improve savings in the nation to help grow the economy and the need to address rising health care costs. sounds familiar. ..

right now i'm going to yield the floor, as they say in the senate, to our distinguished guest speakers, bob kerrey and jack danforth, who together spent more than 30 years i guess in the united states senate and served as governor, for bob kerrey, and attorney general, for dan -- for jack danforth. i will yield the floor force much time as you may consume. >> great. well first off it's great to be with jack again. and let me try to be relatively brief, i've been out of the senate for 13 years, but the first most important question for the american people to ask and answer is do we have a problem? because if you don't think there's a problem, particularly the candidates, and especially the press it's just the

candidate, is there a problem? because if you don't think there's a problem, why pose any solution? one of the challenges we have, happen to think we do have a big problem and that it's a demographic problem. it wasn't caught by liberals or conservatives. you can't blame it on anybody. it's demographics. it would've been easier to solve it in the mid 1990s before the big demographic problem begin a reality which was the baby boom generation beginning to draw down the claims they got uncle on medicare and social security. about 10,000 a day or something white that are moving in the ranks of eligibility. under law they are entitled to these benefits that are specified. longer you wait the more difficult it is to solve the problem. again as i said it's not a problem that was created by left or right. it's a problem that we simply promised more than current law is able to keep. if you don't do anything today,

at some point if you think young people getting screwed today, it's getting worse because of some point you've got to cut benefits much larger, or raise taxes higher than relatively modest adjustments, although in a political environment such as today even relatively minor adjustments can be difficult. get back to the first statement i made, most people and the press will say what's the problem? meaning that anybody that proposes a solution to the problem will be criticized for that solution. alan simpson and i introduced legislation in 95. i remember quite well. bill referenced it. it's called normal retirement age so the got a got and talk, e pressel talk to people who were 75. you have to wait until you're 70 to retire. do you think of that next it's not retirement age any look. it's the eligibility for normal benefits. there's no requirement so actually retire. the point i'm making is that

it's much easier to be a cosponsor of the do-nothing plan. there's a consequences for being a cosponsor of the do-nothing plan. nobody comes to you and says you're making changes and benefits, making changes in taxes. by the way you can never live a solution or a conservative solution. there's a whole range of solutions in between it's not like find a cure for cancer. there's only 30 or 40 things you can do. there are no gimmie selections you can make but no selection is necessary and less until the public and the agents of the public, the press begin to say to senator windbag and others who did not have the responsibility to say to them, why are you sponsoring the do-nothing plan? why are you sponsoring something that is going to produce a tremendous cut in benefits for people that are under the age of 30? i can tell you why, because i'm 71 know. my cohorts vote 80% of his vote. if you're trying to get the vote of geezers, 20% of them vote. why should i do something that will help them?

i would use the chip sector but my kids and grandkids. even though the do-nothing plan is quite negative to them. so i think the biggest problem that we've got going into the 2016 cycle is the one we had in 1994 and 1995, which is hard to me members of congress, far too many candidates get left off the hook because it's easy to sponsor the do-nothing plan at the consequences getting very few questions of why are you proposing something that's going to make it even worse for the people you say you care about the most. i'm done. [laughter] >> senator, ditto. [laughter] well, it's been 20 years since our report. and we just had sandwiches downstairs, a bunch of us, and we had a spirited discussion on the following point. is it fair to say that nothing has been done on the budget in

20 years? and there were those who said, well, it's not literally true because there's some little things that have been done. my position is nothing has been done. >> i have now swung completely over to his point of view. nothing has been done. [laughter] >> by policy center, i just want to highlight this. we negotiated this. >> now, this is also the fourth anniversary of simpson bowles this month, and nothing has been done. i did not realize, as bob says, that there have been six or seven of the commission reports since ours, and nothing has been done. i think that the lesson of this is that commission reports, no matter how good they are, aren't

very efficacious. they don't really do very much. and if you can have the most persuasive case. i could remember after our report came out, we had these beautiful charts, just unbelievable graphs demonstrating where we are hating on social security, medicare, total spending and so on. where we are heading. and i could remember presenting this, i thought doing a good job of presenting the case, to a group of people out in kansas city, older people mainly, and they just viewed it with total disbelief. they didn't want to believe it. and i think that it's fair to say that neither politicians nor voters want to accept that something has to be done that's

serious with regard to the entitlements, and in some way we've got to increase revenue. in the run up to the 19, 22012 presidential election, there was this famous debate in iowa. eight presidential candidates stood on stage and there asks the question question, would you accept a deal with 10 times real spending cuts, $10 of real spending cuts for every dollar of tax increase? and if you would not accept that, would you raise your hand? all eight raised their right hands. they would not accept such a deal. that is another way of saying, raise your right hand and take a pledge. that if you like to be

president, i'm not going to do anything to do with the problem of the debt. because you can't put together a program to deal with the debt if that kind of an arrangement is off the table. there was a piece recently in politico about, it was called the go to simpson-bowles come into his about how politically the simpson-bowles recommendations have been used against people who supported them. what they do is they take some peace, some pieces of the recommendations and they run commercial. so instead of dealing with the whole problem of what to do about the debt as a totality, clever politicians, clever tactic, will take some little piece. so my opponents in favor of

increasingly retirement age, or reducing mortgage interest rate reduction, and that's the commercial. you can say that in about 10 seconds in a commercial. and it's politically devastating to do that. what the public wants to believe is that you don't have to deal with the hard problems. and particularly don't have to deal with medicare and social security. because we can cut waste at the budget. now, check writing programs, which are the entitlement programs, are not particularly inefficient. there is no inefficiency in writing a check. so what they point to and what they hope is the case, the average citizen, like the people i spoke to in kansas city that day, the hope is that there is

just a bunch of wasteful things that you cut back on those wasteful things, eliminate them. and they all have heard stories, and very popular politically to tell these stories. so they hear about something which is ridiculous, some program into why frogs have warts or something like that. that the part about and, cut back. and they believe that will take care of the problem. but the fact is that 10 years from now, entitlements plus interest on the debt, will consume 91% of federal revenue. 15 years from now, 100% of federal revenue. what's that mean? that means that if the government were totally sufficient, if there was not 1 penny of waste in the

government, there is not enough in those discretionary programs to pay for the rest of government. it can't be done. so the wasteful spending argument just doesn't hold water. and what does that and is happening now is that if you don't want to touch the entitlement program, what happens is that there is a squeezed border and anything which pertains to investment in the future of the country, like research, federal refund research, like infrastructure, like education. anything that would produce future growth gets squeezed in order to pay out more and more particularly money to elderly people. i think that what we need is a

relentless pursuit of the question of what to do about the national debt in connection with the next presidential election. and by relentless pursuit, i mean putting candidates on the spot and teaching them on the spot -- keeping them on the spot. i mean asking them questions and follow-up questions and follow-up questions, and more follow-up questions on just what they intend to do. to the intended to anything at all? what is their answer? and to educate ourselves, and i'm talking especially to the media, about sort of the basic facts of this, what is a reasonable answer, what isn't a reasonable answer, and keep the candidates on that point. and maybe organize forums, candidate forums, on that

specific issue. what to do about the debt? what to do about the entitlements? what to do about taxes, and to keep them on it. you know, it's said, challengers always say this at election time. challengers love to have debates. they love to have political debates. and what do political debates generally mean? well, the normal debate now in politics is, you ask the media, ask the candidate, what's your position on, let's say, social security. and you have to have minutes to answer. and then a minute and a half rebuttal from the other side. that is the typical debate. so you can ask a candidate, welcomed what do you intend to do about social security, and they will talk for two and a half minutes. maybe.

or maybe they will dock it then and get over the issue of waste. we don't have to do anything. it's the frogs and warts deal that we've got to address. any politician can talk around any subject for two and a half minutes, anybody. when they talk about the debates, it's always welcomed we need debates just like lincoln-douglas. did you know what lincoln-douglas was? lincoln-douglas was a series of seven debates, and each one lasted three hours on a single subject. what to do about the extension of slavery? that was the subject. and for 21 hours, these two candidates in the senate debated this one issue. and i don't think that that's

going to happen from the issue of entitlements. but something like it has to happen. something like it has to happen to smoke it out, because otherwise the next presidential election will become what every election has been done, has been in recent history, and that is frivolous. >> bob, i wanted to get a question before, i know you can have to leave is a little early. i would like to introduce my begin this come if you're wondering we didn't introduce her at the beginning. maya is president of the committee for responsible federal budget. and we will be hearing from maya as well, but bob, before you leave, jack had mentioned that debate in iowa where the republican candidate felt they would reject a 10-1 deal. and how that wasn't realistic. maybe advice for democratic

candidate will be competing and what they need? >> i don't think it's advice that i think going to rest with the press as to whether or not they accept two and a half minute pop situation but obviously democrats are listed as republicans on obfuscating on a question like this. when we put report out of 94 we are forecasting that the moment when this thing is going to get ugly is now, 2014. and it looks dramatically different over the next 10 to 15 years. so you're actually going to say to a candidate for president, if you when you submit a budget in 2017 and over 90% of your budget without making significant changes in the mandatory program to over 90% of your budget is going to the mandatory program. how do you find all the things you're saying you want to fund? i want to keep our nation strong. i promise you both the demo said want to keep our nation strong

and want to fund defense at approximate current level, maybe even increase over the next 10 or 12 years but i promise you both of them with the other saying we've got to do more education and infrastructure. it will only occur at the press says, you can't do it. we're not talking of something that will happen 30 years from now. we are talking something if this person becomes president in 2017, that's the first budget. they've got to the mandate to do things different because it didn't have the mandate to do things differently, they won't do things differently. because both the parties, whoever wins the presidency, both parties will say we have the midterms coming up. we do what you think of something controversial like this because again the facts are those of us were over the age of 65, we vote. we don't have to be told that government is important in our lives. we know how important medicare and social security is. we vote accordingly. as jack said we will respond to fear monger. oh, my god. we will all be forging in the alley for food. if we have some modest change in

this benefits structure. the presumption were insufficiently patriotic to actually do the right things for kids and grandkids. bob, i think in terms of obfuscation to the democrats are less capable of dodging if the press will allow them to dodge. but just to emphasize, this is going to be a critical 10 year period but it can get really ugly all for the next 10 years. you don't want to the american people be surprised by the things the next that has to do because they were able to dodge it all the way to the presidential campaign. >> how was it that you able to get a bipartisan commission as diverse as that would that you had to agree on the seven findings? was that a difficult process? >> well, you know, the outcome we have two people who voted, that there wasn't a problem. the public -- i they probably would still vote that way today. the commission was created by the president, and i went to

jack and estimate would be willing to co-chair with me. so we kept a bipartisan right from the beginning to the staff was hired by both of us and it made it a lot easier it seems to me to get an agreement if you actually start off with no party involvement. it's basically he and i working together, hiring the staff, developing a reporter is either fred goldberg or mike weinberger suggested we come up with an interim report with an understanding it was going to be difficult to get consensus on solution. by the phillies we could identify the problem, and we did. i would say at the margin there were some pretty significant changes. i think it influenced the budget act. had impact on what that act contained. but it's just a really, as jack said come it's so true. i can. >> he and i in debate 30 years younger each and the question is, what do you do about those is pretty? ari went out of tax increase?

we take a benefit cut? i will not go. go beyond its will give you a standing ovation. i hope that doesn't matter. because the american people are going to get shocked in 2017 when they find out what really has to occur. now it really isn't, it is unsustainable to nice if they cannot do what current law says you have to do. >> the interim report was simply the factual background, the charts, you know? usually are, here's the rate of spending now, here's where we are going. so that wasn't really controversial. what was controversial was, okay, where do they go from your? there were 32 members of the commission, bob and i agreed on some recommendations, and they

think we got maybe four or five other people to go along with that, and nobody else. so it's very hard to get people to focus on okay, what am i going to do about this thing. >> if they do focus on a, good point, i do think you get, it's likely given the set of circumstances beyond just the numbers of than budget, the great recession had a very negative impact on 401(k)s, a people's capacity to fund additional retirement income beyond social security. there's more anxiety about retirement today than there was a 1994. i think both republicans and democrats acknowledge that. i think you get something comparable to what happened in 1983, the last time you had ours in these coming together and saying we have to fix something that we can only together because if we do separately we know what each party would do. it will basically demagogue it and make the other party look like they've just done something

horrible. >> you know, we get targeted sometimes of being fear mongers, talk about bad things will happen if we don't address these problems, i think sometimes we forget our good things would happen if we did address these problems, so it's a positive thing to address, will be the benefit from the trend if we actually solve these problems. >> that's pretty metaphysical. look, i think particularly if you think about the tax reform side of this thing, i do think, relatively easy for somebody doesn't have to face by the republican primary democratic primary to put together a tax and entitlement reform proposal that would grow the economy, be fair to individuals and increase their retirement security. is relatively easy to figure out how to do it, but what jack said is true. democrats won't list of things they say their bas base won't aw the publiother publics love a ty

say their base won't allow. but it's also easy to get ways to do something that would really i think. >> the economy substantially, and result in increased agree that people have about retirement. >> i now have to go catch a flight. >> before you go could i ask you a question, senator? given we just went through with 1.1 chilean whatever and the coming together bipartisan, do you think there will be more bipartisanship in the next congress and the pass congress or is it going to get worst? >> i haven't of the foggiest idea. i don't know. i didn't think it was going to rain today. [laughter] i don't know. i mean, hope springs eternal. i hope there's more bipartisan. i think on this one is the only way you can get through the mass. take the health care debate in 2010. health care is so controversial and personal that unless is

bipartisan like you said it's just easy to say bill hoagland wants to give it of your medicare and demagogue the issue. on either side whether you're republican or democrat. on a subject like this it has to begin with republican and democrats together but you can't do it any other way. it's impossible. so all i got of the moment is hope that they will do it. >> and best regards. merry christmas. >> happy new year. and you are great. [laughter] to questions. one is a question on sort of how do you present this, other than just the sky is falling? i think the way to talk about it is, should the country get stronger or should it get weaker? because it's getting weaker now, you know? it's just getting weaker.

the debt is weakness, the huge debt is weakness. and having to spend more and more dollars in the future simply servicing the debt, that's nothing, you don't get anything from that. so that is weakness. what is making the country stronger? what makes the country stronger is investing in those things which lead to growth. what are those things that lead to growth? well, research, infrastructure, education. that's what leads to growth. so i mean, are we going to do more to encourage growth, or are we going to get weaker? that's the way to present it. on the politics and whether we're getting more or less, or whether there's hope for bipartisanship, well, there was an article in the paper today on this subject, and it was about

how there is no overlap in the two political parties anymore. it used to be. it isn't anymore. the most liberal republican is more conservative than the most conservative democrats in both the house and the senate. that's what the analysis shows. so that's a very, very difficult situation. the polarization of the two parties, certainly our party, republican party, has been pulled to the right, and increasing the democratic party is being pulled to the left. why is that? why is that? the reason is that politicians want to get reelected, or elected in the first place. and we get elected is to listen carefully to the constituents, particularly those who are likely to go to the primaries.

and to tell them what they want to hear. nothing unusual about that, because customer is always right. but the customer are the activist. the customers are the people who show up at the town hall meetings and to show up at the political meetings, and devoted in primary elections. that's the so-called base of the two parties. and that's what politicians are hearing. so really the question is, well, is there an alternative voice that they can your? where is the rest of the country? where are the voices of people who say, we should have a future for america. and i think that that is the question. i think that what we need is a bunch of sort of spirited

centrists who want to try to get something going. >> maya, thank you for being patient and waiting, though we wanted to give as much time as bob with we could. so what do you think? >> okay. so the first thing i would say is read the kerrey-danforth report. i think a lot of people and not separate but for c-span viewers, for me it quietly with something that changed my life because i read it right at the time that i was sort of starting to wake up to the budget deficit did not it was really that big a problem. and the whole report and effort cause me to change my crew because the more you dive into this, the more you realize this is a really serious and profound problem. and i remember those charge. they were excellent, those four colored charts. and it's hard to kind of read the basic data and come away

realizing you don't have a problem with stunning and what's unique about you bring this together, bob, yeah, 20 years later and we still have the exact same problems except with the demographic niche of them we are closer to the moment of reckoning. i would also say to people, read the simpson-bowles report. read but domenici-rivlin report. real work has been done in these about what the solutions are a blessing i would say to read is read the cbo report read the cbo report because they lay out the fact that the fiscal trajectory we are on is absolutely unsustainable. there's no question. and yet what you're hearing today is the deficit has come down so much. all of the focus is on the short term improvement in the budget deficit there's been the result of, some not very smart policies focusing on sequestered and some cap on the discretion part of our budget. improvement in the economy.

but what hasn't improved is the fact that our debt levels are twice the historical average as a share of gdp. it's not just, but that always goes up and dollars. this is a share of economy. we are twice what we were we went into the huge 2008 crisis, and we're twice as our historical average. and it is projected to go up starting again in a couple of years at him as a symbol rate growing faster than the economy forever. so the situation is really bleak. i think the political situation is also really quite bleak but if look at what we've just done this past year, not only do we not fix the debt, not what do we put in place a real copperheads a plan that would to add to these problems, we made it worse. we snuck in about by our estimates as much as $30 billion into this. we're talking about extending expiring tax breaks this week $42 billion without a single

discussion of how to pay for the. we have been letting on more and more debt throughout the year and has barely been any notice of it. so i just as i remain discouraged about the political environment, these issues are really tough. ago in a people talking odyssey about how to reform entitlements and revenue, unique courage. you need leadership, and he bipartisanship. but i don't think we're going to see real effort in this coming if you. i think we should safer not going to fix the debt, could we at least not make it worse? could to be a real commitment to not adding more to the debt than the current plan? the key and this is what we've been talking around, the next president is going to have to make this their issue. that's what this are with the campaign, the national campaign with the focus of the discussion will be on the policy to set the agenda for the coming year come is going to have to tackle fiscal issues responsibly.

and i couldn't agree more that that means the media not letting up on candidates. we're going to ask for a really focusing on the issue, acknowledging the problem, putting out a plan which, by the way, only works if everyone agrees to. if you have one responsible politician lays out what it would take to fix social security or medicare, or the budget, running against someone else's is it so great to we will grow our way out of the problem. it is really tempting to believe that up so the easy but we're going to need people who educate the country about these issues come educate the media because they still need to see this more. and ask our candidates and deeper discussion because we'll have that leading up to the presidential election and real choice will have to be made as soon as the next president is in office, starting one of the most important things people do to set the stage as president is the first budget when they come in the office. i think it's important that we

prepare and ask for the next president is to offer a budget that achieves real improvements. i don't know, i wish, wish were other type a have a balanced the budget but i fear that is out of her reach for the immediate future but to you one thing that should not be happening. we should not let our debt grow faster than our economy. it is impossible to have a thriving economy if your debt is growing faster come on if is the single best for your but is growing issue interest payments. when you ask what the upside of putting a debt to a place is, cbo has run calculations and models, and it shows, we know that each with a comprehensive debt deal in place, that is one of issues keys there is to medium and long-term growth for the country. that's how you can help grow the economy. that's a you will stimulate jobs and better jobs and higher standard of living, and all of that, that is of import for households but it doesn't work

if you keep borrowing to get there. i think it's going to require political leadership and i think that's going to require a real focus on these issues that they all started 20 years ago and that the drumbeat has kept up, that a presidential campaign with people demanding some real answers. >> bill, and it will go to the audience, bill, i want to give you -- >> so much as our consent. loaded be for me to just with a former senator, but an ordained priest and nothing has happened over the last -- nothing, i think things did happen. i think we did put into place at one particular point we actually got to a balanced budget. that was successful. the difficulty is that we did a lot of things that didn't help the long-term. part of this debate is that we have restricted the growth

exactly in the area that senator danforth says it's important for the growth of this country. that is in the discretionary budget and invest in research, investment and infrastructure if you like, and investment in health, education and transportation. that's the area where we really have controlled spending. what we are not done and i was asked to check about this earlier, the last time we did fundamental tax reform was before this report came out, 1986 i believe. we haven't focused on reforming the tax code to make it more growth oriented. that should be part of the agenda going forward in the next presidential election to effect they election to effect a should happen in the next congress but i guess i am as pessimistic as an one and a senator are about to happen in the next congress. so one of what i would like to make is something also happen and this is to the senator's point. what happened was that the debt to gdp which i think about 35,

36% at the time of 20 years ago is now close to well up about 70%. and the big issue there is that back in 1994 this report came out, i think the amount of investment from foreign investors and version of that was close to 35, 40%. today 65% of our debt is not done by americans but he did so by people overseas but it reminds me of senator simpson story, many of you have heard this before, that we have a treaty with taiwan. a treaty with taiwan says that should china attacked taiwan would have to go to war with china to protect taiwan. entity would have to borrow from china to go to war with china but i think it's a little overstatement, quite frankly but it makes the point if we do not have the same degree of sovereignty in terms of going for which is really risking the future of this country and our status in the world. so i think there are real challenges going forward. i also say there has been things

have been accomplished, and i'll try to become things happening on health care. we have slow the rate of growth on health care on a per capita basis to the difficult is one of per capita is coming down, the capitals will grow, particularly in those over 85 we those expensive, and they're coming. it's clear that we are in a much more difficult situation going forward today for the next 20 or so we were at the time this particular report went together. i think we have huge challenges to i do want to focus on the need to talk about the positive aspects, not just the negative aspects of deficit reduction the positive aspects. i do not think they can grow ourselves out of this but i do not think we can tax our way out of this. i don't think we can, i think it's a combination office required bipartisanship which unfortunately doesn't exist today. what worries me more than anything else, i was pointed this out to the senator earlier, the pew report came out yesterday. when this report was put

together and this report was put together, the favorability reading on the conference something like about 70% common 70%. the table reading of congress that it is below 20%. do you think -- >> that's what you get for all that pandering to the public so they will like you. >> if that's true, then it adds to the dilemma about come if they did anything, they are going to be accused of not knowing what the heck they were doing to begin with the his thes conviction and death goal. but that doesn't mean that we can run away from this challenge. i think it requires presidential leadership as much as it requires congressional leadership. and that presidential leadership is what i think the focus here has been to make sure that if we go into the next presidential election, that we put pressure on those candidates are going to be the next, who want he or she

will be the next president of the united states. >> i'm going to try something. is it possible to be one of the slides up? go to like the second one. next one. >> the next slide. yeah, that one. one of the interesting things while we were putting this together is that if you look at, what this is showing is a comparison of two-40 your projections. the darker line, the black line is the original kerrey-danforth projection from 1994 looking over the next 40 years. and looking out to 2035 basically. the red line is the cbo alternative baseline which looks out 40 years from today.

and, obviously, they are almost identical. which to me says a couple of things. raises this interesting question. for one thing, we've learned kind of the idea that nothing has been done, or nothing substantial has been done, but the original for your projection turned out not to be as bad as was projected. in other words, what this says to me is that, like a lot of things in the federal budget, the problem has been pushed out. it's been kicked down the road somewhat through incremental things, some of it good luck, and some of it as a result of legislation. but those incremental steps have

not changed the curve. they haven't solved the problem. they have pushed it off. and it's kind in a largely implemented of what's going on with the federal budget right now. i mean, you look at the next session, and what are they going to do deal with? a lot of things have just been pushed off. the sustainable growth rate, these supposedly doc fix in medicare. the debt limit. they haven't funded the full budget -- the full budget for the full year. the highway trust fund. there's a number of things have just been kicked off, fixed in patch for couple years of done. when you look at the big picture basically that's what happened with the big picture. one could say, well, all right, but maybe we can keep doing this, pushing things off, pushing things off your i think all of us have alluded to why

this is different the i just want to see if i can sort of summarize. the demographics are finally different in 1994 when you look at it and line like that, you have a favorable demographic scenario for the short term anyway. the baby boomers were in their peak earning years are just entering their peak earning years. it was a much smaller, you know, elderly population relative to the working guy. now the boomers are pushing 70. a lot of them are collecting social security and medicare already, and that is a couple of effects. want them it has a big effect on the federal budget because it makes social security and medicare much more expensive. this is not a matter of waste, fraud, and abuse, and congress spending like drunken village. this is just a lot more beneficiaries which means the program is on autopilot will be much more expensive. that is beginning to happen. as having a demonstrable impact on the budget now.

secondly, has an economic victory as the boomers begin to leave the workforce it's going to be more difficult for those remain in the workforce to produce the goods and services to keep us, keep the economy growing and keep us retired boomers with what we expect with our entitlement, as we expect. so the workers of tomorrow will have to be much more productive but given that demographic, and yet another point, we are investing less through the budget anyway in the future of the economy, which is supposed to be producing these goods and services. we looked at some of the trends in federal investment spending, kerry and down for warned about and it has gotten worse since then. national savings. kerrey-danforth warned about that. it's gotten worse since then. there are a lot of forces coming together. now you can look at the debt. but it is twice as high now as

a% of the come as a was in 1994. social security had many years of surpluses ahead of it in 1994. and you know, senator danforth, probably one of the most accurate predictions or projections in this report was that sosa security, was going to run a cash deficit in 2012 according to the kerrey-danforth report. it happened in 2010 or so that was pretty close. and so some of the things that have allowed us to postpone prices over the last 20 years can't be counted on again. we talked about, maya mentioned interest on the debt. at some point interest rate are going to go back up. the interest rate on the 10 year treasury is going to stay at 2% forever. it probably will go back up at some point. hope it would go back a because that would be a sight of a

recovering economy. because we've taken on so much more debt that's going to put pressure on the budget by increased interest payments. one of the charts shows interest payments on the debt go from about 200 billion out to about 800 billion by the end of the decade. by the end of the next 10 years some of the anything catastrophic happening. that's with baseline and, of course, if you look at longer-term on any of these -- can you show the next chart, please? this is the same at current trends are not sustainable chart from the kerrey-danforth report. which we updated using the cd alternative scenario numbers. dash the cbo alternative scenario numbers. the net interest eventually becomes the real driving force but in how the program as boomers begin to retire, health care costs continue to grow. certainly that is programmatically the things that

are driving the gap between spending and revenues. but if you keep doing that, as in the nose of type of off their credit cards, eventually the interest costs will get you, and that happens with the federal budget. and so the low teaser rates we are expensive now on the federal debt is allowing us to take on all this new debt without interest costs going up substantially. that, too, is kind of a one shot deal that was going to pass. i appreciate the point that maybe we got to the last 20 years without a catastrophe but there's a lot of things that happened that i'm going to happen again and that kind of run out of time on as boomers. i wish i had that 20 years back. i felt a lot better 20 years ago, but, you know, that's dash but i wouldn't say hey come in 1994 i could you ask why see and look forward. i don't think i can be able to do the same stuff 20 years from now.

i do know. anyway. so maybe we just need to look at our country as an aging population. and looked about the things that we can do and all the good things that we can do as a nation if we just get our fiscal house in order. i guess for the candidates, what we have to tell them is, you are stuck with the. it's going to be there. when you raise your hand and take the oath of office and it will be there at your first captivating when you're trying to get your priorities straight. you're going to have to come up with a plan for dealing with us or you might as well start for preparing the public during the campaign i try to get some ideas out of them on the table. so whatever, whatever your campaign platform, if you want to cut taxes at a joint increased defense spending. if you want to protect medicare, sosa security, whatever your

campaign agenda is a going to be credible if it regards on this continuing stream of borrowed cash. and i think as bomb and jack-up boats said, having the media and the public i think getting the public involved in this is really crucial. >> okay. so we have been talking a lot. questions from the audience? there's a microphone there. >> one of the issues that's been raised to help solve the problem is the automatic cuts, and i can't get it done the political measures, both are to our to take. you take it out of control and automatic cuts. i just want to get your views on that and how that might work. >> does anybody want to take on sequestration? >> i will. so right now we have is

automatic cuts as part of his question which is the wrong kind of cuts to do. the couple kinds of triggers you can put in place. the trigger we put with a sequential is let's put together a package of cuts that are so stupid, members of congress will never let it. and i, for one, went around to confidently say they will never let this get. this will force them to come up with a deal. evil in the supercommittee did more to come up with the deal in time. are those of us who thought that, i guess we overestimated congresses ability to do the sensible thing. so i think you learn from that unfortunate situation to the question isn't real damage right now. we are cutting again throng parts of the budget to we are not doing anything to fix the problem. at the same time i believe politicians are showing themselves unable to make tough choices. we have not been tried to do this for so long with so little success on the real issues because we are dealing with a bunch of really courageous politician but that's just the

reality. they face some hard constraints as well. i do think the we'll have to move more towards automatic changes in the budget, and then instead of building in stupid policy changes that happen automatically, we want to build some things that are more sensible. so what if we said whenever your debt hit x. percent of gdp, policy makers have to come together and come up with a plan to bring it back and so it's not going faster than the economy, and if they don't, we'll put in sport automatic changes to i would say look at both the revenue side and the spending side of the budget. you look at all parts of the budget. again you don't want to rely on those automatic changes. you will politicians to do with this post to do, make choices, look at priorities. no, pay for those priorities. you start looking at what kind of plan can you have that issue automatic sequester that would be smarter ways to get real

policy changes. >> could i just will be briefly as, the bottom line is there was anegotiate agreement on what those questions should be respected became a sequester of 1985 and has been used ever since i agree with them when completed, knowing that didn't work, the let's go back and change -- i don't like triggers but i think they should do if elected he but if you're going to have the trigger, let's go back and put social security into. let's put medicare not attend%. let's put the whole spending into that. that i think we will get their attention but then maybe the sequential of some impact or the threat of a sequester have some impact when making some hard decisions. >> we have another couple of questions. senator danforth, did you need speed is i'm going to leave pretty soon. >> i thought that might be the case. >> thanks. >> we will just take like one or

two more questions you, but because the stars are out. >> my name is roberto stelle. on the k-12 public education advocate and a former news reporter and a sophisticated state capital. you raise several references to relying on the media to keep people honest. mike wallace is dead. candy crowley is leaving cnn, and the backbone of a lot of the people in the media now, just isn't there. so do you have some recommendations on who in the media might step up to the plate? >> wow, that's what i didn't expect. >> i will jump in now with a specific answer but i do think, i mean, we were having a discussion about how congress has become more polarized. ali institutions around it have.

think tanks have. the media. so you see sort of an ongoing polarization that's really unfortunate. but that's not across the media. the other piece that's difficult for the media is he's a really tough issues to understand. one of the things that bob and i talked about doing in new hampshire, and i welcome some of the states were we doing a lot of public education efforts israelis i did exercise which basically say let's take the budget, picture fiscal goal how you going to get there quick you put your own budget plan together. we do with candidates come with citizens. our plan is amon to run those wa bunch of people in the media. so that when you go to measure or you go to iowa or the candidates go to state what you're trying to run these campaigns, the media have got to the exercise of finding out know, it's not for me that's going to fix this. no, you're not going to be able to just tax billionaires and i that will fix the problem. they've gone through the exercise of overall reaching overall framework which is set on a reasonable fiscal path so

that they can then ask smarter questions. i think there's a part of immediate that's become an opinion journalism, that's a whole different area. but there's also part at this very technical, very difficult. that's why go back to saint regis to be a reports. i think our giveaways to do interesting education that may help particularly focusing on the candidates. >> you do have to educate them. our major newspapers have gone downhill and do not have the influence. >> i would even just add if you follow the problem of us, which everybody was reading about, you read about the whole thing. you don't know what's in it. a couple kind of a little interesting stories, the funny stores, but there's nowhere where you just go and say okay, they just as a $1.1 trillion budget. what's in this? nobody who's been following even the best news coverage knows

because the sensationalist journalism doesn't lead to that. >> i'm sure that both of you -- both of you out there that this inexpensive being called by a reporter about a bill like that into all kind of enjoy to say about it, what it means for the big picture of the nations economic future. the question is always, what's the worst thing you can point out? find something that's absurd in this bill and tell me about that. it happens all the time, but to pick up on what kind was saying. i think what i've been trying to convince -- maya was saying, a tv network for somebody to do with this film one of these budget exercises but i think would make a fascinating tv program. because you have real people making real choices, and they don't talk about this in wonky terms. they don't talk about as if bill and maya and i were talking of the budget. to talk about what it means to the family. i've seen this happen so often. people sit around the stables,

doing it at a congressional town hall meeting or a rotary club or college, and they start relating to items in the budget and how it affects their family. i think with clever programming you could get somebody filming something like this, and it would make the budget and those choices that we need to make much more real for people. >> so two people are interested in doing this, call the congress coalition to call the campaign to fix the debt article in the website for the committee for a responsible federal budget. we have a budget submitted righy the were people can go through that exercise. >> also contact the bipartisan policy center. [laughter] >> of course. >> where are we? if there are people who will, and run these exercises in your communities which are members of

congress. this is something that's a great educational tool to do with the media and then bobble have a network and film some point. >> one more question. >> if there are no more questions, we have answered them all. thank you all for coming. thanks to bpc for hosting us. thank you, maya. and we are out of here. [applause] >> q&a is 10 years old, and to mark a decade of compelling conversations, we are featuring one interview from each year of the series over the holiday season. today author kenneth feinberg on his book what is life worth? worth? which looks at his will as special master o of the fund agreed to compensate victims of september 11 terrorist attacks. you can see that today at 7 p.m. eastern on c-span. right after that, francis collins discusses the promise and challenges facing cancer research. he described an apartment of unprecedented innovation paired with shrinking federal resources. here's more.

>> is amazing to see the insides commander coming out of all sorts of technology that we didn't have before, imaging you mention. the things we do now are phenomenal and getting better. the whole genomics revolution giving us insight into how cells work and how things go wrong sometimes. the efforts to understand sort of the details of clinical phenotypes and avid of electronic health records but all of these things sort of coming together into what i would not have imagined would happen in my lifetime. and yet we are not nurturing that engine of discovery the way that we could be. and a statistic i think is deeply troubling, oftentimes really discouraging to young scientists were think about getting into this field is the following. what's your chance, if you have a great idea by cancer research and its preclinical, not something you're working in a company, you're working in an

academic institution much of the next idea, where are you going to go to get something? what's your chance your grant is going to get funded? it's about one in six. occasionally over multiple last 50 years it's been one in three. and the cancer institute i think is one in 10 actually, even lower. >> that was part of the conversation with nih director francis calls on cancer research. you can see his entire remarks tonight at eight eastern on c-span. here on c-span2 its booktv in prime time with authors and books by former obama administration officials. leon panetta on this broke were the fight -- on his book, worthy fight. timothy geithner looks at stress tests reflections all financial crises. booktv all this week in prime time starting at 8:30 p.m. eastern on c-span2.

>> here's a look at some of the programs you will find christmas day on the c-span networks.

[applause] >> good morning again. i'm a senior fellow at the center for east asia policy

studies and iota like to welcome you again on behalf of a ball of the all of the institutes represented this morning but i welcome now a few words of introduction from the collaborators first the chairman of the board of the foundation for advanced studies. >> good morning everybody. colleagues, ladies and gentlemen i am delighted that the trailer will conference and the united states would convene a hearing at washington, d.c. for the

second time. at the end trouble collaboration among the institution and the international studies at the university at of the foundation for the advanced studies successfully took place last april attracting a large audience and encouraging highly interactive sessions. the trilateral conference has searched but the approach to discuss the significant matters in the asia-pacific region. but ideally that the three series of collaborative efforts among the leading intellectual institutions from the united states, china and korea highlight the potential importance of making public diplomacy for peace and security building towards the common prosperity. ladies and gentlemen, northeast

asia is a region marked by the coexistence of the economic corporation and the tensions simultaneously. first asia as a region has moved to the international stage in the economic growth and the political presence during their recent decades. the second, the rise of china has made the u.s. china relations the most important bilateral relationship in the contemporary world. many efforts have been made to define the u.s. china relations responsible stakeholders, g2, and at the beijing consensus help the active role of china.

on the other hand, china has resisted a new model of major power relations as an effort to define her own vision of the new world order basically the spirit of coordination instead of confrontation. the case of the new model is now laid out in full but we must note that the concept is useful in the fresh new outlook fresh new outlook for international relations and global governance. china is an actor in the region. wanting to take a look at northeast asia however, we start to notice that the region basis of the major challenges despite the economic clout. for example, korea and japan face unprecedented tensions between the remarkable economic

coupling with china and the military alliance in the united states. another is the volatile north korea was dumb. despite the numerous efforts to denuclearize the control north korea fails to show the nuclear ambition but continues. there were tensions between japan and and its neighbors because of the abrupt account to take up an assertive roar in the region since the leadership changed in 2012. the first was the revisionist buf history. another tension is the maritime. now but we have joined in its take a step back to look at the big picture.

the world itself is facing many challenges and uncertainties. as all of us know the upheavals across the various parts of the globe such as isis, syria, iran and ukraine are affecting not just those regions and their founding countries, but the entire world. the economic financial system, global trade and the revolution have not just interlinked the members of the international community that it effectively intertwined all of them together. the crisis in ukraine, for example is very closely watched by the south koreans because we know that north korea is also watching to see how the u.s. and china are reacting to it. what is happening in the middle east has consequences for

northeast asia because its member countries are heavily dependent on the force of energy resources and exports of manufactured goods. incidentally last week i had invited joseph nye at harvard university the foundation to give a special lecture under the title of is the american century over. in the talk of the professor said that the obama policy of rebalancing towards asia is a wise policy to reinforce pre-existing asia balance of power and that the american century can be revitalized by building a positive relationship with china rather than falling into the fallacy of the mindset. i agreed with the projection and

i believe that the u.s. china relations will continue to improve and mature in the future in many constructive ways to provide peace and stability in northeast asia in the world beyond. overcoming global and regional problems requires collaboration among the great powers. although great powers are used for immobilizing the cooperations, their efforts are insufficient to coordinate all of the involved actors. in today's complex challenges that requires mental powers to veto powers to play a greater role for the medium-sized states with a capability and willingness to employ proactive diplomacy with the global regions. given its geographic location among the four powers of china,

japan, russia and the united states over, korea has a long history of coping with daunting challenges of navigating among the players. this enables the national interest to be outlined with regional interest of building peace and security for the common prosperity in the region. borrowing from the cover of the economist a few weeks ago, i want to highlight the important role that korea has over east asia. as a staunch ally of the united states and the partner of china, korea is poised to take the initiative in the middle power diplomacy into facilitating consensus building and revitalizing. ladies and gentlemen, at this

critical juncture in the global politics, itv that is high time for the united states and china to come up with a new modus operandi for the 21st century. as we cannot solely depend on the government to government coordination, nongovernmental encoding think tanks and academia must pool their resources to help usher the new era of peace and prosperity. it is not just for northeast asia but the entire world and all the citizens. i hope this is trilateral conference jointly organized by the brookings institution, the school of international studies and the foundation will be used to men to her taking the

necessary steps. i also hope that this platform will be an opportunity for us to look at the northeast asia region from the purely global perspective with a farsighted objective. along yesterday as close to meeting, i hope today's conference will have an outcome for the future peace and prosperity of the global society as well as the east asia region. thank you again for the participants who share the value ideas for the conference and i would also like to thank the audience who participated in the conference today. thank you very much. [applause] we will proceed to the first panel.

good morning. it's my great pleasure to be back at brookings where i am supposed to be an alumni. i think we are very happy and honored to be part of the enterprise to study the issues of northeast asia on the trilateral basis. we are very happy to work with the foundation for advanced studies and also the brookings institution in this enterprise. i cannot keep up with the comprehensive speech and the eloquent statements.

i just wanted to mention two things. i think the region is very important. it deserves our focus and attention. russell just said that the century according to mansfield is a civic century. and i think northeast asia is not the most important but is one of the most important areas of asia pacific region. so it deserves our focus and attention. there are many issues we need to explore. many areas of cooperation needed to be identified.

the other point i want to make is as china rises, china has a lot to learn. it's been too fast but the chinese and chinese and probably the rest of the world to get used to very quickly and is not familiar with a lot of issues in the world especially or including a lot of issues in the region. so we need a lot of the bilateral, meetings, dialogs to get ourselves familiar with the issues and also to learn how to manage these issues in cooperation with other countries

and other partners. i truly value this opportunity and i want to thank the ambassador for his initiatives and also jonathan for his hard work and we are very glad to be the party of this meaningful important exercise. thank you. [applause] could i ask the first set of presenters to come to the stage. thank you.

[inaudible conversations] okay. i think we should start. the first section is the emerging challenges in the international order in the u.s. china relationship. we have three speakers and also three discussions.

before we start, i want to outline the rules to establish some kind of order. each speaker is supposed to have ten minutes maximum. and then each discussion is also to have a maximum. so i will try to interrupt if you exceed the limit. also, for the q-and-a period, according to the arrangement, we would ask you to write your questions down on the index cards. if we don't have any confusion, then we should start now.

the first speaker is from the national university of korea. i'm not going to go over their credentials. you can go through their biographies. professor, please. >> thank you. i would like to thank the organizers and the foundation for the studies. this is a valuable platform given the fact that korea, u.s., china meeting has been stalled since july of last year year and a valuable platform. i would like to pose a question that is was it really all that bad? >> i find one virtue from the cold war era and that is putting

traditional sources of the conflict under the surface. in the post-cold war era there were all of those sources that had resurfaced. territorial disputes, ethnic conflicts come historical controversies and the practice of identities particularly in the context of east asia. of course we also have new types of problems, the world right crisis in the next side of the security global climate change. on top of that we also have the geopolitics. the most prominent case of course that concerns the possible scenario for the transition between the united states and china had speaking of this i think my personal view is that the debate has been a bit

overblown in other words, the perceptions of the people are running ahead from the realities. for instance, the next gdp of course was very shocking to find that the gdp of china had passed in 2010. 20 years ahead of the projection in goldman sachs by 2003. however, if we go back to the late 19th century, it was the team's 72 that the gdp of the united states have passed their oath in the uk and the uk was clearly aware of the fact. however, the power transition between the uk and the u.s. only took place in 1931 or 1944. 1931 is the year when the uk finally aborted. we cannot can also take it as an

alternative in which the system was established. so, in the former case it came after and in the latter case but now they haven't yet surpassed that of the united states. of course the case cannot apply to the case in the 21st century but still you can see 40 to 60 years is needed before the actual takes place. that is why i am saying that they are going far ahead of the realities. having said that, but i just said what i just said is only applicable to the global dimension of the complication. if we combine our focus to the context of east asia, i think it will come much faster to the region of east asia.

overall, with a narrowing in the united states and china and the nature with the increasingly transformed from one of the constitution based upon my the corporation towards a corporation based on frequent constitution. and also, compared to the global issues or other geographical regions i think that there is room for the corporation between washington and beijing would be much smaller in the case of east asia because it saved so much more important to the strategic interests of china and africa, middle east or latin america. and also it seems to be a new trend in which china appears to be feeling increasingly more nostalgic about its glorious

past. particularly the set of vocabularies that they choose to use make many people wonder whether china isn't really a nostalgic about this glorious path. finally, i think there is also a sort of trend in which the strategic competition is being increasingly walked in. for instance the united states has been saying that it is returning. china has been saying the u.s. return isn't necessary because the rise would be peaceful and nature and for that purpose, the u.s. is taking -- the u.s. is relying on the extension of the alliances and consolidation of traditional allies and on the other hand, china is experiencing partnership arrangements with many other countries. in terms of the economy in the asia-pacific and in terms of the

military, we had to battle versus washington consensus in terms of the norms and values. so at different levels and domains, there seems to be some sort of a strategic competition poised for the future. there are two key regional issues that have important ramifications for the relationships. one, japan. the united states wants to succeed the military capacity in japan upgraded because it can be used in case of the regional contingency but at the same time it is also to reign in on japan if it is intended with the expectations of the state but whether or not they can actually make a balance between the two seemingly conservatory tendencies remains to be seen.

another one is north korea. 20 years ago we asked ourselves the question of whether north korea had any fissile materials. we don't ask this kind of question anymore. we now ask about militarization or whether it has the technology to unload onto the missiles and so on and so forth. according to some estimates as of now, north korea is supposedly possessing 24 to 42 kilograms of plutonium-based materials, possibly 150 kilograms of uranium-based materials compared to almost none ten years ago. north korea already has three nuclear tests excluding supposedly the underground test undertaken in 2010 compared to 010 years ago. now therefore to eight petroleum

weapons and six uranium-based weapons compared to 010 years ago. so, this isn't exactly the area that we really need u.s. china cooperation. but whether or not that kind of cooperation will be really forthcoming to a very successful and satisfied level remains to be seen just because of the trust between washington and beijing. all of these issues are strategically embedded in the u.s. china relations. whether or not you have a maritime code of conduct is not an issue. having one is one thing and actually following through on that particular principle is another. finally, i would like to draw your attention to a much more alarming trend, which is a potential for the significant arms race because of this confrontation and competition in

the region. as i mentioned earlier, there is a sort of battle versus the kind of competition between washington and beijing. this basically comes down to the counter surveillance technologies and of course there are others as i mentioned as well but it includes a sort of missile defense which actually has a very crucial ramifications for the arms races and so on and so forth and also it has a certain ramifications for the nuclear competition. actually the nuclear competition or nuclear stability has two different kind of dilemma is for the regional state. if both washington and beijing are true believers of the principle, that means there is a balance of terror at the very high level.

the question is does that give both washington and beijing more leverage to make use of conventional weapons because it is very unlikely for them to use nuclear weapons because now that makes the u.s. more likely. second, if both washington and beijing are true beefeaters of the principle therefore they will not rely on the nuclear weapons or if they are not true tv verse of the principle therefore there is a highlight and therefore they want to prevent any possibility of escalation that means regional states will be drawn into the competition like we saw in the cold war era.

so in conclusion it can be a solution to many problems. >> thank you professor. the next speaker is a professor at the university. >> i am pleased and honored to be her and i also want to thank you for the advanced studies giving me the opportunity to come to the distinguished brookings institution to share my thought about the topic. when i was asked to talk about the challenges to international order i thought about what other problems are we facing in the

world. he talked about a popular side of the world and here i tried to find out the problems and we are addressing very different aspects. there is a big difference between the scholars because we might lose our job so i'm focused on those challenges. people from different backgrounds look at the world very differently and their understanding of the international order. so i'm here i am here in the capacity that i would like to look at the international challenge and order from

different theoretical perspectives and from the structural perspective in the international order this would shape the countries under national powers. the institutions govern the behaviors and also one other perspective of the diplomatic studies and how that changes the challenge in the u.s. china relationship is. first to look at the perspective i think that today's challenge of order is that we are looking at our power in the economic

development it changes the geopolitical landscape as a sustained high growth rate in india to the most populous country and they want to play a more important role and be economics also made people talk and at the same time we have noticed the secretary discussed the most powerful country but if you look at the u.s. foreign policy they are not so willing in the capacity to do whatever it wants to do and indeed ten or 20 years ago so that means

today's international system which is a bilateral system has lost its constraints. why is end the crisis that exists and the countries that could not find solutions together. they could solve the problem very easily but today there are so many big powers into the country needs to negotiate and find the solution and this will slow down the process of the settlement of the problems and from the liberal perspective it is an attempt to show period of time the international

institutions of the light and the united nations at the world bank are pay playing important roles that we see the new institutions like the g. 20 they are becoming prominent certainly in the international affairs. at the same time we noticed that international norms are enshrined in the nation and they are still very important and they are indispensable. we also noticed there are new rules that are being strongly proposed. and according to the united nations. there are the relations that if

we do see today is in the affairs of other countries that are common practice today. how do we manage the relations in the institutions. are they supplementary of their own institutions and in this gap we face a lot of challenges and obesity more actors than diplomacy. but today they are in the

organizations in the cooperations that play a very important role. so they compete with each other and try to be on the historical right side and moral standard. but today in the terrorist groups you couldn't find it. you want to have a dialogue. as so, in today's variations that we see in the different actors at the different interest at a different dimensions so there are three different perspectives. the government proposes the earlier days but my

understanding is that is how they operate and we may not find a solution to all problems we face today that what is sure is now the problem we are facing today can be results of the china u.s. relationships are important. even though it is important we are still facing a challenge. one of the challenges is from the perspective for example in the early 1990s when the cold war ended, it was only about 27% of that in the u.s..

this might not reflect the powers of the challenges that exist. today we are both leaders and scholars and realize this but at the same time we do see that there is a trust. unless it is very clear in the rising chain we do see that does not support such an example but it enhances.

so i think from the perspective we need to find new rules and try to find a greater rules for the problem of the common concern. given the limited time the last point i want to make it but today it's not just a state of relations but it is more society relations and leave the students in america and china about ten times the number. but at the same time we do see that there are forces here we have the terms that the groups supported sometimes they depend

on the other side of the extreme view. i think that they need to manage that so they don't become a victim of the forces in the fight. the next speaker is the senior political bookings. >> it's a great pleasure to be here on this panel and the topic is in the u.s. china relations and it seems to me that there are two different ways of assessing what the international order is in the challenges today are. the international order are the things we normally think of as

being part of the national institutions in the united united nations and the imf and the world bank. all the different alphabet soup organizations that we rely on to deal with the economy and the international securities and another sort of suspect other assorted suspect might be what are the different problems the country is having, and so taxing the terrorist organizations or climate change or pandemics all in the global economy and all these different types of issues that are not really traditional but are problems of the 21st century and on this sort of category single issue that is global issues. it's doing pretty okay. it is and a great sort of solution to the secular nation that we are in or the change problem but broadly speaking its

been been in the incremental passions into the major powers but not fundamentally. it is in the international order that we wish to impose and destroy the current institution and replaced them with different institutions. that doesn't exist. there are disputes about the different countries would have in the existing institutions and there are differences of what they might do. but they are relatively and we have seen alternative institution building with the bank and the infrastructure investment bank and different sort of controversies about that and we can talk about those later i think that there is a reason to develop a concerned. if they do not fight at the imf

the conflict between the united states and china in for the most part i think that the u.s. leadership in these institutions is broadly accepted again there are differences about what type of influence the countries have but china, india, russia, they are not wanting to take up more of the burden to tackle the connected action problems. that isn't a prize that anyone would want. so i think on that category the global order things are not that bad but that is another race would've to look at the international order and to say that it is not about the international institutions is fundamentally about the interest it pays between the major powers

so those are the foundations of that aspect which are very much in the minds of churchill, stalin and the postwar order in the 1940s. and obviously because it broke down and what does this rely on ant community relies on more than anything else are stable regional orders in strategically important parts of the world. and the reason is because the order has been pretty stable. it's peace table for the decades because the sword of territory and allies have problems for sure but it was relatively stable and they have been fairly

stable since world war ii. and particularly even going back a few years what is happening is each of those healthy or stable orders are under severe pressure for very different reasons but for this sort of pressure points on that aspect of the international order and the middle east is the beginning of the state and the rise to the organizations, the era of weakening. all these different things that placed an influx. it may be the least consequential of the three sort of challenges ironically but it is the one that picks up much of the news. a second we see russia trying to revise the status quo and russia is declining power but history

shows us that you probably have more to worry about from declining powers and the rights powers because the window of opportunity is closing and they want to try to act before it's too late for that is a fundamental change. we wouldn't have have traded at four months ago if we were talking here. it has occurred since the demonstration and third the power in reaction to the rise is i think putting that under pressure. the reason that this is important as the regions as someone referred to it earlier or with a major powers are most concerned about it. that is of course they are being more concerned about their own neighborhood. then about the faraway place or institution.

the global order is okay. it doesn't look like it is cooperating on the different sort of issues. but it is probably most important. the core concern is the united states and china have very different visions of what the order would look like but it tends to obscure because for the united states with its new model means is that it would integrate into the existing order to accept the status quo and have a greater stay over the functioning of that order and the governance and taking the responsibility and having more of a role but eventually it would be unchanged and that is when the officials talk about the u.s. presence and the persistent presence in the asia-pacific.

but for china the united states should accommodate the core vital interest as it rises and make way for it in some way. it's beyond the different problems. it's an old story about the influence and does about china saying that it is the right of influence in the region overtime as it rises. we hear from our chinese colleagues but china is more reactivated changes the status quo for there it is the dispute of japan and whether that is the reaction to the japanese effort or with the aplomb in the south china seas. but i think that there is a reason why china's neighbors do get concerned, and i will just mention a couple.

first is that we do see this changing facts on the ground that have been happening earlier this year. those may be isolated incidences but what is the point at which those actions would hit the wall and they won't have any further. it's like making up for lost time or having to deal with a prolonged period to suggest that it isn't a tit-for-tat thing that may be more ambitious and there is a concern about the negotiating states. so it can become good at. but become code with comments on where the approach is because you might say, and it comes up in the questions and answers, that it is a bad idea.

the united states has the approach for much of its history in the cold war and it worked pretty well so what is wrong with now? study in the ideals are the values there are a couple of problems. first it probably would be pretty stable. but it's how to get from here to there and the transition is impossible because it is inherently destabilizing. so to create the influence is very different from having one and wanting to keep it so processed between the different systems is something that we need to focus on. and the second of course is that the countries -- there are other countries involved and they have agencies and they have a say in the voice and win a major powers when the major powers can get together and divide that isn't the way the world works anymore and probably isn't the way the world should work and that means

it's a very different environment in the 19th century or the 20th century. so they are very significant challenges. most of them are manageable and most of them are with more trust building and manageable but the one that i worry about the most is the territory number one because that is not actually a trust problem. that is more of interest and an ambitious problem coming it isn't going to be solved by, you know, by simply the dialogue on the other issues. we need a way to figure out what that looks like and what the risks are. >> hispanic now we turn to our discussions. hispanic i am going to speak for

him appear. i would like to thank the presenters for their presentations. they were outstanding in each of and each of them is a distinguished scholar and as a relatively order prison, i have confidence in the next generation based on what i've heard today. [applause] i would like to stress a couple of points because to me they are very important. first is the point made about the lag between the country rifle as a major economic power and the behavior is a political military power there is a lag time and that is going to be true in east asia. second they emphasized the important distinction about the global dimension of the power transition into the reach of the dimension of the power

transition and a different set of issues and their own dynamic to be dealt with on their own terms. east asia is particularly interesting in this regard and unique because it is the home region but it's also one where the united states is, to use the phrase, a resident power. and so, it becomes pretty complicated. because of our alliances and because of our sort of long-held approach of having an active presence. there are different visions between the united states and the order. i think what will be very important and tom and others alluded to this, the way that the united states and china interact on the host of specific issues in the region as well as outside of the region and how we

interact is going to contribute in a cumulative way to help each country assesses the long-term intentions of the other and then acts on those assessments. is it, whether its maritime issues or north korea or some of the others come it becomes very important that we work hard every day to get those right. i agree very much with the professor that we are in a very transitional period the matter which scholarly approach you take. and i agree with him in a specific way. and the transitions are plastic. nothing is ever an editable. and the nations have the liberty of choice. how you make your choices at the factors that they take into account become very important. that is true of the government in washington and beijing and tokyo and pyongyang and one

hopes that those choices are made well. not only in the big picture but on the specific issues that i talked about. i think that with respect to east asia itself, the goal of beijing and washington is to do everything we can in the american term it avoids strategic rivalry and builds a new pattern of relations in the interaction between us. there is a strategic mistrust that it's important to think about the different sources of mistrust it could be some misunderstanding. it could be from bad implementation. it could become serious conflicts of interest. each source of mistrust has to be dealt with in different ways. how do countries interpret the actions of the others and finally let me say one thing about the role and that is i

don't think that it's a question of our capacity. i think that we are a very rich and resilient country. we have the capacity. the problem right now is our world. and the mechanisms that define the national will and the national interest. i hope that we can get these right. and then i hope that we can use our enormous capacity in a wise way. >> thank you. >> thank you very much. thank you. >> professor from the university thank you for inviting me. i can't tell you how much i enjoyed listening and following the distinguished speakers. i also agree on the very

insightful comments. just a couple of points i'd like i would like to make complementary. first i think they made a great point for the entire region they made some sort of a ceiling in terms of all of the demands and interests to the calculations that the problem is how do you keep the relation stabilized. ..

>> how they can shoulder all expectations for the region. expectations now are so diversified. it is happening after the text. it isn't just a sort of job between the two giants. it is a job of the entire region. but given some sort of the diversity, it isn't easy to united states and china to operate firmly and