the one with real first lady potential. >> guest: i think that's right and i think there's great mutual admiration between the two. they're both very different women and i think that's right. arbor bush sought in laura bush the great qualities a great spouse for her husband as he embarked on a political career. >> host: the two daughters, jenna is a correspondent and married not in the white house in 2008 and gave george and laura bush their first grandchild. barber is the ceo of an organization called global health core and as we close tonight i want to say thank you to our guests for helping us understand more about the life and times and the still unfolding legacy of laura bush. thanks to both of you for being here and for our callers questions throughout the evening. we are going to close with some thoughts about the members of the bush family, the president

himself and the two daughters on their mother first lady laura bush. thanks for being with us. >> i don't want to steal barbara's -- you can go first next time. i would say probably her work for women and all over really. we were so lucky because her parents took us on travels to africa so we got to see pat farr and being in clinics and schools and meeting people whose lives would be forever changed. i would say her work for women but more broadly pepfar and my dad too. i'm very proud of him for that. >> eight think definitely and this was brought up by anita but after 9/11 -- i'm going to cry. i know, in front of a lot of

people. i think the work that she did after 9/11 and how comforting she was too everyone in the country was an incredible legacy and really critical to the country healing after 9/11. [applause] see if i were doing a series on first ladies i would be probing this question. could the first lady handle the pressure? if the answer is no, then the life of the president is going to be pretty miserable. laura was unbelievably calming. she was a pillar of strength amidst all the noise and the finger-pointing and the yelling and all the stuff that goes on in washington. she is a great first lady, a really great first lady. ♪

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>> treasury secretary jack lew spoke about the risk of the government defaulting on its debt if a barring limit is reached this month. this is hosted by the bipartisan policy center. >> good morning everybody.

i am the president of the bipartisan policy center and i want to thank you for coming out on this dreary morning for what i expect maybe a sober conversation. to save time with us and everyone just insert their own super bowl metaphor now. [laughter] so this morning it is my honor and privilege to introduce the country 76th treasury secretary mr. jack lew. secretary lew is distinguished public servant known as an honest broker and a tough negotiator, a long career in washington for work with tip o'neill and president clinton to tours at the office of management and budget most recently a relaxing ears the president's chief of staff. the secretary as many good traits but most disorienting especially in washington these days is that he is liked and respected by just about everybody. which brings us to today and the discussion of the debt ceiling.

for the bipartisan policy center and must admit that can be responsibility has been a cottage industry. as we have received quite substantial and i would say deserve credit for putting out essentially the same report six or seven times in the last three or four years. but for just about everybody else in the country this has become a pretty ridiculous and repetitive one that we have visited upon our economy. to help us understand where we are today and the shoals and eddies of the current discussion is at great pleasure mr. secretary to ask you to say some words. [applause] >> thank you jason for that introduction and thanks to the bipartisan policy center for having me here today. we have many distinguished guests that i would like to say especially pete domenici and my good friend senator olympia snowe and kent conrad, steve bell and bill hoagland all people that i've worked with and

congressman and secretary clinton. i'm sure i'm missing other people and i apologize. but by policy bipartisan policy center has been at the forefront of shaping public wolesi since it was started seven years ago. at a time when our nation critically needs a place for bipartisan discussion on complex issues the bbc has become that place on a broad range of important topics. a perfect example of that role as the work that this organization has done to shed light on the significance of protecting the full faith and credit of the united states. as we meet here this morning i want to emphasize as the president did in his state of the union last week this can and should be a breakthrough year for our economy. as the gdp report for the fourth quarter of last year underscores, our economy ended 2013 strong and is poised for growth in 2014. the table is now set for us to

build on the economic progress we have made over the last five years and it's incumbent on washington to be part of the solution to avoid the brinksmanship of recent years has done so much to diminish the momentum. it was not that long ago that they cross currents of the worst recession since the great depression has caused havoc in pain but with the combination of swift policy response which began in 2008 and continued into this administration and the hard work determination and resilience of the american businesses and workers we are coming back. the private sector has created more than 8 million jobs. our economy has been steadily expanding. the housing market has rebounden the upswing. the auto industry is surging. we are in a path toward becoming energy efficient and we have seen our deficits more than half in the past five years. still, we are not where we want to be yet. and not where we need to be. we must continue to build on the progress we have made by doing

all they can to help the economy grow faster, help businesses create more jobs and help more americans acquire basic level of economic security. that is why the bipartisan action in the house and senate to pass a budget at the end of last year and an appropriations bill last month is so noteworthy. democrats and republicans found common ground. they made compromises and work together to reach an agreement that keeps her government running for the remainder of this fiscal year and it makes real policy instead of letting our government-run on autopilot. or over the budgets set up blueprint for a second year of regular order for policymaking as a shutdown is behind as did with economic headwinds generated last year by the cross the board cuts we now see that cut down substantially a sequestration has been decreased. important policy decisions in the omnibus appropriations bill also provided an opportunity move forward or smart investments for growth

initiatives like early childhood education and expanding the number of manufacturing sectors. that translates into real opportunity for children to enroll in head start and for students and community colleges to develop the skills they need to find jobs by learning cutting-edge technologies. while this was a step in the right direction lawmakers still have another responsibility that they must meet. even though the house and senate approves the budget and passed a bill to keep the government running they did not yet provide the borrowing authority to pay for the spending commitments that they made. last year congress passed a temporary suspension of the debt limit that lasts only through february 7 which is the end of this week. after that in the absence of congressional action the treasury will be forced to use extraordinary measures to continue to finance the government. let me repeat in just a matter of days the temporary suspension of the debt limit will end in the treasury department will have to start using extraordinary measures so the government can continue to meet its obligations. at different times of the year

these extraordinary measures provide more or less of a cushion depending on variables that we cannot control. for example at some point in the year there are large investments that can be deferred which provide a larger amount of borrowing capacity. at the same time that spending which varies from month to month determines how quickly the head when provided by extraordinary measures will last. now unlike other recent periods when we have had to use extraordinary measures to continue financing the government this time these measures will give us only a brief span of time before we run out or owing authority. in february the same large trust fund investments that were deferred last year are not available and is the beginning of tax filing season tax results resulted borrowing capacities quickly. we now forecast that we are likely to to exhaust these measures by the end of the month the bbc report issued last week came to the same conclusion and even though these are estimates it's clear that extraordinary

measures will not last very long. after we exhaust these borrowing capacities we will be left with only the cash we have on hand with any incoming revenues to meet our country's commitments. notably we expect that outlays over the coming weeks to exceed our net inflows. largely due to the payment of tax refunds so we will jot down our cash balance faster than at other times of the year. without borrowing authority at some point very soon it would not be possible to meet all of the obligations of the federal government. given these realities is imperative that congress move right away to increase our borrowing authority. it would be a mistake to wait until the 11th hour to get this done. as house speaker john boehner has said not only should the united states never default on its debt, we should then i quote we should need to close to it. the fact is simply delaying action of the debt limit can cause harm to our economy rattled financial markets and hurt taxpayers. just think about it. around this time last year we

had had a standout for resell consumer and business confidence dropped and investors and market participants questioned whether was to his giga hold certain types of u.s. government debt. such a question should be unthinkable. so the bottom line is congress needs to act to extend the borrowing authority of our nation and it needs to act now. it's important to remember that increasing the debt limit is congress's responsibresponsib's responsibility and congresses alone. that's because only congress has the power to extend the nation's borrowing authority. no congress in history has ever failed to meet this responsibility. still some in congress have suggested extending the borrowing authority should be tied to spending cuts but as one republican member of congress put it and i quote the time to fight for spending cuts is when you are talking about spending, not at debt ceiling time". the point is as i've noted before raising the debt limit has nothing to do with new

spending. it's about fulfilling spending obligations that congress has already made in and paying the bills that have already been it incurred. refusing to raise the debt ceiling will not make these obligations are bill suddenly vanish. the president has made it clear time and again that neither he nor any other president should have to pay a ransom to the united states to pay its bills. presidents from both political parties have i stood firm on the importance of protecting the full faith and credit of the united states. we should never put this pressured asset in jeopardy. i continue to urge congress to increase our borrowing authority in a timely manner and provide regular updates as new information about her publicity to finance the government comes available. the truth is the longer we wait the greater the risk to the economy. whether it's the economic recovery, the financial markets or dependability of social security payments and military salaries, these are not rings to -- in the aftermath of last year shut down lawmakers on both

sides of the demonstrated they understood what an impediment washington was and there's no reason to repeat the mistakes of the past. progress in washington around the budget bill can marked the beginning of production. makkah bipartisan action. congress should act quickly to resolve the debt limit without unnecessary delays or political posturing that could snowball into manufactured crisis that the american people so clearly want us to avoid. they keep very much and i look forward to taking your questions. [applause] >> we have time for a few questions and please do introduce yourself. senator conrad. >> welcome mr. secretary. it's good to have you here. we are so glad you are in that position. the question that comes to mind is what are the single most important things congress could do right now to strengthen the

economy and improved job creation? >> you now i think that the first thing is just to make sure we don't have a repeat of the kinds of self-inflicted wounds we saw last year. we saw over the last two or three years the economy picking up momentum and things got jammed up in washington. there was -- we saw confidence go down in the markets become volatile so the very first thing i think congress could do is just do its business. that is what happened with the budget. that is what happened and is happening this week with the farm bill. i believe that the debt limit is the last piece that has to happen in order for people to breathe a sigh of relief that we are not going to see the kinds of rinks manship that cause anxiety frankly not just here in the united states but around the world. you know moving beyond that i think there are a number of things where there is a bipartisan consensus for congress could move forward and

it really would help the economy i believe immigration reform has bipartisan consensus and i believe it would very much help our economy. i believe infrastructure investment something we backed the need for a future that's going to be strong and vibrant and there's bipartisan consensus to do that and i think we can make robbers on that. i think skills training is another area where when you go out and talk to employers in this country, did it on friday in virginia, the question that you get asked, to questions. one is can we rely on the structure and can we rely on the fact that there will be generation after generation of workers with the skills we need? i actually think there's quite a lot that could he done to move the economy forward and i think the fourth item is tax reform. i think business tax reform convergence of thinking. i'm going to continue to be optimistic that there things that not only congress could do but where there is bipartisan consensus to move things along.

governor keating. see mr. secretary, demographics are a destiny and those of us who served on the domenici panel here at the bpc on both sides of the issue, tax policy and regulatory policy were stunned at what's coming. the cliff once we get over that, it's a chasm in terms of 10, 15 or 20 years in terms of debt and deficit in part caused by a very good thing. we are living a lot longer. how do we address that and what are your thoughts about that serious future challenge in the debt and deficit? >> first of all when you look at the demographics in the united states are demographics are more positive than the democrats -- demographics and other parts of the world. we have young workers -- more young workers in other countries do and we have the ability to grow and as i

mentioned a moment ago immigration reform in the history of growing our population for people who want a better life than to build our economy. i think when you look at these long-term long-term trends as the president said many times there's a need for bipartisan discussions about how we can deal with some of these tough issues in a balanced and fair way. in the past that is how we made progress weather was 1983 social security reform for the 1986 tax reform. it's going to take a partisan consensus was frankly has been challenging to reach. when you look at the next 10 years we are on a good path. we are seeing the deficit drop rapidly and statistically i quoted cutting the deficit in half is a very significant measure. the first step to deal with the long-term is dealing with the short term and i think we are in the path for dealing for the but the next 10 years. i believe that when the time comes for bipartisan conversation we can keep faith with social security and keep the program as we know it and

keep medicare so it's dependable and title meant for senior citizens and we can make the kinds of policy that over the long-term will make a difference. we have had a challenge finding the space where you can have a balanced approach and balance means that we look at both sides of the equation. as we have said in our fiscal policy for a number of years we have to balance the revenues and spending and that is where the difficulty has come in. i'm not sure this is the year for the long-term fiscal challenge to be dealt with. i actually believe we have made so much progress in the short and medium term we have a little time to deal with the longer-term. what we need is to develop a track record of being able to work together to build trust across the aisle and if we get some of the other things that i mentioned on this year and over the next 18 months that will be an excellent foundation for the harder problems as we go forward >> we have time i think for one more question.

>> joe merrick. >> mr. secretary, every time we have gone around this bush the last few years you have always heard the statement the united states should not default on its debt but and then the sentence continues. and usually the condition is there are things that we ought to do and the debt limit should be a motivator. is it suitable for one side of that kind of discussion to hold open just in case the of changing the local economy and taking u.s. households down with it for purposes of negotiation? >> you know gerald i think what we saw in 2011 was different from anything we have seen in the previous 30 years when we have worked on these budget issues. we have never before seen the argument made that if quote i-5 don't get my way we will default

that is not an acceptable way. the president had to make a firm decision that we couldn't have every year or every six months this kind of high-stakes threat that if you don't capitulate on a matter of broad policy then we are going to default because once it is being responsible and says we can't default in part at another site says we are not. the president's position on this has been a very principled one. he has many times said if you flip the parties around and have the democratic congress sent republican president he wouldn't just a strongly believe it's an obligation to pay her bills. the truth is we are one of the few countries in the world that separates the spending decisions from the decision to borrow and pay for it. we saw the senate move forward with the mcconnell rule which made it easier for congress to deal with a couple of times but putting up the president to raise the debt limit without blocking it. i think there are ways you can deal with this to get both sides

a chance to have their views reflected. what we can't do is we cannot for a moment except the notion that for the first time since 1789 then the united states would not pay its ills in full. frankly as i said the leadership on either side which is why i'm confident it will be addressed and hopefully it will be addressed in a way that doesn't cause a high-wire brinksmanship that does so much damage to our nation. economy. >> i am lucky today. i have had the luxury of introducing the secretary to the united states senate republicans when they were getting ready to move-in for this job and that was a real pleasure. today it is a thank you from me

to you for all you do and what you have done in this very high job that you have had. my job is to say thank you mr. secretary. >> thank you. [applause] after secretary lew's remarks the panel discussed the debt ceiling and the possible effects of reaching the borrowing limit. >> is a great panel here so we want to jump right in with the full bios of everyone here in the packet for those of you watching from outside the room. all of the bios from the bbc's web site. we have starting here amanda sayegh a treasure he represented the s. train government and the australian embassy in shinki in.

rudy penner former director of the congressional budget office now there've been institute, larry lindsey former director of the national economic council of the white house and the former federal reserve governor now running the lindsey group. paul sheard chief economist at standard & poor's and tony fratto the former assistant secretary of the secretary of the treasury who runs hamilton play strategiestrategie s. larry i want to start off with you with a simple question. have the american people gained anything from having the debt ceiling? >> will thank you and it's a pleasure to be here today and i got the first question because i am the -- on the panel. i think the answer is yes and i think it's important to take a look at history in order to understand what that is. as a way of introduction i just thought i would correct slightly something the secretary said about the shoe being on the other foot. when the president was senator he voted against the debt ceiling and said washington is shifting the burden of bad

choices today onto the backs of our children, and grandchildren. america's debt problem is a failure of leadership in america deserves better. so you know when one is in opposition that is quite a natural position to take and i think it's important to put that into context as we consider why we set it up that way. you know, we have a basic set of rules throughout the english civil war are trying to constitution. it basically comes down to no congress being able to bind a future congress. that's important that each congress take an affirmative step, an affirmative step to do any kind of fiscal action. now the founding fathers put in article i section 8, the most extreme case they could have which is the country was at war. and what did they say? well, congress could only appropriate money to fund those

armies for a maximum of two years. they had to come back even in that extreme situation when the country was at war and affirmatively vote for more money. now i can understand that with the reading of history but i think you all understand why that's important. that is actually where the debt ceiling comes from. that is the way it used to be and in 1974 for very good reasons we did a budget reform and we created a category of spending that was not subject to congressional vote. we now call it entitlements are nondiscretionary spending. so every year we simply continue it. now you can say he were simply funding actions for past times but remember the constitution,

all supreme court rulings, the precedent is funding what it passed congress did isn't his story. there is still supposed to be an affirmative vote of the current congress. well okay, fine we understand this is the ruling class involved here and we don't want to have to take tough votes of this is why we do but let's look at how far that has been expanded. we have gone from automatic social security which is set by rule by congress. we now have the affordable care act which is entirely an entitlement. so let's think about the insurance subsidies. we really don't know how much it's going to cost so we will set the rule of how much the individual has to pay and then we have an unlimited not constrained by any known economic area bull funding every thing on top of it as entitlement. well, i can sort of see tangentially how that might

be -- but we also have another entitlement that shows how far we have pushed this concept of no need for congressional appropriation. it's the risk quota. so here we have congress not even saying how the risk quarter is going to be funded and entirely be made up like presidents and at the end discretion of the president. we have this nondiscretionary spending. so if we are going to have an entitlement culture which funds the recorders or most of the budget we will say to congress you have no say at all in funding those three quarters. i think we have kind of push the limit here. i think again it's to favor the ease and convenience of governance but i think we are giving up something in the process. it and though i think it's an inelegant way of doing it i think the right path forward is

to have negotiations and the reason you have a debt ceiling and the reason you have cliffs anytime with the decision-making op bread as it is to force decisions. the president has said no compromise. he said no previous president has ever compromised on the concept of paying your bills. i think that's right. every president has negotiated with the congress. sometimes in a big way. in 87. bush did it at andrews air force base with his no new taxes pledge in order to raise the debt ceiling. president clinton did it under the democrats and again with republicans in 95 and there are seven of these negotiations during bush 40. the reason the debt ceiling as there is for the power of the purse. that's it.

the negotiation should have taken place in the president needs to negotiate and i think it's just slightly inappropriate to say i voted against it but now you guys have to vote for it without negotiating. so there we go. i went on a little too long. >> there is a distinction between appropriations and spending versus the debt limit. i can see rudy's mind racing here but i want to start on a separate issue. as we look at the debt ceiling and have these panic moments in 2011 of it in 2012 and 2013. the most common people send her their breath as there must be a better way. we have thought a lot about this. is there really a better way? >> certainly there are number of better ways i think. basically i fundamentally disagree with larry. i think that is come across basically. there is a paradox in their and that is they always say it could be effective in negotiations and you have to be willing to shoot the hostages. we have never been willing to do

that in a 100 years that it has been in existence. the real place to negotiate overspending and tax matters and including entitlements is when you you're debating the budget resolution. that is when we set our targets for spending, spending and revenues. having a separate debt limit, i don't think you deserve much of a purpose. it certainly hasn't brought about fundamental reforms and entitlements. one of the biggest things that happened around the debt limit was the gramm-rudman-hollings law but that quickly became bipartisan. once the debate got going you hardly heard any mention of defaulting on the debt. in terms of what to do obviously my first choice is to get rid of the debt limit law altogether. my second choice was alluded to by a secretary lew.

he noted what senator mcconnell did in the past. representative honda has a very similar approach in the house. the basic idea would be that you would give the president discretion to set the debt limit a year and it fams. the congress would be able to disapprove of what the president did. the president could veto that law and then it could be the supermajority and be overturned, this veto. ..

>> we have a few countries with this mix of respect that we do have. and it is a relative perspective on how it came about and how it works. >> yes, so the experience with the debt ceiling relatively new. and this includes the budget and the financing decisions as well. and in 2008 is really a was in a unique situation of having an ever declining government security market and this

includes a deficit financing requirement as well. so it introduced the debt ceiling at that time around $75 billion. so could basically go through the act of using securities to maintain a government or market. as i said, the government was running budget surpluses and that change to the global and financial crisis. and the way in which this is laid out, it happened on a number of occasions around our budget. and in december of last year we got to the point where we were running pretty closely up against the limits of our borrowing authority and there was concern at the time not

increasing the debt ceiling and what might have on the financial markets. and the government proposed an increase in the debt ceiling from each level of 300 billion. this is not supported by the opposition in the australian parliament and they supported instead increasing the limit to around a lower level of 400 billion. so still increasing women, but not the amount of government had determined would be sufficient over the next couple of years and this includes the experience of the debt ceiling from 2008 through 2013. in its place, the israeli and

treasurer is a quibble and to the secretary in the u.s., still requiring to issue a direction as to the maximum limit that the government can borrow. but that direction cannot be disallowed by the parliament. so that is pretty much where we are now. >> we all know the cost involved in defaulting on the debt. the other cost involved debating whether we would default on the debt. is there something we can measure their in not having a development at all? >> let's put a perspective on the table and it gets very complicated. including the divided government and accept that. and then you have the debt limit issue, essentially the complexity multiplied by two.

and it is essentially a question and then you have this separate discussion about how much debt will be authorized. but if you look at the decision problem it is a question of this which is running a deficit and now will lead to a debt. and you really only need to decide on one of those two things and not both. and you can't decided independently of one another. so looking at it from a market perspective and bringing the world into this equation just makes a very complicated and opaque and difficult to understand process. why is that important? it is is important because this is not just an issue about domestic policies but u.s. treasury securities damned as a linchpin of the global financial

system with an ultimate risks if they don't default and risk free liquid asset not just in the u.s. financial system of the global financial system. so the whole thing appears to many market participants as i would move around the world sort of and i'm unnecessary issue which then is a potential noise and cost into the system. >> we have seen this from the perspective of the white house and the treasury department and the messaging on this issue and we know that reporters love drama and politicians love drama and the debt ceiling brings drama around this issue of what is the public eye. you think that this is the only way that the national debt gets widespread public attention or is there any other way?

>> there's a pretty high cost to actually put this together. it is a risk to the u.s. government in order to have that conversation. but the debt ceiling has -- as a rhetorical opportunity, probably serves some function and i would dispute some of the negotiations that took place in the path of a really over the debt ceiling and over the budget and it was often an opportunity for congress to use that to have a conversation about the size of the debt. and so this is a rhetorical tool that is used to talk about the debt that is useful. but once people started to take it seriously, and i say this in the sense that there might be an opportunity to not grant the

authority for congress or the administration to access the revenues that congress is mandating her that once people start to take it seriously that was possible, it was part of the rhetorical benefit and this was really to place a strong constraint on government. going back to english civil war. including those asking for tax revenues and parliament to get revenues to fund the wars and other things as well. and this includes saving congress from the burden of having to authorize a treasury

and the debt market on a serious basis. and this prevented them from going willy-nilly. and it was really a matter of convenience and not to restrain the executive in that way. if we and we could talk about what the status of that is that has changed over time. but lost in the process has been a process with then senator obama and the misunderstanding of what the debt ceiling really is and why it has become an opportunistic.

>> every time this issue comes up there is usually a bill to the house or both about prioritization and the idea that maybe congress can pass a law to pay the debt, but not necessarily pay everything that gives him more leverage. so how would markets look at this, how would they look at a default on the general obligations while the u.s. continues making debt payments? >> i don't think that you really want to put the were default in u.s. fiscal policy in the same sentence. [laughter] >> when this issue came up last october and november, markets were furiously trying to delve into this issue.

and there really some esoteric issues. but the conclusion the many came to was that it is far too clever and complicated. and again, what is really being done if at the end of the day this is a rhetorical issue which is actually not going to be played. so i don't think that that is really the right solution to this issue and i don't think that they would breathe a huge sigh of relief. >> when we look at this issue, it is pretty clear that the speaker of the house and the senate majority leader does not accept that the united states will default. and if everyone uses this as a public debate when something is going to raise the dead, does any of this matter out all?

should we ignore this if the leadership in both houses are ultimately going to let this go through because they don't want this to happen? >> there is no argument from me in an inelegant way of doing it. the question is do we want to have the capacity for unlimited spending by government without having to force a revisitation of that and it is an inelegant way, unfortunately because of the budget act and the only point at which this could happen and the problem is getting worse again so does anyone believe that this risk towards the

payment to insurance companies should take place without congress are voting on a? >> that is a nondiscretionary item and come on, folks. we need to revisit the budget process so let's go back and look at the budget act of 1774 and we talked about failures. and it has failed and we had asked loading deficits and debt and elements of it somethings is one ear and some things as 10 years. and it rigs the political case against entitlement reforms. in this part of that we revisit

that in every congress must reprove whatever you want to call an entitlement they are forced to confront the choice and we now have a completely runaway spending process. >> we have the first stage of the bill either. remove the entitlement and remove the debt ceiling. >> some things we can agree on. except we should revisit the budget process because it is not working. and on the other hand i don't see the debt limit as being of all a substitute for the budget process. what have we accomplished in having this other than to create policy uncertainty with now has a lot of academic evidence with policy uncertainty that does

affect hiring and so on. so i certainly think that we do have to visit the budget process and i think that we have to revisit it in just the way the lara said then that is to say that we have to start thinking about ways of imposing a budget on entitlement spending in medicare and social security. and just stepping back and those like canada and the united kingdom who have a nationalized system and they live within that budget. and i think that there are ways that we can limit the growth of these things although some have been discussed in the congress and things that the bipartisan policy center has advocated for medicare and medicaid.

and there is a forward and the question is how on earth do we do it. >> bonus trailer got rid of the debt limit. there were concessions to do that and do people understand that it makes any difference? >> has come at the time there was a lot of attention around what might happen and how this would get resolved in parliament. and it was a deal that was reached that would include more details on interest payments associated and why that that was changing on all of the projects throughout the year. there is also those that deserve a requirement and also a material change which we

typically have around every six months or so, which is quite material in the australian budget landscape and that we would have an additional statement setting out the reasons why there was such a material change and there were some non-legislator varmints around as well sending out why the government is borrowing this with revenue shortfalls and this includes change in spending and infrastructure in those types of things for a great thing as well as our long-term budget or a statement that we do as well. and so we were just in the start of the phase of this new reporting which occurred towards the end of last year and we wanted to know whether the traditional transparency in how the public is reacting to that until it is fully rolled out a

part of our budgets with subsequent reporting. >> a couple of different stages with the debt limit. one is at the end of this week and the secretary of treasury pulls out the bag of tricks and it has gotten more creative over the last couple of decades. whenever we see this very number of lawmakers who say why are we going through these extraordinary measures. people trying to understand when the government is actually going to run out of money and what is the real day that we have to do this and is there any value of figuring out a way to get rid of extraordinary case vendors and deal with this and a deadline on that date and do you really want the flexibility given what the treasury to build back? >> let's start with the

fundamental principle. it had a unified legislation and there was still compromise and concession. and so they said that i will not negotiate again the extreme position here. and so that is the extreme position and that is what has to be modified. if you want wiggle room, i am for all the wiggle room that you can get because we have a very complicated political process and in spite of its problems i think it is probably the best that mankind has been able to devise and i'm a soul believer in that. but we need to have this to avoid the cost of friction and until we get this with the budget act of 1774, let's talk about all this that we can have

4 degrees on the wheel. >> everyone tries to have multiple ways it is either that or with a pair of shoot and you can have it or not have heard you can have extraordinary measures or not have the extraordinary measures. and i think it's crazy that the u.s. government has to go with these kinds of contortions to try to meet the obligations it is incredibly inefficient and this short run and at the end of the day the radical position and i am so envious of the obama administration's view on this. because we have with democrats and republicans, we had to go to congress and the congress to do the thing that in retrospect

now, congress will pass the debt ceiling. and they will pass and raised the debt ceiling and the only thing that i'm really certain of. so the administration does not have to negotiate because it is not a negotiation. there is nothing to negotiate and converse will pass the debt ceiling and it is true that the stakes were not as high as this congress has taken in recent years. but i will tell you that every one of those negotiations that we had to do with congress, the vast majority were not on serious issues. they were someone to be on the board or a commission and another member of congress wanted to get a promise that we would agree to send someone up for a hearing on the cuba policy.

completely and on related to to have the real debate and discussion on long-term entitlement programs. and that is not what it is part of terry what it is is just an abuse on the part of the legislative branch. on the executive. in the executive has realized that they can take a step back from a line and say no, we are not going to allow ourselves to be extorted in this unnatural process. the debt ceiling is a congressional thing and you will understand that this is your obligation to get us out of here and that's where we are right now. and i think it actually is part of the executive position going

forward to have this debate on other areas that are more natural. >> some care about the issues. do you think that when the public pays attention and it becomes a pressure or crisis moment that they are more informed as a result were less informed as a result of having the debate the way you did? >> well, i would guess 70% of the public has never heard of that. but in any case certainly the debates that we have had in recent years about the debt limit or the budget, unfortunately have not been not informative. and so i do think that if there is a crisis, i am hopeful that the congress will deal with this

in an inner national way. the one saying is that if you look at other democracies that have crises like sweden, and we can debate whether canada was a crisis or not and it looks like a crisis to me. that they have ultimately solved the problem in a rational way. and that's not true of the former soviet union where they tried to resolve the problem by printing money and that is the most disastrous way of solving the problem because inflation is not a good thing. and i don't know of any developed democracy since world war ii and when the crisis

comes, they will deal with it appropriately. >> we saw this in october when the issue is being debated. investors pulled out of the short-term with the shortest maturities and they didn't want to get stuck with that and the risk of something like that happening in the seen something like that already. so what is the cost of that development? >> it's very difficult to put the numbers on here. i think the government accounting office did this here since 2011 and we are looking at it in a little bit more detail. some participants were rather reluctant to hold the securities just on this kind of d-day, if you like. there were also treasury securities that use this widely

and essentially like an oil greasing the wheel and as we intimated before they had to start doing quite extensive contingency planning. everyone was looking at the situation and saying that surely the u.s. will not default on its debt. and yet everybody has a duty to this and so everyone had to do this extensive contingency planning of what it and what are they holding and in the other thing is this is a sort of black swan tale of them. nobody believes that it's really going to happen in the delivery of. but what if the debt. what would the consequences be. and i think that is where the costs become potentially high.

and it is a what-if scenario. and if you just contemplate it for a moment, you can tell some pretty scary scenarios about what happened. one of the lessons that we learned in 2008 is the number didn't know a lot about this. i'm a lot people were blindsided by the fact that something that looked innocuous at the time included subprime securities suddenly generated this toxic waste of the financial system. there's a similar level of uncertainty as what is the risk-free thing were to actually default on what would happen. and we really don't want to go there. >> first of all i agree with

everything that you have said and let me put a different interpretation on it. i think it a great thing that the markets are doing their due diligence and they should've done before. second of all, let's give credit to the american economy and markets. i remember around the time of september 30. the media machine was talking about how this would take the economy and we were already seeing signs of economic slowdown. it turns out that the last two quarters and we have had in years was the third and fourth order right in the middle, the ones who are supposed to be so devastated. so i think that we all made to take a little deep breath here with a very sophisticated country. i'm certainly not an advocate of that. but come on, let's grow up and we are trying to do this for our own convenience to avoid negotiations. and that is what the president's

position as. and so when i was in government i also should give you that the founding fathers made a big mistake and it was called article one. [laughter] >> i get that. but that is not what we have. we are a country that moves forward based on the negotiation of compromise and realizing that we have a very robust system. >> i think the relationship between markets and policy is incredibly complicated. i would like to thank that we have vigilantes out there that would force us to discipline the system ultimately. but i think one of the more interesting articles written on this was neil ferguson writing and article called 300 years of sovereign debt crises and the peculiar thing about most of those crises is that the markets

have remained very calm of the budget went down. until one day they didn't. and then something would set them up. saying that it's a bit of bad budget news and when they set off i really set off and that is to say three or 400 basis points in a matter of days. >> we will get the questions from the audience in just a second. amanda and then tony. there is a lot of work that is done is the dumb woman approaches and talking with investors and the media explaining what happened. so how is this communicated to markets. in the markets understand and do they accept that there is a political process here that needs to play out? and of the public pay any attention to that? >> we had never gone to a

situation with such limited time between when parliament needed to make the decision to increase the debt ceiling and when it was going to run up against the limits of the debt ceiling. it was an infatuation for the investment. and there was some concern amongst those in the government and investors would begin to ask what would happen when australia gets to this point and what is the process and doesn't have what the u.s. had in terms of extraordinary measures and capacity and cash management duties. so there was a part of the treasury in terms of explaining to investors how these prices would work and also we have a parliamentary system where the debate is really an environment about what level we have and the level that was increased to.

and we were increasing at a time was to cover what people could clearly see what was going to be the australian government's requirement for a number of number of years. we didn't want it to be in a years time wit was part of the motivation which it was going to 500 billion to provide that as you can see from the present trend predictions. and they would need to borrow a certain amount and they had the authority to do that would. >> did you prepare for the possibility that extraordinary measures would run out? >> yes, i think everyone is spending time in treasury in this way. >> and imported an amount of time in that way. explaining what the measures are and how they work. but on a macro question, the

path on this is not just that there are members of congress who don't understand the debt ceiling conceptually and what it means. that is not the problem. the problem that our people donors and is the debt ceiling and what it means. if you go out and ask people, they don't feel that we should try to negotiate this to get good policy but not raise the debt ceiling at all. 60% should not raise the debt ceiling at all under any circumstances because their belief is that somehow that will limit or cap our ability to go into debt. so we do a poor job this and others to go out and educate them with the debt ceiling actually but maybe we should have bought ads in the super bowl last night to try to explain. and so with our luck it would

have been in the fourth quarter. [laughter] but we need to help educate and their others really want to go out and educate with the full range of fiscal issues that we're dealing with. and they have an important term for consequences for the country. >> do we have any more microphones coming? right here. please tell us who you are. >> hello, my name is susan irving and i have the fiscal outlook of debt management. and so also is the co-author of the fiscal outlook report calling attention for that cannot be heard in any way. i would like to suggest that the act didn't create that kind of

spending that arrived before that. and i would like to suggest that actually her goal of wanting congress to have to look at the debt consequences and the public of spending revenue actions is actually hurt by an after-the-fact debt limit rather than helping. and now people can write to their elected officials and they can vote for increases in mandatory spending and emergency supplementals without an offset and later wrote against paying for them. so that it is a free vote. if you are really seeking to look at the long-term and tried to change the fiscal policy, it seems to me it is time to pay attention to the debt consequences not when you are deciding whether to raise the debt limit after the fact, but whether at the time you talked about the spending and i think that it is important and i'm asking what you think about. >> i think those are both good points.

and i would like to make the distinction here between a congress of votes for the good and one that voting on paying for it. and that is where the problem is. so the congress passed it back whenever and now the new congress is then asked to either vote for the debt increase in taxes or what have you. on that simply is an analytical point of view and the problem is that makes it hard for the country to change its mind. and i will be the first to agree with you that the debt ceiling is an elegant and appropriate way and the only thing that we have left. so i would much prefer to revisit the budget act of 74 in a way that created a different

kind of consequence so that the guys who got elected in a past have it a little bit tougher and that their decision can be reversed easily later on. and that's what we need to do. and i think we need a constraint. >> what they should've done. oh, okay. the people who ran up these big deficits should have been forced to pay for it, just like how we go back to the case of entitlement. now to the point where there is literally no check ever on spending and we can make the budget and entitlement including a complete automatic pilot and i could see that as the slope we are going on and i think that we have underway for this.

>> oh, you're absolutely right. are we debating whether or not we have a responsible government? welcome we have an irresponsible government. [laughter] i don't think there's anyone who will disagree with that. >> you think we have a responsible government? >> [inaudible] >> in a bipartisan way we have done a lousy job. let's face it. so we have to figure out how we are going to go forward at changing that. i don't blame the people for being mad. the reason people don't want to talk about this is because of what they see. they don't see the place being run well. so i'm with you. let's find a way other than what we have of solving the problem. but this is not the way to run the biggest economy of the world. >> are there any other questions? anyone in the back reign.

>> i am with the christian science monitor. what does being an election year there is a lot of talk about how this should all get resolved more easily than maybe it has been in some cases in the past. are you off and that this will get resolved easily? and what is your outlook on how bout will happen and the timetable and in what way remapped remapped broody? >> i think that there is a fundamental question. is the debt limit a real thing. we have heard from numerous people on the panel and other people as well that will never default. so how does this work for bargaining power and this includes speaker boehner's recent comment. on one hand he says we don't

want you to fall on the and on the other hand is that we want to rid i think the safest prediction right now is that yes, it will go smoothly or maybe it will increase spending and extend this to 2022 and 2023 when i don't think it will last a 2021. but that is another matter. and so probably something will happen and things will go smoothly, but there is always a slim possibility out there that there will be an accident and who will actually do something very stupid. >> it would surely be an accident. can we get a microphone over here? >> hello, there seems to be

unanimity that this is not a good way to handle the budget. and i would agree with that. i don't think it's a very effective bargaining tool when they say you can't pull the trigger. and the president can say that he's taking the position that i'm not going to negotiate over this and the only alternative is to fall, which nobody really wants to do. on the other hand they should be a review about entitlement spending in the budget process or it so that question came up before and am wondering what we ought to be doing with the debt limit, thinking about the debt limit reform. some way. and i guess that my suggestion now would be that we have to pass a new debt limit increase

and it was some sort of process and we look at all these issues and try to come up with a better way of tying the debt to the economy is the fiscal decisions as they are being made. having some sort of restraint is a good idea when this entitlement to automated budget. it puts it on the line which is not a good thing. >> really are talking about budget requirements and for all that the founders didn't get the budget and right. they got it wrong. some of it is the that it is is

a little bit differently. so we have a screwed up budget. it's hard even call it a budget process because it's not a functioning process because no one is really forced to come to the table and have that necessary negotiation. although we do budgeting now when we have a political question also and we have the president of one party with both houses controlled by the other party and that tends to work. it's because they are forced to negotiate with each other and we do budget when we run out of borrowing or rerun out of actual money. and we're florist to negotiate. so it's crazy to have to do it

in those kinds of unnatural circumstances. and damaging circumstances as well. i don't know what the right answer is. but there should be a budget process that forces the two branches to come to the table and negotiate. but not at the risk that this cost is too high. they can argue that shutting down government is not too high of a toss. it is costly for everyone we saw that last year. the legislative branch and the executive branch. but maybe there is a way to not also threaten this before it was discovered in 19 everyone agrees no one wants to do that. no one wants to damage the cost of borrowing.

so we do need the budget process reform. >> senator? >> having lived through this repeatedly, i think that we can all agree that defaulting on the debt would be a disaster. and nobody should disagree with that. on the other hand not facing up to the growing debt over the long-term is a disaster of its own kind. and i can tell you that after being in the middle of these discussions for a lot of years, it is really hard to get colleagues to pay attention to where this is all headed. actually in the short-term deficit and trade deficits are coming down dramatically as the secretary pointed out and we can all acknowledge that that is the case. it is also true that our long-term situation is also owns de novo. and i will tell you that it is incredibly hard to get colleagues were facing an

election at the most two years away to focus on long-term. the only way we got bowles-simpson is a group of us said we would not vote for any long-term extension of the debt and plus a commission was put in place to come back with a plan. so i find myself a little torn here. because i know the only way they got something like bowles-simpson was because of a group of us, a small group of us said that we would not vote in any long-term ex-tension of the debt without a commission. to come back with a plan. so we had the decision to spend that should be linked to the authority to borrow and separating it makes no earthly sense. i believe that would force

everyone to put the two together. and put them together and that would be a fundamental reform that maybe people could agree on. >> that is something that we have done and that is to say that the ways and means committee was unified. it's all we have to do is persuade the congress to merge the appropriate and we will have the problem solved. >> anyone else here? >> in terms of the irrationality of a debt limit, does anyone recall that in the budget that was submitted in february of 2000 at the end of the clinton administration it was it was

projected that it would be paid off well within those years and that it would hit the limit again. because that it includes debt that is not held by the public. and it will would be clear of the long-term entitlement max i remember it as well with the administration and certainly a treasury of wondering what this will mean. because it is a critical importance of the debt market globally and we maintain and it's a credit market for everywhere in the world that

would affect the market so much that they became less liquid and less rich and less accessible for other countries. to where their money go. these kinds of problems. and we look at the same thing and regardless of what we do of what happened on the discretion side, we are going to come back to exactly these kinds of issues in the markets of return. >> just like my former colleague, there is no question that the budget process is dysfunctional. even though it could be reformed. it does give back to the fact that people don't implemented in congress, they can ignore the deadlines and all of the other prewrapped with the even in the

current budget act. and i've never seen the process so perverted as it had been in the last two years. so you can't even have that kind of debate. and so the congress will ultimately improve it. but i would be interested in hearing your opinion than anyone else's with respect to how and what degree do the market factor in the equation and what are they doing now to adjust to the uncertainty that we have a deadline this week and obviously by the end of the month of the secretary runs out of his ability to implement the extorted extraordinary measures. >> things seem to be a little bit, and this time around. i think we sort of know what the ending is. and i think my sense of what the market is at the moment is

relatively calm. and i think that this includes what the prospects were with the prevailing sense around the world and nobody really wants to go to that angst of the problem of last year. so at this point it really doesn't make sense as a bargaining tool and i think of it as a sort of game of chicken that only really works for both sides are going towards one another and both have to blink at the last minute. but many times they will keep going and it's really advertising up front that we're not going to die right here into the headlights. that is what we are not willing to do. really there is not a credible bargaining process. so i think that as we talked about before, we still have to do the kind of stress testing and contingency planning and

cope with a what-if scenario. but i think at the moment shows us columnists about cutting some kind of deal. i think of the idea that was raised before about what about the circuit breaker where it is not just kicked down the road, but something good comes out of this seems to be the prevailing sense says that everyone agrees it is a bad system and can be improved. maybe people need to take it off line with the jail and others and come up with something that looks a more robust proposal. >> yes. the funny thing about the way the markets have responded was the money that we were going to pay back in québec at the end of the month, those securities fell in price and longer-term debt

moved the opposite way. the actual risk is quite the opposite. you were going to get your money back at the end of september and there was no question. whether repaid with anything short of this 30 years from now is really what the real issue is. and again i believe that gradually the markets are going to have to readjust to that approach. >> is my unpleasant task to bring you proceedings to the close here this morning. dare i say that we are indebted to you and the panelists and for the questions and responses on for all of you hanging in there. on the behalf of the staff, we thank you for sticking with us here and those particularly on

the early morning after the super bowl. the bipartisan policy center will continue to address these issues of the budget process reform and encourage you all to go to our website as well at the bipartisan policy center.org as we can commute to work need work in the area. thank you and good day. [applause] [inaudible conversations] [inaudible conversations]

in their countries. is they want a lot of and clearly governments make a calculation that it's mostly going to be positive attention and it's going to be worth it and it's going to be worth in russia's case, the $50 billion that we've heard has been spent. in russia's case, actually, if you set aside the united states and the west, it looks like that may well have been a good investment. russia's ambassador is president's putin's top policy aid said in the media that 60 head of state or government are coming to sochi. taking in to account there are only 85 countries participating in the winter olympics. 60 out of 85 is --

whaing it highlights is a gap, perhaps, in how the united states about west look at russia. and how many other countries around the world look at russia. and the kind of attention that the united united states and western countries give to russia. and the kinds of attention that russia gets elsewhere. my mandate is to -- on this panel, to talk specifically about human rights, and i think it's very clear that russia's human rights practices get much more attention in the united states and the west than they do elsewhere. in the case of this particular olympics games, the issue of gay rights has gotten enormous attention in the united states

and the western media. i think it illustrates some of the differences. and i want to talk about that for a few minutes. i don't approve of russia's so-called gay prop -- propaganda law. i have a lot of other reservations about russia's human rights practices. that being said, when you look at russian public opinion, and, you know, the attitudes of people in russian society on these issues it should hardly be surprising that the political system would produce the laws that it has produced. 82% of people in russia are opposed to regular gay pride parades in their cities. 77% of people in russia are opposed to same-sex marriage.

40% of people in russia believe that gays and lesbians should have fewer rights than others. 22% would support criminal prosecution. so it's -- t that environment in which this legislation comes forward. if you look at the law, it's been broadly supported within russia. actually, i think managed to capture the 80% plus share of the russian population, i guess, are happy watching parades of tanks, but less happy watching gay pride parades. without -- on the other hand, you know, reversing russia's post soviet

decriminalization of homosexual conduct, and, you know, remembering that is criminal conduct in a large part of the world. including in india which we frequently talk about is the world's largest democracy. now, if you look well -- well let me skip in the interest of time talking specifically about the law we can talk more about the law if people have questions about that. certainly, though, when you look at public opinion, and also at legislation, you find that russia falls actually somewhere in between the united states and the west on one hand and particularly the middle east in africa. on the other hand in terms of a

public attitude. and again, i don't think it's to -- it's too surprising that russia's legislation should follow russia's public opinion. what i think is, you know, an interesting question, at least for me, is an interesting question is why, when we look at russia and we look at other countries in the world, why we focus on these issues in different ways. and syleste is here. i'm sure she would tell us it's a major priority for the administration and one that is universally applied. and i expect from a certain perspective that's true. but when you look at the very large number of relationships around the world that the united

has, this is an issue that has particularly come to the forward in the case of russia and certainly not only on the part of the administration, but also on the part of the media. and why is that? i think for me, it gets back in many ways to an issue, i think, that tom raised how real uncertainty actually about where russia fits. is russia part of the west and part of western civilization or isn't it? it was a strong temptation on some issues to see russia as outside the west. in other areas there's a strong temptation to see russia inside the west. and when we look at russia and see a russia we want to be

inside western civilization and we see conduct by the government, human rights practices, other things that don't lineup i think it's especially frustrating for many people. like an inch you need to keep scratching. that's the best i've been to be come up with in long reflection an -- on that particular issue. looking concretely at the olympics, you know, the climate that has emerged around this set of issues and certainly the very wide spread concern about russia's treatment of gay and lesbian citizens and about the law. certainly makes it seem likely that some people in sochi may

try to express their view on the issue whether they be athletes or spectators or others. athletes are in a very particular situation i think it's going to be more challenging for many of them to express their view openly, first and foremost, because of the olympics charter, which is very clear in pro-- prohibiting athletes in taking part in demonstrations or other political activities during the olympics. actually a modification that was introduced to the charter, from what understand, the strong initiative of the united during the cold war period. but, you know, spectators also will be in intha challenging situation in expressing their views.

this connects a little bit to what bruce was talking about. here you've got sochi security officers trying to protect everyone and very importantly from a real risk of terrorism. and ask this force that has been assembled and drained for that purpose going to be the best possible force in dealing with protests that may come up. i think that's something certainly to be concerned about as the games go on. we'll have to see what happens. certainly, the russian government, i'm sure, is trying

-- t very vast best to avoid terrorism but also create an environment i'm sure the russia government will try very hard everything goes out without a hitch and major incident. it's a very complicated mix of pressures that will be brought to bear at the olympics venues. and something for us again to watch very closely in the week ahead. >> thank you very much. i was listen together presentation, which -- [inaudible] optimistic. i actually felt that perhaps we were still optimistic. as we would go to -- [inaudible]

the russia and united states may be, you know, well basic question of can you sit still on the bicycle? can you sit still on the bicycle indefinitelily. particularly when the pressures to move in some direction. and many of you know just as a terrific peace in the international interest where he talked about the great power nations when you would have won -- and one rising. you looked a the during the last 500 years, and you came to a conclusion that out of the

dilemma resulted in the war. i decided to do something different. i have tried to look to the best of my ability at cases of between major powers starting with ancient agree and looked at pieces when you would have -- power which; however is not the power. but is in the reality a revolutionary power. not a revolutionary power is my analysis of the cases without a single exception have resulted in the war. i'm talking about ukraine. i think it's difficult to talk about that the u.s. and the european union -- is a --

power. [inaudible] and suddenly not being seen in moscow. quite correctly that without ukraine, russia cannot be an empire. i think that's -- [inaudible] russians however would be in those steps. i think that say that would probably say a great outset. swedish innovation of ukraine. -- [inaudible] decided to support the swedes if we allow ukraine to go and to indagated by another foreign power it would be -- [inaudible]

that's how the stakes have been perceived by russia. i think since it is 2013, where 100 years away from world war i we have to be be very careful not assume since -- russia is not the super power it used to be. and that will be now very simple pliesic because we don't have enough time and we have a lot of things to discuss. let me just say, -- [inaudible] that china today is germany -- clearly a rising power was

considerable ambition. and let's -- russia well i don't want to [inaudible] not quite obviously because it is not and because it has nuclear weapon and because it considerable economic success in recent years not recently but -- [inaudible] but still. russia clearly feels insecure of this. the way the [inaudible] and when you have the serious power like russia and can't think of any questions that russia remains the power [inaudible] and they believe that people think they can do whatever without russia being able to

respond. particular when you have another great power like china, which also seems to feel that it is being subjected to containment. i think we have to be aware of the general geopolitical when we're talking about the u.s.-russian relationship. it doesn't -- [inaudible] solicitation in many forces of the world which -- i think that we have to be very careful in defining american priorities. and deciding which geopolitical ventures should be prepared to pursue. in this case talking about ukraine and we should try to do something very -- [inaudible] american. not just ask what we're entitled to do because of --

[inaudible] but where we're going to be. if the other side would respond not only -- [inaudible] and even more -- [inaudible] make a brief comment? [inaudible] i have heard a couple of points. don't have time to respond to each and every one. [laughter] there are several things that i am disappointing. the rest of the debate about russia in this country witnessing participating. it's very much and people -- [inaudible]

wonderful going to be -- friendship and it's going to be successful. but tom was suggesting three that are very interesting to americans about the olympics is corruption, terrorism, homophobic -- [inaudible] russia. what about the american sporting team? i hadn't -- [inaudible] as if the whole olympics is about american attempt to redo russia the way you want. you seem to have forgotten the olympics is about the kids that go to compete. who will enjoy a culture exchange, who will enjoy living together, and enjoying partnerships and friendship there.

and being here and each and every day listening to the same debate, i'm disappointed that american thinkers seem to have lost the remembrance of what the olympics are about. it is -- [inaudible] give me evidence of the corruption. putin and -- [inaudible] have so many times. the only argument i have heard in this country about alleged corruption in russia is that it is expensive. yes, it's expensive. but you know why. it's something american never care to look in to. for us, olympics it's not just an event of a few weeks where a lot of builders will come. for us, olympics is pretty unique in opportunity to encourage investment in to the region that have been

fantastically attractive in term of geographic and the climate, environment, but didn't see a lot of investment. it's very outdated, and look at the map. russia -- [inaudible] areas within it own territory. ark excess to -- [inaudible] 100 -- in the soviet union it was larger. it included georgia currently. we wanted russianss to have a chance to go to enjoy sports, to enjoy -- it own country. we also want russian olympics team national team to have a training ground that sometimes also is not available whether it's not a secret that some -- [inaudible]

or elsewhere to trade for international competition. the second -- i would say that olympics is going to be a big event in two weeks it's going to be over. but all the infrastructure that has been created is going to stay. it's going stay for our people to enjoy. and i would also add throughout these money or investment in the whole project the government paid less than half the rest of it is a business. and business investment of they understand have to -- [inaudible] all of this is going to be available for people who want to join the -- i've never heard anybody looking in to this on top of that we enjoy -- [inaudible] all of them are good sportsmen.

and my president is one of them. he wanted to use the olympics in order generate within the olympics sports. it's also an important event internally. you all seem to have a discuss the importance of the olympics for russia in terms of russia making a case about its porn.

we understand it from day one. those who had the right to have the event -- [inaudible] and we do it with absolutely -- [inaudible] we have invested a lot in ensuring it's safe games and -- [inaudible] to have it. it's going to be thwarted and we will deny any chance to them. absolutely certain about it and learning -- [inaudible] it's been organized. but it is pretty unique to sochi. the majority of discuss on this country sounds like it's only in sochi. i also -- in the world it's almost nonexistent. look at the preparations of the super mall the other day, if you

can't remember enforcement protecting the air force covering, in term of number of people they were protecting. probably the intensity of effort here. the united states a concern about possible trap of terrorism in these countries. and we understand it. if you didn't decide to cancel the super bowl because it's an event for people to enjoy. sports, it's popular event. it's wonderful that you take measures to deny the chance for terrorists to undermine that kind of effort. -- ercht. we do the same. we are going succeed. homophobic? it's something i'm listening and very much disappointed because it's kind of nonissue because nobody is going to be

discriminated against on any basis including sexual orientation. the russians do not prohibit any type of relations. the only thing that is prohibited is to try to teach a different lifestyle to minorrers who haven't yet grown to make their own well-informed decisions. that's it. in terms of the whatever of sport men, i think -- [inaudible] some of the right suggesting that the olympics charter specifically prohibits, i think it's probably 51 billion propaganda and -- [inaudible] even an explanation as to what might be olympics punishment. it's not russia. it's olympics charted. also, what is important to remember when the olympics go to a place a country. nay need respect the law of the

country and certainly to show a respect to the view of the people who lead there. i'm pretty relaxed about the issue. to me, it's almost nonissue that has been blown out of proportion. i enjoyed reading yesterday something telling my american friend all along that before teaching us these law, a look at the legislation and the number of american state especially in the south. you will see that our legislation is so mild compared yours in the united states. there is a -- political [inaudible] as to why this country or some others try to teach us something they cannot accept on the universal basis within. in term of the quality russian-american relations in general and i'm taking too much of your time.

i will finish soon. tome said froabl the characteristic -- we have lost interest in each other. i cannot agree with that to the full extent. i agree we lost an interesting in each other as exessential threat. whether that kind of sentiment or not. i don't. this is a kind of in a way trying to define the -- [inaudible] there is an easy tendency to define the russian-american relations in term of the disagreements of the regional crisis or something else. but apart from the international crisis we work together and do not agree.

[inaudible] nobody remembered. and they are not developed extended as far as i'm concerned we could have had. it would have been different not only international agenda where we all play a role, but on strictly relations. the trade between two of us is -- [inaudible] the context between our legislation are almost nonexistent. the dialogue between the society is very, very limited. however, we no longer -- [inaudible] there is no basis for the cold war. t something the cold war they do not -- [inaudible] we are yet to establish more positive agenda that will bring

our country together. not only in the crisis but in term of bilateral relations. i'm glad that both presidents want these relations to develop. they want economic relations to become more prominent part of the release l. i hope we will see some steps in order to promote it. what i'm suggesting is that the relations are changing. but in the long run, i'm not sure they're change -- they're going change for the better. it will take time. and i shouldn't expect the relations to change overnight. we will have to work ton. we will be working more and more on positive agenda than on the thing we're -- related to mutually mutual

threat. >> thank you. >> thank you very much. thank you for the presentation. particularly -- [inaudible] the stable which was today. [inaudible] >> i would be -- i would rather hear the discussion then you think of ducking so i will just say less than 60 second worth of comment. and thank you to the panelists for great conversation and to ambassador for laying out so many points from his perspective. it is really helpful, interesting, and important. i'm going to mostly disagree on two points with tom. or clarify two point i think are important. number one, on syria and iran, actually i think it's the exact opposite of you pose the problem which is it's