market in determining which technologies ultimately prevail. and these programs support innovation should be combined with longer term programs for promoting public and private investment. infrastructure investment is one of the most efficient means we have to create employment. to improve the overall productivity of the economy over the long run. and alongside the strong multiyear program in public infrastructure we need to improve the incentives for private investment to modernize the framework of institutions and incentives that help allocate those resources more efficiently. this of course requires fundamental reform of our business tax system. that system as you know today is a complex and unfair mess of subsidies, temporary and permanent with a very high statutory tax rate and huge differences in the effective tax rates across companies in

different industries. the president's proposed to reduce the overall rate to a more competitive level by reducing or eliminating the corporate subsidies in the tax code and to strengthen the incentives for creating and building things here in the united states. we want a system in which businesses compete on the quality of the products and the services they provide not on the creativity of their tax engineers or their lobbyists. along with these tax reforms, we need to restore what were the great strengths of the american financial system, the highest standard for consumer and investor confidence in the world and the most creative and efficient model available for channelling savings to finance investment innovation. in our judgment as a result of the reforms the president has put in place our financial system is much stronger shape today with much larger cushions of capital against risk, greater transparency over firms and

markets and is now in a much stronger position to be a source of credit for an expanding economy. we need to work to expand trade and exports. we've been aggressive in using the safeguards within u.s. trade law to protect american companies from unfair trade practices. we want to see the market share of u.s. companies expand overseas and we want to see a large part of the growing demand in the emerging market economies met by things that we create and build here in this country. now this economic strategy, which is focused on education, innovation, investment and exports is in our judgment the most promising path available to us as americans to create broader economic opportunity and stronger future growth. but of course these reforms if they're going to be effective have to be combined with long-term reforms to restore fiscal balance.

without more substantial steps to bring down our fiscal -- future fiscal deficits, then over the long run, the incomes of americans will grow more slowly and future economic growth will be weaker. these fiscal reforms are essential to ensure we have the room for the investments we need to improve growth and opportunity in the future like in education. in this era of more limited resources, we have to be able to target those more limited resources to investments with the highest returns. we have to make sure we can meet our changing national security needs in a more dangerous -- a still dangerous and uncertain world. and we have to agree on reforms to make sustainable -- make more sustainable, more affordable our commitments to protect health care and retirement security for the millions and millions of americans retiring in the next two decades.

now, this debate about how to restore fiscal sustainability began with the bowles simpson recommendations for balanced mix of tax increases and spending reductions. this debate will likely end there. the debate will result in legislation that has roughly the same overall dimensions of those proposals. that is because the case for balance, for a balanced mix of tax reforms and spending savings should be obvious. it reduce our deficit to a more sustainable level we need roughly $4 trillion in savings other the next decade. about $3 trillion on top of the cuts agreed to last summer. and to do this we propose an overall mix, an overall balance of roughly $2.5 of spending cuts for every dollar of revenue increases. the president's plan like any

credible plan will force savings across the government in programs we can't afford so we have room for investments in things we need. it will force savings in military spending, reallocating funding to meet future threats. it will reduce the rate of growth in health care spending while preserving and protecting our commitments to retirement and health care security. it proposes, as does every bipartisan plan and even as endorsed by the business round table two weeks ago, the president's plan proposes a modest increase in revenues from the most fortunate americans. if you don't raise revenues, as part of the plan to restore fiscal balance, then you have to find another 1% of gdp or roughly $1.5 trillion over ten years from defense or social security or medicare benefits or education or low income programs.

so as each of the bipartisan commissions have looked at this question have concluded, this is very hard to do without sacrificing things that are fundamentally important. to very large majorities of americans in both parties. the republican budget proposals last year show quite vividly what it takes to restore fiscal sustainability if you decide not to raise any revenue. in their budget in order to preserve what are at present historically low rate effective tax rates for the top 2% of americans, and in order to sustain higher levels of defense spending than those the secretary of defense and the joint chiefs believe we need, in order to achieve those two objectives, those budgets proposed by republicans, proposed cuts that would dramatically reduce the level of

future medicare benefits cut even more deeply into the safe net of low income americans and cause further damage to programs that fund education and infrastructure and other investments. reducing the total size of what we call discretionary spending programs to 1.6% of gdp within ten years. which is a level more characteristic of pakistan or subsaharan africa. some republicans have proposed capping overall government spending at a fixed rate of gdp like 20%. some said 16%. some said 20%. but remember this, if you try to do that with 25 million americans becoming eligible for medicare and social security for the next 15 years, to achieve that cap within that would require you to effectively end

the decades' long bipartisan commitment to maintain a guaranteed health care and pension benefit for retiring americans or would leave us unprepared to defend the nation much less offer americans a better education. so remember these realities when you consider the competing proposals for restoring fiscal balance. and if the politics of this moment in this election year prevent us from addressing these challenges before the election, both parties will have to work together very quickly after the election to start to make some tough decisions. as you know at the end of 2012, at the end of this year, we faced a simultaneously expiry of large tax cuts and a large across the board cut in spending together which amount to about 5% of gdp. that should provide washington with a very strong incentive to

agree on a balanced package of fiscal reforms. we have a tough set of challenges as a nation. as tough as they are, they are manageable for the united states. i would prefer those challenges to those of any economy anywhere in the world. we can afford the investments that are going to be important for future growth. we can adjust to the changes that will be compelled by bringing down fu the action of president alongside the fed, we are in a much stronger challenges than we were three years ago. i gave my wife some unwelcome attention a couple weeks ago when i was writing to express concern about amnesia about the financial crisis. and as we face the great political and economic choices ahead, remember how terrible that crisis was.

remember that so many americans are still living with the scars and the damage of that crisis. remember when you listen to the debate about taxes and medicare and medicaid, remember that even before this crisis, almost 20% of children in the united states were living in poverty and 40% of children born were born to parents covered by medicaid. and remember that the fortunes of children born in america today, the quality of the public schools they attend, the quality of health care they get the chance they have to go to college, depends still in this country today depends significantly on the wealth of their parents or on the color of their skin. and remember too that we're a country of great strength and resilience. we've successfully navigated the

most dangerous phase of the worst economic crisis in generations. we need to bring that same sense of national purpose to the many challenges ahead. that's going to require better results from our political system. no economy can be stronger over time than the ability of its political leaders to come together and make some tough decisions. thank you very much. [ applause ] >> thank you very much,ar as you know you don't get off that easily. we're going to have a couple of our members join you and serve as questioners.blinr a

professor of economics and public affairs at princeton and has served as vice chairman of the federal reserve board. the second is john lifski. the distinguished visiting scholar of the economics program of the advanced international studies at john hopkins university and recently left the imf as the acting managing director. if you have any questions that you might want to lob in here, you can email them to jan hopkins@questions@econclub.org. gentlemen. >> i need to get out my blackberry. >> i'm going to like my blackberry. >> all right, who is first? >> i am.

>> mr. secretary, thank you very much for being here tonight. one of my favorite geithner quotes is we save the economy, but we lost the public in doing it. you spoke to the first half of that in your remarks but not the second. i'm not looking to draw you back then. but rather to get your thoughts on whether it's possible and if so how to get the public back. >> it's first remembering that people saw their lives up ended by a set of choices mostly they did not make. and they saw the world burning around them. a broad run on the first time in memory that people faced the risk of losing their savings or this depth of loss and wealth and employment. and then they saw the government forced to act to rescue the

people they thought were responsible fairly on unfairly. and they were angry. understandably angry and scared and frustrated. and i don't think there was any path through this that would have made it easy to do the things we needed to do to solve the crisis and at the same time win at that time broader public support. i say this because if you look back at the history of financial crisis, the reason why governments normally screw it up, the reason they normally wait too long to act or so tentative at the beginning is because they sit there and stare at the deep political cross they have to confront when they act. they wait and hope they can avoid acting. that's what causes financial crisis to be worse than they need to be. that's why it goes too far. it's that fear of political consequences that normally causes governments to be too tentative at the beginning.

we were lucky as a country because we had people who were willing to do those tough things early at a relatively early stage in the crisis and do it with really overwhelming force and it was necessary to do. it worked much more than we thought. again, if you wonder about that, you just need to look at the history of the path, the financial crises from the great depression on. or look at europe today and look at the consequences of trying to adopt a more tentative, gradual slow approach. and i think if you're a -- if you're -- if you're president you want somebody who's president who's willing to say i'm going to put the politics aside and do what i think is necessary to fix it because ultimately i should be judged by our ability to make it better. so i think the only thing that you said what brings people back

is for people to see the evidence of sustained gradual progress and to have a chance to assess the alternative choices offered by competing politicians for where to take the country in the future. i think that i always like to say that life's about alternatives. and what's good about the debate we're having in the country today you see two very stark choices about what makes sense for the country in the future. that i think helps a little bit. when people have choice it's easier for them to assess. time will help. steady pro degrees will help. and having people think more clearly through the alternatives should help, too. >> thank you. if i may this is going to sound like a three part question but it's really only one question. it comes back to talking about

the long run budget deficit problem and in particular bowles simpson. part one, can we realistically expect to solve the long run deficit problem without significantly higher taxes. i think you answered that? >> no. >> can we realistically expect to solve it without huge reductions in the future cost of health care, and then can we realistically expect republicans to accept the first and democrats to accept the second? >> you need as i said, you need the combination of modest revenues tied to reforms. if you look at the underlying drivers of those costs, you can achieve huge benefits in sustainability in making more affordable aus

solvency with what are modest changes in the trajectory of health care spending growth. a lot of people look at the numbers today and thbz that looks beyond our capacity to contemplate. seems too hard politically. i think that's mistaken. for the next ten years we're talking about finding agreement on 2% of gdp. half in taxes and halfof- those adjustments for a country like the united states. much easier than we'veee countries around the world do in a very short period of time. so it absolutely is possible. it's necessary to do is sooner we do it is better easy to adjust to it the sooner you do it. it's understandable why they have to happen together. most americans who know they're going to bear a greater tax burden on the tax front want to

be confident that those increased revenues go to a plan that is reducing deficits not staining the unsustainable. most people want to believe that there's a bit of burden sharing across the american economy in that context. there's a compelling political reality and fairness reality. those two things go together. i think it's very hard to imagine either happening without them happening together. again, to think, why people will be reluctant to see their taxes rise they're always reluctant, understandably reluctant unless they think they're buying meaningful improvements in the long-term fiscal position. people are going to be reluctant to see the benefits cut unless they think the benefit cuts are not going to sustain tax rates we can't afford. they go together. there's no alternative. it's going to have to happen.

it would be better for us if it happened sooner and with design in it than to happen too late without the opportunity to give people time to adjust. >> thank you. >> secretary, i would like to turn to the international side of events for a moment. as you're aware the international monetary fund cut back its forecast for global growth this year and next year between a half and three-quarters of a percent reflecting mainly the expectation of much slower growth, in fact, a modest recession here in europe. how do you assess the efforts that european authorities have put in place and their chances of success, and allied with that what views do you have about experts to expand the global financial safety net to protect in case of an adverse outcome? >> i think if you look back to where the world was in october, the europeans are making some

progress. the combined effect of governments in italy a pretty kretive ecb, a broad strategy to get the financial system stronger their fiscal compact. the combined effects of those actions have substantially calmed the really acute financial tensions of the last 18 months. that's very important because what they've done is make more convincing that want to take the catastrophic risk of the outcome out of the market. that in lower interest rates in the weaker countries in europe is very important and very promising even though you can have a long period of weak economic growth in many parts of europe. i think that means that again relative to last fall, although again it's a tough and uncertain

world i think the downside risk to growth around the world are significantly less than they were. again, for that to be sustained, you've got to keep a close eye on oil and iran and gas prices but you've got to make sure europe keeps moving to sustain this progress. that's going to require them building a stronger financial hold and i believe they are on the path to doing. our view about the imf if you're europe demonstrates to the world it's going to build a stronger financial firewall, then we think it will be easy and appropriate for the imf to go raise supplemental resources to demonstrate, too, if it's necessary for the imf to play a larger role in europe they're going to have the resources to do it without leaving the imf to help the broader membership of the fund. if europe moves in that front, they'll see the imf try to re-enforce that. >> thank you.

let's taking a broader look, it's obvious from growth figures that the relative balance in the global economy continues to shift towards the dynamic emerging market economies and that's likely the case for some time to come. in that context, looking to the medium term what do you think is the role of the u.s. economy, the u.s. dollar and the u.s. financial system? >> well, i think the u.s. is going to be an enormous beneficiary and huge participant in that long boom of growth ahead for those countries. you know, those countries on average are growing 5%, 6%, 7% for pretty long periods of time. europe and japan much lower growth potential. much worse demographics than we have. and we'll lie somewhere between those two. we have lucky as an economy we're so much more broad based and resilient and productive that we're in a very good

position to benefit enormously from that growth ahead. but you see an important change in those basic growth strategies of china in particular because they recognize as they grow to be so large they can't rely on h strategy as much as they have in the past and they have to shift to more domestic growth. for that to happen they're going to have to continue to let their exchange rate move to a more market oriented system and shift the broader set of incentives to encourage that shift. that's going to be a necessary part of making that transition sustainable. mostly promising for this country and if you look at really any major american company in any industry today you see them well positioned, better positioned than their peers in many countries to take advantage of that huge way of growth. >> if i may i'm going to cut you off here, my apologies, but

dinner is about to be served. i want to thank you again. >> no emails? >> i thank you very much again. and just for those interested on april 11th, the club is hosting a dinner for the first chief executor of hong kong on april 23rd the club is hosting a lunch for the president deutsche bank. invitations will be going out shortly. again, mr. secretary, thank you for your insights and we appreciate you being here. [ applause ] enjoy your dinner. the supreme court this week is hearing constitutional

challenge to the president's health care law. the court is releasing audio of the oral argument each day and as soon as we get the audio we're bringing it to you here on c-span 3. that is at about 1:00 p.m. eastern tuesday and wednesday. starting april 1st see the winners in this year's student cam video documentary competition on the theme the constitution and you. as middle and high school students showed which part of the tunings was important to them and why. mornings at 6:50 eastern on c-span and meet the students who created them during "washington journal" each day. for a preview check studentca studentcam.org and congratulations to all no participate m.d. this year's competition. in march of 1979 c-span

began televising the u.s. house of representatives to households nationwide. and today our content of nonfiction books and american history is available on tv, radio and online. >> we're talking now about the supreme court. but they are the ones that changed this country inevitably with what we call the march to progress. the march towards knocking down the walls of discrimination that permitted us to pass a 1964 civil rights act and public accommodation so people whose skin was not white could go into a restaurant and go into hotels, public accommodations. the '65 act for voting rights. '68 act the public accommodations. the 1973 act to say that women are going to be treated equally. the americans with disability act that said the disabled will be a part of the american family. all of that is the march to progress and, my friends, the one organization, the one institution that's protected is the supreme court of the united

states. >> c-span, created by america's cable companies as a public service. zbigniew brzezinski was president carter's national security adviser and stephen hadley held the same position under george w. bush. they spoke at the university of maryland earlier this month about u.s. policy in the middle east. this is an hour and a half. >> we still got it wrong. >> good afternoon, my name is john townshend, and it's my great pleasure to welcome you to another forum with dr. sadat and telhami. it's a special honor to host on our campus two giants of

american foreign policy, dr. zbigniew brzezinski, former national security adviser to president jimmy carter and mr. stephen hadley, former national skaurt adviser to president george w. bush. thank you, gentlemen, very much for joining us today. we really do appreciate it. [ applause ] >> this forum could not be more timely. unfortunately could not be more timely. the united states is facing enormous challenges in the united states as the arab awakening continues to change politics in the region. the violence in syria, can i say the butchery in syria, has left the international community should do to end the bloodshed, and the challenges posed by iran's nuclear program have many talking about the prospects of war. let's all hope that does not happen.