>> what the syrian government have been think monotonous as would have been true to start off with but it has in some ways also become a self fulfilling prophecy. many of the fears the outside world had about what would happen in syria if they became involved have come to pass anyway. the conflict has spread. this time last year, the u.n. was going figures of 9000 syrians debt. now it is something in the region of 90,000. that's in one year in syria.

it has become radicalized. it has become increasingly sectarian, and if there ever were a possibility of a clear initiative that possibly could bring a swift end to this conflict, i don't really see it now. it doesn't mean it's a lost cause. i don't think anyone should view it as one, but it is as complex and as messy as you can imagine. you know, i remember being in iraq in 2006 -- and don't forget in iraq in 2006 people were talking about the division of the country. i believe the vice president biden at that point had a plan which talked about splitting iraq into three states to make it comfortable to try to reduce the violence. lebanon, even in its darkest hour during the civil war and after the war with israel, when it was wracked by political upheaval looked into the of this but did not go that far. so i don't think the break about

syria which people are talking about, the sectarian differences are very serious and should be treated so, but i don't think it is a done deal at the moment. and two the 10th i would certainly go to the initial 30 to be as engaged as possible. so things were think about the armed

gulf. they have come from supporters in kuwait, and qatar come in saudi arabia, elsewhere in the islamic world. the turkish intelligence is very effective and they're perfectly capable of closing off that border if they choose to do so. for a long period the rebels were not able to get any kind of

weapons. but that changed about this time last year. and suddenly they're able to get slightly smaller arms. but that has always been that they're given enough to fight and die but not enough to win. that is the reality on the ground, that still do not heavily armed. most of the heavy weapons they have are weapons that they've seized from government bases that they've managed to overrun. and we saw that on our last trip ground rockets have been taken from one military base on to another student government base. so the armed opposition has evolved. it's coalesced. to essentially, to broader base. there are those we can go islamists which ranges from the most hardline elements, those who have sworn allegiance a sexually to al qaeda.

and -- essentially to al qaeda. more towards secular side but there are really not a lot of secularists left. they move from one group to another which is why we should never see a static situation but these groups have been evolving all the time. this time last year they carried out some deadly bombings and to be feared this was al qaeda getting involved in syria, but the truth was they had no power. they had very little following the it was impossible to establish even where they were. as they say, now they are essentially -- in particular which is again a militant islamic organization different in the sense that they are not jihadists. in other words, they have a certain vision for a hardline

islamist state inside syria. but they do not see the struggle as a wider regional struggle but this is what people tell me. now, we also know that many other people who follow these groups follow them because that is where the focus, attention is. that they are the groups of the money, they are able to pay fighters but most of the people who pick up weapons have not worked in syria for at least 18 months. so for many of them, actually fighting can become the only way managing to earn a living. they will probably move from group to group depending on which group is getting money, which group is getting resources. which clearly for western policymakers is something to bear in mind. so i see an evolution over the last problem. another situation where essentially the armed opposition control pretty much most of northern syria. the northern provinces up to a

line, kind of south of aleppo city, which point the government starts to reassert control. ethnically it's pretty homogenous we muslim and a sunni. that doesn't mean there are not exceptions. so things have evolved but they've also gotten to a point where you feel that the armed opposition is probably incapable of advancing much further than it actually has. it's relied on audacity. it's relied on guerrilla warfare to achieve what he has done. it has relied on essentially david and goliath tactics against a vastly superior military force, the one that is not geared to deal with an armed insurgency which essentially which is what it is which is why you're seeing hezbollah were so effectively because of course that's always been their greatest strength is in

guerrilla warfare as well if you put the two together, then i think there is a potentially every potent force. i would just like to talk about the humanity and situation on ground. are very first trip over was to visit people who are internally displaced living intense and woods right on the border. you could literally see the road in turkey on the other side of the bushes and the barbed wire. since then it has spiraled out of control. everywhere you travel there are dislocated, displaced families living in greenhouses, living in caves. we did one story and we were showing what essentially was an old roman tomb where a family had been sheltering. this is near an area being contested between the opposition and the government.

my cameraman who is here went down into it and discovered five small boys, five, six small boys sat there in the dark on their own. their mother had gone out to get food. that was a few hours earlier. they at all south across lake did waiting for her to return and to take them out of there. nobody knew that they were there. you know, the humanitarian situation, it is a crisis. it is as bad as i've ever seen it anywhere. i think it is probably comparable to afghanistan during the civil war. people are relying on handouts. i have no doubt that foreign aid is making its way in, that there is no perception on the ground the outside world has done anything at all. people receive humanitarian aid, fighters get some western but there is a general sense inside

syria that they have been abandoned by the outside world. people still to this day will ask what is the difference between a syrian and a libyan? it sounds like a bad joke. there is no answer, but that is their perception that they don't see why the libyans were assisted in a way that they haven't been. most of them are victims of the war that they didn't choose, whatever their site, whatever their ethnicity, whatever their religion, they are ultimately the ones who pay the price because when the opposition was into an area, then the government response. its bombing is pretty indiscriminate so you can't use artillery to pin point attacks, not without advanced technology on the ground which they generally don't use. and so, therefore, that's why you have quite so many killed from 9000 this time last year to probably about 90,000. so it's a gloomy picture. happy to take your questions,

and thank you very much listening. >> thank you, ian. next, dave. >> thank you, dr. anthony. i should start by saying that my remarks did not reflect the blessings of the department of defense or the united states government. i imagine professor sullivan will say something similar but not speak for the department of defense i'm sure i will not pretend to speak for professor sullivan. today i wish to address the two topics. the first is will of the united nations and the second is the military implications of no-fly zone. and i would deal in united nations in the context of warfare and unisys to every american president the first to go to action with allies even the invasion of grenada, jonah forgotten, was formally part of the coalition operation, with a very's caribbean states token amounts of troops or police.

token by our side but very significant for saint kitts and nevis, for example. this is strong for democrat elected in the post-iraq era. of course, the gold standard for coalition operations is a blessing by the united nations. since the fall of the berlin wall there been only two u.s. would actions which did not have some sort of u.n. sanctions or claimed sanction if not explicit. one was kosovo, the other was iraq. we all know the story of iraq and the problems of fighting of the coalition of the willing. less well-known are the problems from the un-u.n. sanctioned actions in kosovo. foremost among these problems was the obstructive role played by russia which was determined to thwart what it saw videos let power grab to replace a despotic russian ally. as of last week the gallup poll 60% of americans said they did not support military action in syria if diplomacy or sanctions fail.

an american presence would ignore the number at its been. compounded his problems is somewhat uncertain nature of the armed opposition which would emerge in control in syria is outside work were replaced the as distinct from the unarmed charismatic democratic senate opposition which we see in western capitals the leaders of the armed opposition within syria are uncertain at best, extremely shady at worst. given this a u.n. mandate would seem to be the man requirement for an american president to begin military action in syria. but this one happened so long as the chinese and the russians oppose a mandate. they feel they were hoodwinked when what they thought was a limited mandate to protect benghazi from a master was expanded into a mandate for regime change in tripoli and building on ian's comments, that's why libya is treated differently from syria, because libya was first. the experience of libya has informed and to a great extent shape the international inaction on syria. even with the new powers team in

place, analysis would suggest in western -- not the slow-motion when we are seeing now, or thought to be imminent, and talking something along the lines of the massacres of rwanda, then the u.s. will probably not take action without some sort of u.n. sanction. so that's my points on the u.n. and i draw that from my experience working in peacekeeping in the office of secretary of defense, which is very you in specific. my second point concerns the nature of a no-fly zone. i should caveat my remarks by saying that i'm not an air defense artillery meant, but rather served exclusively in light and airborne infantry special operations force. soldiers who work with big equipment such as patriot batteries, they call people like me crunchies because that's the sound we make when you run over us. [laughter] i'm a relatively low-tech, my military experience is wrote to the low-tech. i was a guest at a major weapons expedition when i was in graduate school and they were

showing all these laser weapons and then the salesman said, so what are you looking for in military stuff? i said i want a set of wool socks that don't have seen across the toe and a greece pencil but will ride with the temperature is below freezing. the beauty in being an academic as you can plagiarize anything so long as you acknowledge it. so let me start by referring to a great panel on this issue of a no-fly zone held a few weeks ago at the u.s. institute of peace. you can do the panel on the u.s. institute of peace website remarked, particularly general dave and joseph holliday of the institute for the study of war, particularly informative. i should also point out that my colleague has written on the subject very, very informally. go to their website and you can link to that and don trombley is also spoken on the subject. i've plagiarized some other work but since i knowledge it i can plagiarize it. so let me make a few quick points. the first is that a no-fly zone is a euphemism for war. it sounds nice but something

something to do at distance but it is an act of war and it will involve killing people and destroying things. inevitably, some the killing and destruction will happen on things we do what you are. when this happens our noble motives are forgotten and the dominant narrative becomes taking inspired death and destruction. so if were going to discuss this issue let us discuss it without misconceptions. war, even in the age of pushbutton warfare and stealth bombers, remains exactly what general sherman said it was. the second point is that there's considerable definition room and defined what a no-fly zone is. our shared view, the sort of defined and no-fly zone is issued by the decade-long operation over northern and southern iraq but a clever staff officer, and i've known quite a few my day, put proposed courses of actions which would not involve constant sugar aircraft over damascus, the complete destruction of every missile and radar installation of the creating -- create a ring of every runway. my third point is that a no-fly

zone would require a base somewhere close by. these bases would probably come with a cost. turkey is the only credible base but the ruling party there is issues of its own, particularly in the last week, and turkey may insist on conditions which the u.s. will reject. our relationship with turkey is much more transactional than it was in the mid '80s when i had the privilege of working briefly in turkish affairs. we can operate from more remote locations but this will require considerable staging of expensive and scarce, key point is scarce, not expensive, military assets, particularly aerial tankers and aircraft carriers which are still in high demand in the gulf, in support of operations in afghanistan, and to do with the next act in the ongoing freak show that is north korea. my fourth point is that -- thank you, mona -- your very kind. my fourth point is that geography matters. look, syria is not libya. in libya most of the targets

were on a flat slightly populated littoral strip. operations in c. would involve flying over and through mountains and inhabited areas. this terrain is much better for the use of surface-to-air weapons than it was libya and the cancellations involving conducting aerial military operations over syria are much, much, much more complicated. my fifth point, and i haven't heard any other commentators do this, perhaps it's my background special operations, is that modern u.s. practice not to deploy a pot into an egg we can't retreat ensured his planes be shot down. an amazing amount of air force special operations forces are devoted to airmen recovery. this means that any man in activities with it the potential for ground combat, albeit of a very limited nature. we should understand the implications of what is being proposed. don't let the salesman for you. airplanes get shot down and airplanes with violence resulting president. my final point is my most important one. my study of history, and i

welcome people disputing this year and the questions and answers, suggest that whatever type of no-fly zone isn't limited will never satisfy those who seek a no-fly zone. if every fixed wing aircraft in syria is destroyed, we'll hear about helicopters engaged in military operations as we did during the uprising in southern iraq after desert storm where we had an effective fixed wing no-fly zone. if helicopters are destroyed, then we will notice that most of the indiscriminate killing is being done by the regime that's being conducted by indirect fire from artillery as assad in syria able -- look, i don't let insurgents were seeking to gain the maximum accessibility support for the fight. they are in a struggle to the death and a very brutal assad regime to as one is to have the constant without misconceptions. only the removal of assad will diminish the demand signal for military intervention. i have not discussed the as 300, the patriots or other technical

matters but if your printer matters but if you're burning to a we decided to take a question. just know that most objective oe observers would you find the note especially as cannon fodder, at least as, remarks accordingly. thank you and i welcome your questions. [applause] >> thank you, dave. ms. waxman. >> thank you, dr. anthony come for inviting my organization, the international rescue committee, here today. the conflict in syria has resulted in one of the most, the largest unit during emergencies in history. bn talked about the massive scale of displacement inside the country and just to put a number on it, the conservative estimate are that more than 4 million people are displaced internally, tens of millions are in need of humanitarian assistance, and more than one and a half million syrians have sought refuge in

neighboring countries. just today, the united nations launched its largest funding appeal ever for $5 billion to respond to the crisis in the region and. for more than a year, my organization, the international rescue committee, has been working with syrian let partners to deliver vital medical aid for field hospitals and clinics in war zones across syria. we are working inside city to deliver health care to those forced from homes, people living on the board that ian talked about, provide education to children who can no longer attend school and felt safe places for traumatized syria and children. we also see syrian refugees in jordan, lebanon and iraq. supporting refugees in urban and rural communities throughout the region and reaching out to those who are suffering most. so far we have raised and spent nearly $50 million on aid to syrian, supported by a mothers

the u.s., the uk, european institutions and private donations. i want to focus today on three issues. first is what the international charity needs to do to get aid inside syria. second is how we can best support refugees in countries hosting them come and to prevent an escalation of the tensions that mona talked about. and third, how we can help refugees realize their right to protect a building to flee from the conflict. first, the ioc believes the international charity needs to increase support to those in need inside syria. although the u.s. and other donors have been generous in the response to the crisis, humanitarian needs far outstrip the support provided. we need to significantly increase funding levels, and do so quickly. the american government and american people deserve enormous credit for stepping in early and at a scale in unprecedented assistance to the crisis.

the united states is the largest donor, and they can claim even greater role not only as a donor but as a leverage or of assistance. the u.n. appeal today provides an opportunity for the nazis government to do that just that but equally important is that aid needs to flow through a diversity of channels. the international community really should continue to explore always to reach those in the worst of conflict zones in syria the across borders from neighboring countries, across conflict lines inside syria through the united nations, international committee of the red cross, ngo and syrian relief structures. more aid needs to flow directly through three and partners, especially those that are properly supported through an intensive capacity building. institutions of governance and civil society, also need assistance in building their core capabilities. the three key areas need inside syria continue to be food,

health care and fuel. the medical infrastructure has been surveyed. doctors have been targeted and now that summer has arrived, providing increase support for emergency water and sanitation is essential to mitigate the spread an increase of disease. importantly, the international community needs to ensure that humanitarian aid is not conflated with political objectives. assistance should be provided solely for the purpose of alleviating suffering based on the eight. humanitarian action is about saving lives. irrespective of nationality, gender, race. political or religious beliefs and affiliation. conflating political dimension aid jeopardizes human terrain aid workers, access to vulnerable populations, and risks diverting already insufficient resources from reaching syrians most in need of the. second, the international community should support syrian

urban refugees and communities hosting them. while formal refugee camps continue to garner most attention and resources, that's not what most syrian refugees are living. more than 70% live in urban and rural communities across the middle east. if they have financial resources, they rent apartments, often sharing cost with numerous families. if they have family and friends, they live with them. although that's increasingly rare due to the strain on host family resource. in order to survive refugees that are increasingly large debt are sending their children to work, engaging earlier forced marriage, and exchanging sex for basic goods. across the region, tension between refugees and resource poor host kennedys are rising. these dynamics are clear today in lebanon. there are no refugee camps in lebanon, and 100% of refugees in the country live in communities

and villages across the country. many are living in settlements that are spontaneously emerging. and as of may, a country, lebanon is country 4.2 million people, the country to open its borders to more than half a million syrian refugees. the u.n. refugee agency contently predicts that by the end of 2131 in five people in lebanon, 1 million people, will be refugees from syria. the u.n. appeal today requests the largest amounts for lebanon. it's $1.2 billion, and this is a clear acknowledgment of the increasing attention on the lebanese government and on the host kennedys inside the country that are absorbing this massive influx of people. so in order to address this massive human needs for catastrophe, the international rescue committee believes that we should provide assistance to

vulnerable lebanese communities as well as the refugees from see. we also need to increase the quantity and quality of services provided to most refugee groups. specifically refugee women, children and non-registered refugees but we also need to supplement humanitarian assistance by ensuring that traditional development of dollars in lebanon target communities that are most affected by the refugee influx. given the destruction in syria, it may be months or years before display settings can return to destroy homes and communities. infrastructure and social services will always need to be rebuilt. planning about the future of syria needs to address a multiple range of issues, including the need for refugees and internally displaced people. finally, it is essential that border countries, countries bordering syria remain, keep the

borders open to provide safe haven for all those displaced. the u.s. government should use the policy to encourage countries in the region to keep their borders open. though they may sound appealing, safe zone proposals have a poor record in practice, and can create a false sense of security for civilians and displaced persons inside syria. it will definitely get political solution to end the civil war in syria, and until then it is imperative the international community scale up and support operations both within syria and within the refugee hosting countries in order to solve the regional crisis and protect the syrian people. appreciate the opportunity to join me today, and i look forward to answering your questions. thank you. >> thank you, sharon. and that last speaker before we open the floor for questions is paul sullivan.

>> well, a lot of territory has already been covered. had to give the usual caveat. these are my opinions although, do not represent those of the u.s. government george tackle or any other institution i may be involved with. and now there's a very good chance i might get myself in trouble. this could be obama's rwanda. how many people have died? this is not slow-motion. from 2000 to 90,000 in one year? this is far from slow-motion. my head hurts when i think this and my heart hurts when i think of syria. my head because it's so complicated. and also because if you want to look at this at a strategic 35,000-foot level, this could

turn into a maelstrom. no kidding. look at the neighborhoods. israel, jordan, turkey, lebanon, the palestinians, the kurds, iraq, saudi arabia, qatar, bahrain. there were bahrain is killed a couple days ago. the russians are a big part of the problem that is going on here. the port of cartoonists have kept this going for some time. city has its own internal maelstrom. but thinking as a strategic person or strategic thing about this idea, it really gets to me, this gets to me. this writer gets to me. the children in syria. if you didn't read this report yet, read it.

i think of myself as, well, often a tough guy. i work with the military. supposed to be a tough guy. i read through some of the stuff. i held my head in my hands and i wept. this is what's happening here. the shouting of society, the shattering of any kind because the shattering of infrastructure this is a very, very dangerous situation if the question is how do we get from here to there. $5 billion i heard for an appeal. how does i've hundred billion dollars of sound for trying to get this country somewhat stabilized? somewhat stabilized your country and. we to figure out our preferred outcomes in the short run, the medium run and the long run. and i don't think that thinking even started of what's going to be needed to be done.

may be the first start would get to what ms. lacks and whistling, started to get of the children and the people, make their lives a little bit a better. one of the main things we're going to have to face in the future is how angry these children are going to be and how this is going to come back at us. not just the united states, the neighborhood and possibly the world. have food, have clinics, take care of the orphans, maybe bring some of them to this country. this is not bleeding heart thinking. this is strategic thinking and just being human. do well by doing good. do well by doing good. we can talk about all the military strategy in the world

and all the big theories of political science, but it all boils down to the people on the ground that ian has talked about, and others have talked about. this is about people. the no-fly zone was talked about by dave. a lot of people are thinking this is a possibility to do this no-fly zones are messy. people died. people get angry or. we can use soft power and hard power as a combination, but, frankly, it's probably too late. and it will probably be too little. this could've been dealt with months ago. it wasn't. it's even worse. it's pulling in the rest of the region into the whirlpool of syria. look at what's happening in lebanon, what's happening in iraq, what's happening on the border with israel.

one could look at this as a 3-d moving spider web of intrigue and danger. every time you try to change something with a policy move, everything else changes. and also there's a military current in this type of situation, volatile, uncertain, complex, and ambiguous. in washingtwashingt on is not particularly good with any of those. could would build a coalition to work on this? i doubt that right now. and the maelstrom is coming. the timidity is astonishing. and it's not just timidity coming out of washington, it's all over the place. so what's the option? let it play itself out, give war a chance, get iran involved, hezbollah getting more powerful?

this spinning out of control, we have a senior sunni official saying for calls for jihad. is it effective jihad out of lebanon by hezbollah. get the russians there, the iranians are there. an iranian general was killed in syria. the gcc is the loose cannon in this situation, in many ways. they are sending material out there, not the gcc itself, the people in there, and eventually becoming out of control. the sunni-shia split in this whole thing i think is magnified beyond what should be. a lot of this has to do with money, power and strategic positioning, and the sectarian differences are unveil to all of that. there's a great deal of nihilism and all of this come as a more a situation like this continues,

the more nihilism you will have. it's a lot easier to deal with people who believe in something, when their lives are shattered and they believe in nothing, it's far more difficult. the harsh winds of the potential series in sparked maelstrom could have global effects in oil and other markets and other strategic issues. batten down the hatches, get out the sea anchors, here we go. [applause] >> thank you, paul. it's now my privilege to ask questions of the presenters, from the cards filled with questions that have been submitted. mona, for you, and i'll try to

have two for each of the others, but it will also necessitate that your inches be perhaps shorter -- that your answers be perhaps shorter that elsewhere would longer time. so try to keep your responses three minutes, something of that nature. mona, two questions. how does iran's involvement with hezbollah and and the assad regime affected the administration, the obama administration's political calculus? and the second one, in what ways with the current israeli government, if at all, prefer the assad regime to remain in power or deal with whatever new regime might rise to replace it?

>> thank you. on iran, i think the answer is iran's involvement makes the administration's calculus inordinately more complicated. i mean, i think you know, just to take a step back an and lookt iran shall come and hezbollah, iran is the staunchest supporter of the assad regime. they have provided financing. they have provided weapons. they have provided advice. they have as we have noted some irgc commanders on the ground. and you now have, as i noted, a deepening involvement by hezbollah, to the extent that there's an asset there are perhaps thousands of hezbollah fighters on the ground operating in syria. so in terms of political calculus i think what we have now is, unfortunately, inordinately more competent its situation. i think it underscores iran's

ability, quite frankly, to put a cable. i think iran and hezbollah have made a strategic decision to go all in in terms of their support for the assad regime. i believe that in the case of hezbollah, they view this as an existential battle. and as a result they are going to be i think extraordinarily sort of persistent adversaries in this. from my perspective i think ultimately we need to consider iran's role in this, particularly one is looking up political, diplomatic solutions. iran i would argue holds the power to play a real spoiler, and so, therefore, on some level the calculus has to take on board iran's role and how to perhaps counter that. that could be done in a variety of ways. in terms of israel and the israeli government's preferences, i would not pretend

to have insight into what their preferences are. i think at this point as i noted, israel is doing understandably what's happening in syria with increasing alarm. and i don't, i think from tel aviv perspective it's hard to see, frankly, any good at, right now in syria. and, therefore, i think they are very much in the mode of establishing with a key interest our, laying out very clear red lines both in terms of protection of israeli people, their borders, and again i think the third goal being preventing the transfer of strategic weapons. and i think in pursuit of those three goals, they will do what they deem necessary. >> thank you, mona. these questions are for ian. and there are three. given your recent experiences

in, being in syria as opposed to viewing it from the western capital as is the case for many of us in this room, my to comment on the degree to which american and/or other intervention thus far has helped more or hurt more? second question, how sustainable is the possible reality of an alawite state spanning damascus, cartoonists and the south was homes, have sustainable do you see that as an outcome, and lastly, how will the kurds of serious northeast recent de facto self-confidence change, if at all if the rebels secure reins

of power. and/or if the regime is available? >> thank you very much but i will try to keep my answers a brief. the perception on the ground on the question of degree that the u.s. and efficient an extra extension, in terms of the perception on the ground, very few people believe that their action has been any intervention. sharon talked about humanitarian aid. learned a lot of it has been delivered on the ground them and you see that happening. but by the time it reaches people on the ground for have no idea where it's come from. if the delivery of aid and assistance is part of a policy objective i would probably argue that the message isn't getting through. at the moment.

in terms of intervention, militarily, has that helped or hurt? well, let's be honest here. without weapons, people can't fight. so to that extent the delivery of arms and munitions ostensibly -- originally have become tools of events. it has led to greater killing pixels supplied weapons to the syrian government by it, and displathesupply of weapons to ts has essentially, that's what's led to the massive loss of life over the last 12 months. i sorted don't pretend to know what the answer is in syria, but what i can tell you the only thing that is guaranteed is that more people will die and the majority of them will be civilians. the idea of an alawite state, plenty of people talk about this. you know, even the tartu's

provinces are not as homogenous as people like to think of course it is traditionally an alawite heartland. people think perhaps this is a government plan b. its fallback plan. i think we're being incredible difficult to pull off. it's hard to imagine that that would be a desirable outcome for anybody in the country. i go back to my earlier point that the terrain is some in syria absolutely exist but it's been driven by extreme focus on both sides by the jihad is, and also by groups like the national defense force which essentially militia. but they don't have to have the day, an alawite state does not have to be -- seems to me highly fanciful idea, historically of course there's been something similar to that but only if it's sustained by an outside power.

lastly, on the kurds, we've had some contact with kurds, not an endless amount. they certainly have managed to govern themselves in some areas the kurds are working with rebels. there's some kurdish villages you travel through and they have essentially, they run their own village now. the pkk flag flies in some of these villages. but they have an agreement on the ground. there's a lot of very practical agreements that seem to fly in the face. certain parts of the country, electricity flows. as an agreement between rebels and the government. so for the kurds, that local agreement stands. they are allowed to run their own affairs. but when the next governmengovernmen ts of syria fits in damascus, whoever that is, then that wil would be a question that has to be addressed, how much autonomy is granted to i certainly don't hear kurds calling for a separate state within syria, but they will absolutely demand a

high degree of autonomy. >> thank you, ian. next for you, dave. what can be done to prevent and/or and spillover violence into series of neighboring states? part two, what might change the calculus of russia and/or china moving to support assad to a greater degree than they already have? is there any point where they might agree to facilitate a transition of leadership? if so, where might that point be? and third, how does the instability in syria change israel's calculus, if at all, with iran's nuclear program?

>> thank you for the questions. they are all easy once. if i could give you confident answers to those questions i would be upstairs surrounded by -- instead of the lights being grilled. but that being said i will give my best ever. what can be done to prevent and end of spillover violence? spillover violence i find to be an unhealthy metaphor. you know, borders, it's, violence and imprintable and that if violence occurs in one state and it happened in another, that somehow your sovereignty has been defiled never to be recovered. orders are permeable to violence in juárez, well, juarez to el paso but it does go from nogales into nogales, arizona. and it can be restored in stage realize this, and they can either ratchet up our security

ratcheted down. what we've done is in some states that we are concerned about, which is jordan from using the recent opponent of the first armored division headquarters to prepare for humanitarian support, and i would imagine any other contingency which should become possible, also using the deployment of patriot battery, u.s. patent battery to jordan, presumably that is to deter any possible missile strikes on syria into jordan. measures like that seem to be the effective ones. and the states that are concerned about spillover violence, for example, if you look at iraq, violence could spill over into iraq but to what effect. the border in italy alongside syria, there isn't much there. and so you can have depth. like you don't have, the u.s. border patrol does not have to intercept every single illegal alien the moment they cross the border. in areas that are desert they

can stand back 40 or 50 miles and then deal with the problem here there are steps being made but the concept itself i think is relatively unhelpful. what you have to do instead is engage each state as an independent element and say, what are the element of stability in this state, and then address those elements. that is more helpful friend for analysis. the second, what will lead to a change of leadership in china or russia transition of leadership? my own assessment is that china is following russia's lead. so let's just put that aside. i could be incorrect but i'm the guy talking. so let's just look at russia. rush i think feels humiliated. they feel like they were misled over libya and they realize we just had one client overthrown and shot in the ditch people will be our place in the world if we give up the place would have a base in the mediterranean to no effect? the need to be some sort of

graceful transition. there can be a win loss from the russian perspective. there has to be a win-win. this runs counter to some of our goals, and in particular one of the big things that i look at human rights, which are a motivating factor as professor sullivan said, and should be but they're not necessarily determinative factors. won a big issue to talk to people of human rights is this idea of impunity. it is quite possible that assad will remain impossible -- in power. he made meet the same and gadhafi. the easiest way to convince russia to put a more helpful role in this scenario would be to say look, your client has been your client forever, he's never been an american client, he will have a graceful easement from power. might wind up in moscow, you know, both bashar al-assad and his wife are graduates of the university of london. his wife is a british citizen,

you know. the british government recently has great problems deporting people they don't like it if they can someone make their way there they would probably be there at least 15 years, but that would run counter to the idea in western people who commit human rights violations should be punished. that being said, idi amin led that is based peacefully. instability in syria and israel, this is just an etiquette because and only a marginally educated guess, but it would seem to me if i were an israeli leader, i would prefer having a coherent central is a state where there are discrete buttons that i can push whether our institutions that i could take actions against and get a predictable reaction, that that would be more stable for me than this maelstrom of uncertainty. which is basically the nature of the syrian opposition. i'm sorry if these are not cheerful answers, but it's the truth as i see it. i would be happy to engage

afterwards with anybody who cares to dispute that. thank you. >> sharon, here's a to for you. why does the use of chemical weapons in syria prosecuted a quote unquote red line? while the death of tens of thousands of civilians do not or have not up until this point in your presentation to anywhere near the same degree? and how do the syrians do this distinction made by the west of what is and is not acceptable by the syrian government? and further on that, with regard to iraq, is it not the case that syria took in 1.3 million iraqis in the early years of the us-led invasion and occupation, and the

u.s., until now, correct me if i'm wrong, the question that puts it in the u.s. is yet to allow in as many as 30,000 iraqis, and many of whom have put their lives on the line for the united states as translators, drivers, interrogators and the like. and lastly, how has assad's approach, if at all, the civil unrest been informed by events in egypt, libya, and elsewhere? what lessons, if any, might assad have learned from other revolts that have allowed him to remain in power? >> so thank you for the question. let me just can't get all this by saying as a mentoring organization we have to try to very carefully draw the line and advancing political questions but let me do the best i can do. first of on the question about

iraq and syrian refugees, yes, it is absolutely that many iraqis fled the violence in iraq during the war there, and found safe haven in syria. many of them are now going back to iraq. and it is, in fact, true that many iraqis were resettled by the united states, translators, and others who worked for the american government, that program continues. and the united states has resettled tens of thousands of iraqis and will continue to do so in the future. in terms of syria, we and the international community have not yet reached a point where a massive resettlement program is, has been instituted. there is some small-scale resettlement, and i think that's an area that the international community needs to contemplate

and land for in the future should this conflict persists. in terms of your question about targeting of civilians as a humanitarian organization, we don't have a red line on chemical weapons. our view is that the government should not target civilians, treated. and that those civilians who were targeted and/or engaged absolutely must have the ability to flee and seek safe haven in host, in neighboring countries. that's a waste of stronger advocate for the principle of open borders to make sure that those civilians were targeted in any way, shape, or form, or who feel a fear of persecution can find safe haven outside of the war zone. your third question -- remind me -- was about assad? >> the lessons from libya and

egypt, to what degree, if at all, have they informed assad in terms of perhaps of what he might be able to succeed in getting away with by remaining in power. >> one again, from a humanitarian perspective, you know, we're not in a position to analyze lessons learned from any government action. our position is that regardless of the actions of any government civilians ought not to be targeted. and if they are getting in danger that the author the ability to fully and find safe haven. >> poll, for you, would you comment the collision that was originally put the ian, how will the kurds recent de facto governance of change if the rebels secure reins of power and/or if the regime unveils?

in what ways, if any, are we still too soon to say, how the events in turkey in the last week impacted one way or the other, turkey's role in humanitarian matters, or security issues speak with well, i'll take the turkey question first. it's just beginning situation where i don't think it's clear what's going to happen with this. of course, it wasn't exactly clear what was going to happen when the first demonstrations again in egypt and libya and in syria, and in other countries. it could be a simple demonstration. it could be a discussion of political differences or it could spin into something else. but there's a huge difference between turkeys -- turkey and these other countries as i mentioned the early ones was elected. is not a dictator. and turkey also has a long

history of certain degree of dissent being cracked down upon. we are not releasing that right now. and this is in many ways a maturation of society in turkey. people are speaking their minds happening in a small grassy space although most of it is actually paved over in turkey. where is this going? i don't know. how will that affect their ability to work on this issue? turkeys a big economy, has a powerful military, significant intelligence services and they will be able to handle many different things at the same time. but if this starts to spin out of control in one way, the trick is going to have to work inwardly for a while. anthat may affect things. but currently -- turkey is definite where he was tapping on its borders in syria and iraq and elsewhere. it's a serious concern for them,

particularly when missiles go over and start killing turks and the small villages near the border. what was the other question? >> whomever would like to respond to these questions. "the new york times" reports today of advanced israeli preparations for the possibility of a third lebanon war, which israeli sources say will be a shock and awe war of total destruction. please elaborate on saudi arabia and qatar's role in promoting one side or another of this conflict. any takers? >> i'm happy -- >> mona. >> on the question of the saudi and qatar, both gulf countries

have played a role in supporting the syrian opposition, various armed groups. i think the issue to date has been that rather than coordinating their support, they have instead often worked at cross purposes, that each country has sort of been jostling for influence in the syrian theater. so that unfortunately has had the effect of deepening those differences. we are at a stage now i think where there is more attempt to be made to sort of centralized channels of support and have the gulf countries, saudi and qatar, in particular work more closely in harmony. whether or not that's going to be successful or not remains to be seen. >> with regard to that also, qatar is involved in many different countries in the region. egypt, it's involved in egypt at

its a small country but it does have a lot of strategic depth so i think the way of looking at is that qatar is playing with fire and many of these countries and it may come back after i hope that doesn't happen. the coordination between qatar in saudi arabia is definitely limited. .. >> bad idea. >> ian, question to you regarding more recent events in

turkey on the role that the erred -- erdogan government can now play given what's been occurring in the last week. >> i really defer to paul on turkey. turkey has been our host for many endless weeks on the border, but while some of my colleagues have focused on politics in istanbul -- i will pick up just on the qatar/saudi question. this certainly seems to have been a movement. it's difficult to ascertain to what extent this has actually happened. but, actually, the focus of power in terms of support for the rebels has shifted toward saudi arabia, away from qatar. there was a meeting that took place in the last couple of weeks with members of the syrian opposition. the general who is the sort of mom mall military commander in

charge of the recognized military structure within inside the country seems to be being empowered by and by saudi arabia to be a unified military figure. it seems to me there's a lot spoken about the opposition being very divided. that's very true. the central power is with the armed men. and it's those military commanders who will be the ones potentially capable of affecting any kind of political impact on the ground. and it's difficult to be sure, and there's an interesting piece in foreign policy magazine i think today by hassan hassan who's monitored this movement and specifically talking about the battle as saudi arabia's first battle inside syria. and the suggestion is, one may well know better than i, that western policymakers in particular in this town are trying to -- they see that as potentially a credible way

forward, of unifying the armed opposition. >> before thanking the audience and speakers, i wanted to extend a note of appreciation again to c-span for its outsize role in making decisions through a myriad of opportunities and possibilities to better inform the english-speaking public on these phony issues. it's hard to recall a more phony, complex and at the same time relevant and urgent program and event that the national council has been privileged to host here in the nation's capital on capitol hill than the one we've been treated to for the last two hours. and yet at the same time with a note of humility, none of the

speakers or any of those in the audience would claim to be bereft of blemish or devoid of defect or free from flaw. none have any pretends of having a monopoly on the method, copyright on the concept, trademark on the technique or a patent on the process. so we thank all of you for coming, and we've got a lot of food for thought and and a lot of thought for food. [laughter] until the next event. thank you all. [applause] [inaudible conversations] >> today defense secretary chuck hagel and joint chiefs of staff chairman general martin dempsey testify before the senate appropriations subcommittee on defense. they're expected to face questions on the 2014 defense

budget, sexual assaults in the military and other issues. live coverage at 10 a.m. eastern on c-span3. >> one of the interesting aspects of this building's history is the fact that it exists at all. and really much of the reason that this building is still here is due to our governor at the time, governor vance. when the civil war started to come to a close and union troops were camped outside raleigh, he was very concerned about the fate of the people of raleigh and of its buildings. he knew what had happened in many of the other southern cities when troops came through, and so he crafted a peaceful surrender of the city of raleigh. he agreed to leave the thety of raleigh and have the confederate troops leave the city peacefully if the union troops would also take charge to have city of

raleigh peacefully and specifically they would spare the state capitol with its museum and library. we do have three representations of george washington here at the state capitol; one outside and two inside. the statue downstairs is actually a copy of the original statue which was in the statehouse that burned, and that was destroyed. that statue was made by an italian sculptor named antonio. he represented george washington in a way that he felt really matched his representation as a military leader, as a political leader. and so he made him in a very class call way. it looked like a roman general. and that was not entirely a popular decision with the people of north carolina. and probably the thing that shocked people the most is his legs and feet are completely bare. and many people thought that was a little disrespectful, to show a president with his legs and his toes showing. >> more from the north carolina

state capitol next weekend as booktv and american history tv look at history and literary life in raleigh, north carolina. saturday at noon eastern on c-span2's booktv and sunday at 5 on c-span3's american history tv. >> last week the pakistani national assembly elected nawaz sharif as their new prime minister. sharif's party won in the may 11th elections with sharif receiving 244 votes from the 342-seat assembly. this is sharif's third term as prime minister. he previously served from 1990 to 1993 and again from 1997 to 1999. this event is courtesy of ptv global. [speaking in native tongue]

>> has secured 244 votes. [applause] [cheers and applause] >> please, pleasing -- >> translator: please keep quiet. let me proceed further, please. please let me proceed further. let me allow to continue the proceeding further. >> sharif is declared to have been elected as the islamic

prime minister of pakistan. i request the honorable prime minister to take the seat to ofe prime minister. [cheers and applause] please, proceedings -- [inaudible] [speaking in native tongue] >> translator: please do not disturb the proceedings. let it continue. >> honorable nawaz sharif to have been elected prime minister of pakistan. [applause] now i give the floor, now i give

the floor to the honorable prime minister of pakistan. [applause] spoke. [speaking in native tongue] >> translator: mr. speaker, first of all, i thank allah that he has given me an opportunity to serve the people of pakistan and pakistan. given me the courage to deal

with the responsibilities that have been imparted to me. i thank the people of pakistan that they have shown their confidence in the pakistan military -- [inaudible] this is a great -- [inaudible] for me. [cheers and applause] i believe that today the people have shown their love towards me. they will also stand shoulder to shoulder with me in my mission. i pay tribute to the entire nation that despite the conspiracies to spread uncertainty, they came out to

vote and wrote a bright chapter of democracy. [applause] people deserve congratulations who voted for their parties and played a national role. mr. speaker, i also thank the honorable members of the house who have given me the honor of leader of the house today and also those who voted for me as for those who expressed different opinion. god willing, i will try my best to come to the expectations of the house.

the decision of the people has proved their belief in democracy. and the time has proved that pakistan and democracy go together. there is no other way than democracy. we have witnessed the ruins of despotic rules. whenever we deviated from democracy, the constitution and other values were disturbed. whenever there was dictatorship, it was a great damage to pakistan. the unity of the nation was

disturbed, was shaken. lawlessness was there, and the respect of the nation, dignity of the nation got damaged in the community of nations. and as a result of the dictatorship, the country was dismembered. pakistan's existence, sovereignty and prosperity and its place in the community of nation is in the -- [inaudible] of democracy and superiority of constitution, and -- [inaudible] should be stopped forever. it is a matter of pleasure that

it will not tolerate, the house will not tolerate any -- [inaudible] pakistan has already paid a heavy price for this. there is no room for any such circus in the country. the house has to play a very important and strong role. people are the real masters of power. [inaudible] our cooperation, our differences whatever they are, they should be for pakistan. whatever party we belong to, our identity should be pakistani so that after five years when we

leave, then we leave a prosperous and self-respecting pakistan and let pakistan be seen as a shining star on the horizon of the world. [applause] mr. speaker, i have been telling that the time has come for the politics of -- [inaudible] not of power. we have laid down the foundation our journey began from kpk where despite of a majority, we left the field for the movement for justice. another milestone was laid in the province of balochistan.

there we left the place for the -- [inaudible] and governor to follow the pears. this is -- the parties. this is because we are trying to, we will cooperate with all the provincial governments. mr. speaker, during the last five years as an opposition party, we have given a new democratic culture. we cooperated for positive

amendments in constitution, and we wanted the government should complete its five-year term despite allegations of a friendly opposition, we served as an ideal opposition. god willing, we will still lay down the foundation for new traditions. the country is faced with more -- [inaudible] problems; bloodshedding, poverty , despair among the young people, extremism, corruption,

and pakistan's beginning place in the world. there's a jungle of challenges. my government is accepting the challenge. i will not paint a rosy picture. the nation should know that the economy of the nation is in very bad phase, is facing big problems. i assure the nation that i will not spare a single moment to change the fate of the country, to change the fate of the

people, and my king will also do the same. [applause] as this responsibility is on my shoulder, every moment is vicious to me, and i will not spare any time to solve the issues facing the country. the focal point of my policy will be in the field of agriculture, industries, commerce.

by creating a strong infrastructure, will be the priority of my government. initial steps have started. my government will not tolerate corruption. [applause] in corruption will have to face tough accountability. we have closed the chapter of nepotism and favoritism. we have devised a transparent system for the people who will be appointed in high positions

and appointments will only be made on merit. [inaudible] in the international and national -- [inaudible] for these posts and -- [inaudible] to is serve the country. the purpose of this change is to insure that only meritorious people should have the reins of the country in their hands. every step will be an evidence of our spirit and sincerity.

we have made a comprehensive plan for the solution of the problems facing the country, including -- [inaudible] at this time i would like to only say that the job has started, a process has started for a shining pakistan. my eyes are witnessing a pakistan, a bright pakistan where laborers, farmers, women, youth and everyone will have an opportunity to prosper.

rights of the minorities will be guaranteed. [speaking in native tongue] >> translator: we will try to build a country which will be known as a country with good governance, clean democracy. [applause] and not as a country facing poverty and despair. we need the support of parliament in our journey, support of the media and people. we all have to play the role. everyone has to play a role. mr. speaker, i have been telling

quite often that the problems pakistan is facing today for that we have to be on the same page. all of us and all the stakeholders in pakistan, we have to unite, we have to assemble together and face the problems facing the country. the country is facing a lot of problems, and they are so great that a is single party cannot solve them.

if all of us unite together sitting in this house, we can solve all the problems facing pakistan which we have mentioned, and in no time, and we can raise our heads and march forward. i will again -- [inaudible] today that let us get together, let us assemble together, and in the interest of the country we will also get in touch with other parties so that we sit down across a table and share our ideas and vision, and let us

prepare a common agenda. [applause] let us make -- [inaudible] to insure that how can we get the country out of this problems whether it is a rural area or urban area, whether it was -- [inaudible] whether it is karachi or -- [inaudible] every place has similar poverty. some have gone forward, some are very depressed and backward. we have displayed a unity.

when i have presented the poster of governor to the -- [inaudible] army party, this is not a favor. from the very election day, i have said that wherever any party has a mandate, we will respect that. [applause] and keeping that in mind, i have offered to let them form their own governments. balochistan, kpk -- [inaudible] we will cooperate fully with

these governments. whatever cooperation >> translator: similarly, in the travel area if there is no peace, nobody seeks -- [inaudible] and we will destroy peace everywhere. similarly in balochistan, the

first step that has been taken, and a new chapter has been written in the history of pakistan. this is the first time that the true leadership of balochistan has been given the opportunity. i am very happy. this is the greatest step. i have told milieu tents -- my lieutenants that let us give opportunity to them to play their role in setting right the situation in balochistan. when there is piece in balochistan, every pakistani will be happy.

whether it's from -- [inaudible] or any other place. now i want to show -- share one more project that i will provide later. i met the chinese prime minister recently and discussed a project, and we agreed. myself and the chinese prime minister both agreed that we will build a railroad and a rod rod -- road from kashmir to punjab and to finish. [inaudible] other branch of this project will go to karachi.

we have agreed to this project, settled this prompt, -- project, and he has told me that when you take over the office, set a task force, and i will do the same in china, and there should be people who can work fast, and they should -- vez visibility and steps should be taken, solid steps should be taken to complete the project. i have just mentioned the broad outlines of a modern area -- [inaudible] kpk, punjab, baa balochistan wil

greatly benefit from this project. look, the last administration in pakistan handed over the administration of -- [inaudible] to china. [applause] this is a great thing of the former government. it's my desire, and i have talked with -- [inaudible] and others that my desire is

that given the location, the center point of -- [inaudible] it should be a free port, and it should have a special status. and it will not only benefit balochistan, but entire pakistan. we are laid on the foundation of -- [inaudible] i want that all these projects should be completed during the five-year tenure, and god willing, we will take all the steps which will benefit everyone in the country. this is not a mission of my

party alone. this is the desire of everyone sitting in this house that pakistan should progress with speed. the burden of debt should go. there should be prosperity, there should be peace, children go to school, women -- mothers should not worry about their children going out and their husbands going out to work. and on the other hand, they should have peace that pakistan has become a bastion of peace and tranquility.

come and let us build a pakistan like this -- [inaudible] balochistan, kpk, karachi, punjab. we have to eliminate extremism and lawlessness. let us consult together what steps should be taken, how to address these issues. the attacks of drones should stop. [applause] this chapter should be closed now. we respect the sovereignty of other countries, so it is the

responsibility of other countries also to respect our sovereignty. this has been going on for quite a few years now. it should stop. let us sit down together and charter common strategy. mr. speaker, once again i thank you and all the members of the house. let god provide me guidance. [speaking in native tongue] >> translator: i also want to say when there was an election for speaker and the deputy speaker, i would like to compliment madam speaker. was really very happy the way

she conducted the whole proceedings. [applause] this is the beauty of democracy. [applause] [speaking in native tongue] >> translator: the way she assumed the seat of the speaker, that was really encouraging. it should have happened 60 years ago, but we have been wandering, and we have not seen these scenes before. this is really delightful. during the last five years, we learned a lesson that we will not allow any government to go

through undemocratic means. we will follow the democratic means. i am very happy that parliament has completed five years. we have also a role in all this along with the government. and these are the steps that will take pakistan to its real shining destiny. i am very happy to watch and witness all those scenes and let god give us strength to take things forward. and even in parliament there should be very constructive

discussion. mr. speaker,ly not take much time -- i will not take much time and again thank everyone. bless us all, long live pakistan. [applause] >> today defense secretary chuck hague and joint chiefs of staff chairman general martin dempsey testify before the senate appropriations committee on defense. they're expected to face questions about sexual assault in the military and the budget. that's at 10 a.m. eastern on c-span3. >> the name of this place still registers with a shuddering in the hearts of the american people. more than any other name connected to the civil war except lincoln's, gettysburg

reverberates. americans retain the knowledge that what happened here was the crux of our terrible national trial, and even americans who aren't sure precisely what transpired on these fields know that all the glory and all the tragedy we associate with the civil war resides most palpably, most indelibly here. >> the 150th anniversary of the battle of gettysburg live all day, sunday, june 30th, on american history tv on c-span3. >> the american bankers' association released its latest economic forecast friday saying it was one of the more positive ones they've put out and shows stronger economic growth later this year into 2014. this briefing is 20 minutes. >> all right. hello, everybody. welcome. i'd like to -- i'm jeff sigmund, senior director of public

relations for aba. i'd like to thank everyone for coming to today's press conference. aba's economic advisory committee meets twice a year to meet with washington officials including the federal reserve board. the members of the eac in attendance today are scott browne, raymond james and associations; peter hooper, deutsche bank; ethan harris, bank of america/merrill lynch; christopher lowe, ftn financial; nathaniel carp, bba compass; gregory miller, sun trust bank; george -- [inaudible] huntington bank; richard moody, regents bank; carl tannenbaum, northern trust and scott anderson, eac chair and chief economist for bank of the west. also in attendance is bob davis, aba's executive vice president of mortgage market policy and once a bank economist himself. after our chairman delivers today's forecast, there will be

a question and answer session. we ask that you, please, state your name and the name of your publication. so i'll hand it over to scott anderson to get things started. >> thank you. good morning, everybody. thank you all for coming this morning. well, after meeting yesterday and today to discuss the u.s. economic outlook, it's the view of our committee that after slower growth in the second and third quarter of this year, u.s. economic growth will accelerate to 2.8% growth in the first half of 2014. the combination of a recovering housing market, resilient consumer spending, less fiscal drag and a pick-up in the global economy will be the catalyst for a faster u.s. economic growth rate. the housing market will be an important part of the story. the eac committee believe that is the housing market has entered a sustainable recovery

with strong gains forecast for home construction. the current forecast is 15% growth in residential construction this year and next year. in new home sales, we're expecting about 25% growth in new home sales in 2013. and in home prices, there's different home price metrics, but our fha home price measure that we use, we're expecting to grow at least 5, 6% over the next year or two each year. so the housing market, we believe, has finally caught up with the broader economic recovery, and the wealth effect created from rising home values will be a much more important boost to consumer confidence and spending going forward. turning to the consumer, the consumer will also be in a more important position to support the economic recovery. we do think there'll be a better support than there has been over the last couple of years and

will be stronger over the next two years. indeed, we think real consumer spending growth which fourth quarter in 2012 was up only 1.8%, we think will rise to above a 2.5% growth rate in 2013 and 2014. it's a combination of several factors, why we see a stronger consumer. high stock prices are certainly helping, rising home values are another piece of the wealth story. we're also seeing declining gas and energy prices which is helping out lower income households also boost their real incomes s. so this is certainly helping out disposable income, and as i always -- also allowing consumers to kind of. shrug off to some extent the rising taxes and the reduced federal spending. looking at the sequester effects, the committee does believe that the fiscal drag from spending cuts and tax hikes is peaking in this quarter and

will also kind of be a bigger factor in the third quarter of this year. but then we think that drag will diminish over time. there's some debate about what the multiplier effects of the is she quester drag is -- sequester drag is, but i can talk more about that in g and a. -- q&a. but we do think fiscal drag will diminish over time. we're not expecting new tightening measures over the forecast horizon. at the same time, the committee sees progress in reducing the country's budget deficit. if federal deficit is expected to fall this year to 600 billion -- 650 billion, excuse me, in 2013 falling to 600 billion in fiscal year 2014. that's down from a 1.1 trillion federal deficit in 2012. turning to the jobs and the job market, the committee does expect a pickup in job growth, especially in the fourth quarter

of 2013 and into 2014. the committee's consensus view is that job growth will accelerate into the 200,000 a month range next year. i think the rebound we saw in the may payroll jobs this morning, 175,000 jobs created, is an encouraging sign of improvement in our labor market, particularly the job growth we saw in restaurant, sales and retail suggests that the consumer and consumer spending is hanging in there despite the spending cuts and tax hikes. that's an encouraging sign. the impact on the unemployment rate which, of course, is tied to fed policy, we do see continued gradual improvement in the unemployment rate even though the unemployment rate ticked up a little bit -- actually, it rised up to 7.6 %. we do see that dropping to 7.2% by the fourth quarter of this year. moreover, when you look at the unemployment rate longer term,

we do expect the fed's threshold of 6.5% unemployment to be reached a little bit sooner than what we thought in previous meetings, at about the first quarter of 2015. turning to fed policy, i know there's a lot of interest in what this all means, the improving economy, improving labor market for the fed and their actions. we do believe that the stronger economy and job creation by the end of the year will allow the federal reserve to reduce the pace of its asset purchases before the end of the year. now, i know the markets are focused on september time frame, the fomc meetings. there were a few committee members that thought dialing down or taper of the asset purchases could happen before or at the september meeting, but the majority of that would be before the end of the year, and there are a few committee members that also thought it wouldn't be tapering or dialing

down until early 2014. so given that forecast for the fed, we certainly don't see any rise in fed funds rate over the forecast horizon. so the committee does forecast only a slight rise in long-term interest rates as the economy improves as the fed begins to scale back on its asset purchases. we do see the ten-year treasury yield moving up to 2.2% by the end of the year and moving to 2.5% by mid 2014. if you look at mortgage rates, we already just moved a little bit above 4% on the 0-year fix -- 3046 year fixed rate mortgage. we think that could be up to 4.6 by the middle of 2014. the other concern people have had is on the inflation area environment, whether we're going to see inflation or deflation.

we think it will remain on the back burner for the federal reserve. we do see lower inflation this year than last year. we are going to trend down on cpi inflation, we think, to 1.4 this year from 1.9 last year. even on the core rate we're going to be well in the mid range of the fed's target zone at 1.5 on core pce. so this will be a factor, holding and constraining the increase we're going to see in real rates. inflation declining will help keep a lid on those increases despite fed taper or dialing down. on the bank credit side, we also have more good news to report. consumer credit growth, we think, will accelerate this year to around a 6.5% pace. business lending will remain strong. we're expecting 9 president growth this year -- 9% growth this year, and we've continued to see improvement in credit quality both for consumers and businesses. deliberate again si rates on

both business loans and consumer loans continue to decline as the economy improves, and we think that improvement will continue this year. i don't want to paint this all rosy. obviously, there's risks that remain to the forecast. we do think those risks havediminished from where they were in january. we got over the fiscal cliff issues, for example. so what are we focused on for downside risk to the forecast? we still belief that a weak global economy is a threat. continued reis education in europe -- recession in europe. we're not completely out of the woods yet. we're seeing disappointing economic data coming out of the emerging market economies including china and brazil. that's another concern. it'll certainly impact our production side of our economy. we saw that this morning in the job numbers. it's going to impact our exports and our production. the other thing we're worried about a little bit is there could be a bigger multiplier effect from the fiscal drag than what we've seen so far.

there was some debate among the committee about when, you know, whether the sequester was really having an impact or not, and we all believe it's going to have a significant impact on growth. we think that impact has been delayed a little bit partly because employered move the income growth into the fourth quarter, expecting tax increases, and that helps smooth out consumer spending in the first quarter, but we do think those impacts are going to hit more broadly in the second, third quarters of this year, and in the multiplier effects might be a little steeper than what we have. the other, i guess, third real concern we had as we debated the risks upside and downside was a premature exit from monetary accommodation from the federal reserve. now, when we say exit, we're not really talking about a scaling back or tapering or dialing down of asset purchases. we think that's likely to happen, and it's not really a downside risk to the forecast. but a more aggressive approach

perhaps when the the fed starts to raise rates. that's something we still think is not in the cards, in the forecast and shouldn't be undertaken because there's so many risks still out there in the forecast. we think it could hurt the housing market and consumer spending. so in short, this is, i think, one of the more positive economic forecasts that our group has come out with since the economic expansion started in 2009. we do see real improvement in the private sector economy. certainly clearly visible in the economic data. and i think this will lead to a more stable and sustainable expansion path for the u.s. economy by 2014. so thank you for coming and thank you for your attention the. i now open up for any questions. >> [inaudible] >> this one? >> [inaudible] >> okay, sorry.

>> questions. >> yeah. >> [inaudible] markets international. what do you make of the recent rise we've seen in mortgage rates? do you think it's tied to -- [inaudible] or is it more a reflection of how the market's doing? and do you think the fed will have to respond to maybe do more to push it back down to -- [inaudible] >> well, i think the market's rise in mortgage rates is certainly reflecting the market response to the new taper discussion and the dialing down of asset purchases. we've seen it's really following the trend in the treasury market as we saw ten-year treasury yields rise, and i think there's also some concern of where the fed dials down on their asset purchases. right now the fed is buying mortgage-backed securities and treasuries as part of their asset purchases, and there's some discussion in the last fed minutes, some members offered the seed of thought that they should focus on scaling back

agency debt purchases rather than treasury debt purchases. they don't feel comfortable with the interventions in housing. that has gotten some mortgage-backed securities nervous about that, and we have seen some spreads widening out a little bit in the mortgage space. but for the most part, it's really a response to the change in fed tone and the expectation that we're getting closer to the date of a fed exit. >> you said that -- [inaudible] they will dial down purchases for the end of the year. was there any talk or any projection of about how much they would dial down and where they would take away, i guess? >> therefore differing views on the committee, but i think even thought they would take a scaled approach, maybe 20, $25 billion decline on monthly purchases from where they are right now. you know, as much as a quarter lower than what they're doing now is a possibility. but there's a range of views. i think that, a lot of that will

be driven by the data and how the data evolves over time. yeah. >> greg -- [inaudible] from market watch. i just want to follow up there. you said it's going to be driven by the data. so there's a little bit of chatter this morning that 200,000 jobs per month is not a imagine ific number. do you have a sense of -- not a magic number. do you have a sense of what we could see in the next couple months? >> yeah. i think our committee's view is there is no real magic number on jobs. i've heard a lot of debate about the 200,000 jobs a month. i think there's differing views on that. i think the fed will probably look at a broad range of labor market indicators and not just the monthly payroll numbers -- >> [inaudible] >> um, i think the 175,000 jobs we got this morning, i think you can read into it what you wallet. i don't think it really changes my view at all. i think from my point of view, i

think we need stronger growth. i would like to see the taper push back because i think there's enough uncertainties globally, fiscally that we don't need to pile on tighter financial conditions. yeah. >> just to come back to the issue of housing and the mortgage rates, do you have any concerns that the run-up in rates could undermine the housing recovery? >> could you repeat the question? >> yeah, yeah, sorry. the question was on whether the rise in mortgage rates could undermine the housing recovery. no, i think the committee's view was that the housing recovery would be sustainable despite a slight rise or modest rise in mortgage rates. with that said, we have seen some reaction recently in some of the mortgage purchase application data from rising, the rising rates we saw in may.

mortgage rates jumped about 70 basis points over the last month, and that has led to about a 6% decline month over month in purchase applications for mortgages. so there has been some negative impact on the spike. remains to be seen whether that's going to be sustainable. i think that could slow things around a lit -- slow things down a little bit. it's really been running ahead of income growth, and i think as rates rise, housing affordable will be more of an issue in those markets. >> [inaudible] from the very sharp pullback in the refinancing? mortgage refinancing activity? i mean, it has been helping people improve balance sheets, free up cash flow. >> yeah. well, that's where the real impact's going to be from rising rates, and we've already seen re-fi applications are down 40% from a month ago already, the pace of them. so you are seeing impacts going to affect the banking industry, obviously, on the mortgage side.

there's going to be some income effects, because i think there has been some. but probably less than what we've seen. i don't think people are refinancing really to take out income on their homes. i think they've been refinancing to make their housing a little more affordable. that's freeing up a little bit of, you know, income in other areas. but i don't necessarily think it's going to have as big of an impact as we saw in the bubble years. yeah. >> what did you or why did the committee feel the need to include this warning about premature exit from policy? what motivated that? >> well, i think, you know, we've seen the market reaction to just the taper news and some of the stock market and bond market reactions to it. you know, there's a chance that action becomes more severe, especially if the fed makes,

takes aggressive action. and we do think that while we're seeing green chute -- shoots or positive signs, given the risk on a management basis, you don't need to be adding to that in terms of tightened financial positions at this point. i think the time will be coming, but we just, we believe that the fed should are remain fairly cautious here as they see the continued improvement in numbers. we only have really come off of one strong quarter in the first quarter, and we've had similar slowdowns before, and we're predicting one this time. another 1.7% growth in the second quarter. so it's, you know, there's certainly mixed signals out there in the market. and that's enough, i think, to keep the fed on a cautious stance. >> [inaudible] wall"wall street journal." two questions. so you said the sequester impact will be noted