the chairwoman of the senate intelligence community acquitted in they have this paper with the headline yesterday that she rejects the new york times report, recent report on benghazi but said that there were no ties to al qaeda. ..you have been saying that for quite a while now. can you talk to us and explain how you know that al qaeda would we involved? guest: what have seen since the story came out and that was the story that said there was no link whatsoever in the attack -- whate are different in they are referring to when they say an al qaeda attack. if you're talking about an attack plan and plotted by corelle qaeda -- by core al qaeda, then they are probably correct. peopleare talking about

who have ties to al qaeda, or are affiliated in some way, i think some of those players were involved in what happened in benghazi. it may depend onit may depend oe ties are. i would tend to agree with senator feinstein's reaction. i think it oversimplifies matters to say we had no involvement and it oversimplifies things to suggest the core al qaeda planned this because i don't think that is the case. >> host: does it matter? >> guest: it does matter in the sense that we want to know exactly who was responsible and we want to know whether there was any al qaeda instruction so from that point of view it does matter. from the point of view of if they are not affiliated with al qaeda do we not need to worry

about them so much? i don't think that's the case. one of the things we we are all in agreement on is the role of onstar al-sharia organization part of which we were counting on for some security. it's almost worse if people that we were counting on to help us turn around and attacked us. from that point of view it really doesn't matter whether they are linked to al qaeda or not. they could still be very deadly and very much a threat. >> host: the "washington post" recently reported that u.s. officials suspected the former guantánamo bay detainee played a role in the attack on the american diplomatic compound in benghazi and are planning to designate the group he leads as a foreign intelligence -- why do they need to designate his group is a foreign --'s. >> guest: this is a group that has been acting with one of the militia organizations in libya. i think there are still some

question about what his role if any was personally in the attack on benghazi but the significance of designating the organization that way is that we can use different financial instruments to go after their financing. it may have implications in terms of the status that we focus on them from a security point of view in terms of travel restrictions. so it will basically put heightened restrictions and allow us to use certain tools that we can't use without that destination. it is significant. i don't know that it tells us in and of itself much about its role, the role of that group in benghazi on that day but it does mean we consider that group very much a threat. >> host: james.

international monetary fund chief christine lagarde talked about the positive she sees in the world economy in 2014. she cites the u.s. budget deal as one step towards stabilizing the economy. on the national press club, this is an outward. [applause] >> now for our guest today, she is the first woman at the helm of the international monetary fund and the first woman to hold a finance minister job in a g7 country. christine lagarde has led the imf for two and a half years during which time she has been a -- european economic crisis. when she took over the job headquartered in washington ms. lagarde was not you knew. she attended holton arms school in bethesda and worked at the

u.s. capital as an aide to then represented william cullen where she helped him correspond with this french-speaking constituents during the watergate hearings. [laughter] a one-time member of the french national synchronized swimming team and devoted antitrust labor lawyer, madam lagarde became the first chairman of the law firm baker mckenzie. early in her career at the job interview law firm impairs she was told she would never become partner because she was a woman. later in her career she would stress it will opportunities for women encouraging them to work and advance their careers. climbing from latter madam lagarde joined the french government in june 2005 as minister for foreign. she worked briefly as a minister for agriculture and fisheries in 2007 became france's head of finance. she also chaired at the thing

counsel, the body of economics and finance ministers of the european union. this experience with the e.u. europe as he came in handy when the dam lagarde negotiated a bailout of greece and economic help for portugal and cyprus. according to a news report in the darkest hour she handed out m&m candies to lift the spirits of her global counterparts. [laughter] with europe slowly emerging from the deep recession and the u.s. dealing with its own budget issues she expressed optimism about the global economy in recent weeks saying the imf will raise its outlook both for the u.s. and for the global economy. yet she remains concerned about the global recovery being uneven and subdued and about the slowing of the emerging market economies the main engine of willful growth in the last several years. speaking in mali on january 9 she said the risk of volatility in the financial markets may create new challenges in

emerging market economies and further slow growth. in the u.s. she is urging the fund's largest shareholders to fulfill a pledge made three years ago to approve the increase of the imf's lending capacity and allow developing countries including china. clearly for the iron lady of the global economy the challenges are far from over. to hear about these matters today least join me in getting a warm national press club welcome to managing director of the imf, christine lagarde. [applause] >> thank you so much. as you can tell i do as i'm told i thought i had to. >> about the time when the media clearly failed.

good afternoon and thank you very much for having me with you. i would like to thank the national press club and especially angela greiling keane for not only inviting me to this prestigious venue but presenting the outline of what i want to talk to you about now. as is if we have prepared that together which we have not. let me first of all of course begin by wishing all a happy new year. i guess it's still time to do that given we are just exactly halfway through between our western new year in the lunar new year which will come in a few weeks time. i think it's also appropriate to wish ourselves a happy new year given what i would like to talk to you about which has to do with the global economy and what we should expect for 2014. i'm going to test you knew more ologies skills by asking you to think about the magic seven,

okay? most of you will know that seven is quite a number. all sorts of themes, religions and so if we think about 2014, all right i'm just giving you 2014, drop the zero, 142 times, seven. that is just part of the example so 2014 will be a milestone and hopefully a magic year in many respects. it will mark do hundredth anniversary of the first world war back in 1914. it's this 17th anniversary, drop the zero. [laughter] of the bretton woods conference that actually gave birth to the imf.

and it will be the fifth anniversary of the fall of the prayer room -- berlin wall, the 25th. it will also marked the seventh anniversary of the financial market jitters that quickly turned into the greatest global economic calamity since the great depression. the crisis still lingers. yet, optimism is in the air. we have left the deep freeze behind us and the horizon looks just a bit writer. so my hope and my wish for 2014 is that after those seven miserable years, weak and fragile, we have seven strong years. i doubt whether the g7 will have anything to do with it or whether it will be the g20. i certainly hope that the imf will have something to do with it. now is this wishful thinking?

no, but it will not happen randomly without us together and policymakers in particular making the right decisions. having the right policy mix, organizing themselves in a coordinated way. let me talk about first of all the global outlook as we see it in that i would like to touch on the policies that i believe will help us transform those seven miserable years into seven strong years. now i'm going to anticipate potential questions that some of you might he tempted to ask, by just stating clearly that i'm not going to give you the number of our revised world economic outlook number that will be disclosed on january 21. suffice it to say that it will be directionally positive as a revision. but i'm going to discuss the main traits. we saw the momentum strengthen in the latter half of 2013 and

we believe that it will continue to strengthen in 2014. largely due to improvements in the advanced economies. yet, despite that and that directionally positive movement, growth is still stuck in fairly low year. the potential which we believe is at around 4% which means that the world could, if it were at full potential, could create a lot more jobs than before and we do have at the moment and we could do that without having to worry about the inflation genie coming out of the bottle. without positive initial statement, i would also like to add that it will not be without downside risks and significant ones. with inflation running way below

central bank targets in most corners, clearly we are seeing rising risks of deflation, which could prove disastrous for the recovery. if inflation is the genie, then certainly deflation is the ogre. it must be fought decisively. during the years of the crisis, we have relied heavily on the emerging market economies and on the low income economies to actually be the drivers of growth and if you combined those two categories emerging and new income countries they produce actually three-quarters of global growth. however, a growing number of those emerging market economies are slowing down as the economy cycle continues so that is also one of the risks that we see going forward. we also see risks arising out of the financial market turbulence

and the volatility of capital flows. the reaction to the fed's tapering has been calm so far and this is partly due to the run and we had a dry run back in june. it is good news that this is gone but there could still be rough waters ahead. overall, as they set the direction is positive, but global growth is still too low, too fragile and too uneven. moreover, even as it is, or as the forecast that it will be, it is not enough to create the 200 million jobs that are needed by people who are looking for a job everywhere in the world. additionally, into many countries, actually most countries, the benefits of growth are being enjoyed by far too few people and just to give an example in the united states,

95% of income gains since 2009 went to the top 1%. 95% of the income growth, gains, went to the top 1%. now this is not a recipe for stability and not a recipe for sustainability. let's now turn to the policy recommendation. because all of that really points to the fact that policymakers all need to stay focused, focused on the policies that are needed for sustainable and inclusive growth as well as rewarding jobs. we so far have certainly avoided the worst case scenario and all policymakers have made part of the necessary efforts. those that went way beyond the call of duty were the central bankers.

they did that to keep interest rates low and the financial system functioning while governments in most places deployed fiscal stimulus where they could and applied adequate, sometimes a bit too much fiscal consolidation where they should. the road has certainly been difficult and it continues to be so but is edward mauro once said difficulty is the excuse that history never accepts. now that the global economy looks more stable, the big priority for policymakers from our point of view in 2014 is going to be to fortify the feeble global recovery and make it sustainable. great. what does it mean in practice? i'm going to run you through the

advanced economies that i will take my groups and then the emerging markets, then the low income countries as to what we see as a good coordinator policy mix that should the applied in order to secure and strengthen that growth and create those jobs. if we look at the advanced economies first, what it means is that you remember what i said about the monetary policies applied by the central banks. well central banks are going to have to slightly gradually over time and properly communicated, undo what they have done. that, they should not do that until growth is robust enough and firmly rooted. so the way in which tapering is applied, the way in which from and conventional to conventional return to have to be very well-timed. at the same time, countries will

need to use the rule created via that unconventional policy used to put in place the reforms that are needed to jumpstart growth and jobs. so it's not just for central bankers to do some policy work but it's also for the other players. in terms of budgetary policy in particular. now let it go deeper in touch on the different regions. and we will look first at the largest economic player in the world, the united states. growth in the united states is certainly picking up driven essentially by private demand. and that recovery that we have observed in 2013, that unfortunately was the fiscal calm consolidation of 2014, will be helped by the loosening of the fiscal concept as a result of the recent budget deal.

still, it will be critical to avoid premature withdrawal of monetary support and to return to an orderly budget process, including removing the threat of the debt ceiling. if we look now at the euro area, the euro area is clearly turning the corner from recession to recovery. but when you drill down, growth is still unbalanced with some countries growing reasonably well and some economies doing quite well and other still lagging behind. and some of those are actually suffering from significant high debt and credit constraints as well. so here are monetary policy can can continue to help. clearly the ecb has done quite a bit to facilitate the financing of the economy but they can do

more and we believe that it can do so in a very targeted way by facilitating targeted landing in particular in order to avoid the financial fragmentation that is still there despite the unconventional policy that has been applied with going forward compliance. we believe the forthcoming assets, quality and stress tests that will take lace in the course of 2014 is going to help if it is done evenhandedly and in a credible manner. and obviously well communicated as well. in the euro area we also believe there is a need to accelerate reforms, did lose labor market and enhance credit market access. now let's turn to japan. in japan the initial boost from economics and the three arrows

has been effective but it is weakening a bit. hopefully temporary fiscal stimulus announced by the prime minister abbé will actually offset or partially upset the negative effects of the necessary consumption increase which is one step in the process of increasing consumption tax. now the challenge for japan is to agree on medium term fiscal adjustments, medium-term and to the economic and social reforms that we believe are needed to strengthen growth in japan. what do i mean by that? well, the regulating the service and public markets that is heavily regulated and highly protected and that is what i mean by social reforms. making sure that women in the japanese economy can actually

access the job market. i am very pleased actually the high minister abbé has listened to that recommendation and that he is including in his budget for 2014 significant amount of spending on data centers for japanese women. now, moving away from the advanced economies let's look at the emerging markets. the challenge there is going to be to navigate any bumping us and stay strong. policymakers may be wary of any signs of financial excess and they should especially in the form of asset bubbles are rising deaths including through backdoor channels or instruments. financial regulation needs to be strengthened in order to be able to better manage credit cycles. and yes, many countries also could do more in the structural thought. if only by way of investing in

the necessary infrastructure, you know well managed and with a good strategy in order to remove the bottle met that some of those emerging markets faces they have grown quite steadily over the last five years. what about low income countries? hear the news is generally good. this country has really been the bright spot of the global economy. but now is the time to look in those games and make sure that some of the buffers that they have used during the time of the financial crisis are reconstituted and that they can build stronger defense against either the direct by way of the markets for instance or the consequential external shocks that could result from movement of capital flows that would weaken the growth in the emerging market economies but particularly the trading and investment partners of those low-income countries.

in addition, countries, the low income countries in addition to building the buffers including byways in revenues frankly because they have the benefit of strong growth but we haven't seen in those economies and equivalent and proportional increase of their revenue so they have to focus on that. but they also should keep on spending effectively and selectively on important social programs and infrastructure budgets. i have to say that i'm just coming back from two fast growing regions of the world. i was just before christmas in asia visiting cambodia, myanmar and -- which is not in the category of the low-income countries and i just got back from south africa kenya and mali. those regions have growing at the rate of 6.5 and 5% respectively and when we are here in d.c. often we tend to

forget the massive movements that are taking place in those markets and how those economies are on the go and how the middle-class is building and the economic power is strengthening in those areas. everything is relative. let's face it anyone who has been to mali will not say that a middle class is rising and everything is growing, no. the speed for which it is taking place is just phenomenal. i will not close that sort of pattern of the global economy without mentioning the air countries in transition and while you are right that we had to spend quite of bit of time on europe and the euro area we have also spent quite a bit of time on the countries in transition to try to help them strengthen the economy in order to restore some political stability going forward. it's exactly three years ago that the arab spring started

back in tunisia and then spread out to the rest of the region. as these countries grapple with the reforms needed to unleash the dynamism of the private sector and create more jobs for the young people, they need support and they need international support in a significant way. and not just from next-door neighbors. so i have tried to take you through the various regions of the world up in terms of where we see those economies, where we see them going forward and i have tried to describe the policies and the coordination of policies that they apply which doesn't mean to say that there are no issues that actually cut across those different groups. that requires, and resolve common solutions to common problems. think about the legacy of public and private debt for instance. think about the fiscal

consolidation. think about the reforms to the financial system that do not apply only by virtue of the dodd-frank act but that apply across-the-board because just like environmental threats, just like contagious disease, those issues know no borders. the same mystery with rising inequality. as i mentioned to you, rising income has gone to 1% of the population. now you will say to me of course this is as a result of the improvement of the security market. those are problems that cut across all groups of countries and they are not abstract. so it is only by addressing them that we can actually ensure future prosperity, that we can meet the rising aspiration of the young people in those countries and global citizens more generally for jobs, for

security, for opportunity and for dignity. so i will conclude. at the outset i made reference to the bretton woods conference in this country about seven years ago and the funding of the imf amongst others. now to move forward, and for the imf to continue to be supportive force and an ally and partner financial stability that is needed for all economies to prosper we need the same spirit of cooperation and global solidarity today. some people sometimes worry and they wonder and they say why is it that the imf is supporting europe at the moment? and i remind them 70 years ago the first countries that have the benefit of imf support for european countries like my country. france was actually the first

program with the imf and then it moved around the planet. we had to help latin american countries. we had to help asian countries. we are helping african countries throughout different kinds of businesses and we are helping europe at the moment. and it will be another group of countries next time around. now i believe that the imf can play an especially important role here as a forum not just lending and collecting back as we always do but also to operate as a full coordination. we have certainly played our part in collective response to the crisis. we have made no less than 154 lending commitments and provided technical assistance to 90% of our initiative since the onset of the crisis since 2008. and we have abided her best

possible advice to all 188 members. one of the strengths of the imf is that we actually see the bigger picture. it's not being arrogant about it. we just have to look under the skin of the economy of 180 members and we have to compare best practices. we have too offered vice that takes into account what spillover effects will be as a result of the domestic policy decided by one country or the other. no other institution can do that at that skill -- that scale, that level. the role certainly become more important with time. we need to continue to adopt and to reflect the changing dynamics of the global economy and homeownership. that is why we need to continue the support of our entire membership. i will end with one thing. i would just like to pay tribute

to the organization and through you to the journalists who very often have this commitment to truth and honesty and do that sometimes in very difficult circumstances in very faraway places where they take risks, much more so than we often think of. i will end with another icon of american journalism here. i mean walter cronkite and he actually says, you will know what he says. but he says something which i have heard president chirac say so many times in the french version of course during cabinet meetings. he used to say after having describe something horrendous happening in the world, and all of those you know sort of waiting to see what we could do, and he would say why law.

walter cronkite used to say, and that's the way it is. thank you very much. [applause] >> thank you. we have lots of questions on lots of topics from all around the world. let's start here in the u.s.. what is your reaction to the u.s. congress leaping the increase in the imf budget out of the omnibus spending bill and have you met with our law may kirson recent weeks and you do you plan any more meetings now but that decision looks to have been made? >> is that the only question on the u.s.? [laughter] okay, good. i did say right after the announcement of the deal which in and of itself is great. you know to have a deal on the budget, no matter what the deal

is i was going to say is a good indication that there is willingness to actually work in a more orderly fashion and it is i hope one step of many. and i certainly hope in the many steps to come the imf reform will be included. i very much think it's a question of timing and not a question of determination to exclude the imf. i would find it extraordinarily disconcerting given that the international monetary fund was actually created in the united states largely under the joint initiative of treasury secretary white from this country and lord keynes from the united kingdom and given the fact that the imf 's main mission is to work,

help with and ensure the best possible enhances stability in the world, which is clearly in the interest of all economies, first amongst all the u.s. economy which is clearly the largest player, my largest shareholder and one that is bound to have a vested interest in financial stability. so i very much hope it is the imf working in partnering with all of its funders but also essentially as far as this country is concerned the united states of america, yes. and have i worked with lots of people? yes, i have. >> and what is your strategy for twisting those arms to get a different result when the u.s. works on its next budget to? >> you no my partners there the table will tell you i have never been in the business of twisting arms which is probably the reason why i will never be a very good politician.

i am the other hand believe that time is on our side number one and number two that the merits of the case would suffice to convince those in charge that it's essentially a force for good and as a force for economic development and find financial stability which is not only in interest of the entire planet that in the interest of the economic layers including of course the united states of america. and given the role that it can play in the institution, what i will hope is that by continuing to explain what we do, why we do it, what principles we do it in the name of, i hope that sensible and common sense judgment will prevail. >> is the imf still have a timetable for the 2010 quota in governance reform? >> now this is coded and not

everybody knows about this. so i'm going to explain just for a second. the 2010 reform was a decision made by all members of the imf particularly the g20 countries because that is where it was really essentially pushed but it was decided for the imf. to actually strengthen the institution, to give it more permanence financial strength, to intervene where it was needed and that was called the doubling of the quotas. the imf is a "institution and the second part of the reform was to change the position of the imf so that they would be less european representation on the board and more voice votes, quota available for emerging and dynamic countries that were underrepresented. that was you know the genes of

the 2010 reform. the commitment was to complete the reform by the end of 2012. we are now at the end of 2013, the beginning of 2014 and we are still short of one of the three thresholds to actually complete that reform and the united states support is vital for that >> what are their repercussions of the u.s. congress's action on your european programs and their support among developing countries? >> well i am not sure about the intention of the question but for all the programs that we have put together, both for the european countries and the euro area countries and lots of other programs that we have, and just to give you an example their programs with jordan. we have for grams with tunisia. we have programs with morocco.

we have programs with pakistan. there are lots of other countries. it's not as if the imf were just written for the euro area. those programs are divvied up, negotiated in partnership with the governments on the ground and then taken back to the board of the imf and approved by members of the board and once the program is approved, it becomes the program of the country. it's very important that the country takes ownership of that program but it is fully supported by the board, the entire board. >> to you see the u.s.'s failure to increase the funding is a turning point for the future? >> no, not at all because i really think you know as a lead economy, as the key partner at the table, the united states of america art round to support the

institution and you know we work for stability, we work for economic development and it's in the interest of the entire membership but is clearly in the interest of the united states as well. let's assume that we have not been able to help the euro area countries and they have been -- there have been difficulties in that part of the world. it's a key partner for the united states and it's a key economic region in the world. if it had been in disarray, everybody would have suffered as a result so i think everybody is interested including the u.s.. >> looking to the fed, what is your assessment of the impact of the fed tapering on the global economy? >> while it's a bit difficult to say because they are beginning now. they have sort of hinted back in may and june that they might be looking into tapering and that

gave us a bit of a dress for her soul of what it might be. more than a dress rehearsal, i think it has helped everybody anticipate what the outcome of the tapering would be and that has helped countries as particularly emerging market countries prepare. this is what has taken place in the last six months. so what the consequences will be, difficult to predict that the announcement that was made in december certainly did not produce the outcome that we saw in may and june. so we can hopefully expect most of the anticipation has not taken place and if conducted gradually, if communicated as it was in december should not reduce massive effects. there will be consequences, clearly because you don't move

as significantly yet gradually is has announced without consequences. if you don't anticipate massive heavy and serious consequences. >> what would a premature fed asset timetable look like? >> the premature exit? >> exit timetable. >> why should we speculate on that because it's been clearly announced that it would be gradual, that it would need anchored in various economic criteria that have some flexibility about how the board of the fed will read them, but it doesn't seem that there is any prematurity to be feared. you know, prematurity would entail all sorts of things but clearly because people have thought about it it's unlikely to happen so why should i speculate? i won't.

[laughter] >> looking to the fed leadership much attention is being paid to the fact that janet yellen is the first female chair. from your own perspective, what is the significance of that? >> that women can do anything. [applause] if i may add, particularly janet >> on the topic of women, in addition to ms. yellen we have of this week gm women heads of state in korea and chile and this is happening in recent months. are we finally starting to see real change in terms of women in these top leadership roles? >> i would say that those changes are all very welcome.

as i said in africa just recently in front of the representatives of the corporate sector in kenya and i was happy to see that they had to gm kenya and a few other countries around was also a woman. it's not as if it was a token appointment to show up with a woman at the helm. there is clear determination and there is clear potential that is being tapped and i hope it will be continued to be tapped but i think that requires constant vigilance as well. >> looking at women who are not necessarily at the top he talked about the importance of funding daycare in japan. tell us a lot more about the importance of women in the professional workplace as it concerns global economic growth, an area that you study. what other countries besides japan has seen positive development in what countries is there concern? >> the work that we have done,

the analyses that we have conducted leads us to believe that it's positive across-the-board. it's never a negative and there are countries where it is more so the case. japan is one. a country like saudi arabia is one of the country like united states of america as well could benefit from better and facilitated access of women in the work lace. as i said it's across-the-board a+ and in some countries where the hurdles, the obstacles and cultural differences are more announced there is a potential higher upside to them joining the workforce but it's across-the-board. >> you told us in your speech that the walmart be getting a preview of the economic forecast until next week but on the topic of forecasting can you address the ims forecasts are more backward looking based on data that we are to have rather than true predictions looking

forward? >> the imf works on models so clearly you develop your model on the basis of historical data and then we don't just stop there. we don't just run numbers through models to sort of anticipate them. we also check with the country. we have 188 country desks that include economists and sometimes financial experts focusing on those particular market so we also use their knowledge, they're close to the ground understanding of where things are going and then they read from the economic indicators and they read what's happening both at the private-sector level but also obviously on the basis of the policy mix decided by the country so it's a combination of both that leads us to the forecasts. but you know as a lawyer background as a noneconomist background although i understand

it, i would say a forecast is a forecast as a forecast and then it is closer to the truth the better we are but it's a forecast. we try to do it as well as we can. >> this questioner says a year or two ago the term currency wars was very popular but we haven't heard as much about them recently although we are hearing a lot about currency. are the currency wars over now? >> yeah there was big talk about it and the finance minister brazil who started that in the first place. it was about three years ago actually and no, we don't see the currency war and clearly in our models we see a much better alignment of currencies relative to the fundamentals of the economy's. added to which you know the monetary tools that have been used by those countries when there were capital flows, when

there were currencies adequate to facilitate a much more consistent and harmonious monetary system, so know there is none of that at the moment. >> you have suggested that there needs to be more than one reserve currency. how do you see more currencies are merging over time and over what timeframe? >> you know when you look back, you see that for instance the sterling, the british pound gradually over time, and it was accelerated by the wars of course, lost its role as a reserve currency and gradually the u.s. dollar went up. this is a reflection of i think a combination of the strength of the economy and the confidence that the rest of the world has in that economy so you actually have both, more reserve currency to not necessarily rifle joined

the u.s. as a reserve currency. i think we will see that and what period of time i don't have a clue. >> how would you assess the stability of the global banking system at this point and what more needs to be done to shore that up? >> well, the banking system is certainly more stable than it was six years ago. that is really a truism. but we also believe that a lot more needs to be done. there is then significant work by the oslo committee which brings all the financial and monetary experts together, which is a group no matter how much we have heard about them. there has been a lot of work done by the fsb, the financial stability board and at national

revelatory levels and legislative levels there has been a lot of work conducted in various corners of the world and in this country and europe as well with several directives that if taken place. but i would say that there is more work to be done on the issue of cross order resolution for instance. if we had a major financial institution that was in significant trouble and such troubles were to expand beyond the borders of one country and the issue of cross-border resolution is not yet settled and resolved, i would say on the derivative market there is still work to be done as well and i think that we need to think mort the imf, we need to think more about the consequences of these financial regulatory changes as they apply to the emerging markets but more so in low-income countries because we are clearly seeing now a translation of some of the

financial groups affecting low-income countries and we need to be wary of that. >> what the factor of this regulation in the u.s.? are you comfortable where this country is out on back? >> it think it's not just in that country. that was appointed trying to make. we had it about seven years ago when we had no idea where those products were, how much there was, where were the county parties -- counterparties and the platforms have to be strengthened. there has to be more coordination between the various markets and that is where we need more. it's not just in the u.s.. >> this questioner says a consensus is forming in the developed world particularly central banks should accept or least tolerate higher inflation. what is your opinion on that? >> well if only inflation could be as high as the high-end of the target of central bank it would be quite good that we are not there. i don't think it can be as sort

of straightforward and one-size-fits-all as the question would imply. i think it needs to be very tailored to the specifics of the economy. when i look at for instance japan where clearly the inflation target is somewhere around one of the moment and it will take time to get to two, that is an effort in the right direction. if we look at the regional currency zones like the euro area there are all differentiations that could be helpful but is not the case at the moment because there is one single target number. i would say a little bit more would not hurt. >> at the imf meeting in october you were quite critical of the u.s. congress and of course a lot has happened since then. >> i had nothing to do with it.

>> to the government shutdown hurt global confidence in what is your assessment of the u.s. congress since october? >> you know, i said at the time that any degree of uncertainty is hurting the economy simply because the economic players do not know in which framework they are going to operate, whether it's budgetary, whether it's tax wise, whether it's regulatorywise. in all dimensions they need predictability so the government shutdown in and of itself without mentioning the dire consequences of having federal employees not operating in a normal way although i know there have and -- salaries have been constant -- compensated, it questions the ability of a sovereign to monitor its operations.

so i think we are all very pleased to see that an orderly budgetary process is back on the hill, that there is a determination to observe fiscal principles so all of that is much better. as i said you know any deal is better than no deal, let's face it area and see if the stock market in the u.s. has the correction this year that it has anticipated, what sort of impact would that have on growth in the global economy and how significant an impact do you see your rear with that he felt the most? >> you no more importantly than the stock market corrections i think what will be very important on a cross-border basis particularly the emerging

markets will be the monetary policy. that is what will be observed and will have consequences if not done properly. i doubt a slight correction in the stock market would have a major impact outside of the u.s.. >> what do you see for the value of the euro relative to the dollar this year? this questioner says strategists have been calling for this for the last couple of years, only to lose their shirts. strategists have been predicting the euro will fall relative to the dollar for the past couple of years only to lose their shirts. >> they have been saying that for the last 10 years. some observers have been saying that ever since the euro was put in place. they still have pages of magazines and the financial newspapers that were predicting it. as much as there is trepidation and concern, and there was in the stability about the eurozone and its viability --

is to protect the currency and the level of the euro vis-à-vis the dollar are not going to go there. >> is europe really likely to face deflation? >> you now as i said the inflation target which is then the monetary policy decided by the european central bank is much higher than the inflation actually observed in that region we really have to distinguish the core inflation to see if that is the case, and it is. so to inflation is a rising risk we are seeing some interesting development. spain for instance was almost, at least for short period of time, moving into the deflation zone. it has picked up. it is back in the inflation zone

so it is a risk, but i would not put too high a probability on that. >> we have questions on probably every continent in the globe on the pile but moving to one of their continent. it's been a year since johanns johanns -- share with us your opinion on how successfully you think that program has been and whether it has had any spillover effects around the world? >> there is no question there has been success as a result of what is now commonly referred to as -- clearly the massive shift in the monetary policy decided by the central bank of japan has had a huge impact. the fiscal stimulus that had been announced a few months ago will also have an impact. we understand that there is political determination to actually raise the consumption tax first in april and then

later on. i think it is still short of two things. one is a medium-term fiscal consolidation policy that will be anchored in the economic policies of japan and probably even more so than has already been identified by the japanese authorities. the economic reforms that will actually boost and consolidate japan's economy. i think more can be done. >> what the should the imf do to address rising income will fully? you mentioned the scope of the problem. what is your role in addressing that? >> you know, the only thing that we can do because this is our mission in article i of the articles of the imf is to locus on stability and financial and economic stability to the extent that any factor jeopardize that

stability we need to look into it and internalize it and do enough correlations and so on and so forth to identify where there is a problem. so this is what we have a gun doing and we will continue doing so as we will continue to work and study the relationship between growth and jobs. because we also regard that as a critical issue. >> we are unfortunately almost out of time but before asking the last question just a couple of housekeeping matters to take care of. first of all i would like to remind you our next speaker on january 22 we have d. murray smith the executive director of the nfl players association. secondly i would like to present our guest today with the traditional national press club coffee mug. see i was told about that. [laughter] >> are we making a. >> yes, we are doing a swap. >> lovely. thank you.

[applause] >> ladies with the mugs. [laughter] >> and they match. one last question. one of our audience members wants to know whether you will consider a run as candidate in france's next presidential election? [applause] >> you now i'm very happy as budget director of the imf settled here in washington d.c.. thank you. [applause] >> thank you. thank you for coming today. i would also like to thank our national press club staff including our broadcast center and the national press club journal institute staffer helping organize today's event and here's a reminder you can find more information about the national press club on line as

well as a copy of today's program at www.press.org and thank you. we are adjourned. ..

it was a project that was one of the early new seem -- new seem project. it's a project in the concept that had been under consideration for some years before franklin roosevelt became president. frank norris of nebraska, senator was looking to help improve the quality of life and the tennessee river valley to bring flood control to

generation electrical power, and to improve the lives of the people living in the tennessee river valley. it's one of the poorest regions in the country at the end of the 1920s. and a serious attempt at remaining the social and economic lives of the people living in the river valley from knoxville to the ohio river. this weekend on booktv and american history tv a look at the history and literary life of chattanooga, tennessee. [inaudible conversations]

[inaudible conversations] the committee on homeland security will come order. the democratic national committee meeting to exam the danger to the threat of extremism. i now recognize myself for an opening statement. today the president's rhetoric on the threat of al qaeda and the franchises are in stark contrast to the reality we are witnessing in the middle east and northern africa. whether or not the down playing of the spread of these islamic extremist groups and the real threat they pose, which are me it's aizing from the civil war in syria as to further a political agenda or to simply to avoid the conflict all together. i believe this false narrative greatly endangers our national security. protecting this nation requires we correctly identify the threat

against it. it also requires that the united states lead on the world stage. i'm increasingly concerned that we are doing very little of both. the administration has labeled the fort hood massacre in my home state, workplace violence. explain benghazi away with a protest to a video as opposed to an al qaeda driive attack. and remove words like violent, islamic, extremism. with each attack the administration appears to distance themselves from who is behind it. president obama repeatedly tells us that al qaeda is on its heelings and on the run. in may of last year, the president said that bin laden is dead, and so are most of his top lieutenants. there have been no large scale attacks on the united states in our homeland is more secure. killing bin laden was an important accomplishment, but it

is not put al qaeda on its heels or secure the homeland. in fact peter bergen recently wrote in an article last week that al qaeda appears to control more territory in the arab world than has done at any time in its history. foremost, in the narrative is the administration's frequent use of the core al qaeda concept. today there is no central al qaeda nucleares. references apply its defeat would dismantle terrorist efforts around the world and eliminate the terrorist threat to the homeland. this is simply not the case. over time, the term al qaeda has come to symbolize an ideology of hate toward the west with a goal of establishment of fate rule by

shia law and the pathway through violent jihad. we're are seeing it spread play out in the middle east in africa and in the caucuses. and altogether many terrorist groups subscribe to the ideology. we must understand they are independent organizations planning and conducting organizations without the oversight of al qaeda central command. the only core is the ideology itself. and the defeat of an ideology requires more than just drone strikes. the failure to recognize the truth prevents us from understanding the real threat from islamic extremism and clouds are judgment in fighting against it. ultimately you cannot defeat an enemy you're unwilling to define. second part of the false narrative, is our increasing willingness to abdicate our responsibility as a world leader. in the aftermath of world war

ii, president truman said the people of theth face the future with grave uncertainty. compose of almost equality of great hope and great fear. in this time of doubt, they look to the united states never before for good will, strength, and wise leadership. again, today, the people of the world face the world with grave uncertainty and look to the united for stable leadership. we are witnessing a worldwide rebalancing as we have before never seen before in modern history. this time; however, it is exacerbated by a sunni shia sectarian conflict that con seemed -- consumed the middle east, caused great unrest across the region, and forcing countries around the world to interceded. yet our steadfast leadership is notably absent. terrorist groups are multiplying. they are spreading like wild fire.

like a spyder web across northern africa. foreign fighters are poring in every day to syria at an alarming rate. while syria itself is being pulled apart by saudi arabia and iran. right lanes are drawn across diminishing our world standing, and forcing other countries to act where we have failed. our negotiations with iran damaged our relationship with saudi arabia and israel. american forces pulled out of iraq and al qaeda now has taken over -- once the symbol of the united states commitment to stability in iraq. we are pulling out of afghanistan. where not so long ago the 9/11 master minds plotted against the united states. in egypt, we have been indecisive with our support while radical elements are growing. our lack of leadership has damaged our standing in the world, and creating a power

vacuum being frilled by terrorist who are prospering in our absence. president kennedy told us our strength as well as our convictions have imposed upon this nation, the role of leader and freedoms cause. i believe that statement is as true today as it was then. it is through our stability leadership and clearly identifying our edge my we will secure the home land and protect our american people. i look forward to this distinguished panel's testimony, and today's discussion. i want to thank all the witnesses for being here today. the chair recognizes the ranking member, the gentleman from mississippi. >> thank you, mr. chairman. i also welcome our witnesses today. it's good to see you. as you know, you are an original member of the body when it was a select committee.

without any jurisdiction, we still have a little bit around. [laughter] we're working on that too. today's hearing seeks to exam whether u.s. policy to address unrest in the middle east the -- of al qaeda and withdrawal of u.s. forces from afghanistan and iraq. adverse i are affect homeland security in the united states. the examination must begin with an authorityive statement of this administration's policies and actions in each area. i have -- because there is no witness from the administration for us to question about these policies, it is unclear how this hearing will aid this committee's understanding of these critical issues or help inform our oversight of the policies necessary to impact this nation's homeland security. it appears that this hearing begins with the assumption that

to maintain safety and security within the borders this nation must use its him tear -- military to address every threat outside the shores. given such a perspective, the united states would be in a position of constantly engaging in military action abroad. after 1.5 trillion and 6,000 american lives lost, there are many in this country who us to consider a viable exit strategy. there are also many people who believe the safety of this nation can be secured by means that are tailored to each circumstance based on realistic assessment of the threat. as we consider the threat, we must acknowledge our current posture. most experts agree that the death of bin laden has substantially weakened al qaeda. its capabilities to mount large scale attacks have been reduced. -- al qaeda is more decentralized,

more dependent on the affiliates, and has to come to rely on its ability to radicalize and recruit to carry out attacks. the lack of a clear organizational and leadership structure has severely diminished the group's ability to develop joint plan and wage large scale attacks. i'm not advocating that america return to a preseptember 11th posture. i know, anyone -- i don't know anyone who would advocate such a position. however, we must plan based on the facts as they are not the facts as they were. as the legislative body, we must ask serious question about our homeland security policy and posture -- and our posture should be given the ongoing dismantling of al qaeda. the congressional research service has said that some of the questions we should ask involve the cost associated with

continue military presence and the challenges of restoring the readiness of our forces. we must discuss a strait ghai protects u.s. interest as well as integrational efforts across u.s. government agencies in support of a broad u.s. political strategy. as we consider our policies, we need to ask about the national security apparatus that has developed in this country. the revelations of about the massive collection of information and operation of the fisa court have caused people to question how these activities have been proved our homeland. as i understand the administration will announce its plans to revamp the nsa surveillance program. i look forward to hearing about those plans. this committee needs to be part of discussion about the effects that these meta data collection of programs have on our homeland

security. mr. chairman, i agree we need to take a serious look at how world events play this to the homeland security policy. this congress must be willing to legislate and make changes in the through a affect the homeland security of this nation. however, before we legislate, we need to be willing to discuss the law and underlying policies with all the relevant parties, the congress and the administration in the room. i look forward to having that discussion. i also look forward to the administration's being invited here to testify about how the overseas policy will affect our homeland security. with that, mr. chairman, i yield back. >> i thrang the ranking member. the other members are reminded that opening statements may be submit forked the record. we're pleased to have four distinguished witnesses with us discuss the important topic. first, we're delighted to have senator joseph lieberman. he represents the state of

connecticut in the united states senate from 1989 to 2013. in the months after 9/11, senator lieberman lead the fight to create the department of homeland security, which lead to the creation of this committee and the senate committee on homeland security. which he chaired until his retirement from congress last year. next, we have our dear friend who served on this committee, she actually was the sort of my boss, if you will. she was the chairwoman of the intelligence subcommittee as i was ranking member. congresswoman jane hair month. it's great to see you here today. she represented california's 36th district in the us house of representatives from 1993 to 2011. served on multiple congressional committees, boards, and commissions including this committee and the house permanent select committee on intelligence, and the house committee on the armed services. she's currently the president of

the woodrow wilson international center for -- and member of the defense policy board and the homeland security advisory committee among others. it's great to see you. next we are pleased to have a very distinguished witness, general jackie ton. retired four-star general. who completed 37 years in public service in december of 2003 cull m -- vice chief of staff of the u.s. army. he currently serve of chairman of the board of the institute for study of war and sits on the board of directors for met life and general dynamics. i thank you, sir, for being here. next is dr.set jones. the associate director of international security and defense policy center at the rand corporation. he served as plans officer and adviser to the commanding general of the u.s. special forces in afghanistan as well as representative for commander of

u.s. special operations command to the assistant secretary of defense for special operations. the witnesses' full written statements will be included in the record. the chair recognizes senator lieberman for his testimony. >> thank you, chairman, ranking member, it's great to be back before you. thank you for convening this hearing. thank you for inviting me to testify, thank you for putting me in the great company of the other witnesses at the table. i think it's very important that your holding this hearing. let me briefly explain why. in the gat math of the attacks of september 11th, 2001, the overwhelming focus of our government and of the american people was on the threat of terrorism. 12 years later, this is no longer the case. our loss of focus is in part, a consequence of the success we have achieved namely that we have not had another catastrophic attack on our homeland since that terrible

tuesday morning at in september of 2001. but pride in achievement must be tempered by an awareness of harsh realities. first, al-qaeda and its affiliates remain a ruthless, determined, and adaptive adversary. second, the underlying ideology that inspires and drives al qaeda to attack us and our allies, namely, the ideology of violent islamist extremism is neither defeated nor exhausted. it manifests itself not just in a resurgent al qaeda but the terrorist organizations that are either unaffiliated with al qaeda or loosely eaflted with it but have the same goal and camen't to use violence against innocence. for that reason, our safety as a nation is ultimately inseparateble from our ability to meet the fullness of the threat. our security, as nation, also

requires, as you have said, that we stay engaged in the world beyond our borders. that's the best way to prevent another terrorist attack against america like the one that occurred on 9/11. yet increasingly we hear voices on both sides of the political spectrum who say that the threat of terrorism is receding. that the end of this conflict is here or near. therefore, we can withdraw from much of the rest of the world. that narrative is a tight of the hearing suggests is false and really does endanger our homeland. there's no question that the united states under prosecute bush and president obama has inflicted severe damage to core al qaeda senior leadership that reinstituted itself in the mid 2001s and the bible area of northwestern pakistan after they were driven by the courageous american military from neighboring afghanistan after

9/11. but to borrow a phrase from general petraeus, while the progress we have achieved against core al qaeda is real and significant, it is also fragile and reversible. for example, this is a very timely example, core al qaeda and the triable area of pakistan has been degraded by the persistent targeted application of military force against those individuals and networks. the precondition for those operations and the intelligence that enables them has been america's presence in afghanistan. if the united states withdrawals all of our military forces from afghanistan at the end of this year, the so-called zero option, which some now advocate, you can be sure that al qaeda will regenerate on both sides of the afghan-pakistan border. it you doubt that, i urge you to look at what is now happening in

western iraq. where just a few years ago, during the u.s.-lead surge al qaeda was dealt and even more crippling blow than core al qaeda offer -- suffered in pakistan now it's al qaeda that surging back in iraq hoisting its black flag over cities and murdering hundreds of innocent iraqis. just in the last year. to me it lead to an important conclusion which is that space core al-qaeda and triable pakistan has been slunk, thanks to persistent u.s. action and leadership, new territory where al qaeda affiliates can find sanction ware has grown significantly during the same period. particularly in the middle east and north africa and sub saharan africa. al qaeda and other violent extremist groups have long exploit the muslim majority countries that have been

weakened or fragmented by conflict, and neglected by the international community including the u.s. they take advantage of these places to recruit radicalized and train the next generation of extremists foot soldiers. they use these places to plot and plan attacks including against our homeland. that's why al qaeda and its affiliates first went to afghanistan in the 1990s, that's why they later turned to yemen and somalia in the 2001s, and that is why today they are fighting to build sanction wares in syria, iraq, and libya. there is now clear, present, and increasing threat to america and our allies from those three countries. but administration policy makers have signified any involvement -- i stress any involvement by the u.s. military there senior if all intents and purposes off the table. that means that the u.s. will not be able to assist our local

allies and combating the rise of al qaeda in these countries. it also means that we're failing to help deal with the underlying conditions that are making al qaeda's resurgence possible. to put as bluntly as i can, i do not, today, see a credible or coherent american strategy for these countries syria, iraq, and libya that most threaten to emerge as al qaeda's newest and dangerous foot holes. this failure, it should be added, as consequences for our national security that extend beyond counterterrorism across the middle east, and beyond the credibility of american leadership is being questioned as it has not been for a very long time. friends and enemies alike there are doubts about our staying power, question about our reliability as an ally, and

suspiciouses a the the end of the day, america will hesitate to back up our promises and historic commitments with the use of force if necessary in a diernlg use world. that is the reality i believe of how the u.s. has seen right now in too many places in the world. some in washington look at what is happening in syria, iraqi, and libya and down play the significance of the security. with it our need to get involved. yes, al qaeda-affiliated growns there. situation is confusing and say yachtic, we're told, and after the conflicts have gone on forever and will go on forever. keep in mind that 20 years ago during the 1990s most people in

washington dismissed what was happening in afghanistan as someone else's civil war. and thus began the road to 9/11. i fear very much that 20 years from now, or less, someone else is going to be sitting here testifying before this committee saying much the same about pulling back from syria, libya, and iraq today. in brief, what do i think the u.s. should be doing now to protect our people against future 9/11 attacks? first, i don't advocate sending tens of thousand of troops to these countries. i don't believe it's within our power or our responsibility to solve every problem these countries face. these are the standard, and i think, hallow strawman arguments against what we can and should. and there's a lot we can and should do. in syria, we can and should much more aggressively provide militarily relevant support to nonextremist rebel forces. in iraq, we can and should make

clear to the government we are willing to support iraqis against al qaeda with u.s. air power as well as putting a small number offed a viers own the ground while using the increased assistance is leverage to encourage the mall lackey government to politically reconcile. and libya we can put in place and should a large scale, well resourced u.s. led effort to build up the new libyan army. and security forces as quickly as possible. and in an afghanistan, we can choose not to squander the gains of the past decade and dishonor the brave americans who risk and lost their lives there. instead we can keep a sufficient, follow on military presence to sustain the increasingly capable, afghan national security forces in our shared fight against al qaeda and the taliban. that will also safe guard

incidentally the gains that have been made in human rights and human development more broadly particularly among afghan women all of which will be erased if the taliban returns. mr. chairman, ranking member, none of these possible actions by the u.s. represent simple or quick solutions. there are no easy solutions to this threat. but there are smart, strong steps question take that will put us in a better position to deal with the evolving threats we face here at home. ly ultimately make a safer as a country. mr. chairman, i just ask unanimous consent that the statement will be entered to the record. i thank you, again. >> without objection. so ordered. thank you, senator, for your analyze. the chair recognizes the former colleague congresswoman jane harmon for her testimony. >> thank you, mr. chairman. good morning to so many good friends. this feels like a homecoming, as you pointed out. i spent eight years on this

committee, four when it was a select committee, and then four when we finally eked out a little bit of jurisdiction to form a real committee. i worked with most of you, certainly, all of you in the top row and as you pointed out, chairman mccaul you and i were partners on the subcommittee on intelligence. mr. thompson, had he chaired the committee and when he was the ranking member, and i traveled the world looking at garden spots where terror cells are growing, and i feel that the history of bipartisanship of this committee has set an example for the house. i hope it will continue to set an example for this house. and, by the way, that other body somewhere in the capitol. because my little deathless phrase i have been repeating for years is the terrorists won't check our party registrations before they blow us up.

we need to focus on this. , and sorting ourselves out by party is not helpful. now i am at the wilson center, a garden of nonpartisanship, i have to say it feels very good. but i continue to focus on these issues, as you pointed out, i'm on the defense policy board, the state department foreign policy board, the dni board, and recently joined the homeland security board will i, hopefully, will advise jay in the new role. i care intensely about the policies here, and getting them right. so in true bipartisan fashion, let me start with something not in any testimony, but that is an endorsement of some of the things you said, comairm mccaul and some of the things you said ramping member thompson in the opening statements. ic they are both true. as are many of the things this my dear friend joe lieberman said. chairman, you said that the terror threat is growing, and

some are not paying adequate attention to that. the terror threat has changed from the 9/11 days. the core al qaeda, as i think you said, and i know senator lieberman said has been substantially destroyed by the efforts of two administrations. one a republican, one a democrat. and i think most people would agree that president obama not only continued the effort of president bush but increased those efforts against core al qaeda and most of those high value targets have been removed. it's less of a force. ..

his successors run this organization, and it has taken advantage of an unfortunate vacuum in iraq because unfortunately president's small lecky makes inadequate efforts in some of the city parts of his country but also in syria for obvious reasons. so the terror threat has changed. but ranking member thompson is also correct that to defeat this threat we need more than kinetic force. playing whacko mall, which we have done pretty well and which we should continue to do in some parts of the world using drone is and other activities will eliminate individuals, but it will not to be the threat. we really come in the end, after when many in this body and

around the world. we need in addition to applying these strategies to project an american narrative, and i think all of us agree on that turf. that explains why we are doing, why we're doing it, and persuade some kid in the bodies of human not to strap on a suicide best but rather to help police joined a productive economy in this country, go to a school that does not teach extremism in the guise of having people memorize the car run but teaches reasonable subjects in a truly dispassionate way. we have to have -- have to help build those schools and have to make sure that curls it to go to them. i have a long statement here, but want to now turn my focus

because i remember the abide minute rule, and i am about to exceed eight, two things that i think are the more eat immediate threats to the homeland data and they relate to terror, obviously, but i don't want us to lose the sight as reacting about foreign terror organizations. one of them is home grown terror consulting this committee has focused on extensively since 9/11 there have been almost 400 homegrown terrorists indicted on a tear related charges were killed before they could be indicted in this country. low walls are a big part of this problem. this committee has studied hit we know this because there is involvement on how people have radical beliefs which are protected under our constitution then transition to wanting to be engaged in violent acts which are not protected. and we pass legislation a couple of times which unfortunately died in the senate. it is a huge issue, and we have

to look at it in our country in that we have to look at these practices affected americans being recruited for attacks abroad by groups in syria, at such representative. but the other issue that is a huge, and the problem, and you and i were just talking about this timesaver chair. and it is absolutely imperative that congress pull together the passed legislation that gives our government the tools to work with private industry which is a huge bargain this on solving this problem. congress has been extremely partisan. there have been all kinds of problems wide bills have not passed. i know that senator lieberman and my dear friend senator collins had a bill in the senate that they could not move. you say you just told me that there may be some chance of moving a bill here. i hope so. godspeed. we are way behind the curve and

understanding, responding to, adapting to, and responding to cyber intrusion especially in the private sector and sadly the leaks by edward snowdon have given some of our tool kit to bad cops. i think this is pernicious. so, in conclusion the threats today are different. they are on a smaller scale, but there are very serious that we have to keep focused on it. we need a narrative and a whole of government approach as much as are more than we need a kinetic approach in my view, but in less partisanship is a huge obstacle to of progress, and there's this committee in true homeland security committee fashion to pull together into the right things about cyber chair, homegrown terror, and helping us make the wise decisions about a u.s. international role. thank you, mr. chairman. >> thank you, jane. it is great to see you again. let me just say that today we

will be marking up our cyber security bill capa level. i have enjoyed a good relationship with the ranking member. as you said, spirited by ship the -- spirited bipartisanship. i think that it will be passed unanimously just as the border security bill was passed unanimously out of this committee and when it comes to national security, as you say, they don't check or party affiliation and we should be working together when it comes to national security. thank you for that comment. next the chair recognizes general keane for his testimony. >> good morning, mr. chairman, ranking went to five distinguished members of the committee. thank you for inviting me to testify today on an important subject. i am honored to share this panel with three distinguished colleagues, particularly to friends that me just say that they are both great american

patriots and i want to thank him publicly for their many years of devoted and selfless service to this great country. you have asked us to consider the president's speech, the national defense university as a basis for our commentary on the security of the united states and the american people. it is true that osama bin laden is dead and there have been no major attacks on the homeland and fewer troops are in harm's way, but it is not true that our alliance is stronger. indeed they are weaker because our of allies are questioning the will of the united states. many allies believe the united states will not be there for them anytime apparel and sadly some recent polls indicating that the united states standing in the world is at its lowest since prior to world war two. how did this happen? is this because of the protracted wars in iraq in afghanistan? is it the u.s. backing of israel and our inability to resolve the israeli-palestinian dispute? absolutely not in my judgment.

it is because of american. when american is strong in the world the world as a safer place. and when it is inconsistent, indecisive, and we are willing to permit others to lead to do not have the capacity but we are paralyzed by the fear of adverse consequence, then american leaders are weak in the world is a more dangerous place. as such our adversaries are emboldened to become more aggressive, take more risk, the results are more death, casualties, and the security of the american people is threatened. tragically this is where we are today. despite our success in denying sanctuary and driving the al qaeda from afghanistan and pakistan, defeating the al qaeda and iraq and killing osama bin laden and many al qaeda leaders, the harsh reality is that radical islam, the al qaeda and

its affiliates represent an ambitious political movement that they committed ideology, and it is on the rise, and the evidence is overwhelming. the al qaeda are quickly taking control of the western iraq while they had seized control of northern syria. the border is nonexistent for comment today there is a bonafide sanctuary from which operations can be conducted against our allies in the region , specifically jordan. the radical islamists would not be the catalyst for the revolutionary changes that swept over the middle east. bases geopolitical changes as of rigidity to gain influence and as such controlled territory and people. while there are exerting pressure.

it's not mention to a u.s. policy, which is quite astounding. furthermore, 12 years after 9/11, we still have no comprehensive strategy to defeat radical islam or al qaeda. we do not even have a military strategy. we used chose to kill al qaeda in pakistan and yemen, as we shared, but that is not a military strategy but a tactic and an instrument of war. it has limitations also because leaders are replaced quickly in an ideological movement, and the mission goes on. contrast this current reality with our strategy and policies in the 20th century with the united states was involved in another struggle to mind other ideological struggle, communism. we fashioned a grand strategy, reorganized major alliances in europe and southeast asia and nato to contain it by egg green on a common political will as

well as sharing intelligence, training, adoption, equipment, tactics, we encourage some of our best universities to study the subject, hold department scrub around the subject and think tanks like my colleagues were initiated because of the challenge. after all, ideas in an ideological struggle truly matter to understand the ideas, their history of development, their witnesses and strengths and to challenge our own ideas against them, fundamental to the fighting in understanding our enemy. today there is no such strategy. we have no formal alliances to partner politically and intellectually and militarily against them. assisting our allies so that troops can do it only when necessary. i agree with congresswoman harman. this is the whole of government

approach and is largely non kinetic. the radical islamists understand this better than we do them. assets they fear our ideas, democracy and capitalism. the advancement of these ideas in their region is a major threat to radical islamists because it makes it all the more difficult to to been to the people's will and force surrendered. this is why the arabs bring in such a threat to them. no one was demonstrating in this tree for radical islam to achieve a better life. the people in the streets were looking at what the united states in the west has to help change their lives, political and social justice, economic opportunity. that is democracy and capitalism . there for the radicals are all lanes and influence the outcome is still uncertain to an unpredictable on the contrary, as many of my friends in the region of the u.s. policy in the middle east and the two most

frequent descriptions dissing days with a retreat. no one can say that with certainty depending upon resources that any one of these al qaeda hot spots that we mention it is a direct threat against the people of the united states, but this much we can say , that when we have uninterrupted recruiting, training, planning, as that al qaeda was able to do for almost eight years prior to 9/11, then the risk to u.s. interests and the security of the american people is exponentially higher staff. after all, what makes this movement the most threatening we have ever faced is their stated and unequivocal desire to use wmd against the people of the united states. unchecked radical islam come back ambitious political

movement is in an ideological struggle with the yen is states and its allies that will dominate most of the 21st century. we lost 3,000 americans on our land and now almost 7,000 troops in foreign lands as we attempted to defeat and protect our people and our way of life. we desperately need strong american leaders to define radical islam for what it is to fashion a comprehensive strategy and to partner effectively with our allies defeated. we have a long way to go. thank you, and i look forward to your questions. >> thank you, general. i certainly agree it is a war of ideology. john strikes have been effective, but i do not think a low that they can kill an ideology and movement, and that is a great challenge that we have today. the chair now recognizes dr. jones for his testimony. >> thank you, chairman, ranking member thompson, members of the

committee. there is obviously a range of perspectives on al qaeda in the threat to the united states from islamic extremists. my own view in those that did both in my written testimony and oral testimony are formed by ongoing work, my own work on this subject including the forthcoming report on this work that i am overseeing and then my past service within u.s. special operations and particularly visits recently including to those same units overseas, especially afghanistan, which i will come back to. the argument that i will make here in my all remarks will be several fold. one is, while the al qaeda end of a broader movement has become decentralized, i think the date is important. what we have seen in running the numbers is an increase, an increase to make notable increase in the number of what i will call.

[inaudible] , over the past couple of years, particularly since 2010 that especially in north africa, and syria, lebanon, and i will include the sinai. second, there is an increase, again, an increase in the number of attacks perpetrated by these organizations. and as part of that an increase in the casualties and fatalities that come out of that. while the trend is troubling in one sense, it is worth noting that not all of these groups are planning attacks against the u.s. homeland and its interests overseas. as i will come back to in a moment at ticket is worth highlighting which of these groups present the most serious threat led to want to know on the verge of the sochi olympics that we have multiple groups in the north caucasus and in central asia him controlling fact that present a threat that

threat obviously in texas not just in our infrastructure overseas, but also major events like the olympics. i will the rehash the structure of this organization. i do want to the highlight the fact that the biggest increase in what some have called that a al qaeda movement has been in the organization that are not sworn affiliate's, that is, they know pledge allegiance to umar abdulmutallab but have a very similar world view and would like to establish an islamic emirate in areas they control and in particular we have seen that increasing groups operate in north africa. i will come back to the threat posed by those groups in a moment, but let me shift afghanistan where i've visited not that long ago in or i have noted very serious concerns.

we have worked for a long time against groups operating in those areas. there is still a notable presence of those groups a lot of very porous border, both afghanistan and pakistan. we have tried for the last several years to kill or capture the a year of al qaeda in northeastern afghanistan with limited success, no success, in fact. he has not been captured or killed. i would ask a rhetorical question that as we pull our forces closed down our bases, and potentially even exit to will it be easier order to continue to target these individuals? i don't just me with forces but collecting information, intelligence of these individuals operating in this area. the answer is straight forward. it would be much more difficult for. we have a number of groups that upon the tax against the u.s.

homeland which includes al qaeda , the times square bombers, u.s. forces and u.s. government installations in the region and u.s. citizens to include other groups. let me just come back briefly to this. what are these groups -- what threat to they pose to the homeland? in my view the was that pose the most significant threat at the moment to the homeland continue to be the group's operating in yemen, a al qaeda in the arabian peninsula, and that inspired networks. i would know this was not just a homegrown plot. but both of the brothers listened extensively to al qaeda leaders including the now deceased on war of lockheed. boston, including from the inspire magazine. there was a connection.

it just happened to be of the internet, to what we consider court al qaeda. we have threats to it embassy's overseas from groups targeting plots from tunisia which has planned attacks against u.s. diplomats and infrastructure. americans, europeans. again to my would highlight that there is a very serious threat to u.s. infrastructure, services overseas. this is not just about homeland, and this is definitely not just about the court al qaeda. let me just say in closing that we need a proactive policy. in my view we have been reactive. we have now returned. advisers and trainers that were reluctant to do. traders have been useful on multiple levels. i think we did a phenomenal job during the cold war in combating

soviet, marxist, lynn and ideology. we have been slow the develop a policy along those lines. let me end by saying the in this a debate, we cannot lose our ability to monitor individuals that have linked up with websites that are radicalizing americans like the boston bombers. as it spreads the largest presence in the arab world in history. so too does the threat with the homeland. that is my concern as chairman of homeland security. i would also submit that not only inspired of the internet heated travel to dagestan.

he will be releasing a report later this month which will document some of the influences he had while he was over their general keane, would like to ask you, question, in the new book, secretary gates wrote that under president obama, the national security staff, his words, kill primarily by hill staffers, academics from a political optimists little experience in managing large organizations increasingly operational micromanagement of military matters, the combination that has proven disastrous in the past. c-net in history. the political heavy handedness and the present statements about al qaeda being on the run were concerning to me. do you believe the evisceration

is downplaying the threat of al qaeda to further their political goals of claiming victory? >> in my view there is no doubt there were downplaying it. champion the success of killing osama bin laden and many of its leaders, but the fact is, as we have all testified, it is clearly on the rise. it is clearly a threat to us here in the home when. it is part of the plan. the al qaeda has always intended to take territory and gain control of people they bring foreign fighters to that scene. but is being played out and fuss

part of our overall strategy, and we have severed the command-and-control of that strategy to a large degree. they did not maintain operational control because of the pressure we have put on them that is a good thing. does that answer your question, mr. chairman? okay. >> i think so. again, it al qaeda on the run, the war on terror, i've personally experienced with the state department and other agencies traveling overseas it attempts not to even use these words to change the vernacular. and i'm about as bipartisan as they come, but it concerns me that this language is taken out of the vernacular. >> i agree. listen, i had problems with the bush and administration in at educating the american people to what this movement is in keeping us posted on what our progress

is against it. i challenge them for not having a comprehensive strategy to deal with this. it was taking sanctuary away in afghanistan initially in in going after wm d's and iraq, but that is not a comprehensive strategy to defeat al qaeda. it is even worse because it has its head in the sand about it. it will not describe what it is. the revolutionary change. it's a put -- correct their want to say it's over. i do applaud the president. it's a courageous effort to go and with military forces, not just on the place, but to prove

to the world that osama bin laden was killed. i don't think that has solved the problem. it is not case closed. the threat is growing throughout northern africa in the middle east. senator lieberman, last week, the house armed services committee tea classified testimony after months of hearing. general carter during the attack testified and said to me and started to become pretty clear quickly that this was certainly a terrorist attack, not just something sporadic check. i believe leon panetta was a part of this as well. again, there's been -- the response was not that this is a al qaeda attack but some blame on some video and a protest over what do you make of that? chair. >> a couple of things. the first is that it was obviously a terrorist attack, by

any generally held definition of terrorism which is its use of violence to achieve a political end or convey a political message. these are people who are attacking the u.s. consulate in benghazi. they obviously were not there just have a good time or profess they did not like that the consulate was there. there were there to make a statement against america. classic terrorism. why there was a hesitancy to do that at the beginning, frankly even if it was as some white affected by the video which i ended up concluding that it was it was only that the terrorists saw this as a moment of opportunity to strike. still, it was terrorism. it was not as if you are affected by an awful, grotesque, anti muslim video and your response to that is to attack the u.s. consulate in benghazi and burn it down and kill the u.s. ambassador.

if that's not terrorism -- the other thing i want to say karan is based on -- the recession was ending the investigation over the last few months of 2012, one of the things we concluded command i will say first for myself, some of the terrorists involved were inspired or were loosely involved. a lot of them were indigenous and separate. part of the problem when you limit the enemy to al qaeda and affiliates and not to the broader category of violent extremists and terrace is that you miss part of the enemy and part of our conclusion, senator collins, was that we don't have adequate intelligence command least we did not get that point on non al qaeda, clearly violent islamic extremists. in the last month finally put on

the foreign terrorist organization last, bragging about many things coming including, i'm sure, intelligence oversight of those groups. and i agree. you know, that distinction between court al qaeda? al qaeda kevin al qaeda affiliate's, i think they are all. some movement, that is a common thread. we are -- this distinction with that difference to my think we need to be focused on the movement itself and not distinguish between all the different groups. they all stand for the same philosophy. i would be remiss if i did not give my colleague jane harmon heard do. >> thank you. i appreciate that. i do think there was a terror attack in benghazi. ..

i think there are a lot of brain cells on this both on these boards and in the administration and various departments. i just came from 10 hours at the defense policy board and your whole department jack is all over it this subject. sure, maybe it could be doing even better but there is a discussion on south asia that was pretty bone chilling and a lot of people wanting to