good for the economy, it certainly gets wrapped up in this discussion and as a consequence big deals people start or wondering about. fourth, and this is something that really doesn't get reported much and discussed much, but growth rates for medicare and medicaid today are very, very low. and, therefore, there will be much -- it will be much more painful and much harder to achieve significantly great orer cuts at least in the short term, and i should point out that if you go too hard too quickly, you may actually even undermine some of the underlying reforms that you want to see for the longer-term objective which is

indisputable, that 2021 and beyond when the baby boomers turn 75 and get older and impose even more and more costs on our system, we will have to have a much more efficient system, or we're going to bankrupt our government, and we're going to make it very impossible to reinvest in things that we all think we need to do. um, so very, very important. and i tell you that in the '90s when we did, and donna was involved in this, in the last balance ared budget discussions, we had a much higher growth rate so it was much easier to squeeze down savings than it is today. and lastly i would just say this, that the obama administration you may have read -- again, this was in yesterday's paper -- is more and more concerned about squeezing out on medicaid reimbursement or cuts or federal support for medicaid certainly. why? because it's very hard for them

to ask governors to implement this legislation at a time when they're squeezing down federal support for it. so that is a bigger deal too. fifth, the health care community is divided over the desirability of avoiding the sequester. now, you may have heard and it's absolutely true that it is saying we're doing government by sequester, and we're not doing thoughtful type of budgeting work, and it's absolutely the case that it's not the way that any government or any business should be run. but the most influential powers in health care well recognize that if you open the door to avoid the sequester, it's almost inevitable the medicare cuts will be higher, beneficiary cuts will be on the table and probably medicate cuts will be on the table. as a consequence, they're not really looking for a big deal. so, again, environmentally this creates dynamics that are very, very difficult to see bigger

deals. sixth, other nonhealth care issues are getting far more air time. whether you talk about immigration, gun control, tax reform and important issues like whether beyonce lip synced or not -- [laughter] they're getting far, far greater attention. yet having said all of this, the health care stakeholders -- by the way, health care stakeholders are a name for special interest groups that we like or don't want to offend -- are presuming that the affordable care act will slowly, if messily, get into place over time. again, this is something that a lot of people forget but almost all stakeholders supported or did not oppose health reform. and as a consequence, they're quite invested in trying to make it work. they made and are making bets on market share over margins which is to say that they want, they

understand that there'll be pressures to constrain kohs, so -- costs, so they're going to be looking forward to covering more people with lower margins but getting the return pack through the market share. -- back through the market share. and you'll see the market trends happening in in this area. hospitals are consolidating, health plans are consolidating, and they're doing this because they're betting that they can survive and, indeed, thrive in this market. and, indeed, reform is preceding a pace. the action that is being done by the executive branch, by the states and by the stakeholders are great examples of this. and it's happening every single day. there isn't a day that doesn't go by that pat's not working on something whether it's the federal-state level or working with the business community's self-insured plans, providers, etc. guess what, i'm down to two more. nine. almost all understand that notwithstanding the d.c.

headwinds that all purchasers are demanding greater value. and their patience is drying up. and in an environment when there still is a lot of fat in the whole health care industry, there is great opportunity. there's extraordinary geographic variation, certainly, but there is great, great opportunity to find savings. the question's really going to be finding it and who gets allocated it. and that's going to be a big, big challenge. okay. and what's more, there is a growing understanding that structural reforms and incentives that are necessary the to be prepared for the 2021 period and beyond that i mentioned have to be put in place shortly. you can't just wait until 2021 and then suddenly, oh, all these things will be in place. so notwithstanding everything i said, there is a growing

acknowledgment by most republicans and democrats that some of these reforms have to go in place, and maybe they have to be squeezed out a little bit less hard in the early years but significantly in the outer year is, but definitely that is out there which bodes well for the possibility of of some movement forward even in this congress. um, so what will that policy prescription be, you ask? well, i see my time's up. [laughter] >> oh, continue. >> so it is for dr. mcclellan to confirm or to alter my diagnosis, but i believe the prescribing to him. [laughter] at least for this speech. after all, he's the man of the house. thank you very much. [applause] >> chris, there is a q&a.

>> yeah, there is a discussion segment coming up, so chris is not going to get off that easily. but i do really appreciate chris' setting the stage, and i want to add my thanks to everyone who made it possible for us to be here today. i never thought i'd be this close to the university of miami basketball team in such a great year, but it's great to be back down here at miami. always enjoy working with president chalet la and the rest of the leaders here, steve and others, who have been involved in putting this together. as chris said, we do go way back, and i think that's a good thing in recognizing that we both really do want the same kinds of things for health care reform; better health for americans, doing it a at a cost that's sustainable, doing it in a way that encourages the kind of innovation that so many of you are involved with here in florida. but it has been a bumpy road at times. chris may not even remember this, but one of the things i was in with him after i was this

new by in washington, you know, he'd come from some job at a university out on the west coast that shall remain nameless, and i remember doing one of the first briefings to some of the white house staff, and i won't name the name of the person involved, but i was going through my list of what i thought should be include inside the medicare reform package, and i concluded by saying this idea's the most important one, it's one that every single, almost every single economist think is the a good idea. and without missing a beat the person we're speaking to said, is that a pro or a con? [laughter] but it does highlight that there's some, there are a lot of things we have to take account of in many getting health care policy right and, fortunately as chris said, there is a lot going on in the private sector, in states and employers as you'll hear more about later around the employer efforts around the country that are going to drive at reform despite whatever friday lock and whatever challenges there may be in washington. and i do want to talk some about

that, a little different perspective or highlight a few points that reinforce the viewpoints that chris made. we are at a critical time in health policy, and i don't think the talk of gridlock should change the focus from the fact that this should be one of the major policy issues that we are dealing with at the federal level and the state level. we're not done yet, important as the affordable care act was. we're not done yet in terms of getting the goal of, on the one hand, fulfilling the biomedical promise of this sently with real achievement of a permized medical care and health system, one that puts much more emphasis on identifying what people can do to stay well and getting them the right combination of treatments based on their genomics, based on understanding of molecular biology, based on their preferences and very good data, good evidence to back it

up. we should be able to get to much percent, healthier hives for all americans, and we should be able to do it at a cost that we can sustain. we are definitely not there yet, and i want to talk about three points along the way that might help us get there. one is the next steps for the affordable care act. the second is that going back to that issue of medicare and federal health care entitlement reform that chris raised. and then, third are what i would call real health care reform, changes in the way that health care is delivered, changes in the way that we think about health. that doesn't happen in washington or tallahassee, it happens by the way care is delivered all around the country, things that you all are involved with. but, obviously, our health care policies have an impact on that. so the affordable care act implementation is going on the right now, and that is going to, i think, increasingly be news during the course of the year. i haven't been directly involved in a lot of the details of that

implementation, but i do have some memories back from our last national effort to implement significant version of health care reform, involve competing plans working in areas and with new kinds of rate regulations and constraints that didn't exist before, and that was the implementation of the medicare part d program back in 2006 when i was administrator of cms. and while this is a lot more complicated and a lot different in some ways, there's some common features that i think people who are working hard day and night on the ppaca right now are working through in a similar climb of way. the first is setting up and specifying the rules of the road. what is it that plans immediate to do, how can their coverage work, what's allowed in terms of actuarial equivalence and in terms of setting up their bids, and while there's been some more clarity on those issues in recent months, there still are,

i think, important questions out there, and these issues do vary state by state. i remember there is a point a little bit earlier in the process than we are now where we started hearing from actuaries around the country. green lights went on, and it became clear from there that there was going to be participation and that while a lot of details still needed to be worked out, we were going to be, you know, everybody was going to be showing up for the game on day one. we're at a point now where those questions are going to need to be answered at different states. i think there are a number of states that are very much on track for all of that, and somewhere it's a little bit more up in the air. maybe we can come back to some of these issues later. aside from just having the rules of the road in place, we need the system in place. there are a lot of pieces of data that need to flow from, say, cms to states and vice versa in terms of who's eligible, what kinds of

subsidies they should get, in terms of plans of what financial support they're receiving, things like that. a lot of those you can't really many practice tell whether they're going to work for sure until you actually turn on the pipes and start running water through them, running the data through them and see what stops out where. we definitely had our share of issues, and the pipe's flowing smoothly the very beginning of medicare part d particularly for people who switched over from medicaid to medicare coverage all on one day and having some systems in place to mack that up -- to back that up is going to be important as well. and hen a third hinge that, i mean, um can't be implemented is communication and outreach. this program has been politically controversial. medicare part d, i thought that was controversial the time but, boy, that looked like "kumbaya" bipartisanship compared to some of this. [laughter]

but one thing that was important after that law passed was an ability to get everybody, especially everybody in the health care community and everybody who worked with seniors whether or not they supported the law, they got together on getting the facts out. so so this was not, you know, puff, happy talk about, hey, this is a great law, you should definitely sign up. this was short of real facts about what the new benefits meant for individuals so that they had places where they could go as they called it. i spent a lot of time down here at south florida at pharmacies, at senior centers working with some of the -- back then it was blue cross, right? with blue cross on it initiatives to help people find out what exactly they qualified for, how they could sign up, what their drugs would cost. you know, the facts that they really wanted to know. what was personally relevant for them. and something like that here is going to be important too.

i do think as chris said there are going to be as with any major program some bumps along the way, and probably what we'll end up seeing is something that looks more like a phase-in rather than a poof, this is all up and running around the country. beginning of 2014. um, i do think, though, what's particularly going to be important here is what states end up doing. chris mentioned some steps that look like are happening in the administration to give states a bit more flexibility many their medicaid programs -- in their medicaid programs. i think that's for several reasons, one is there are a lot of things states are doing in terms of health care reform. a second is we're seeing real fallout from the supreme court decision last year for upholding the individual mandate or i guess the tax penalty as justice roberts called it. but what that judgment also did was give states a good deal more leverage in how they expand

medicaid, to which populations. and the federal-state process in terms of how state health reforms are implemented is one that involves negotiation on both sides. i think now more than ever the states are in a pretty strong position, so i'll be particularly interested in states like florida where there may be some new ideas for medicaid flexible, innovative ways of doing benefits. i know some of those have been controversial, but i think you're going to see more of that around the country. also something to look for in terms of implementation of law is what happens over really the next few weeks many terms of some of -- in terms of some of the states that i guess are more red if not purple that are moving forward or trying to move forward on their own health insurance exchanges or i guess they're now called health insurance marketplace. i've really got to keep up with the terminology. >> i'll send you a memo. [laughter] >> for how their exchanges are going to work; what the minimum requirement should be, how much

for example about and so forth. look at states like utah in the next few weeks to see how this is going to play out, but it's going to be a big part of reform in the coming year. crystals talked about the importance of budget and entitlement reform, and i think this is an issue where congress may have a chance if there's a reason for optimism here, it's that there may not need to be a strong effort to get a lot of short-term savings. this is a result of what chris chris -- [inaudible] now for about the first time in history for several years in a row it's been growing slower on a per capita basis than our overall economy. and if you look at the forecast out from here, it's projected to do that for the next ten years. now, there are a couple ways people can react to that. one is, great, let's not do anything that seems like everything's working, and we should just plow on ahead, maybe

come back to this issue in another decade. number one, we don't know if slowdown in costs are really going to be sustained or not. no question the big recession that we're just coming out of had a lot to do with it. there may also be some sort of health care insurance cycle issues and issues in innovation. but on the other hand, i think there are some real changes happening in health care delivery where a number of health care organizations are shifting from maybe primarily of activities to focusing more on value and inknow innovative approaches that can deliver care at a lower cost. i think the challenge for medicare, though, is it's by no means certain that it's going to be able to keep supporting that based on where it is now. i say that for two reasons. number one is if you look for the reasons that medicare costs are projected to grow more

slowly for at least the next decade, it's because medicare's going to be putting a lot of pressure, a lot more pressure than it's been able to sustain in the past on the prices that it pays for everything. the prices it pays for medicare advantage health plans, the prices in place to skilled nursing facilities, hospitals, you name it and especially doctors, you know? the 0% reduction -- 30% reductions scheduled down the road again. but really there's a whole lot of financial pressure there that people like the retiring actuary for cms don't think the is going to be sustainable if the result of that is more money gets put back into medicare down the road, then we're not in such a good place in terms of long-term fiscal outlook. the other problem is the way that medicare pays now is, i think, really not in a position where it's driving the kind of personalized health care that i was emphasizing a few minutes ago. and that's what i'd like to end

with talking about is how to get faster to that kind of innovative, personalized prevention-oriented way of delivering health care. i think the innovation that you are all doing around the state and around the country, this is going to be an area for leadership by the u.s. the technology's going to be there. i think the only question is how fast and how expensive is it going to be to make that kind of progress. and this is where some of the reforms in the way that our health care policies work could really help. ..

>> it involves things like preventing complications, avoiding relations. these areas is where medicare start to take more steps but a lot was going on and the private sector and a lot more is going on in pilots that are starting in the medicare program's. we at the brookings are very involved with reforms called accountable care organizations. i said accountable care payment more generally, what those are about as measuring at least some aspect of what we really want health care to deliver, some aspect of better quality, better health and lower overall cost. one of the other things i did when us back there was start a pilot program that basically set up the payment system that told health care organizations that wanted to work with us, look, you can keep getting your physician payment, hospital

payment, part eight in the payment but in addition we want you to also track important measures of health for the population that you are serving. so how well your patients are doing in getting preventive evidence-based treatments, how will your patients with chronic diseases are doing in terms of controlling their diabetes, blood sugar for their diabetes, blood pressure. if they've got high blood pressure, cholesterol levels, if they've got coronary artery disease, how they're doing in terms of their own experience with care as they perceive it. and the deal was that they could show improvement in most of those dimensions of quality, and if they also saw a reduction in all recalls -- all across cost, that was making a difference. shared savings in health care reform, medicare now has about 250 organizations that are doing this, covering about 50% of the medicare population. the rate of penetration, these

reforms in the private sector is even larger. what many of these organizations are doing overtime is a might start out having also their payments the same old way, based on volume, maybe negotiate a lower rate, but over time as they get more familiar with a new kind of financial arrangements, and understanding of the risks involved they switch the payment of the. they move to something that puts more than payment base and getting better results at lower cost which makes a big difference. you can pay for things like outreach, your patients can help them get the right preventive service. you can pay for care teams that can help patients with chronic diseases to adhere to their medications better, modify their lifestyles more effectively. you can put more intensive health but even home visits by doctors around your patients, which means you can get more personalized care instead of focusing on the results. a lot of interest is paid on the

payment side of these kinds of reforms. i just want to close with emphasizing the importance of engaging people, engaging consumers as well. i start out i talk about part d, to end on that. so this is a program where i like the way medicare was traditionally designed, people had to choose among a range of competing plans. i got a subsidy from medicare towards their health insurance plan, and they made a choice based on the benefit, what was covered and how. and that's how they got there coverage. in principle that sounds a bit like the aca, depending on how things are implemented from here. but what was very important in the process, number one, ended up with a lot of very angry seniors, many of whom i met down here in south florida, could not have been more irate that the government didn't just come up with a drug benefit that why don't you discover this until

knew what it is? why do i have to choose? 50 different plans, out of pocket limits of what does this all mean? but what they did was choose plants that were really innovative compared to the standard drug benefit that congress put into law. that standard drug benefit added deductible and 25% coinsurance and catastrophic coverage on the backend. doughnut hole in the middle because people thought is going to turn out to be more expensive than did. almost no one in medicare is enrolled in the plan like that today. what seniors joseph looking around at it, after talking to a lot of their friends about it, and complained to me about it, and others, they overwhelmingly chose plants that have a tiered benefit plan with a really cost-effective rise was generic that worked just as well as brand names, basically free when branding for available, and no generic was available, that drug plans are typically negotiate low prices for a couple of the drugs that work similarly.

cholesterol-lowering drugs or nonsedating antihistamines or something like that. those preferred drugs is 25 bucks a month or something. most everything else was covered. but unlike traditional insurance design, people paid a big part of the difference in cost for the high value, the higher tiered treatment. under a traditional insurance plan from if mrs. bechtel summit brand name drug and there was a generic available she might say -- say 10 or $15 a month. under this she would say basically the whole difference in cost. that's what happened. a lot of seniors talk to the pharmacists, you are on such and such a drug. the drug pressure medicine cost $92. there's a generic across $1. you can save $91 if you switch. that's exactly what seniors did. there's this huge trend away from a generic going from about 50 to 80% in just five years under the program, to what was resulted in huge savings for the program. rick foster, who just left, gave

an interview where he talked about how they did not anticipate how much seniors were going to respond to these kinds of opportunities for savings. and for that reason among others, automatic party programs ranked 40% below had no average increases after two years. the point being that that kind of consumer involvement taken to other parts of health care i think it's going to be a big part of getting to that sustainable personable system going forward. starting with employers now doing things like setting up benefit for elective surgery where a price gives information on outcomes like obligation rates, how fast people are back at work. and overall cost turns out in this case is some the best places to get surgery. also have the lowest cost, least time in the hospital. so the benefit design your basically make those providers free, and then people paid the difference that they choose a more expensive place with less

quality to get service. the challenger in terms of getting from here to there is coming up with those measures, how to show people and compelling way like seniors believe, rightly, the brand and generic drugs are about the same, that there are better, cheaper ways to get better health. it's not just about more services, more intensity is better. that's going to take a lot of leadership, particularly leadership from health professionals but i think leadership from all of you as well, not something that can be accomplished from washington. that's what people are that americans trust the least. it makes for a good task force for health care reform. thank you all very much. [applause] >> thank you both to chris and to mark, for framing the discussion this morning. a couple of questions that certainly jumped to mind. when we think about the health care reform effort in the country, certainly from our perspective at florida blue, we

like the idea of more people being covered. we think that's the right way to go. we think the systems focusing on wellness, prevention, health in the first place, is absolutely correct. but any piece of legislation you're going to wind up with some unintended consequences. just a quick reminder to everyone, we got the do we have because we had an election in massachusetts that didn't allow for the bill to end up being covered. so chris, could you start by, are there things in the bill that if you had the opportunity, you would change or enhance to get us to a better place? >> well, actually i think it's the perfect bill. >> really? [laughter] >> no, no. nowhere in the history of the congress have such an outcome been achieved, and the one thing that you know about health reform is health reform will be reform.

that is the only certainly that you know about health care. and certainly, there are a large number of areas that i think people would look at. i think one area that i would say though is, frequently when we legislate before, just legislate to legislate, rather than step back and see what you really needed, we create more problems. and so one thing that i would really encourage folks to do first and foremost is, because i think the real lesson of health reform legislation was because there was at least the early part a real effort to try to integrate republican and democratic ideas at the beginning, you will see that this is a very, you know, i call this the most partisan bipartisan legislation initiative mankind. and the reason is, it is private insurance based, interstate

based. there's no public option. the exchange is really with the development of republicans were advocating are really the focal point. in fact, if he said well, whose bill was this committee would say this was mitt romney's legislation. so i guess i would say if you would ever look in health reform, need for criteria. you needed to have insurance reform the people all want to see. you needed to have an individual requirement to make those insurance forms credible and sustainable. you needed have subsidies to make them affordable. and you needed to pay for them to make them sustainable over a period of time. within the heart of health reform to me, i would call those the four pillars of health reform. those four pillars were part of this law. now, where you can disagree is on the various elements of each one of those pillars, how much subsidies, what the structure was, what the rules are, what

the guidance are. i think there's plenty of room for movement in any and all of those things. but to see all the structural reforms, 24/7, were planted to me accelerates them, yes. should we, i believe we should, yes. i think, let me give you an example. just this week the cms announced that their competitive bidding program were more successful than anyone ever imagined they would become much like the part d program was. would i look at doing more in those areas? what i expand those areas for the rest of the program? i absolutely would. so i would do more on costs. what i think about different transitions? maybe. johnny depp legislation? i'm not sure. -- do i need legislation? i'm not sure. to overtime this legislation and this law will be embedded and it will be reform and it will be improved. and as does it will be more and

more political support for it. >> thank you. i hear from both of your comments that evolutionary process. mark, i think he may become it that it would be phased in big can you give us more specifics about what you think will actually face in, what might not be there on day one, we might see some later stage? >> i think the first thing that the law, picking up on chris's point about, while there are a lot of republican ideas, in my opinion work in part d, our in some form in ac eight. i think a lot of people are still wondering how is that all going to play out? there's details, implementation does matter. one important thing to look at just the next few weeks is what happens with some of the exchanges in some of the states that really do want to push be -- push the envelope, plan to double, maybe some -- or maybe

even under not so strict definition may have trouble meeting the letter of the law. there's certainly a good deal of potential administrative flexibility in implementing these steps. so that sort of the first thing to watch. i think the second thing is, in terms of what may be phased in, some of these insurance market reforms that are very popular with the american public, but are going to have some significant effects on premiums and perhaps on who offers insurance, small business and so forth, and give some state that up until now they haven't had much in the way of restrictions on age rating or underwriting, things like that. that could have big impact. if you're in a small