growth in the macro sense and of personal accountability in the banking or the micro sense. >> this weekend on "american history tv," louis lerman and james grant look at origins, departures and arguments for returning to the gold standard. that's saturday evening, just past 7:00 eastern. also this weekend, more from "the contenders," our series on key political figures who ran for president but lost but changed political history. sunday, charles evan hughes ran against woodrow wilson in 1916 and was the last supreme court justice to be nominated by a major party. that's at 7:30 p.m. "american history tv" this weekend on c-span 3. this is the conversation we need to have in this country that nobody is willing to have, okay? what role should the government play in housing financing? >> in "reckless endangerment" pulitzer prize winning "new york times" columnist grichen

morgenson detailed the 2008 financial melttown and one continuing issue, government subsidized homeownership. >> if you want to subsidize homeownership and we want to talk about it and the populace agrees it's something we should subsidize, then put it on the balance sheet and make it clear and make it evident and make everybody aware of how much it's costing, but when you deliver it through the third-party enterprises, fannie mae and freddie mac, when you deliver the subsidy through a public company with private shareholders and executives who can extract a lot of that subsidy for themselves, that is not a very good way of subsidizing homeownership. i think we've seen that, the end of that movie, in 2008. >> more with gretchen morgenson sunday at 8:00 on c-span even "q&a." earlier this week, new hampshire senator kelly ayotte talked about automatic defense budget cuts set to go in effect

next january. those cuts are the results of congress unable to agree on deficit reduction measures. held at the brookings institute, this is half an hour. >> we're really thrilled to see the two panels that are following me on this because it's a great array of national security experts, department of defense officials and members of our defense industrial base that i'm sure will give you even greater insight than i'll provide today, but what i'd like to do is provide the context of where we are with respect to this issue of sequestration because our country is facing a grave threat to our national security, and the grave threat was created by congress in the debt ceiling deal that we did last summer. i am one who voted against that deal because, frankly, i didn't like the way this was set up from the beginning in terms of where it put our national

security, and also i would have liked to have seen us do what we should do in terms of the fiscal state of the country and put together a strong, responsible fiscal plan for our country that takes into account the big picture which obviously is not just defense spending, not just non-defense discretionary spending but also the 60% plus of our budget that includes mandatory spending, and until we do that, we're not going to get our fiscal house in order in the way that we need to to get our country on the right track. but today we're here to talk about this threat to our national security, and i want to put it in perspective because i'm not someone -- i serve on the senate armed services committee and also i'm the ranking republican on the readiness subcommit, and i'm not someone who says we shouldn't cut anything from our department of defense, but we have to put in perspective where we are with our department of defense right now because in addition to this

issue of sequestration, the president's proposed 2013 budget that is come forward, has already been taken up by the senate armed services committee and the house committee in terms of the authorizing committees, that will be a cut of $487 billion of spending reductions over the next ten years, and there are some pretty tough choices in those initial spending reductions. but our defense leaders and secretary panetta have testified before the senate armed services committee about the choices made in those reductions, and they are difficult but doable. what we're here talking about today is an additional $500 billion to $600 billion in across-the-board fashion that will come in january of this 2013 because of the super committee's failure to come up

with savings, and it hits both defense and non-defense. my focus today will be on the defense end, but that additional $500 billion, gets close to 600 billion when you include interest, it's done in an across-the-board fashion so essentially everything gets cut. there's no strategic thinking to the way it would be implemented, and, therefore, we do everything insufficiently, and if you listen to what our military leaders say about it, starting with secretary panetta, he has said we would be shooting ourselves in the head to allow sequestration to go forward in january. he's described it as devastating, catastrophic. it would inflict severe damage to our national security for generations. and to understand why our military leaders are so concerned about this, again, i said i'm the ranking republican on the readiness subcommittee,

and i've been particularly focused on making sure we maintain the readiness of our forces to prevail in the conflicts that we're involved in today. we still remain in a conflict in afghanistan and to deter tomorrow's conflicts. and when that deterrence fails to defeat our enemies decisively, that's why our national security exists, and we now have one of the most competent and battle hardened military forces in the history of our country. i know many in this room have met our men and women who are serving right now. the training that they have, the courage that they have shown is phenomenal, and they are the very, very best, and we cannot at this time in this moment in the history of our country gut our first class forces or break faith with our troops. if you hear what our chairman of the joint chiefs of staff has said recently, it's pretty

shocking. chairman dempsey has said that if sequestration goes forward, that our advantages over potential adversaries will diminish. it will diminish deterrence and, quote, increase the likelihood of conflict, and none of us wants to see that happen. and if you look at other times in the history of our country where we have reduced defense spending, let's go back to the early '90s. at that point we had ended a conflict. we had thought that we were going to take a peace dividend at that point and, of course, coming from -- we eventually had 9/11, but at that point there was a feeling in the country that we could scale back on defense spending, and here's where we are today. we're not in the same position at all. we are in a position where, according to secretary panetta, just last month he said that the

threats to our country have not receded. our troops remain engaged in the conflict in afghanistan. we continue to confront a real terrorist threat emanating from somalia, yemen, pakistan, and north africa, and as secretary panetta has said, we continue to see the proliferation of weapons of mass destruction, threats from iran and north korea, and turmoil in the middle east. we also see what is happening, the rising power of china and the investment they are making in their military in the asia-pacific region and, of course, we have other conflicts, like the conflict happening right now in syria. the course of where we are right now in our national security, this is not a time for us to make decisions that will undermine our ability to confront these challenges that we faced right now, and let me

talk briefly what this means and what we know so far will be the impact of sequestration on our various forces. with respect to the army, i told you that the initial $487 billion in reductions, that's going to result in approximately a 72,000 reduction in our army. now, everyone who has looked at this would agree with getting out of iraq and a gradual decline in the level of forces in afghanistan, that we were going to do some downsizing of our ground forces. so the initial reduction of 72,000 to our army is happening, but with sequestration general odierno has testified that we would be facing an additional 100,000 reduction in our army if we allowed sequestration to go forward. with 50% of that reduction

coming from the guard and reserve, and i think this is an issue that governors aren't aware of fully yet, although elected officials at all levels in this country are becoming aware of it. in fact, the council of mayors recently issued a resolution on the effects of sequestration urging congress to come to an agreement on it. think about it, 100,000, 50,000 from the guard and reserve and the function that our guard and reserve play, we couldn't have fought in iraq or afghanistan without the guard or reserve, and they also play a very important homeland function for our security as well as responding to natural disasters for our governors. now, let's talk about the marine corps. under the initial reductions that are likely to happen, the marine corps is going to be reduced at this point by 20,000.

if sequestration goes forward the marine corps will face, according to the assistant come can't, an additional 18,000 in reduction in our marine co-but here's the thing that keeps me up at night. the assistant come can't for the marine corps came before the readiness subcommittee. i asked him about the impacts of sequestration, and he said this. sequestration would render the marines incapable of conducting a single major contingency operation. think about it, our marine corps. that to me is a shocking statement and one that cries out for us on a bipartisan basis to resolve this issue. and if the department of defense chooses to protect manpower accounts when the army and marine corps would have to cut even more deeply than into training, maintenance and

modernization funds which, of course, would have a negative impact on industry, which we're going to talk about in a minute, secretary panetta has said that sequestration would result in us having the navy bring us back to 1915, ground forces back to 1940 before where we were before world war ii, and the smallest air force in the history of our country. we would have to potentially undermine contracts and agreements that we have, including the joint strike fighter, the kc-46a super tanker and many of our modernization efforts that are under way right now that are very, very important to making sure that our men and women in uniform have the very best equipment to protect our country. but in conjunction with this no one would say that the department of defense is an area

where it's a jobs program, but the reality is that sequestration not only undermines our national security, it will hurt our economy, and it could fundamentally tear our defense industrial base, and that is of deep concern, not only to my membership on the senate armed services committee but as a member of the small business committee. often with our essential weapons system, it's not just the large defense contractors that will certainly be impacted by the sequestration cuts, but they rely many times on very small contractors, and in some areas there's one contractor, a small company who's producing the component where you have a sole supplier, and when these businesses go out of business, or they decide to do something else because they cannot deal with the uncertainty of where we are right now, or they cannot address or keep their bottom

line in a sustainable way because of the cuts that are coming, they go out of business, and they don't come back, and it's not easy for us to recreate that capacity so quickly if we suddenly find ourselves in a situation where we need that type of equipment, where we need that part, and that just doesn't happen overnight, and that's a deep concern, in the only for our large defense contractors, but for many small businesses throughout this country that serve those contractors. so we're not just talking about the jobs issue which is, of course, concern to anyone who serves in congress. we're talking about lost lives. if we don't give our men and women the equipment that they need, the very best, and we don't stay on the cutting edge of technology when it comes to areas like isr and other areas where we need valuable information to protect america. there have been several reports

about this which i think will probably be talked about today with the panel. the national association of manufacturers issued a report last week that studied the impacts of sequestration. the bipartisan policy center and the center for security policy have also looked at this issue. the george mason university has done a study to look state by state to see what are the impacts on jobs if we go forward with sequestration, and here's what the report says. more than a million private sector job, including 130,000 manufacturing jobs, will be lost in 2014 if we just continue to sit on our hands in congress. total job losses will increase unemployment by 0.7% and gdp could be impacted by almost 1% lower in 2014. think about it. where are we nationally with our unemployment? over 40 weeks plus of over 8%

unemployment, and so in the only do we undermine our national security but a lot of people will be out of work if we continue on this path. just a couple of numbers. the neighboring state of virginia is estimated will lose approximately 123,000 jobs. ohio 18,000 jobs. connecticut, 34,000 jobs. i could go through every state in the nation. my own home state of new hampshire, 3,300 jobs. we're a small state. i can tell you 3,300 jobs matters very, very much to our state, but we're one of the smaller impacts, if you look around the country. and some people may believe around here in congress, when i say here, not here in this room, but collectively in congress, that this is an issue that we can wait till the lame duck session to address, but the problem is this. the department of defense and the pentagon, they are already paralyzed by sequestration.

they don't know if it's coming. they worry that we have the political will to resolve this, and so they are holding on right now in terms of action or inaction, and our contractors are lehr feeling the impact of it. in fact, bob stevens, the ceo of lockheed martin, talked about this paralyzing effect of where we are right now with sequestration, and he said the very prospect of sequestration is already having a chilling effect on the industry. we're not going to hire. we're not going to make speculative investments. we're not going to invest in incremental training because of the uncertainties associated with $53 billion of reductions in the first fiscal quarter of next year as a huge disruption to our business. and yesterday bob stevens came forward and talked about the fact that they are likely, lockheed martin, is going to have to issue what's called the warn act notice. our large defense contractors

have a duty under federal law, prior before 60 to 90 days before a potential layoff occurs, they have to notify their employees that they may be laid off, and so there are potentially hundreds of thousands of warn act notices that could be issued before the november election which i don't know if that's not a wake-up to members of congress, that this is an issue that needs to be addressed now. i don't know what it is, and -- and the bottom line is that our defense industrial base, they report to their board of directors. they have responsibilities to their employees. they can't wait until december to take the actions that need to be taken, and so we will feel the impacts of sequestration before the lame duck session, and it's one of the compelling reasons why this is an issue that i hope will be addressed on

a bipartisan basis. before the election we owe that to our american people because our foremost responsibility in this government is to make sure that they are safe and protected, and let's not forget that without protection and safety, our economy cannot thrive and grow. we all saw what happened on september 11th. not only the loss of human life but also the devastating impact on our economy of an event like that, and so we -- there is a relationship, in the only in keeping us safe, but in making sure that we can continue to prosper as a nation. so where are we and what's next? there are three proposals that have been out on the table. they are republican proposals mainly, and one is one that i'm co-sponsoring along with senator mckyle -- senator mccain, excuse me, and several other republican

senators in the senate that would deal with the sequestration, to deal with year round, it's about $900 million, and it addresses both defense and non-defense sequestration because we appreciate that members may come to this to resolve it for for every flee positions that came open that you would only fill one, our bill would say for every three positions that come open you can fill two out of three and we would keep a federal pay freeze in 2014. that covers us. the house chairman mckeen in the house has a similar proposal. this is just implementing for

every three position that is come open that you can only fill one. congressman ryan in the house have passed a bill that would address sthis. my hope is that we will see a bipartisan group get together before an election. because this is too important to kick the can down the road for a lame duck session for the reasons that i just described. also where you have it in the lame duck session and our national security should not be put the risk for that. some have said that they would not on the democratic end, harry

reid had said without increases to our tax rates then we will not resolve sequestratrion. there are those of us that have said we are willing to work with you but we will not further hurt our economy by increasing task rates. but there were areas that we came up with that he we are w l willing to sit down and talk with you about before the election. i would hope that both sides would say that this is an area that we need to find common ground and this is not a time to further hurt our economy by devastating our defense industrial base. and that is pretty much where we are i appreciate all of you being here today and the reason that i became so incensed about this issue is because i don't

know how we can look the american people in the eye and say we are not going to put that foremost responsibility of propepr protecting our country and making sure that we fulfill that respo responsibility and we should not allow these issues to stop us. that is what worries me around here. we need to look and address the debt. there is no question that it has to be addressed, but we shouldn't create a national security crisis on top of that. i look forward to answering your questions, thank you. [ applause ] >> thank you, senator very much. we will take just a couple of questions. i will feel free to recognize

anyone who has one. and please identify yourself. one question please. so, we'll start here. in the 4th row. >> kevin mier, i'm fon fused by all of the talk of our defense spending and what i see our military doing around the world. we are talking about returning to our bases in thailand and the fill fephilippines and vietnam 13,000 troops in kuwait. we are beefing up our troops in iraq and we have are special forces all over east and west africa and we are talking about

missile bases in eastern europe and talking about opening new bases in panama, columbia and peru. it seems like a disconnect between a talk of military spending reduction which i'm tempted to addwhich is in line with the in creaticrease in our national debt. is my perception wrong? >> i think i would respectively disagree with your perception in this sense. let's start with the administrations national security strategy which is a shift in focus and that being a very important part of the world in terms of our economy, and the

entire world's economy. in conjunction with that, the administration had said they are going to keep the focus on the middle east and rightly so. if you look at what is happening right now with iran and producing the capability of a nuclear weapon, the strength that we have in terms of the protection and protection of our allies. so if we want, and i think we need to do, have the presentation we v. we also see other areas in the world where we have dealt great blows to al qaeda but, they are also continuing to thrive on areas of africa, and to me there are great risks around the world that need to be addressed. i think the one premise i would disagree with how you framed it, is defense spending would need

to be reduced. although difficult choices on the number of reductions. we are talking about let's not be irresponsible coming in january between $500 billion and $600 billion, i agree with the administration's shift of foe cushion to t cus focus to the asia pacific and i don't think we should be withdrawing from it or significantly diminishing our capability and let's not forget the strength in the world economy, there is a direct relationship between not only the thriving economy of america but our relationship with economies around the world and our strength in keeping security

for our country. >> another question? yes, ma'am? >> helen, resources of the feature. >> if you flatly reject revenue increases, what kinds of increases do you have in mind that you would be happy to talk about? >> here is what i flatly reject. i think we have a broken tax code. i don't think there is no question that on a bipartisan basis we have to do a large fiscal agreement for the country that would not only include a tax reform. i think there is bipartisan support for simplifying our code and also eliminating loop holes, deductions and making it a simpler fairer code. i think in the context of that, we can look and -- the super

committee in fact did some examination of aivreas of reven that aren't adding our tax rates, but whether it is eliminating loop holes but don't further hurt our conneconomy. what we aren't willing to talk about is to take our broken tax code and increase tax rates on individuals to do this. i think that is the wrong way to go for america. >> i kacan't hear in this setti. the super committee did look at a whole host of revenue raisers. last year i voted on the ethanol -- that is an example of where we could find