it under present circumstances. and we need to think about what breaking those promises mean for the future and for investment in the future. the second thing is don't listen to people who tell you what percentage of gdp it used to be, because if they talk about the last 40 years, you've got three major conflicts in there that caused. so i would say let's go back to 1900 and the percentage of gdp of medicare was, that's correct, zero. and social security was, that's right, zero. and 85% of the people in this country lived on pharmacy and made their money from agriculture. i think it's fair to say we've changed a little bit. and the last thing is demographics. today net of deaths, 11,000 people, are going to join medicare. that's a fact. and we're going to put another 40 million of these people into medicare. is it relevant what percentage

of gdp we used to spend or used to raise in a world that is profoundly different than just 1964, just 45 or 50 years ago. the answer is maybe, but i think there is a certain nostalgia to that that is not useful. so i think that you're going to see these guys kick the can down the road. i think they're going to do what they just did on the highway bill, which is fight about two or three months extension. and i hate to say it, but until people get everything resolved overseas, and we start paying the real interest rate on the tenure. one last thing i want to say without trying to dominate it, the hen-year was at.1%. that's the lowest since eisenhower. so you can borrow money at that rate. why not build things. why not do things? you're borrowing money at below

inflation. >> exactly. >> they're basically paying us to spend their money. >> you can find all of our coverage of the national journal discussion on the federal budget and deficit online at c-span.org, include paul ryan's comments on military spending. he said yesterday he seriously misspoke and has apologized to the head of the joint chiefs of staff. live from the spy museum here in washington, d.c., a discussion about the truth behind the 9/11 attacks. participants include authors of books on conspiracies circulating about the terrorist attacks on the world trade center and the pentagon. it's moderated by former special assistant to president george w. bush, david fromm. you can watch live coverage on booktv.org at 6:30 eastern. while congress son break this week and next, c-span 3 features american history tv prime time at 8:00 p.m. eastern. tonight the life of president dwight eisenhower. you'll hear from the architect

of the memorial honoring the nation's 34th president, and from eisenhower's granddaughter. then an archival film about general eisenhower, made by the u.s. army. >> when we're warned in the next 12 to 18 months america will suffer a catastrophic cyberattack, they don't choose those words indiscriminately. we're already four or five months into that warning period, it tells me we have to move rapidly, but not in a way that either violates privacy or the basic tenets of privacy, and that encourages quick reaction, not sort of regulatory environment. >> tonight the chairman of the house subcommittee on communications and technology. congressman greg walden on cybersecurity and privacy at 8:00 eastern on the communicators on c-span 2. the u.s. house passed its

2013 budget last week, written by republicans and passed without a democratic vote. the republican plan for international spending is a 7% cut in current funding, and would consolidate usaid's development assistance program. while the president would increase state department funds nearly 1 1/2%. the republican budget provides nearly $41 billion for international affairs, including the state department. compare that to the president's request of nearly $52 billion in discretionary spending. secretary of state hillary clinton explained the president's request to the senate foreign relations committee. we'll show you that it's nearly two and a half hours.

the hearing will come to order. madam secretary, welcome back to the committee. as always, i think you know this, this is a great pleasure for us to welcome you here, to have you here. and it's enormously helpful for us obviously to hear your thoughts, especially at a time when we are facing so many different challenges, and at the same time i think presented with so many opportunities. the demand for u.s. leadership i think has never been higher. whether because of the issues

raised by the arab spring, by nuclear proliferation, climate change, particularly the challenge of iran and the middle east. budget realities, however, have placed a premium on projecting u.s. power. not only effectively, but efficiently. i think that more than at recent moments, we need a smart, coordinated, and strong budget in order to safeguard the american people. in particular, to fund the administration's pursuit of opportunities and to face the challenges that we are all too well aware of. obviously, for anybody running for office, and i know you know this, madam secretary, cutting foreign aid and talking about comparison between some particular community at home where you're standing and our

commitment abroad is a pretty easy applause line on the stump. and needless to say, it is good foreign policy to correct an unsustainable fiscal course. so we need to do what we need to do in order to put our house in order. but at the same time, it seems to me that our expenditures on diplomacy are really minuscule compared to the return on investment. our international affairs budget is in my judgment a smart investment that ultimately yields outsized returns and saves us money over the long haul. there is nothing conservative about starving our foreign policy budget of a few billion dollars today in order to spend a trillion dollars later on when an otherwise avoidable crisis strikes or an armed conflict looms.

this year's budget request reflects very difficult decisions and some obvious trade-offs. i commend the administration for identifying programs where we can save money, for deepening reforms at state and usaid, and for leveraging u.s. funds in multilateral forums. we also know how crucial our military is to our national defense, and i think everybody on the committee and in the administration shares the belief that we would never hesitate to use force when necessary. but clearly smart and able diplomacy and development policy knut traditionalize threats before they become crises. and can manage crises if threats escalate. and ensure a stability after conflicts are resolved. and all of this can be done at a fraction of the cost of military deployment. diplomats and development experts support counterterrorism efforts at this moment in

countries like yemen, somalia, pakistan, afghanistan, and programs to destroy small arms and shoulder-fired missiles and deprive our enemies of the tools to attack us, teaching foreign military officers american values and skills creates capacity so that we can fight together and slayer burdens. forming counterterrorism officials and american investigative techniques increases their capacity, their capability, and our security. and implementing stricter export controls, training international weapons inspectors, securing our borders allows us to guard against the most pernicious of threats and the threat of weapons inspection and terrorism. so the stakes are enormous in the coming years. we will have great opportunities to build and redefine our relationships around the world, particularly in the middle east. the region is moving in many different directions, but one

thing is clear. it is transforming before our eyes. as you know, madam secretary, i recently traveled in the middle east, spent a number of days in the region, and came way more convinced than ever of both the opportunities that exist to help the people of the middle east seek their legitimate political and economic aspirations, but also a renewed sense of the fragility of the moment and the urgency of our engagement in that region. so i truly fully share your perspective and the goals of the middle east and north africa incentive fund, which will make sure that we have the tools and the flexibility needed to act proactively and take advantage of opportunities when they arise. i look forward to continuing that conversation with you to make sure that you have those tools, and also to try to ascertain the best way forward with respect to the north africa

incentive fund in the middle east to support lasting change and the continued hopes that we all share for a renewed effort in the middle east peace process. we all know the difference that the united states can make. our efforts to vaccinate children, combat climate change, engage at-risk u.s. promote core u.s. international security issues. our global presence does something else. it creates jobs. through loans and forums we lift the economies of low income countries and simultaneously, and that is important for americans to understand in terms in of our own interests, we open markets for american businesses and recognize the connections between promoting our business and creating jobs elsewhere. energetic global leadership is a strategic imperative for america, not a favor that we do for other countries. it's who we are.

it's in the american dna. from the marshall plan to our response to the earthquakes in haiti and the floods in pakistan. it strengthens our security and it makes us stronger at home and in the world. and as we carefully watch our expenditures, we also need to scrutinize the cuts that have been proposed. so we look forward to your comments this afternoon, madam secretary, and to talking throughout the year about the state department's priorities. senator lugar? >> mr. chairman, i join you in welcoming secretary clinton to the committee once again. we look forward to discussing the administration's foreign policy priorities and budget requests for fiscal year 2013. since your visit last year, the american economy remains under great stress. the unemployment rate stands well above the historical standards at 8.3% nationally, and 9% in my home state of

indiana. at the close of 2011, nearly 14 million americans were still looking for work, and millions more were underemployed. the united states national debt has risen above $15 trillion, posing extreme economic risk for our country. american families continue to bear the brunt of these economic uncertainties. within this context, the administration's request for resources must be prioritized to meet the requirements of budget austerity, while addressing the vital national security objectives the chairman has so well outlined. this past year has also brought further uncertainty overseas. people in north africa and the middle east are marking the anniversaries of their protests, their protests for democracy and accountability from their leaders. for some these anniversaries

have been celebrations of a break with a troubled past. for others they're a reminder that progress remains very elusive. in syria, the world continues to bear witness to the violent repression by the assad regime against the syrian people. this tragedy unfolds daily, bringing with it an increasing death toll. after the regrettable veto in the security council by russia and china earlier this month, the u.n. general assembly voted overwhelmingly, as did the united states senate to condemn the syrian regime's brutal use of force against civilians. during this upheaval, our government must pay special attention to syria's weapons of mass destruction. now in egypt, the difficult transition to a democratic civilian government has been marked by changing timelines. protests and sectarian violence. given this tentative transition,

when what resources should be spent on building institutions is certainly our debate, and it's disheartening that the egyptian authorities would choose to harass the work of civil society organizations focused on elections and government transparency. i look forward to secretary clinton's update on efforts to secure the release of those facing trial for those work on behalf of democracy. amidst these changes in the region, we face the ongoing threats to peace and a global economy posed by iran. the iran government continues to flout the will of the international community for a verifiable end to its nuclear weapons program. the most recent inspections by the ieaa failed. frailing to address the ieaa's questions or grant inspection access to the sites.

the iranian nuclear program is a grave threat to our close ally israel and to our own security interests. growing understanding that this crisis may lead to military conflict has helped push oil prices well above $100 per barrel. an increasing number of americans are paying $4 or more per gallon of gasoline, and most analysts believe prices will go higher. for years i've talked about the risk to united states national security of our dependence on foreign oil. i appreciate secretary clinton's recent reorganization in the department in this regard which elevates the prominence of energy security within the state department. and i compliment you on this really remarkable endeavor. but given the intensity of multiple crises in the middle east and the uncertainty and the threats to our oil supply, these

are not limited to the current crisis with iran. as incomprehensible as it to me that the president has rejected approval of the keystone xl pipeline. few national security decisions in were more clearly at odds with core united states interests than the president's pipeline delay. the prospect that iran could obstruct oil flowing from the straits of hormuz for even a relatively short period underscores the importance of having safe and secure fuel supplies for the united states. the iranian threat is intensify by its growing alliance with the chavez regime in venezuela, which could choose to support tehran with its own oil supply disruption during a conflict. our government should explicitly warn venezuela the united states would regard such a disruption as a threat to the united states security interests.

today's high oil prices are difficult for american families and american businesses. yet without action, the worst is likely to be months or years down the road. even if the iranian nuclear program is halted without resort to warfare, middle east oil supplies will remain at risk from political manipulation, conflict, and terrorism. a serious sustained oil supply disruption could cripple our economy. over time we know rising oil demand from china, india, and other emerging economies will reduce capacity and stress global oil supplies. the keystone xl pipeline is one of the best means at our disposal to help overcome future difficulties now. moreover, the decision to delay sends a signal to markets and our overseas enemies that we are not serious about ending the united states' energy dependence. pricing today incorporates expectations, a future supply. we must not leave any doubt that

this country will break its oil dependence on unstable allies like canada and it requires innovation to do more with less fuel. while bolstering energy security, the pipeline would create 20,000 new jobs for americans with no cost to american taxpayers. the administration in my judgment should reverse course and i would encourage secretary clinton to recommend to the president that in our national security interest to immediately approve the pipeline. in closing i would like to express my appreciation for the dedicated men and women serving in roles within the state department and usaid.

in an era of declining resources, we're asking for them to deal with difficult and wide ranging challenges often at even greater risk. we're asking them to reduce threats from weapons of mass destruction, help mitigate epidemics and food and security, watch over the united states business interest and travelers, promote democracy and assist in combatting terrorism. we're asking them to achieve these united states foreign policy goals and enumerable others in a global environment that's increasingly dangerous for diplomatic personnel. we are very grateful for their willingness to serve their country and grateful for your willingness to serve our country and we greet you again and look forward to your testimony. thank you, chairman. >> thank you, senator luger. madame secretary, the floor is yours. we welcome your comments.

>> thank you very much. i appreciate senator kerry, ranking member lugar, members of the committee to be here once again to have this opportunity. i want to thank you for the support that this committee has given to the state department and usaid over the last three quite consequential and unpredictable years. i'm especially grateful for the very kind words about our diplomats and development experts who are serving around the world, some in very difficult circumstances. you have seen the world transforming right before your eyes from arab revolutions to the rise of new economic powers to a more dispersed but still dangerous al qaeda and terrorist network and in this time only the united states of america has the reach, resources and relationships to anchor a more peaceful and prosperous world. the state department and usaid budget is essential for our

national and economic security. it's also something more. a down payment on america's leadership. when i took this job, i saw a world that needed america but also one that questioned our focus and our staying power. so we have worked together to put american leadership on a firm foundation for decades ahead. we ended one war and are winding down another. we have cemented our place as a pacific power. we have also maintained our alliance across the atlantic. we have elevated the role of economics within our diplomacy and we have reached beyond governments to engage directly with people with a special focus on women and girls. we are updating diplomacy and development for the 21st century and finding ways to work smarter and more efficiently and after the first diplomacy and development review, we created two new bureaus, taking the work we were already doing on

counterterrorism and combining it with other efforts for counterterrorism and energy. i really commend senator lugar. it was his idea, it was his talking with me when i was visiting with him prior to my confirmation that made me determine that we would actually accomplish this. we have reorganized our assets into a bureau focused on fragile states. like many americans in these tough economic times, we have certainly made difficult tradeoffs and painful cuts. we've requested 18% less for europe and central asia preserving our most essential programs and using savings for more urgent needs elsewhere. we're scaling back construction of our embassies and consulates improving procurement to save money and taking steps across the board to lower costs.

our request of 51.6 billion represents an increase of less than the rate of inflation and just over 1% of the federal budget. this is coming at the very same time that our responsibilities are multiplying around the world. today i want briefly to highlight our five priorities. first, our request allows us to sustain our vital national security missions in iraq, afghanistan and pakistan and reflects a temporary extraordinary costs of operating on the front lines. as president obama has said, the tide of war is receding but as troops come home thankfully civilians remain to carry out the critical missions of diplomacy and development. in iraq, civilians are now in the lead helping that country emerge as a stable sovereign democratic power. this increases our civilian budget but state and usaid are asking for only one-tenth of the $48 billion the u.s. government

spent on iraq as recently as 2011. the 2013 request for iraq including defense spending is $40 billion less than just two years ago. we're doing what must be done to try to normalize our relationship at a far lower cost than what we have been expending. over time despite the tragic violence of this past week, we expect to see similar governmentwide savings in afghanistan. this year's request will support the ongoing transition helping afghans take responsibility for their own security and their own future and ensuring that this country is never again a safe haven for terrorists. we remain committed to working on issues of joint interest with pakistan including counterterrorism, economic stability and regional cooperation. second in the asia pacific, the administration is making an

unprecedented effort to build a strong network of relationships and institutions because we believe in the century ahead no region will be more consequential to our economic and security future. as we tighten our belts around the world, we're investing the attempts to do more with less. in asia we are strengthening our alliances, launching strategic dialogues underscoring america will remain a pacific power. third, we are focused on the wave of change sweeping the arab world. as the nation transforms, so must our engagement. alongside our bilateral and security support, we propose a $770 million middle east and north africa incentive fund. this fund will support credible proposals validated by rigorous

analysis and by congress from countries that make a meaningful commitment to democratic change, effective institutions and broad based economic growth. in an unpredictable time we can respond to unprecedented needs in a way that reflects our agility and our leadership in the region. this budget request would also allow us to help the syrian people survive a brutal assault and plan for a future without assad. it continues our assistance for civil society and arab partners in jordan, morocco, tunisia and elsewhere. it provides a record level of support from our ally israel and makes possible our diplomacy at the u.n. and around the world which has put in place the toughest sanctions that any country faced against iran. the fourth priority is what i call economic state craft.

in particular, how we use diplomacy and development to create american jobs. with more than 1,000 state department economic officers working to help american businesses connect to new markets and consumers, we are pushing back every day against corruption, red tape, favoritism, distorted currencies and intellectual property theft. our investment in development also helps us create trading partners in the future. we've worked closely on three trade agreements that we believe will create tens of thousands of jobs in america. we hope to work with congress to ensure that as russia enters wto, foreign competitors do not have an advantage over american businesses and finally we're elevating development alongside diplomacy and defense. poverty, disease, hunger, climate change can destabilize societies and sow the seeds for future conflicts. we need to make strategic investments today in order to meet our traditional foreign