restore law and disease are affected in the united states. and to reduce carbon pollution to have a big effect on asthma is the main hospitalization for children and african americans are more likely than white and 40 percent are more likely to die. and in 2004 above the u.s. spend $5 billion on medicaid with asthma related illnesses. this is the big deal. . .

with. >> so this twisted this in the way of getting it implemented. the court challenge actually means by the youth action by congress and the action by the next president says states have until 2018 to file plans. which of those risks are considered the greatest and what are you doing to counter it? >> we are committing to getting this done. we have a year to finalize this which they are taking comments and we have a request for a

number of senators to extend this to 120 days, which they agreed to do that. and so we have heard about this for the last 120 days. and i said when i came into my position in january 1 of the principal things that i need to do is to make sure that the direction to the epa the president gave last summer as part of the overall action plan and that is to propose this and when i said that i didn't really realize that that was a sunday. and we are committing to finishing the roll to create this implementation by the epa. and he noted that some states can move that back particularly if they get into regional

arrangements, which is the most cost effective way to the states might come together to get the reduction that will be required once the rule is finalized and so if they have this program or as california has done to go under a more market-based system into together and this includes the reductions and they will have until 2018 to analyze the lands. so i am quite confident that we will get our job done. i'm also confident that we will resist and i have no doubt that there will be an attempt to try to overturn this to uphold this is it is finalized so with

respect to the courts i think that there's a long history of this starting in 2007 and is recognizes that it is a dangerous pollutant in the epa has the authority to regulate it and there's no doubt that there will be other challenge is that the epa does. but they have had a stunning stream of his successes this spring in terms of upholding the authority to tackle these major crisis these of pollution and illness in our country. c-span: >> the president has been quoted as saying i really don't care to be without the senate. but he wrote in the post this morning that the conquest between the democratic senate control, obama has chosen legacy, adding five months

before the seven-month majority will be determined and he is complicating the message of some candidate and exposing them to political risks and they refused to take himself. >> some of you might remember me from my previous service in the white house when i worked for president clinton. i don't think the president thinks about it in those terms. i think what the president is thinking about is that he has an obligation to the american people to children and grandchildren and people who are making decisions today and they are trying to make it work the best that they can. and so it's very important that we understand the way this works in the storm surges and the sea level rise in the name the effects of time and change and

as i mentioned earlier. so i think the president's obligation is to do what he needs to do under the legal authorities that he has been granted by congress through the clean air act to ensure that we have this tackled as the most important existential problem. so i think that we think about it from a political perspective, we show that there is broad support reducing carbon pollution is roughly 70% across the country into red states and blue states, amongst the republicans and democrats are taking the actions and this is an issue that presents a different set of political

challenges and there is no doubt that they will come after this rule and they will try to put it squarely in the context of a political campaign that is ongoing in 2014. so i think that anyone who wants to go out and talk about the benefits as the president did, and visit a children's hospital in the home state, i think that they will find that the politics is such that you can defend taking action here and the public will want that. so i think that people who deny the existence of climate change who want to try to run and they really can't get it and they can't see what's going on around them and they want to deny the

public health the fact that it has on our families, i think that that is the losing side of the argument. so if you think about this, anyone who tries to run this has a difficult time. and they are putting this back with the advertising campaign with the cope others. and i think that that is politics that people have to do have on their own or state-by-state basis. >> so what do you think about this on this level? >> it is probably an important

point. >> no doubt that the narrative that she tells them in the book from her experience, the secretary of state will lay these facts out and i'm anxious that i have read some of the excerpts of the book especially which has now been printed. and i'm sure it will be interesting to the public with these tapes on the tough problems with the secretary of state with the public being able to line up in tuesday.

>> thank you. >> one thing that we need to mention a earlier is that some states have as long as 2018 to finalize that and that's what you need to do in this administration. especially if a republican is there. >> i think that with a deadline of 2018 it is they are for states that want to join together to try to address this in the most effective way

possible. and it will highly be finalized. including reducing their emissions by the end of the obama administration and they will be under legal order whether they want to join with california or not, there is some discussion combining with this and more states, like new jersey, they might want to go back depending on how we might see that happening. there are other states that

might decide that, but i think once you have made that decision, then i think that there's a real obligation to move forward. president bush tried to overturn a number of rules and many had a problem with this. so finally when they did go into effect and they try to reverse some of this and they were basically finalized as was appropriate under the laws that were prevailing at the time.

so this shows us how to it embrace as climate change and i think that if we think about a challenge in the 2016 contacts if you're trying to run the nationalist, i think you're going to have a very hard time. >> so are these rules, are these at the peak? that you hope to accomplish more >> you know, again they have a mitigation of which this is

other elements of that occluding implementing this efficiency with more deployment of renewables and we are doubling the amount of renewables on public land and recently they had expanded those commitments as well and the community will have to react to that and plan for that and there is a whole

workaround on that in the president has proposed a billion dollars in the current budget and we have a strong dialogue and the president was just that the g7 and this is a serious topic with all of the leaders who committed themselves to try to move forward to a positive outcome in 2015 with significant reduction strategies at that time and they also spent a lot of time talking about energy security in the european system as we develop these examples in the ukraine.

so there's a lot to do at the international level and one of the principal dialogs were there. there is some news coming out of china from the academic advisors to the government and what they are going to do in this post 2020. matt. and there's a lot to do and i think this is the most important element in one element of this function strategy. >> why not just turn this whole thing there. >> i think the system, i think that people who have talked

about the press recently, they have served veterans well and this is a problem of getting into the system and i think that the bill that senator sanders and senator mccain just agreed upon last night is a much better way to go than privatizing our veterans health care since we had the ability to provide this but they have been promised and the resources that have been contained in this bill focus on getting the primary care doctors into the system to focus on improving the facilities that would come from the resources and it would be a much better way to go than simply privatizing the system.

and so that builds on the president's commitment that is sometimes lost in the conversation especially for taking care of the veterans in the baby boomer veterans who are now in the system as well as those who need the quality of care that they are capable of delivering and we honestly have problems in the structure of how that services being performed. and so the acting secretary has now taken action to improve the kind of legislation especially

seeing that someone can be the va with the veterans health system and who can provide this kind of reinvention to get those improvements on. >> we have enough of this engagement and that congressional campaign that they are happy with how we are raising money but we don't feel that it's been at all effectively raised. >> i think the president has

framed a choice between an economy that works for the middle-class and working people versus an economy that is based on these old ideas. so this is across the country as we have seen states and cities pushing for equity and this pushes for reforming the way individuals are paid for overtime. and the democratic congress would leave the country versus a republican congress. so i think they are doing what they need to do, which is doing this job first and foremost. secondly putting issues on the table where we can make

progress. and when did they engage that, and he will engage one appropriate and he makes that argument to the democrat constituencies because you can see an increase in that as the campaign season rolls around in the fall. >> i think he has been out there talking about the issues and those are all issues critical to moving this country forward and

they have to make a case for their own constituents which i think they can provide a narrative and a supporting environment. >> tomorrow we are talking about this. >> we are talking about the changes in the problems that they would have in this includes those who are in kentucky. vote came out faster than any republican in announcing the new standards and referred to it as

an assault on the coal industry. and this will lead to higher electricity rates than the lowest income earners. so what about criticizing this? >> with respect to the republicans, i think that if you look at the real economics of this, the epa analysis shows a because of the efficiency the you will see prices on average go down by about 8% and that is

the price at this level. and so i think that there are things that we need to do to ensure that people, that the administration can understand that this has been reflected to do this and i mentioned this earlier if you look at the system and they spent a significant amount of money whether rising that home of those individuals. so it's possible to do that with the right policies and this is what we are asking the states to do and of course to have the flexibility to decide how to move forward with that.

the other thing is that we could come back to where we started, the most effective by the public health implications are continued at the pollution levels that we are seeing and i have given you some statistics to demonstrate that. and i think that those are ways to ensure that electricity remains affordable and that's why we have the ability to do that. so the politics, first of all we will look at this and it reduces the amount over a fairly long period of time between now and 2030 with about 40% of electricity production to see

increases in gas as well as renewables and a significant reduction in demand. so we are not taking call the layout of the system. but the coal that will be burned will have to be done in a more efficient way and a more effective way to raise this that has been utilized. so i think it makes decisions about whether to keep those are whether to register them. >> let's go to susan page.

>> having served in the bill clinton white house on the obama white house, how was it that this worked? >> okay, that is a topic that i have and i think that each person that comes into the office has a lot of skills and the challenges are different and we obviously saw the breakup of the soviet union and we have tried to expand a democratic europe and i think that the project was pushed forward and we had to deal with al qaeda but

nothing in the way that president bush and president obama had to come to grips with in terms of that. so i think people bring their own personality to the job and i think that the purpose of the job is their primary duty to ensure that everyone has an opportunity in this country and that is what motivated all three of them and i think if she does decide to run and she is elected president, she will get up just as president obama gets up every day and go into the oval office and to help working people. >> can you give three adjectives that describe this?

>> discipline, tough, and determination. >> yes? >> in regards to this, as the president was talking about this, what was the bottom line as far as what terms he would be able to live with if you guys are walking around? >> secretary of defense made the determination that the transfer was in the national security interest of the united states and that the threats would be substantially part of this.

there were assurances given and there are also ways we will monitor them and i think that first and foremost the president thought that we had a commitment and also a duty to leave no man or woman behind on the battlefield, and we have exercised it and have talked about it several times this week and they thought was the right thing to do and the secretary of defense, who had to make those findings felt like it was in the national security interests to move forward with a and second that the threat posed by the detainees could be substantially integrated. and that is what the discussions and dialogues have been all about. >> as you probably know we have

a lot of ways of knowing what people are doing around the country and around the world. and i think it's fair to say we will keep an eye on it. >> i know you have been under current role for a relatively long period of time. but the president had nearly six years and especially to address emissions from power plants. why did he wait until now to do a? two i have to say that in the first two years he was seeking legislation in the bill passed the house but ultimately didn't pass the senate. that was an economy wide approach that you would say maybe more efficient and in the

meantime without substantial reductions of the transportation sector and came back in the office and began to work on this action plan in the second term and so a piece of the was to take reduction out of the power structure, which is the largest sector for the co2 emissions in the country, as much as 40% of the power sector. and so i think that that shows that the congress is unlikely to move forward and i think that they were working in sectors to reduce the co2 pollution is much as possible. and that is why we are in the possession with this rule to reduce carbon emissions by 70% by 2020.

and the president not taking climate action plans,, had he not done anything including the improvement, to those of you that think this is all about tracking natural gas, if he hadn't done that omissions would of been about 4% above 2005 levels. so they would've been 5% below the 2000 and five levels as a result below 2020. so there is a very significant movement and if you look across the globe, the united states has reduced its admissions more than any other country over this period of time. and i think that that is a testament to the leadership both in terms of clean energy at the

beginning and these important regulations including much more efficient appliances as well. [inaudible question] >> we also have the experience of serving in the clinton administration. some have a few of these political appearances and perhaps the president may be willing to take action on this. so i'm just wondering what you think about this. >> i think the president, you know, i think that he knew that

this was a controversial decision in decision that he had taken ownership of and so he knows it's important to the american people that this was about an actual human being who is under great distress and had been held by the taliban. and while controversial he said yesterday and i think it was the right decision and we will move forward with that we will ask the va secretary eric shinseki two duo revealed. so i think it could be better by someone else and he will accept his resignation.

and so i think that particularly it is certainly a tough call and the right thing to do. as the chairman said, we made a decision to do that and it is important to us. >> i wanted to come back to this question because of this transition. as the president believe that he has the constitutional executive authority before the end of his term to believe that it is a natural security issue to transfer the detainees before he departed? >> i don't think he really wants

to close guantánamo, i think he's doing it within the bounds that have been passed and we let our friends on capitol hill now what was stretches are unacceptable in the current round of negotiations. and we are working to ensure that the remaining detainees there close down guantánamo is part of the administration. >> the senate democrats, some of them are saying that we have to stop doing out iris related to this. are you sympathetic to the senate democrats who feel that way? map i think that we would like to be talking about this.

on the president has found this in the scheduling of the va, there are opportunities to bring a surge in home, it's a tough call, but we have to make it. and so i think that the president will make those tough decisions in the context of that is he will keep coming back and keep coming back and talking about an economic program with the american people. but you just don't get the choice to say i'm sorry, i will wait until after november to deal with the opportunities to

bring one of our young soldiers home who has been captured. i mean, you don't get to make that call. you have to make a decision right then and there and that's that to bring sergeant bergdahl home. [inaudible question] >> we are asking the pentagon to stand on for now on these administrative actions. >> i wonder if it is just the mere threat of taking action if it's jeopardizing your position. because republicans will say

they say that given the limits of what you can do with executive action, onto also putting yourself between a rock and a hard place with the advocates of status would like broader action from you. >> yes, i never really tried to make a living in this way as a republican. i think there is an opportunity. i think that we would like to see legislation moves move forward. that is what i think. and i think that there is an opportunity to get it done, that is a much better solution than a permanent solution for a broken immigration system and the pain that it's causing across the country. so that means to wait and see

whether republican leadership can get a compromise together they can earn the bipartisan support over the summer and the present time, we are reviewing authority about how to particularly alleviate the pain that he is focused on and i think we will have to think through if congress is unable to act. and so if we went ahead, i'm fairly certain that they would use that as an excuse for inaction. so they would have to wait and make an assessment sometime

during the course of the summer. >> so is this broad enough to even satisfy people who want something comprehensive done? >> we would like to talk about this and i'm curious how the administration is looking at this issue in the context of immigration reform and how that might compel them to act now when it could last a little bit longer. >> the law requires that unaccompanied minors cannot be returned from a have to be

turned over to the department of health and human services and secretary duncan has pulled this together as an inner agency work with the tax forest led by fema -- the task force led by fema with the children and it's just heartbreaking as a situation with 10 or 12-year-old kids accompanied by their parents particularly in central america, trying to find their way up to the u.s. often to be reunited with those who are living out here. so it's another reason that we need reform the system and get a legal immigration system to work and be viable. in the meantime we have to deal with this humanitarian crisis.

so all agencies of government led by dhs have now been coordinated by fema and are finding an appropriate place to make sure that these these kids are safe and well taken care of. [inaudible question] >> i don't know the answer to that. >> we are looking at restrictions with the chamber of commerce that this rule had caused job losses up to $24,000 per year up to 15 or 16 years. we talked about climate changes with his intended schedule this year. some wondering if it's true, i'm even taking into account where

there are potential job losses and economic cost? >> sure. especially with our analysis of these jobs, they build out her clean energy infrastructure and efficiency in general with these systems over the long-term. so i think the claims of massive job losses have been debunked with a set of assumptions that have zero to do with the rule. so there are fantasy job loss numbers are basically have been debunked by independent experts that with out it. and that isn't to say that there won't be places in occupations where we will see some job loss and we need to be sensitive to

that whether that is the loss of a plant or otherwise.

>> >> please note to our meeting with the fed is completely off the record today's presentation represents the opinion of this committee and should not be interpreted by but the fed may believe. all members rabil tuesday today and will be available after words for questions. the members in attendance to day is bank of the west, american bank, bank of america merrill lynch, pnc lynch, pnc, deutsche bank suntrust huntington bank

regions but mitchell corporation and northern trust. we will have a question and answer session we ask you to have a question state your name and the name of your publications let me introduce the chair in chief chair to get things started. >> good morning i know when the meeting falls on an employment friday it can be tricky to get away from the desk summary appreciated that you are here. i think if you picked one word with that consensus view we are optimistic we will see solid grossi and

into next year of course, gdp growth fell 1% that is in part so weather but also a global slowdown of activity half the first quarter that it minibuses violent inventory correction but the big news and bad news was confirmed to this morning that we are back on a much better track 217,000 jobs to day on average about 250,000 in the first two months of the corridor is confirmation to not only have a decent balance of activity be expect gdp growth will reach almost 4 percent but not quite in the second quarter of this

year then settle into something like 3 percent growth going forward. if you look closely at the forecast the growth rate does decelerates a little bit but not much starting off at 3.25% at 2050 watching something closer at three because we're optimistic yet employed in their rate will fall be expect it to will be 5.6% at the end of 2015. within touching distance of the overestimate of 5.5% and at the same time we expected a moderate rise of interest rates during that time as well. the reason for economic growth but no to expect it

will accelerate but our senses by the end of this year from the 1% numbers will be closer a 1.five.

seeing up pick up intel loans which suggests that companies are beginning to contemplate stonkers spending on equipment and structures. locate and foreign trade and inventory there's been quite a bit of volatility that is where most of the weakness was for example, and to we figure that is likely to continue the future we're not expecting a lot of

positive for they give florida long run from the today may be responsible for a quarterly surprised we don't think they will change the trajectory of growth. finally coming to discuss the fed there is remarkable agreement and i ought to step back to say even with the growth picture of you is tighter than it has been that other readings. there is general agreement as always disliked to this jaundice to the weakest but that is partly because in the middle stage of a cycle but the stuff played out as expected now we have a

second court usher - - six recorded data in hand to show the job growth is on a better track it is similar to our view of the fed projectors' day with no wind down of the qe that barring some kind of extreme shock to stick to the tapering pace they have established the committee is an agreement it will end to this year's november or december. most of us in fact, are an agreement dimbleby in november but after that we are looking for the fed to normalize interest-rate its to move the fed funds rate up in the second half of 2015. a little bit a divergence in few but not much but the first hike is expected in

the third or fourth quarter and from there rethink the fed will stop reinvesting security is off of the portfolio to allow the balance sheet to begin to shrink. it is important to stress well lit is the beginning of a tightening move is still a normalization of interest rates that rates are so extraordinarily low by a canal in the beginning are more by removing a the accommodation in about the outright tightening. so that is the forecast if anyone has questions. >> i want to talk about the

labor market with the a good report as they call it today did the committee talk about the caveat or the saucepot its over what time frame they get better? some of the things that are not going as well and absolutely yes it did. in particular we talk about the appropriate level of the unemployed rate in the us since we no labor force participation isn't what has been in prior cycles in fact, not only what it has spent but it is dropping normally you would see growth. talk about underemployment

and how that suggests the labor market but the forecast on jobs is we will sleaze slightly faster job growth than in recent years. we're optimistic on average we will see more than 200,000 jobs per month and we're optimistic that pace will pick up further and also that the appointment rate will continue to come down. there are reasons to think demographics play a role with the drop of labor force participation. but there are also reasons to sink there was cyclical damage done. while it is extremely difficult old ways to estimate the natural rate rate, we are of these

comfortable there is still plenty of slack in the labor market. in addition, obie do have ideas about to approach it to. for example, be discussed the of weight that ought to be put on the long-term unemployed and inverses short-term. our sense is that normally a doctor and unemployment reaches the equilibrium partly because they are skilled workers in the group that is a reflection of the extreme nature still playing on the economy. considering how many people might come back and

participate but if we do see job growth may be not quite as strong as the last two months at 200 + but a lot of that will be gone over the next couple of years. >>. >> you anticipate the pick up and but i was curious how does that work out with a small community banks or the larger banks? there is still a more modest growth. >> but we are expecting it will not be exactly between large banks and small banks

there is stability in the delinquencies into looks like we're getting to the point the default rates are bottoming out in this a more stable environment to work from that we have more clarity with regulation i am sure you are aware there is a significant tightening of regulation with those directives how to apply that every three years six months but we have a much better sense of what that is to make a decision making easier but more important to is we start to see a pickup of loan demand is a little more balanced if you look at consumer lending last year

the bulk of the strength was categories of student loans fell we're starting to see a other types of lending as well of greece said example home-equity lending has begun to recover it our sense is community banks can purchase of pay at a greater rate to. >> it is getting more flexible with the inflation in target may be 3%? >> so do we think the fed is getting more flexible with its target? that is notwa#j something we discussed yesterday in the meeting. i can answer that question my own view.

there may be a bit of flexibility because we have been so low but i suspect the judgment is on the specifics.ç that may allow it to continue but that is my view not the view of the committee. >> fox business. is there in the thank that you are worried about keeping you up that night? that will not get off track with the ukraine or other events? >> there is anything we are particularly worried about to keep us up that night?

one of the things we discussed is the upside and downside risk on the list of the downside is geopolitics is write-up there. not just to the military action in ukraine and that is part of it but to crack down on credit in china. something reapplied that is necessary but it will be difficult to negotiate in china is extremely important to the coal will economy. also watching the tide of regulation as well related there are still stress test and to raise the european

banks are a little slower did u.s. to implement liquidity requirements that is say potential source of economic weakness as well but the end of these were big enough concerns. antonio their side there are potential reasons the possibility to see more spending with a decent depreciation one of home prices and see decent to appreciation of equity valuations in between those it may be possible consumption could be better

than the forecast of our numbers. >> the "wall street journal." to what extent are you a and the other members seeing as changes in underwriting standards? talk about the regulatory very be more stable but given those other things is there some loosening? >> the question about the of willingness to lend to to tighten or loosen constraints on lending and to double the of the conversation, at the consensus view is it is tougher to get a load now primarily because of the new mortgage rules at the beginning of figure.

so they are higher. as a result of the regulation. its is of little bit easier to get a business loan then there was or the straight up a bank loan but mortgage lending is an important part of our business and it is tougher to write those loans no. what is the right time to stop reinvestment before or after the rate hike? >> so when those bonds

roll-offs' the investment sheet with that first rate hike is just barely before but the bull career in the third or fourth quarter and one expecting a the first rate hike. most of us agree that every investment is likely to end in the middle of 2015. so just in front of the first rate hike. >> let's get the fed ex said in to tell if a.

with that extraordinary dash ran up the balance sheet now it is beginning the process to exit and and wine to it is an charter territory just as the crisis was the exit will be. any sense of well level of confidence with the fed's ability to do this? you talk about the chinese said that tricky situation. >> the question is the level of confidence with the fed's ability to access from the extraordinary easing measures setter not disruptive to the economy i think we are more confident

than we were before then we have been the past because the fed introduced new tools to manage that and in particular the reverse repo facility vigorously it tested there is an appetite for that to gives the fed the ability to capes of securities even if the banks try down day excess reserve from other sources. that give some of flexibility and that yesterday there was no concern expressed by the committee to give them the flexibility to gracefully exit and avoided a shock.

>> [inaudible] >> some of the question and is about the recent remarks in a speech may be a little worried that the markets are so-called with so little volatility. and a sign of the excessive

risk-taking. that is something we discussed yesterday. we went back and talked with their own institutions but also those of us with capital markets groups talked to give a sense of where our customers are as well. to suggest an appetite for risk that there was is accessing and in some areas so people have removed risk from their interest-rate portfolios. partly because the regulators have done a very good job to make people aware of the small community

banks the possibility of the sharp rate hike and what that would do with investment portfolios. so with low volatility and low interest rates could be an indication of risk-taking it is difficult to find that we're not seeing those signs with our customers. >> in the other questions? thank you very much. [inaudible conversations]

>> russia than the united states is a nation and its mission and they are pretty similar. we believe bin distribution of our core values. but it did not go anywhere.

to wait to all those years was a the holiday. so how it was presented to the nation is that a new crane a fascist came to power. in flying the flag of the former liberation army during world war ii and the proof set these are fighting so it looks like we're just trying to protect brushup.

know the overwhelming majority of russians are liberating ukraine from the fascist threat.

>> ladies and gentlemen. we hope you had a good blend janvier extremely pleased to have tony here to finish up on the new conference4>]

>> >> so we should pay particular attention. [laughter] now we ask him to go back to tell us about the effect of the ukraine crisis. thank you so much. [applause] thank you so much it is always great to be at brookings with good friends and colleagues.

and also as an institution and individuals the administration in futures ministrations and that capital that we do not have a monopoly on. and they appreciate you hosting me very much. and to trace where we are into trays where we are. this is a very active issue there is much going on in europe with the president and his european counterparts and this will

be always in the headlines if we go back to the protest at the end of last year it is fair to say that while the catalyst for change basically reversing himself with the european union something that europe expected united states expected russia and the kreme people that was the catalyst what we saw rootage in something even in different will of the dissatisfaction and disenfranchisement from all walks of life with corruption and technocrats economic stagnation and lack of opportunity and the assault came together.

and the vicious crackdown that followed. then we had russia they used to its greater size and wealth to intimidate a smaller neighbor with the incursion and occupation and annexation buildup of forces along of border to use the buildings and the tripling of the price of gas to the ukraine. by the or what -- almost orwellian machine based on too profound irony is the ethnic russian he claimed to be defending in george far

greater freedoms in the ukraine under president putin in russia. the extreme form of federalist is exactly the opposite that what putin excerpts and russia. mistakes for the united states in the international community if you go back to the very first major foreign policy the vice president biden the speeches that laid out the idea of the reset but they said there be clear differences and clear bread lines and is our profound rejection is the most important that we believe profoundly people have the right to decide their own

future and resume to associate. so is the principle to redraw borders by force to undermine the territorial integrity of the democracy was not acceptable it was also something that needed a swift and stern reaction. finally something that was important in the 19 that what you know, very well when the soviet union fell apart it left many successor states with nuclear weapons and they all agreed to give up nuclear weapons but in the case of the ukraine was not prepared to do that and tell what had a firm commitment by russia or the

united states that the sovereignty would be guaranteed so they signed a the budapest agreement batf that this piece of paper could be torn up called into question the united states responds into points of time from the moment of the violent reaction we worked hard to root the escalating crisis the vice president was constantly on the phone

and deeply engaged with european partners as a low as president to attend to see if we could forge diplomatic immunity for a way forward but once the russians went into crimea the policy shifted and first to isolate russia and second support ukraine and build support in the international community the first with regards to russia to be simple and straightforward we need to oppose cost they have taken and stop them from taking further irresponsible action and hope to take that space that they operated in going

forward. this is the first instance some you know, the litany of the jury suspension and the efforts of the united nations to isolate russia politically and we saw that with the security council and not siding with russia and then the general assembly when it found itself with another 10 countries. and then with crimean in the east and with the st. petersburg showcase this

did not just happen with that focused work starting with the president to move all of us in the same direction people say they did not go to this g8 meeting or the g-7? or of vote of the u.n. assembly does not mean anything. it does. because one way that president putin and russia define power is a geopolitical standing and influence to undermine it russia politically in the international community even more significant were the measures to isolate economically. the president was determined to adhere to the basic principle with europe and other countries first the practical impact to impose

sanctions is much greater but second the political impact is reinforced as the sense of isolation so as you know, to engage in in the process with restrictions on doing business of key figures to post targeted sanctions of the inner circle outside of government we denied export license of military technology and the european union, canada and liechtenstein had similar if not identical measures. just as significant be developed more severe measures targeted debt at the same time very effective in the financial energy sector. the very knowledge these

measures route there had a deterrent effect that they agreed to move forward creates a climate of uncertainty without having to pull the trigger. there is a discussion about the impact or lack of impact with the sanctions and it to me the case is not even close but very clear. we heard first from the finance minister even putin himself acknowledging the sanctions. recently and announced the decline in the quarter profits amanda cross all

whole host of measures we can see the dramatic impact been given the financial markets to isolation and the pressure and may be more

significant capital flight. $51 billion of the first quarter which is more than all of 2013 and going for the imf world bank estimate the capital flight from russia is to be 100 and $200 billion. investors are pulling back and look for countries to keep their commitment and is connected internationally and in all of those areas russia's actions and sent a message to investors that is not the environment they want to invest in. russia's credit rating was cut just above the junk-bond russian companies and ad issuing bonds to raise capital and economic contraction is clear we have seen in the first quarter there protecting something close to zero growth with a multi billion dollar deal

with large oil company that is sanctioned. some of this was happening before the crisis but virtually every expert makes it very clear that everything we did accelerated and deep into the process. those are the measures of what we have done to isolate for its actions a new crane that what is more important is i am absolutely convinced russia's actions in ukraine are strategic loser going into the future. first yes you can say it one crimea but in so doing is

probably lost ukraine it is more united in its orientation than ever in that sense of identity is deeper than never. then crimea itself it is true in the short term the action produced a political bounce for putin and i think that will change any significant way. russia is spending $7 billion with the direct cost budget torrey it - - budgetary support they will spend between 50 and $60 billion per rail and bridges and electricity and water to make up for what crimea has lost as a result of the actions this puts downward pressure on discretionary spending to modernize the economy. so the boom will come off

the rose as people understand this is not for free. second strategically what president putin has done a new crane is reenergize made no to the point we have not seen in years. ironically the very thing that he is to prevent is exactly what is likely to happen as the territory is already growing. to the extent we are successful to reverse the decline in defense spending this will prove to be the single most of capital russia's actions to create the potential for real energy reform the biggest single jolt to decrease dependence on russia the

anyone can imagine to upgrade infrastructure this has the potential erotically to kill the goose that lays the one golden day to end the unintended consequences what message do russia's actions said ukraine sent to non ethnic russians this could open a can of worms in moscow. finally made the most interesting thinking how president putin seized power it is a combination of geopolitical influence and economic strength there was a recent survey with the russian people were asked

what are the two top priorities the results for evenly split international influence to create conditions for prosperity so both of those are in profound jeopardy to deliver that influence there is a way out to integrate russia's economy away from fossil fuels played by the rules but ultimately it's up to president putin if he wants to pursue it and my concern is left with few choices there will be a strong incentive with president putin to play the nationalist card to produce a jolt of short-term support

that is the danger and the hope of the entire administration it is not the course that we choose i will come back to that. but second is the support for ukraine and the effort put into killed the international support. it began with economic support with the european partners and others 27 million over two years. improving macroeconomic management and tackling to be anchored to by the imf agreement that was achieved in record time. than $4 billion and

$1 billion u.s. loan guarantee on low-income families. separate and apart pursuing a program of u.s. if technical support capacity building and government ministries and then most recently from the united states and europe it is worth commenting it was a remarkable achievement the most free and fair election we would often marvel at the irony of some people complaining about being disenfranchised because they were creating the disenfranchisement. most are too young to remember but there was a wonderful movie called

pleasing saddle when i was growing up there was the scene when the share surrounded douse he holds himself hostage and says you better let me go or i will shoot myself that is exactly what those that were complaining word doing. then to complain about the illegit fascist dominating. and so much for domination. and $23 million to help the security forces to do with the immediate needs against the armed separatist we

provide meals ready to eat people laughed about that but then looked at the photographs of them eating those meals to be sustained in the field without them body armor, communications equipment, disposable robots , those were all short-term measures but now with the new government and in cooperation with europe with a comprehensive security sector reform. someone have thus provide a false sorts of weapons systems starting yesterday and that is the wrong thing to do it is important reassessed the shortcomings of the sector to understand the reforms and to establish priories insufficient

resources and mismanagement and corruption assistance will not be effective but the new government that determines the shortcomings of the past and we are determined to see it with them. finally the president was determined hearing from many allies and partners listening to the concerns they had to take immediate steps to bolster the article five commitment and what he set up to do is produce the airline and steve presence to nato and in the immediate sense additional f-16s to poland to the baltics, rotating shifts in to the black sea been

deployed for company size paratrooper divisions this week the president announced a new commitment to reassure with the $1 billion fund to allow us to pre-position increase the number of u.s. personnel through central and eastern europe and moldova and georgia. it is vital to u.s. being gauge to take the steps to incur the nato partners to do the same. so to say all 28 members participated. but unfortunately is characterized.

but catalyzed by russia's actions. where do we come from here? first it is important we get a grip and resolve the situation in eastern europe. on the surface the deal escalation to ration down the rhetoric about ukrainian election there were designed principally to take the pressure off of russia to divide europe from the united states or from each other to create confusion because unfortunately most tactics i don't think can indicate the change of heart is still seeks to have done to influence to covert support that we saw recently

to increase in flows of militants and maybe the most striking development you have seen the videos and media reports multiple attempts everyday to cross the border with armed men and weapons recently the incident where separatist try to take over the previous military that responded in the battle there were killed and they were russian the separatist unfortunately have become increasingly violent and heavily armed and actively targeting and kelp -- killing security forces you cannot have it both ways on the one hand take steps to deal escalate the crisis but at the same time actually

take steps to a accelerate it is important we keep the pressure on russia to change the course and that is what happened at the president's meetings then he secured commitments from our partners for coordinated actions for than acceptable interference to affirm the readiness to intensify end employment to impose further cost on russia if it proves necessary. we also make clear what is russia's needs to do do in order to meaningfully to escalate the crisis to provide an opportunity to move forward and to encage with ukraine to stop the

flow of militance exercise influence with the armed separatist to renounce violence and of course, in terms of what it can do no military invasion are bogus peacekeeping humanitarian interventions but it is equally important that ukraine responds in the appropriate manner. there is a plan for peace unity and reform like pursuing / national dialogue amnesty for those who'd put down their weapons. ukraine should pursue those steps. should avoid having to pursue martial law. or the use of force or full-scale counterterrorism operations again if russia takes the important steps that i outline to meaningful the escalation.

especially anti-corruption. . .