yes. thank you all very much. and we're live this friday morning. the coast guard commandant is coming to speak at the internatioñal studies this morning. he is expected to speak about the coast guard amidst tough budget times and other maritime challenges. this is live on c-span3.

again, we are live here on this friday morning at the center for strategic and international studies. we'll hear from paul kuzuk. he is expected to talk blt coast guard's mission and the effect the economy is having on that mission. no legislative business in the house for today. there will be be a brief pro forma session today. the session is in and lawmakers will be gathering in about half an hour to the debate about the keystone pipeline. the house passed its measure on the vote earlier this week. you can see that at 9:30 eastern. house republicans continuing their retreat in hershey pennsylvania. senate democrats held a meeting

in baltimore with president obama yesterday. today the president is back here in washington. he is meeting with british prime minister dave cameron. that meeting is set for 11:05 eastern today, and afterwards the two will hold a press conference at 12:20. following the joint press conference, we'll open the phone line for your reaction. we'll also look aá your tweets and facebook posts. c-span.

well, good morning, everyone, and thank you for coming out to see us-- csis this morning. let me thank lockheed martin making this meeting possible here this morning. there's coffee outside. i would like to introduce myself and my partner in crime with the u.s. naval institute. as you probably know, csis partnered with the maritime service to bring issues to the maritime. itrj wonderful to have as our second speaker just after the

cno spoke the commandant of the coast guard, admiral kumft. what we have here today is really the bridging of homeland security and law enforcement with national security and the coast guard lives every day in that space. from his own personal experiences starting as the coordinator for deepwater horizon, oil spill recovery efforts to working on issues in the asia pacific, the avenue here in the commandant certainly person personifies what áhe coast guard is all about. without further ado and thanking admiral daly for honoring this event, i would like to welcome commandant. >> thank you very much.

i like to scan the audience and as i scan, i probably see ten of you who have written reports on me. it's daunting to stand in front of you today, but it's important because i spoke at sna yesterday, and there were a lot of people who didn't realize all the great things that the coast guard does, first and foremost, as a member of the armed services, as a law enforcement agency, as a humanitarian service, as a regulatory agency, as a member of the national intel community and all the great things that we do for our country. so i want to thank you first for taking time to be with us today, and i certainly want to entertain your questions as well and leave ample time for us to be able to do so. when i stepped into this job about eight months ago, the first thing i did is i put the commandant in direction. it was very straightforward but really building on the eight

commandants that served before me while i've been on active duty, took the best of their ideas and had continuity of command rather than transition of command as i stepped into this position. but i also looked at how we've - been executing our budgets since i'm sure when 10 revenue cutters were chartered under alexander hamilton, we probably wanted 15 but only got 10. we usually work with what's left over, and my first approach is we need to have a budget that is driven first and foremost by a strategy. by a strategy that is relevant, that resonates across whole of government, so we've been able to "o exactly that. the first piece that we rolled out under my predecessor admiral pat, is an army strategy. i recently released a strategy on the western hemisphere and i'll talk about that at length here shortly. in the next several weeks, we will release a strategy for

cyber, and i'll talk a little bit about that as well. and i'm also very focused on what i call the energy renaissance. every day a new tank barge is entering our waterways with a u.s. certificate of inspection on it right now because rightú now we export more oil than we import. we are a net producer. we're an opec nation. we produce more oil and gas than any other nation in the world right now, whic$ is why oil is hovering around $46 per barrel. so let me talk a little bit about the western hemisphere. there was a smithsonian back in the late '70s, there was this vignette that played, basketball players, three in white shorts, three in black shorts, and you watch very closely as pethey pass the basketball among them. if you pay very close attention they pass that ball about 12 times. and about 65% of the people get it, but 65%, what they don't

see, is in the middle of that vignette someone dressed up in a gorilla suit, does a moon walk between them and no one saw it take place. i use this gorilla metaphor in the context of the western hemisphere. today eight out of ten of the most violent nations of the world are right here in our backyard in the western hemisphere to include violent crime, undermining rule of law to governments, and how did that happen? what's happened is that gorilla was actually organized crime, moving drugs, mg jt people, moving weapons into central america. much of that destined for the united states but that's why we now have eight of the ten most ñ- violent nations erected here in our backyard. we saw this play out last summer with unaccompanied minor children, and some of us when you look at that the first thing you ant to do is we need

more detention facilities we need more beds, how do we place these children, and that's creating a symptom. whaelts the ultimate cause? the ultimate cause are the parents of honduras guatemala el salvador. three of these violent nations guatemala being number one, are trying to get their children to a safe nation. a country with 35% unemployment, 50% poverty, but a young child being born in honduras today, one in nine will be murdered before they reach the age of 21. how did that happen? so i'm looking at the cause of that and how that is taking place here in our hemisphere. besides the unaccompanied minors, we're looking at drug flow, and within the western hemisphere, i'm taking a very offensive approach and attacki'g organizing crime works the most vulnerable, and that's when it's on the water.

we realize that when drugs come ashore, they're not coming ashore in the united states they come ashore well south of here. so when i look at where does our maritime border begin it begins at the territorial sea of 41 countries with which we have bilateral agreements to do counter-drug operations. once those drugs come ashore very difficult to detect. so one of my imperatives under my commandant's direction is we will have intelligence via operations. we've been a member of the international intelligence r(t&háhp &hc% community for more than 12 years now, 13 and a sign of vectorships. my last s$ip i left over 13 years ago. we would go out and pick a spot in the ocean, and i would say, they're going to come right here. more often than not it was like forrest gump before they caught all the shrimp, but more often than not you went home and you

were skunked. that's not the case anymore. a high endurance cutter returned just before thanksgiving with more than half a million of contraband. in this line of business, one a year is staggering, but 13 in one deployment, but this is all intelligence driving operations. our intelligence product is so good today that we have at least one layer of intelligence on about 80% of the flow in the eastern pacific and in the western caribbean and even some of the flow destined for europe as well, 80%. on the best of days, i have an airplane, i have a cutter that i can vector to go after 20%. so i cant$eh! 60% get a free pass. why is this a concern to me? obviously we have this challenge

with regional stability in central america. this is a $750 billion enterprise. i have a $10 billion slingshot in my budget. but if we use intel appropriately, again where organized crime is the most vulnerable, where i have the upper hand is at sea complemented with the authorities we have. it's also compliments, but i am so much so that many companies are trying to replicate the united states coast guard. they have the color scheme right, they have the strike right. if i want to buy my ships instead of theirs. what they can't replicate is our people. what they can't replicate are authorities, are governance. we reach across any aspects, because any maritime steak

stakeholder, they have to look at one place. as i try to wake others up to this challenge, this gorilla if you will there is another very troubling number and that number is 450,000. those arq the number of american died due to drug overdose, drug crime here in our united states of america. we now have more people dying to drug overdoses drug violence each year than we do highway fatalities. so i need to build up this click it or ticket, but at a much higher level as we're looking how do we invest in the coast challenges we see in the 21st century. the next line of the western hemisphere besides goint out and combatting networks is safeguarding commerce. 90% of our trade currently rides on the sea. yesterday, and this relates to our cyber strategy, we host aided

a public meeting for the maritime industry. in 2002 the maritime transportation security act probably one of the most wide-sweeping pieces of legislation to impact the coast guard, impacted a number of facilities that do international trade. and they balked at first when we said you have to build a higher fence, more cameras, credentials, security guards and so forth. but now they're coming to us and saying, well, we need to know what the international standards are for cyber. if you look to see what's playing out right now on the west coast with the ilwu renewing its contract we're starting to see gridlock in our courts and we live in an inventory economy. so there is no room for error if there is a disruption in any of our courts. special physical you ! especially if you look at a court complex in long beach where over a million dollars in congress is in that congress. that just goes through there.

what you don't see is warehouses in the heartland. gets on a rail car that goes to the factory just in time. that's keeping our economic engine running. six months ago and on sabine river, there is a facility that will be the largest lng export in the world when all those six liquefaction plants come worldwide. they can accommodate ships with drafts of over 60 feet. that should open on or about april fool's day of 2016. with that there will be a flow of gas ships. thq)e will also be a flow of container ships, some of them carrying up to 18,000 container

units coming through the canal which may have an impact on where we do trade here in the united states. but behind all of that, the coast guard is the enabler. we do not want to be the inhibitor of allowing all this maritime commerce to take place. so that's a key element as we look western hemisphere and then how we enable congress and keep that engine running as well. western hemisphere strategy is and this question comes up time and time again. in the maritime environment, our border is not our territorial sea. our border begins at the port of does trade with the united states. our maritime security regime we have teams that go out and we audit all of the ports, all the facilities that trade with the united states. and their compliance with the international port security codes, they get a clean bill of

health. if they are not any ship that calls on that facility within five times before it arrives here in the united states is going to have a welcoming committee. a very stringent inspection to make sure that their security standards have not been compromised as they go through these ports. so what that does to a shipper is either they don't do commerce at that port or that facility compliance. well, it's a very indirect way, if you will, to correct scale. at that point as that ship leaves, the coast guard and customs and border protection at the national targeting center here in reston, virginia we look at the cargo man i festifestmanifest, we lookxat the crew member, the contents of that product. is there a person of interest? is theru that manifest that may cause grave concern? obviously, the worst case being

a weapon of mass destruction. so we screen all of that well in advance of those ships coming into our territorial sea, way out in the high seas. we have 12 bilateral agreements with flag states of convenience that allow us to go on those ships if we thin that there is a weapon of mass destruction on those ships. we don't have to ask for permission. but you don't want to board that ship as it's coming under the golden gate bridge. that's why we have flight deck-equipped cutters. that's why we have a tier 2 team a maritime security response team that uses the exact same tactics techniques, p)ocedures as our special operations forces to go on board, and if it is a worst case, to take positive control uj)pá ship and buy us that trade space, that time we need of what do we do with the final disposition of this ship that was destined for the united states and perhaps torching off

a very worst case scenario? and the other aspect of our border is the flow of illegal "trssr it's not just here in the united states, it's playing out in a global scale. it's playing out in australia with migrant flow going to that country. we're seeing that in the european union in just the last few weeks with very large numbers. the coast guard has been dealing with the phenomena now since the maritime boat lift of 1980. last month we had a 200% increase in migrant flow leaving cuba. there was perception that our feet dry policy was going to change, and what we saw were, as rudimentary as these vessels are, these were really makeshift chugs trying to get to the united states. as i'm dealing with that threat and moving ships around we have a 50-year-old fleet of 210-foot cutters. they do have a flight deck on them. so if you're holding 100, 150

migrants, it takes several days to go through a screening process before you patriate these individuals. 40 of the 50 cutters we had to send so dry out. they're 20 years beyond their service lifeñbut we're still operating them for 50 years. so what's the consequence? we have these great, brand new fast response cutters. they're about 150, 40 feet long a crew of 22. but that crew of 22 is now holding 100 migrants for a period of five days. as these migrants get anxious to be medically evacuated and then they become dry to enter the united states but those fast response cutters were not designed to hold migrants for days on end as we look at thq final disposition of these individuals. this phenomena i don't think is going to change in the 21st

century. when i look yt the abyss between have and have not nations when i look at stability in the region, you don't have to look beyond the country of haiti whose economic engine just doesn't seem to get started. but there are a lot of other leading indicators throughout the region where the united states is going to become a very attractive target to emigrate to, much like we saw in the 1900s with the eurean phenomenon. they'll do so illegally, and we want to screen out who is a person of interest that may cause harm to the united states, and who is a bona fide economic migrant looking to better their way of life. that will be a challenge as well. i'll shift gears real quick to another area i'm looking at and that's the arctic. when i say arctic it's also antarctica. when people ask me what do i lose sleep over it's the coast guard cutter polar star that is

brimming the channel as i speak. things are going a little slower than expected. a little bit more work than they anticipated. we have great imagery, but the ice is thicker it's more dense, there is fast ice in here as well, but what happens if they have a major engineering casualty while they're breaking in? there used to be a point in time where i could send another heavy icebreaker to the rescue. right now they're going it alone, and every time i would swim in water over my head, it was always == to have a buddy. but the united states doesn't have a buddy system right now as we're operating at the very far extremes of the world. we have equities well beyond scientific research in antarctica. then as i shift to the arctic, for the next two years, the united states will chair the arctic council. the head of that delegation will be my predecessor admiral pat. as we look at how do we view the

arctic in the 21st century, what i see as the most blooming challenges will be safety of life at sea and protecting the environent itself. so we will stand up on arctic coast guard forum and we will host all eight members of the arctic council -- this includes russia -- in march as we look at a government structure for the arctic going forward. first and foremost, safety of life at sea and also band width. how do you communicate up in this region? to deal with a very complex continuancy. to deal with a spill at sea may be only a few hundred meters. we need to be sensitive to the indigenous nations that have been living there as well. we are doing that on a daily basis, but we have the opportunity over the next couple of years to really make our

presence felt in the arctic, but it's hard to do so in a very persistent manner when our nation -- these are national assets -- our heavy icebreakers is one. and our medium icebreaker, our fleet, is one. so i'm keenly interested in recapitalizing on our capability as we go forward. there is a number of direcáives that i've teed up as i look at this world p)ound us and the first area i look at is our human resource competenceies. we operate in a muchxmore complex environment. we have boats that are pursuing boats 140 miles offshore using warning shots up to and including deadly force and doing an arrest as an e-5. we have a cyber command we have intel specialists, we have an acquisition program that is not only mature but received five federal government awards in the

past year. our ships are much more complex the systems on there to leverage them to their full capability, you cannot send others to sea. we get the general approach, they leave and it brings us back to the premise. we have to be proficient in 21st century. we regulate an industry that is now turning to alternative fuels. they're offshore supply vessels using lng as a supply force. i don't want to find ourselves luring from an industry we're trying to regulate. we should be imposing the - standard and not learning from industry. we've never had closed loop communities other than the aviation community within the coast guard, and we need to tighten those circles a little õbit more than we have in the past whether it's seagoing whether it's response, doing intelligence, doing acquisition, all of our support missions, every one of them are valuable, i need it all, but i nqq" to

make sure that i've got competent individuals and i have an assignment process that grows those subject matter experts, because we can no longer be that swiss army knife that jack of all trades, master of non as we're doing brain surgery out here in the 21st century. so we're going to overhaul that as well. i'm also directing, as we look at the flow of oil within our inland waterway system. two years ago, about 2 million barrels of oil went downriver. last year it was 50 million. itúwent up by a factor of 25. as i mentioned more barges are being built when they come down on high river conditions. they're shifting silt and there's a lot of exposure and something could go bad, but i need to make sure that maritime transportation system, the waterway is reliable. we're maintaining that with 60-year-old maritime buoy

tenders, so if you thought those ships were old, i have something even older yet. i need to take a harder look at that and how do we recapitalize that. there is a lot of talk about, hey, we have gps. we won't need that anymore. but what happens if that gps signal goes dark? then what do we do? i'm very focused on that aspect as well. qzuá at night as well. not just in our navigation systems, but this is our timing system. our financial market relies on gps. there is no backup right now. that's another key focus area of mine as i look into the 21st century. i also look at climate change. not what's causing it but i know that the sea level is rising. you know we've measured the ocean temperatures. those are rising. and there are two phenomena that i observed in the last year. in 2013, it was super tycoon

hiwan. that came into sea at 196 kns, the highest in history. we topped that this year and that was super tycoon vong fong. as they were digging out 18 feet of snow? in the southeast, they were dragging snow across the united states. katrina was a category 3. sandy was a category 1. this is a category 5-plus-plus. do we have the resiliency within the coast guard to respond to an incident of that magnitude at a point of time where my active and reserve combined are less than 50,000 people as we look at how to respond to some of these continuancies. we're staying very focused on that as well. i close by saying there is not a

point in time where we have not had a better relationship with the united states navy. i'm meeting with admiral greener on a regular basis. very soon we will swap out the strategy for the 21st century. when i look at the challenges he's facing gone are the days when you have six months to lead up to a contingency. when you have unpredictable leadership on the korean peninsula threatening our country with icbm missiles clearly the navy does have to reposráion. and as they reposition, what do you pull from? so in many cases the navy has had to pull from the western hemisphere. as they do so first and foremost, i applaud the great support and teamwork we have had with our navy with law enforce enforcement attach littlementment n those ships. i paint a bleak picture but it would have been more bleak without thiç relationship we've

had with our navy. but as the navy repositions to the pacific, i'm repositioning to the western hemisphere. our presence is up 40%. obviously, i did not put together a fleet of 40% overnight. we're using intelligence, we're doing what i call risk-based decision making, but one of my highest priority threats on a global scale and right now they're right here in our backyard to go after that gorilla. it's a great time to lead this organization. when i spoke to the corps cadets at the coast guard academy, i said, your biggest challenge when you leave this institution, you're going to leave an organiztion that's more securq more mature, and if that is your biggest problem, then bring it on, but the strength of our human resource capital, i've never seen where it is today. so when i step back and look at

our united states coast guard i could not be more optimistic. i could not be more thankful to the 88,000 active duty, our reserve, our civilian, and our auxil auxiliria auxiliriasts. i look forward to hearing your question. thank you for listening to my view of our world from a coast guard perspective, so peter, i turn it over to you for some moderating discussion. [applause] >> my intent here is to just ask a couple questions and open it up quickly to the audience. thank you for your remarks. we had a forum last month where a speaçer who really looks at this closely looked at the coast guard's acquisition construction and investment accounts and noted the fact that historically it had been at 1.5 to 2 billion

and now is 14 out centered on more than 1.1 billion. you mentioned that the cutters were over 40 years old. what does this do to your ability to recapitalize that force? >> my primary responsibility, as- i told my work forces, i spent most of my work as operator, and now i'm in marketing sales. we've done our due diligence. for two years running now, we have a clean financial audit opinion. we were the first military service to do so and then the marine corps followed suit last "tvqp). well, we did it again. when you look at the fact that we can maintain a ship for 50 years, it was designed at a point in time where that ship was dqár to maybe go out for two weeks and do search and rescue before the magnusson act was even signed.

now we've been able to maintain that cutter through the 21st century. over the last several years, our acquisition budt has gone from 1.5 to just south of $1 billion. and i cannot run our coast guard on a budget like that. we need the fast response cutters. the national security cutter has gone are the days where you go out for a two-month patrol. they deploy, they provide persistent presence, and are providing tremendous return on that investme't. quick sea story. coast guard cutter just completed a rim of the pacific the largest rim of the pacific this last year. as she was doing her workups in san diego, we diverted her twice she was the first time the p.a.

participated in the rim of the pacific. when that was said and done, they went out and forced our e.g. against fisheryies all in one deployment. we are down to three competitors of offshore cutters. i have gonq to my staff and scrubbed every specification that's on there with a view towards affordability. we view this as though i am personally paying for it out of my checking account, one that is affordable, but two, this is going to meet the requirements that i foresee in the 21st century. but i can't do it on a budget south of $1 billion. >> shifting gears just a minute you've been commandant now for about seven and a half months. in some sense you spent most of your life preparing for the job and there's probably no

surprises. but i always feel like it's worth asking now that you're the man, you're the number one guy, is there any aspect now that you're in the job that has surprised you or at least was unexpected? >> actually two surprises. the first surprise is in the last month i was on five continents continents. i've met with every geographic component commander, and they all said we want more united states coast guard as an instrument of national security in their area of responsibility because many of the threats that they see are coast guard-like, criminal activity. law enforcement authorities are requisites. that's been the first surprise of how far and wide can i sprep" this peanut butter across the we've tried to do that in years past, but now i'm stacking peanut butter, i'm stacking some of that in the western hemisphere. that's the first surprise. the other actually comes as no

surprise and i call ourselves the silent service. because we don't overstate. in fact we often understate our value to the nation. how few people understand what the coast guard delivers to our õnation day in and day out. urp+e daily contact with american citizens with bad guys and we're great instruments of diplomacy overseas, but very few people understand that. the epitome of that is when we do our coast guard foundation awards, and we had a rescue swimmer in the last year saveñ13 lives on multiple rescue missions. this wasn't just on the open water, this was in the search zone against the cliff as people are being scraped across barnacles, and all 13 of them in all likelihood should have perished. he saved all 13 of their lives. as he stepped up to the podium to receive his award, i said,

words? he said, i'm a rescue swimmer, this is what i trained to do, "tp'd i had duty that day. and he walked off. it is mind-numbing. we have 80000 people just like that. we train them, we empower them, they do great things. but the value they provide the nation is often underappreciated. >> you talked about the west hem and the that maybe the navy is focusing more on the asia pacific, the other side of the todpv epresents a bit of a threshold because some of the requirements eased up just todpv on travel restrictions and the amount of money that could be spent, use of credit cards, things like that. what does this opening to cuba mean to the coast guard? >> first i'll say what it means to the coast guard and i'll mention what it means to the department of homeland security as well. we've had this unique policy with the government of cuba now for a number of years this feet dry policy and it's been very

challenging for those of us on the front line having been there as the likes of key west appear a lot of times people looking to better their lives will go to desperate efforts to try to make landfall here in the united states. once they do, they're home free. it's the only policy like that. so it would make our world of work a little bit easier. what i don't know, would the government of cuba try to prevent people from leaving because there's been a policy change? and then if they do there might be a reverse effect. you might have cuba nationals leaving the united states destined for cuba and trying to embark there and then bring them back the other way. so it could play out one of two ways. i look at it from a couple different aspects there. from a department of homeland security aspect we're unique in that we're 22 components but we're not weaved together like the department is under the

nichols act. secretary jay johnson released a memo shortly after i became commandant talking about unity of effort in the homeland department of security. how do ut apply it to what are the most relevant threats viewed by the departsq'tal level? we joined three task forces. we joined task force east led by vice admiral dean lee focused on dhs equities maritime. his deputy u)s& be a member from customs and border protection. there will be a joint passport west. that will be led from the border patrol robert harris. his deputy will be a coast guard individual. then we'll have another joint task force for investigations, which is really getting into the criminal networks, led by immigrations and custom enforcement. his deputy will also be coast guard. so we're starting to turn dhs a little bit more peripheral by

the creation of these task forces as we look atñemerging threats, and then how do we apply -- resources will always be scarce but how do we optimally apply resources and deal with those threats? >> do you see that you'll be able to deploy or at least employ, coast guard forces further south in the hemisphere and maybe operate from other countries or have more access to launch activities from? >> these are not staged questions, by the way. it's a great question. you may know the white house, when we released our western hemisphere strategy, if you release a strategy you want to make sure you have connective so our first connective tissue is to our department that has a southern border and approaches campaign. but the next piece is to the white house that has a strategy for central america. president obama has met with the presidents of honduras guatemala, el salvador.

he has heard their concerns. a lot of that violent crime is collateral damage for the flow of contraband destined for the united states. so there is a responsibility for the united states to step up to the plate. so as we look at i have six patrol boats in bahrain as i speak today, and they've beq' there 12 years the very same concept could apply in central america. a dedicated squadron of patrol boats operating in this region could first of all help build up their coast guards but at the same time there is actyonable intelligence. i can divert them to either do unilateral or combined operations with these countries. as they look at their navy model in this region, the countries of this region, it's very much a coast guard model. so it's a very good fit for us, and i think it's a very good fit for our nation as well. >> thanks. just as a guy who operated out there in the persian gulf with

those wpds, i just want to say that they were fantastic in their contribution, and to the mission also, super impressed with the junior structure obviously in those small wdbs and what those officers and crew accomplished out there was impressive. as promised i wanted to open it õup more quickly to audience questions, and the gentlesp' right in the back there. sir? >> admiral, good to see you again, sir, as always. your initiatives are incredibly aggressive, they'rq exciting to hear. we hear the added almost tasks that are being put on you by our country and our global partners but it still seems like we're still using admiral loy's analogy of the dull knife. is the administration and the department of homeland security ready to go to congress and work with them on their offer to get the coast guard the funding

needed to get you not to be the dull knife but the sharp tip of the spear? >> my responsibility and i'm very optimistic in that regard, especially when i go to my boss secretary johnson, and his first concern is counterterrorism. obviously. look at what played out in belgium, look what played out in harris before thatir pair rhys -- paris ñefore that, and we're looking at a continuum if that were to continue. he's been very vocal one, in lifting that continuum resolution and having a fully funded department as he looks at counte)terrorism. his number two concern is recapitalizing the coast guard. i'm happy being number two. we haven't always even been in the top fivqbut to be number two at an inflexion point where we need to invest in our coast

guard in 21st century, i'm very happy with the position i have in the coast guard right now. >> we have a question right here. sir? >> good morning, admiral. good to see you again. will watson of the maritime security council. can you speak a little bit to the coast guard's role in safeguarding american or u.s. flag owned and crude shipping in high risk areas like the gulfs of guinea malaysia and et cetera? >> ironically, there is only one u.s. flag bona fide crude ship and it's out in hawaii. it's primarily a form flag fleet. we just released a notice of proposed rule making in the last day or two. as we look at violent crime we look at safety standards on cruise ships, and very early on in my assignment i think it was in week two, i met with all the ceos in the cruise shipping industry. and i said from this point on @r(t&háhp &hc% we're going to have a

relationship, but what we are not going to have is a partnership. it is in our mutual best interests as a regulator that we provide enough maneuvering space between the two of you, and we do periodic inspections on these ships, make sure they're in compliance with international code. but now we're doing spot checks. we show up unannounhed just to keep them honest. and it's in thei) best interest to say we got a coast guard seal "tjt approval and we've been spot-checked. so it provides us better credibility, but it's certainly good for their business product line as well. but the next piece of rule make gs -- making, and it's still on the street right now this ranks in my top five regulatory packages i'd like to see get through next year. the lady in > there? >> i would like to ask you a

question concerning your arctic capabilities especially in the interim of budget cuts and what are your immediate plans to increase your polar iceberg fleet? thank you. >> first we need to start with the 21st century. and if you're going to be operating in the arctic till spvyou want to make sure you meet or exceed the environmental standards that are in the arctic. that's everything from gray water to the type of fuel you burn the emissions, and right now none of our icebreakers meet today's modern standards, and those are going to be updated even more so with the release of the polar code. i say that because we're also looking at what will it take to bring the coast guard cutter polar sea back to life? it's been laid up for over six years. it could run for about 10 years so we're still doing an assessment of what would it take to bring a 4p)uá

to life and then hopefully keep it on life support for another 10 years. but it's like that old car you just don't want to let go of. at some point you throw good money after bad, but this is i want to make sure that we make a sound investment but if i'm sinking so much money into that to the pont where i could have recapitalized that ship outright, and i don't want to "t#ind out four or five years later that thats exactly what i should have done, because it's going to take several years for our shipyards to be able to produce a heavy ice breaker. just the technology that goes in to building a hull with a hull skin of several inches thick which is what we have on our polar ice breakers. clearly this needs to be a 'ew line item in our budget. i can't do it with the acquisition budget that i have right now. but clearly an ice breaker is not, you know the coast guard operates and maintains it, but it really answers a lot of mission needs for a number of agencies within our federal

government, and also internationally, as well. so we're looking across all of government to find the resources - to put in to a recapitalization - of our arctic capability. >> this lady down here? >> thank you. marissa lena with northrop grumman. you covered such a broad scope "trá's hard to decide what to ask. but i am curious. you mentioned being in panama for the -- to look at the canal. in honduras. >> nicaragua. >> not a new cjjt well, my term is four years just from áhe outside looking in. nicaragua, fresh water source,

if this were ever completed to transit that canal+++>uw sea route&vyññiw3e1r of that cargo because it's been diverted to another direction. so it's not just the canal it's all the infrastructure that we need to goq around that in order for that to be a viable tpwaterway. muchr canal. a very mature panama canal, as

well. so, it willx$mq- decades for that toçót( really realize its full potential. even if that canal was completed.i] õ>ajut like to just go back to the dhs, youe1 know, the competition moment. you talked about the fact that .oáhut have free capitalizationçó challenge. we talked about that. now, you're at a higher priority within dhs. but at the risk of getting to a sensitive subject,é@clp dhs itself has a target onjfñ its back politically because of the association with the very highly charged immigration issue.< how do you see thatñi playing out? everybody else has a full-year budget. you don't.#: f1 o what type ofe1 ñhçó -- needs to be done to protect the coast guard in this ñienvironment? >> again back to the marketing and sales at expect of this job. so with 114 congress my responsibility is to engage, you know, the many overseers, t," appropriators, the authorizers

that impact the coast guard budget. indicate that we are part of you kno- the third largest federal agency in our government is the department of homeland security.lp number onexd is dod, number two isñr veteran affairs. number three it the department of homeland security. just on that oknoteyor asked does the coast guard fit well in the department of homeland security?r

external environment challenges opportunities but strategic document and not a fist pounding, saying i ngayl more but to be able to articulate that in a strategic national strategict( objectives. >> thank you. time to open upçg7çxd to more.fp@nr >> independent!f former armyñr adversary in the western e1hemisphere. i had the privilege of working with youro+ attachees flout the region, in particular the one in haiti.lpqxd in that vein,t(ñi do you have something akin to whatnb the army has in the -- you know the rapid equipping force office.fáñi+++r

department support to be able to do so. but we're doing it with a whole of government approach, just before the thanksgiving holiday, i took the entire leadership team, from the interdiction committee, and we went first we went to puerto rico. puerto rico is seeing a 300% increase in flow. and at the same time they've seen a violent -- tremendous spike in violent crime there, as

well. but i haven't seen 300% increase in flow leaving puerto rico. at least not by sea. so i met with the governor, i met with their regional commissioner we're protecting that front door, but what's leaving the back door? from there we met with the presidents of panama, honduras, and colombia, so they could see firsthand what the challenges are downrange. and the demand signal for u.s. capabilities, whether it's capacity building or whether it's basing resources in those countries is as loud as i've ever heard. but you really need to get down and see firsthand, you know, it was important that you bring other members of this leadership team, whole of government down to see for yourself. so i don't see, and i'm trying to tell the person next to me and as that communication goes down the line the message gets scrambled and it's not understood.

we're all seeing the problems from different aspects but with whole of government, on what needs to be done down there. and i'm very optimistic for the opportunity that have presented themselves. >> we seem to be at the end of our allotted time. just want to one more time thank the admiral for coming out and making himself available. excellent remarks and the q&a was wonderful, thank our sponsor lockheed martin one more time and our partner csis. we think this is a wonderful partnership, between us, the naval institute and csis. thank you very much, sir. give the commandant a hand. [ applause ]

live coverage continues at 10:30 eastern today when the brookings institution will host a discussion on federal spending caps. a panel will look into whether current caps are sustainable or allow for adequate national defense and domestic spending. and then coming up at noon eastern a group of foreign policy analysts and military strategists will talk about strategies for countering global jihadist ideology. team members will present their proposals at the national press club. again that starts at noon eastern.

u.s. secretary of state john kerry paid his respects today to the victims of last week's terrorist attacks in paris. in a show of american solidarity with the french people the state departmented tweeted out this picture this morning. secretary kerry met with french president francois hollande and the french foreign minister before visiting the sites of the attacks offering silent prayers and laying wreaths to honor the dead under heavy security. president obama is meeting today with british prime minister david cameron who's visiting the u.s. white house says the leaders will discuss the global economy and cybersecurity. they will also hold a joint news conference this afternoon at the white house, which you'll be able to watch live on c-span. it's set to start at 12:20 eastern today.

here are some of our featured programs for this weekend on the c-span network. on c-span2 saturday night at 10:00 on book tv's "after words" "wall street journal" editor brett stephens argues our enemies are taking advantage of the situation abroad. and sunday night at 10:00 democratic representative from new york steve israel on his recent novel about a salesman and a top secret government surveillance program. and on american history tv on c-span3, saturday at 8:00 p.m. eastern, on lectures in history george mason university professor john turner on the

early mormons and their attempt to create a new zion in the american west during the 1830s. and sunday afternoon at 4:00, on reel america nine from little rock. the 1964 academy award winning film about the forced desegregation of little rock arkansas' all-white central high school. find our complete schedule at c-span.org. call us at 202-626-3400. e-mail us at comments comments @c-span.org. or send us a tweet@krp span, #comments. lake us on facebook, follow us on twitter.

senator rand paul now on judicial restraint and activism. he recently spoke at the heritage foundation's conservative policy summit here in washington, d.c. his comments are about half an hour. i know some of you have been here the whole time, and a lot of media interest in the subjects we're covering and i think the country is learning that conservatives do have some great ideas make a better life for every american. that's the whole point of what we're doing here today. i'm excited to introduce our next speaker who is just as

comfortable on the cover of a magazine as he is filibustering the senate. when he was running for office the washington establishment was afraid that if he got here he would cause trouble. their fears have been well founded. i'm very proud that i supported him when it wasn't cool. i was told i was stupid, he couldn't get elected, and i'm grateful that he has proved all of the critics wrong. that rand paul, i think, has been a fresh face on the political scene, and i think very important to the conservative movement. i have said a number of times that the only majority that's left for freedom minded americans is the majority that comes from welding. a lot of libertarian ideas with conservative ideas. i believe that the libertarian concepts of individualism

self-reliance, and free markets are certainly consistent with the foundation of conservative thought. and if we can weld with those libertarian foundations at the conservative values that build a strong society and guarantees of a strong defense, that we will have the majority of americans who understand how do we build a stronger country a brighter future and more opportunity for every american. rand paul represents that in many ways, and he has shown, as he goes around the country that folks are not traditionally interest ed interested or interested in a lot of the things that he says and talks about. which is very important to our movement. he's attracted millennials. he's spoken on college campuses. he's known that our ideas are persuasive when presented in a persuasive way. so we are honored and excited to have senator rand paul here at the heritage foundation. he's been here many times since

i've been in heritage speaking on a number of issues. and today i think he's here to probably stir you up just a little bit more than he has before. so please welcome senator rand paul. [ applause ] >> thank you. thank you. thanks jim. i think you're doing a great job. heritage continues to grow. i think they say online we've got maybe 20,000, 25,000 people watching online. and i asked laughingly is this was off the record and i can say anything i want. can we just be frank. he said yeah nobody is going to be in there from the media. so here it goes. you hear a lot of speeches and everybody's going to give you lots of speeches, i'd like to make it little more interactive. so we're going to poll the crowd to begin with. media and cameramen you may participate also. i'd like to know who in the crowd thinks judicial restraint is a great philosophy versus judicial activism? we'll start with judicial restraint.

who in the crowd thinks that your legal philosophy would be judicial restraint. [ applause ] this is going to be a tough sell. how many people think judicial activism is the way to go and that's what we should have is an activist court? nobody. this is really going to be a tough sell. all right. does anybody know why justice roberts did not strike down obamacare? judicial restraint. so i guess everybody here is for obamacare, right? thinks that the court should stay the heck out of obamacare and obamacare is just fine because the majority wanted it. in fact, that's what justice roberts said. he said that we should not get in the way of the majority. do you know where that comes from? that comes from oliver wendell holmes. the great progressive back in the lautner case. when he dissents he says that the court has no business getting in the way to what the majority will is. we should leave it up to the majority.

so if you are for judicial restraint, i guess then what happens when a legislature does bad things? what happens when legislature says well we're going to pass jim crow laws throughout most of the 19th century. most of the 20th century. should we have an activist court that comes in and overturns that? so it goes back. can we have the first slide? the only slide. i won't bore you with a lot of slides. but we have one slide. where is it going to be? it's going to be -- i can't see it. that's not going to help me. we have a time line basically. we go back and we start in 1905 with lautner and go all the way through obamacare. and the question is, in each of these cases what should conservatives be for restraint or activism? we go back to lautner and in the lautner case state legislatures were becoming more progressive and restricting the right or the liberty of contractors. so what happened is you had an activist court in the lautner case that rules 5-4 that says states can't interfere with the

right to contract. so the question is are you for activism or restraint? when it comes -- when it is with regard to state governments interfering with the liberty to contract. we move on a little bit later and we get into the new deal. here it's not state governments, it's the federal government. the federal government is passing all kinds of laws assuming new powers that weren't essentially in the constitution. so you once again have an activist court in the beginning until fdr got his way, you have an activist, conservative court who overturns federal laws. one after another. until finally you get a majority of fdr appointees who say no judicial restraint is the way to go. then you move on longer and you come out the depression and go into the time where we're looking at brown versus the board, and we're looking at institutionalized either racism or separation or segregation. what's the position of judicial restraint? judicial restraint says let the states do whatever they want.

is that the conservative position? i frankly think it's not my position. i think if the states do wrong, that we should overturn them. that there is a role for the supreme court to mete out justice. the 14th amendment gives the supreme court, it gives the federal government a role in saying the states can't do certain things. there is a book called the conscience of the constitution by timothy sanderford which i think is a great book because he talks about it in that if we were to say well, gosh we believe in just state's rights, federal government has no role in the states, could you be basically in favor of what john hal kuehne said? not only john calhoun supported slavery, but john calhoun supported sort of a tyranny of state government. he thought state government could do anything it wants. is that sort of the liberty position? is that the conservative limited government position that we believe so much in a small federal government that there is no role nationally to say to a state government they can't do certain things? so it comes to brown, i'm not a

judicial restraint guy, either. i'm a judicial activist when it comes to lautner. i'm a judicial activist when it comes to the new deal. but i'm also a judicial activist when it comes to brown. i think the federal government was right to overturn state governments that were saying that separate but equal is find. plessy versus ferguson is a mistake. plessy versus ferguson is judicial restraint. we get to brown, i'm an activist. then we go to the next one. what's the next one we talk about when we want to know about activism versus restraint? it's gris cold. and you say why are we even having this discussion? does anything of this have anything to do with politics or current events? does anybody remember george stephanopoulos' question in the presidential debates last time? he asked them what do you think about griswold? well a lot of people didn't know what griswold was, probably. but griswold had to do with birth control. state government said you can't sell birth control to women. and so if you're a state's rights kind of person and you say i guess, hands off.

if you believe in judicial restraint you're like let the states do what they want. that's a state right. or you might say well individuals have rights also, and states can't tread upon individual rights. and then you might say, well, maybe i am for griswold, and i am or for overturning the state law that says you can't have birth control. and so there's a question again are you an activist or restraint? some say griswold led to roe. i guess you're for roe also.ji6d in roe you actually have a competition of rights i think. you have a competition of rights between a mother and a child. so it's a little bit different than just whether or not you are restricting someone's liberty. because i think there are two individuals involved. this side would say there's not. but i don't think roe is as clear-cut as far as restraint or activism. why is this pertinent? because we move all the way up to obamacare. and when we get to obamacare, whether he believes it or not i don't know but justice roberts laid down the gauntlet and said judicial restraint is why the majority can do whatever they want basically. not only did he say that he basically said that if there are

two arguments two equal arguments for whether it's constitutional, unconstitutional, whether it's atax or a penalty we just have to accept that basically the presumption is of constitutionality. this kind of gets back to this idea of restraint. if we believe in judicial restraint, we presume the majority is correct. we presume that laws are constitutional until we can prove otherwise. now there is a school of thought that thinks differently. randy barnett writes about something of this. he talks about the presumption of liberty that maybe we should start out with the presumption of liberty. i liken it to saying maybe we should be presumed innocent until found guilty. maybe we should presume to be free until we are restricted. [ applause ] yes, i've got one convert! yes! my point is really not to try to convert you from judicial restraint to judicial activism, but to think about it. because i think it's not as simple as we make it sound. we say we don't want judges

writing laws. i don't want judges writing laws, either. but do i want judges to protect my freedom? do i want judges to take an activist role in defense of liberty? do i want them to presume liberty and put the burden on the government to prove constitutionality? i think this is important. and it became very important in the case with regard to obamacare. in that basically justice roberts says that it's not his role to replace the majority will. now some of you might say well i'm still for judicial restraint. i don't care about any of those cases we just need a better majority. that is an argument. but the question has to come also if you don't have a better majority. if you have a jim crow majority in the south, does the court have a role in overturning something where a person's individual rights are at stake? i think they do. i think it's an important debate because ultimately ideas are important. i think it was victor hugo who said that ideas are really sometimes more important than a strong army.

basically idea ares the presupposition behind all of this. they precede all of this and really empower all of us. i think as we look forward to what kind of government we want or what kind of role we think government has what kind of role the judiciary has, it's important to decide. and to examine ourselves, whether we're for restraint or activism with regard to the court. another constitutional question we have is on the separation of powers. and i think this is an equally important question. it is legislative question and possibly a judicial question as well. there is a professor from tufts who wrote recently and said the separation -- there's an equilibrium that's supposed to be there between the different powers, between the different branches but we're having a collapse in the separation of powers. we're having a collapse of this equilibrium. our founding fathers talked about there being sort of an ambition that we would pit one ambition against another. an ambition for the legislature should be an ambition that is pitted against the ambition of the presidency.

the hope was -- and many times in our history this ambition was i think beyond party label. unfortunately i think now things are so partisan that if it is a democrat president usurping authority all democrats will support them. but if it's a republican president usurping and taking on too much executive power all republicans will support him. instead of what our founding fathers intended was that congress would object to having its power taken from them by the executive branch and these ambitions would be pitted back and forth and those ambitions would push us forward towards more of an equilibrium. it isn't just on immigration that the president has usurped and created a broad upon the executive branch power that isn't there. it's also in obamacare amending the rules. we're going to have another ruling on the supreme court on that coming up. but it's also on the power of war. the power it declare war was absolutely without question giving to the legislature. we've been at war now for five months. and no vote in congress.

so before christmas, i decided i would declare war. and i decided i would declare war on a water bill. and people are like why is he doing to declare on a water bill? and i say well it's my only avenue for having any power around here. i'm not chairman of the committee. i don't get to decide the agenda. well they've been working on this water bill for six years. as jim will attest to sometimes they get pretty annoyed if you try to amend something they're trying to do so i amended it with the declaration of war for isis. because i think they are a threat. i think they're a threat to our embassy in baghdad. they're a threat to our consulate in erbil and frankly it's been pretty apparent that they're a threat to americans by killing americans. and there should be a debate. this shouldn't happen with the president. the president shouldn't do this alone. and so these debates have to go on, and to me i think what's more important than belonging to one political party or another is the ideas of the constitution and how the whole goal of the constitution was in limiting

power. and trying to not let too much power gravitate to one body or to one person. while i'm here in washington, in the future as long as i'm here that will be my overriding goal is to try to limit power, and to try to keep too much power from gravitating to one person or body. and i think this is above and beyond all partisan politics. and i will continue as long as i'm given that privilege. thank you very much. [ applause ] and i would ask to raise your hand if i converted you from restraint to activism but i'm afraid to. >> we both have microphones here. >> all right. we'll take some questions. yes, sir. [ inaudible ] why is she obsessed with you? [ inaudible ]

-- a couple of political -- okay, these people are crazy, let them fight. he didn't answer in public. but if you want to, i can tell you. so our next -- my question is how smart is it for you to pick a fight in this for muslim they are crazy. they are -- what do americans have -- >> good question. i guess the way i would look at it is and i say this often because i think it bears repeetding. i think there's a long war going on. the long war in ways is sunni

versus shia. but it's also within the islamic faith there's a war going on between what i call civilized islam, and barbaric islam. and some conservatives like to criticize the president and say oh, why is he being so nice to islam? i think sometimes what he's trying to do is point out that there are difference. because if you want to paint with a broad brush that everybody in islam is an enemy of the united states, you're talking about a horrific, terrible kind of war with, you know, a billion people hating america. i don't think that's true. i think that the vast majority of islam is peace loving and civilized. but if it's 5% or 10% of islam that's a lot of people. and that's a big problem. the long war is not only sunni versus shia but there's also a long war between a barbaric form of islam against mainstream islam and against the west. i think no matter what we do we have to defend ourselves. so printing cartoons shouldn't

engender people murdering you. and so we do have to defend ourselves. france has to defend themselves. we have to defend ourselves. we also have to defend our diplomatic missions around the world. i've put a lot of blame at the feet of hillary clinton for not defending the embassy or the consulate in benghazi. i think she did a terrible job. [ applause ] and i think that it's inexcusable, basically, when you're asked for security that you not provide it. that is the job of the commander in chief and that's the job of the executive branch. the same goes, though for erbil or for baghdad. while i don't want to be in the middle of the long war because i don't think there really is an answer in this long war and much of this war should be left to be fought by the middle east at the same time we can't leave our embassies unprotected. so we have a couple choices. we either come home completely and bring everything home or we defend our embassies and our interest. i think at this point what i would say is we defend our interests. but that doesn't mean that we have to be involved in every war

and squirmish. i just end by saying one thing, if there's any one true thing that i think is irrefutable and that the facts really support, is that every time we've gotten involved to topple a secular dictator, it's been replaced with chaos and the rise of radical islam. and that would be in hillary's war in libya this would also be, though, in the republican war in iraq. i think what's over there now is less stable than before, and so i think there are more problems with the rise of iran as a problem, because there is no counterbalance in iraq anymore. and so some of these problems are insolvable. the only thing that i think we have to know from our perspective is we should defend our country and our people. >> senator paul makes some important distinction. something we've looked at a lot at heritage. there is political islam. welding itself with the powers of government. perverting the basic religion itself. and there is a civilized, more i

guess religious islam. and making that distinction is very important i think in solving the problem itself. some other questions for senator paul. yes, sir. >> while i agree with your definition [ inaudible ] but to your point about separation of powers, and the intention of the founding fathers, how do we get that in to a pop culture everyman definition that we can understand? because it does transcend. and you bring those topics up and get out of the labels i think would easily -- >> but some people don't understand that and we fall into the democrats are nice, republicans are mean and we end up in this mess. >> i think one simple sentence i would say is unelected bureaucrats shouldn't write laws. but who are the unelected bureaucrats working for. it's a separation of powers issue issue. all of the bureaucracy of the government works for the

president. so we have abdicated our role as congress. people say obamacare was 2,000 pages. that's so long. yeah, that's pretty long but the regulations are already 20,000 pages. so much of it is being done without our knowledge, but without us doing what we need to do. so there is debate right now over defunding the immigration the executive order. i'm all for that. however i'm for that and about 1,000 other things on every bill. i want 1,000 instructions or thousands of instructions on every appropriation bill. people say you're trying to tie the hands of the president. that's our job. i don't care if it's a republican president. the power of the purse, when people talk about the power of the purse, those are instructions. we've been writing sort of outlines of bills sending them to the president, and no matter which party they are they do whatever they want. as a consequence, they do many things that we didn't intend. i also think that regulations that are written that are very expensive like over $100 million, ought to come back. jim was the lead sponsor of

something called the rooerns act when he was in the senate. i have it now. says that any legislation written by a bureaucrat by another branch of government that is very very expensive has to come back to be voted on to become law by the congress. that would go a long way towards reasserting our authority and reasserting the balance of powers. >> other questions? yes, sir? >> senator paul i thought that you're a -- your father you know was one of the big founder of the libertarian party, and that one of the main thrusts was you were against regulations. and i'm glad you're slowing down this president but are you for regulations in a constitutional way, rather than you know, just more red tape? i thought that was what -- >> absolutely. i'll give you an example of that. we passed a law that the clean water act that says that no one can discharge pollutants into a navigable stream. i'd note for that.

i think that if you've got a company and you have benzene and you're dumping it in the ohio river, not only should you be punished if you are doing it purposely you should be in prison for doing that. i support that regulation. that's a federal government regulation. however, that was passed in the 1970s. it says discharging pollutants in a navigable stream. over time now they've defined dirt as a pollutant and your backyard as a stream. and we now spend $100 million policing private property and i think we do so much to harass private property owners we've forgotten about the stuff we're supposed to be doing which is the ohio river and the great lakes and the oceans. so there is a role for government in communal property. but, we've gone way too far on what we've done to individuals. one quick example. ken lucas put clean dirt on his own land to raise the elevation to sell lots in southern mississippi. he's been in prison for ten years. he was 70 when he went to jail. he's now 79 and still in prison, for putting clean dirt on his

own land. that is a crime and whoever put him in jail is the one who really ought to be in jail. >> one more question. >> senator i was just at an americans for limited government and they were making a libertarian case against tpa. that it was ceding too much power to the president. what's your view of this? >> i have mixed feelings. you're talking about the authority that's given for the trade agreements. and what's the tpa, what's the actual acronym stand for? >> trade promotion authority. >> trade promotion authority. this is an argument to be made by some on the separation of powers that by giving this authority to the president that you're taking power that should be the congress'. there's also another argument that these are really treaties and they ought to be done as treaties and they're not, they're done by simple majority. but i'm also a big believer in free trade that i think free trade is a good thing. so there have been libertarians or libertarian conservatives, my

father included, who voted against some of the trade deals because they felt like they gave up sovereignty to international bodies. i think it's a valid point. i have voted for the trade deals, though, because like a lot of things in washington, i've weighed the good and the bad, and i think the good of trade has caused me to vote for things that i think aren't perfectly basically. we would lessen our trade barriers and do that through the sovereignty of the congress. but unfortunately i think what i've been offered to vote on hasn't been that. trade helps even the poorest among us more than anybody else. i think the average person who shops in a walmart-type store, or walmart, they're everywhere, saves about $800 or $900 a year because of free trade. >> let's thank senator rand paul. [ applause ] the c-span cities tour takes book tv and american history tv on the road. traveling to u.s. cities to learn about their history and

literary life. this weekend we partnered with comcast for a visit to wheeling, west virginia. >> i wrote these books the wheeling family. they're two volumes. the reason i thought it was important to collect these histories is that wheeling transformed into an industrial city in the latter part of the 19th century. and early part of the 20th century. and it's kind of uncommon in west virginia in that it drew a lot of immigrants from western europe here in search of jobs and opportunity. so that generation, that immigrant generation is pretty much gone. i thought it was important to record their stories. to get the memories of the immigrant generation and the ethnic neighborhoods they formed. it's an important part of our history. most people tend to focus on the frontier history, the civil war history, those periods are important, but of equal

importance in my mind is this industrial period and the immigration that wheeling had. >> wheeling starts as an outpost on the frontier. that river was the western extent of the united states in the 1770s. the first project funded by the federal government for road production was the national road that extended from cumberland, maryland, to wheeling, virginia. and when it comes here to wheeling that will give this community, which about that time is about 50 years old, the real spurt that it needs for growth. and over the next 20 to 25 years, the population of -- of wheeling will almost triple. >> watch all of our events from wheeling saturday at noon

eastern on c-span2's book tv, and sunday afternoon at 2:00 on american history tv on c-span3. live now to the brookings institution here in washington where a panel of experts will discuss whether federal spending caps implemented in the sequester are sustainable or will allow for adequate national defense and domestic spending. this sliv on c-span3 just about to get under way. >> good morning.

>> good morning. i'm david wessel director of the hutchins center on fiscal and monetary policy here in brookings and i'm very pleased to be here today to discuss something which is in the category of really important and hard to understand. which is the cap that congress and the president agreed to on domestic and defense spending. now, i'm going to give a little bit of a introduction, i'll introduce the panel, and we'll take it from there. you should know that c-span is in the room so if you fall asleep, your mother will see it. so don't. and if your cell phone goes off, i'll put one of those hearts

around you like they do at the ball game. this is especially true if you're on the panel. so, the history and the plumbing of all this is complicated and packed with acronymacronyms. the bca, the bbo, the rgo in jargon that only people in washington could invent, sequestration, chimps authorization appropriation. but it doesn't need to be that complicated. when the next fiscal year begins on october 1st of this year, lawmakers have to pass a new set of appropriations bills or extend current regulations in order to avoid a government shutdown. because of a budget control act passed in 2011, and the failure of a congressional super committee, there are now legal limits ona5 spending that were signed into law by the president, and although they were altered in for 2013 and 2014 by the ryan murray compromise they are in place and

if congress tries to spend too much money there's a system of across-the-board spending cuts that will ratchet spending down. now it's really important to talk to remember that we're talking about caps on annually appropriated spending. cf1 o that's roughly $1 trillion a year. roughly a third of the federal budget. salaries of the park rangers, the gasoline and the bullets for the army. the grants to state and local government. it does not include benefit programs like social security and medicare and medicaid and interest on the debt. they're not subject to the caps. and because nothing is ever simple in washington, we'll talk about this when we get to defense, the caps don't apply to the money we spend in afghanistan, and now that we're back in iraq, in iraq. our focus today is the ceilings that apply for the years going forward. from the fiscal year that starts october 1st, fy-2015 through 2021. for this coming fiscal year the

caps are only about $2 billion higher than for the furniture fiscal year without any allowance for inflation. that's about -- take about $17 billion more to keep up with inflation, $44 billion more to keep up with the growth of the economy. and some people most of them republicans, think that's just fine. that they want to shrink government. and other people, most but not all of them democrats think this is nuts that we're squeezing that part of the federal budget that includes almost everything you can consider an investment in the future. and some people including some on the panel here say it's a little hard to say whether we're spending too much or too little without asking well what is the money going for? and that's not something that the caps tell you. the caps are a level, congress punted the decisions on what to spend more on, not less. i think it's important to remember that the caps have had an effect. people often think oh, congress does this so then they evade it. but in this case it's not true. the caps have constrainedu

federal spending. perhaps not as much as they were initially intended to. they did play a role in the shrinking of the budget deficit, which has come down quite a bit. and they in my opinion contributed to a tightening of fiscal policy when we were still suffering the aftereffects of the great recession. but that's the past. there is no question that the caps will be tougher and tougher for congress to live with over time. although they'll increase by about 2.4% a year over the next five years. that's roughly enough to compensate for inflation not enough to compensate for population growth or the growth of the economy or what i sense is public demand for various programs to help the middle-class or if the caps hold and if current spending trends continue cbo prongents that 85% of the increase in annual spending offer the next decade will go for social security major health care programs, and interest. which are not constrained by the cap, which are largely on autopilot.

and the pressure will come on that remaining slice of federal spending. and as a result of that, measured as a -- against the size of the economy, that annually appropriated domestic spending will shrink as a share of gdp to levels we haven't seen in 40 years, and the level of public investment domestic public investment will shrink accordingly. now with all that's going on in the world, the unrest overseas, the security threats at homejf the struggles of the middle class, the difficulty of maintaining our infrastructure, congress may decide that these caps sounded good but they're just too hard to live with. and without getting too mired in the parliamentary detail our goal here today is to take a close look at the economics, and the politics of these caps, on why they matter on what the money goes for and on what congress is likely to be about them. i'm fortunate to have really a very experienced and excellent set of panelists here. at the far end is michael

o'hanlon a senior fellow at brookings, co-director of the center on 21st security and research. he's written several books most recently one with jim steinberg on u.s./china relations. in his distant past he worked at the congressional budget office. so did bob hale who left the congressional budget office and went on to worry about even more bigger numbers. he was for five years the undersecretary of defense and the comptroller at the pentagon. that means he had a $600 billion checking account to worry about. he's been the assistant secretary of the air force for financial management. he spent time as executive director of an organization i never heard of before, the american society of military comp trollers. and i bet that christmas party is just wild. after a distinguished career in government he left the pentagon in 2014 and is now at booz allen. next to him is my colleague ron haskins who is co-director of

our center on children and families, a senior consultant at the n.e. casey foundation. he spent 14 years on the staff of the house ways and means committee where he played a key role in welfare reform and spent some time but less than a year for reasons you can ask him about in the george w. bush's white house. his most recent book is a very interesting one called "show me the evidence" about president obama's fight for rigor and results in social policy. and last but certainly not east is alice rivlin who if i met her resume we'd be at 11:30. she's director of the engelberg center at brookings. she's the founding director of cbo, former director of omb for bill clinton, vice chair of the federal reserve and relevant to these conversations is a fixture on every single commission that we create to do something about the deficit. but fortunately, alice we don't judge you by the results you get. just by the quality of the work. >> oh, you should judge by the

results right now. >> right, okay. cyclically adjusted. what we're going to do here is we're going to start -- i'm going to talk with each of the people up here for awhile and then we'll have time for questions, and because we wantc to do both defense and domestic we're going to 85alternate a little bit. i'm going to start with bob hale, and i wonder if you could for those of us who don't live and breathe the defense budget which is not the people in the american society of military comptrollers but the other 99% of us, what's been happening to the defense budget over the last four or five years? what is the circumstance the historical circumstance in which we find ourselves now? >> just for the record, that job was probably the most fun one i ever had. >> that says something about your other ones. >> unfortunate thing to say. >> so, the defense budget peaked in fiscal year 10. since then it has been coming down. the&g total budget down by about 25% after adjustment for inflation. the base part of the budget

excluding wartime funds down about 15%. in fairness it>/lo' to fight the base budget as well. many argues that we weren't at the end of the clinton administration spending spending enough to maintain the size of the military to modernize it to maintain infrastructure. so war costs certainly played a big role in that sharp.

>> in the base budget, as well. >> look ahead where are we going? >> so in two weeks, little more than two weeks we'll get the president's budget for fiscal '16. i don't know. i'm out of government for sure what it will be. but i anticipate that the president will propose funding above those cap levels. that they've discussed for both defense and nondefense. probably $30 billion to $40 billion in defense. if they do that i think there are three broadways congress could respond by far in my mind the last likely is that they could appropriate at the higher level, not change the caps. that would trigger a formal sequestration next january. and i might add we use that word loosely. but that's the only thing that constitutes sequestration. the automatic cuts if they appropriate above the caps. i think that's the least likely. two other scenarios are more likely. one, they could leave the caps because it will be a tough political lift to change them but bring the president's budget

down to the cap levels. in that case the agencies will end up with sequester level budgets but at least we would have made considered decisions about how to get down to that level. and the last outcome and the one i hope happens, is that we see another budget deal, probably a mini deal along the lines of the twho that we saw. there was one in 2013, and another -- 2012 i should say, another one in 2013. the last one the murray/ryan deal that david referred to, that raises the caps at least to some extent, and then appropriates at that level. so they consider decisions but we get into this more later at least believe that some modest increase in defense is appropriate given the state of threats that we face today. so that's a brief outcome. three scenarios sequestration the formal one least likely in my mind. >> isn't there an alternative to your third one since they have this account the overseas contingency operations that was intended for money for avz and

iraq it's not covered by the cap. >> right. >> wouldn't it be possible for congress to put more of the base budget in there and pretend? >> well, to some extent, yes. but it is by law supposed to be for the added cost of wartime activities. now there's a gray area, and congress has exploited it, so has the administration i might add me included in the past to put a little more money in there. but there's only so much you can do i think and still live within that area. oko as it's called is a possible way out if we're going to stay with the current caps for defense. it won't do anything for nondefense. that's an important point. there are problems there, too at least i think. >> michael can we live within the caps on defense spending and be safe? >> david i think the short answer is we can probably be safe here in the united states. but the world will begin to fray abroad. and it will be harder to manage

china's rise in a way that i think is most stabilizing to the region. and i'm not against china's rise but i think if it happens too fast during a perception of american retrenchment it could be destabilizing for the western pacific. i think the conflicts in the middle east while no one is talking about putting american brigade combat teams back in any of these conflict zones, nor should they, none 9less the conflicts are far from over and we're going to be able -- going to need to be able to do substantial things in those zones whether we like it or not. most of us don't like it for good reason. it doesn't change the fact that what we just saw in france could happen here. and we're implicated in what's going on in this broader region. i guess if i could just say one other thing by way of framing my way of looking at this and just to give a couple more reference points right now we are planning to spend in 2015 in the course of this year something just under $600 billion on the military.

and that includes somewhere in the range of $60 billion to $70 billion on the contingencies. not only iraq and afghanistan, but ebola. adding some capability and some rotations to forces going to estonia, latvia and lithuania to make sure vladimir putin takes seriously our nato commitments to those countries. and a few other sundry things. anyway, we're at just under $600 billion. for reference the cold war average for the united states was about $500 billion. so, i'm adjusting for inflation. this is 2015 dollars. so we're a little bit above the cold war average. on the other hand we're much below the cold war average in the size of the military. so we've gotten a lot more expensive per person. and meanwhile, while we still represent 40% of global military spending there's an interesting thing going on china and russia have very clearly moved in to theymsumber two and three positions behind us in a way that they were not in the 1990s.

in the 1990s, a lot of our big allies were in that sort of number two number three role as russia was essentially collapsing, and china was still beginning its rise. and now we're at a point where our budget of just under $600 billion, and that includes the war costs is still three to four times china's. but on the trajectories that both countries are on, in the next decade you could start to see convergence.$iu5ñ and you know, that raises more questions than answers about whether that's okay, whether that's avoidable, at what pace we should allow that to happen. i'm trying to give some reference points. and then just one last thing is that in the 1990s, when alice was omb director and bob was at the air force we were -- >> the world was wonderful. >> and the world was pretty good but we were spending about $400 billion a year on the military to adjust for inflation. once we phased in the cuts from the cold war force, but that was able to sustain a slightly

larger force than we've got today. and so one of the arguments people will make is well today's world looks certainly at least as dangerous as the world of the 1990s. and yet you're trying to cope with that world is a smaller military. and if you sequester or go to sequester level cuts in any way, you're going to be forced to cut even further, and so anyway we can talk more about the specific service by service later on but these are just some reference points. $400 billion is where we were in the '90s. $500 billion is the cold war average. a little under $600 billion is where we are now. but as you know we're headed yawnward, more towards that $500 billion mark. >> we have a smaller military because we pay each one of the troops more? or because we're more capital intensive? >> i'll say a quick word and let bob who obviously managed this in detail add something. we're certainly paying more per troop. military compensation is good. there's a big commission working on this with a lot of retired military as well as others. we may have to be a little more

judicial about how we use military compensation. not because the typical private first class is overpaid. but you have certain categories of people for example recent retirees from the military who might be 48 years old, have a new job, getting a new salary,job, getting a new salary but they still get 50% of their maximum paycheck annually forever. that's part of the military pension system that was designed for understandable reasons, and certainly if those people are hurt or wounded and need care in the veterans affairs budget they should get it. and that's a totally separate part of the budget not covered by any of the numbers we have been discussing today. but you can ask questions about whether we are overcompensating in certain areas. and i think we probably are. so that's part of it but its ahe not really just the pay. it's the operating of the force. it's the cost per fighter per ship, then things like cleanup of military bases. there are all sorts of things. everything is driving up that per person cost well above the rate of inflation. >> alice i want to ask you

about domestic but i just want to ask a political point bob has raised. if congress raises the caps on defense spending is it plausible that they won't raise the caps on domestic spending? >> yes i think so. >> really. >> you're asking for speculation but remember this is a republican dominated congress and if they raise the caps on defense, it wouldn't surprise me if they kept the caps on domestic. >> you think the president would sign that kind of bill? >> well, i don't know. it depends what else, it would be part of a big negotiation and trading off this and that. but we're not in that world at the moment. >> wouldn't you say alice though, that this would be a real indication of how republicans are going to handle

the current situation, are they going to look for ways to [ inaudible ] democrats and ways not to [ inaudible ] democrats and so on. if they raise defense and leave domestic discretionary where it is, that's a war cry. >> war crime? >> cry. >> oh. >> you know more about republican thinking than i do but i think there's another consideration here. when the sequestration was first being debated and you remember we thought it was something that would never happen because it would be so unacceptable to republicans to cut defense, and so unacceptable to democrats to cut domestic that no way was it going to happen. we were wrong. >> let's turn to the domestic caps, alice. is it okay to live within these domestic caps or do you think that would be a mistake? >> i think it would be a mistake

for the long run. i mean we can live with them for another year, probably without devastating effect. but i think there are several things to remember. one is that this crazy sounding category, non-defense discretionary spending, is almost everything the government does except those big entitlement programs and defense and interest. it covers the things we want our government to do and have wanted them to do for a long time and it's not very large. it runs under 4% of our gdp and has for decades forever, actually on the average -- >> about something like 17%, i think, of all federal spending? >> right. something in that order. but if you think of the size of the economy and think of all of these different programs you mentioned some of them that are

in there that it's been a historically less than 4% of gdp. it went above that in the '70s and then came down rapidly went above it briefly with the stimulus but has come down and it's headed down, down down in relation to anything in relation to population in relation to the size of the economy. so i think one thing to say even if you think what we spend for this set of programs is about right now, you should worry about the future because the caps imply that this set of programs will not keep up with inflation or population or the growth of the economy. i personally think that they are too low now, that we should be investing in the future that means i think a big infrastructure program but i also think we should reform our

tax system and pay for the investments in the future. >> brian what's your view on these domestic caps? >> i pretty much agree with alice. i would emphasize i think we're spending too little now, especially on infrastructure. there are several good examples. that's what really comes down to specifically where should we be spending more money and infrastructure is i think the most likely candidate. a lot of people disagree. i'm glad we have caps because it shows at least one third of congress will do something about the deficit. we focus on discretionary spending and ignore two-thirds of the budget and the part that's growing like mad. think of this. we used to spend 70%, almost 70% even as recently as early '60s on discretionary spending but because mandatory spending, namely social security medicare, so forth has exploded so much, it's a declining part of the budget and yet that's

really the focus of their attention. so it's good that we are reducing the deficit. we have to reduce the deficit but i don't see how those caps are sustainable. i mildly disagree with alice. very bad idea to do t(n áthat,g do it(;#danyway because i don't think the caps can be sustained. now, that doesn't mean that everything's going to fall t]ìáhp &hc% apart. it means they are going to play games. that's what i think they'll do. just like you have overseas contingency, you can have emergencies. we do all kinds of things and i bet you this year they will have $20 billion, $25 billion $30 billion worth of, you know, expanding, under the budget act they can do that and i think they will. there's no way they can hold these caps. it will be even more difficult next year and even more difficult year after that. >> you could have said that three years ago and probably did, and here we are with much lower spending levels. >> yes, but we still took advantage of some of those provisions. i think we will do it even more now. >> you just read a book that says a lot of what the government does may not do any good.

and we should -- >> i didn't -- i omitted the word may. >> okay. but isn't therezv some point to having a budget constraint here which says to the congress okay look, live within these things and let's spend more on the stuff that works and less on what doesn't. that's kind of the idea. a, is that a good idea and b, why doesn't that ever happen? >> why did it never happen? >> why don't they set priorities and spend more on what they should and less on what they shouldn't? >> i think it's just too hard. the government is gargantuan. there's aw3 book of government programs, if you dropped it on your toe you would immediately have to go to the hospital. it's thousands of pages of little teeny -- the government is -- how could you -- we can't even control the department of defense. we were in a meeting a couple months ago that an important senior official in the department of defense said they don't even know whatçó the budget is. is that correct? >> no.

that's not right. >> you can account for the whole -- i'm talking about azósbih38 >> but they're not. here's why. wait. just quickly.ti rbuu alice get a word in here. >> we are talking about culture here. in the culture of congress it's to cheat. to figure out ways to round all kinds of provisions that they impose upon themselves and they don't work because congress

figures out way around them. >> alice? >> i think that's rather unfair. the point is that even if you wanted to cut government spending because you thought it was too high and in the aggregate, i don't on this set of domestic programs that we're talking about, but even if you thought that, putting caps on is just squeezing down everything. now, i'm not opposed to the caps. but the way congress handles the caps is to say well we've only got this amount of money, we don't have time and we don't have the energy or we don't have the mandate to make decisions as to what we should fund and what we shouldn't, so what we'll do is just allocate these spending amounts among the subcommittees of the appropriations committee

in what seems like a fair way roughly what they were doing last year, and let them figure it out and they have the same problem. they have a lot of constituencies leaning on them. they have 5 whole bunch ñ of programs as ron has said, and everybody'sñr screaming don't cut õus, so what do they do? what would you d/ñctr(t&háhp &hc% you would cut everybody a little bit and that's what weu have been doing now for a very long time. now, could we do better? i think so. but it woulñ take a really dramaticñ change in the way mostly administration and the congress operate. you would÷d have to have a president who said let's change about how to do it and/or-rz you would have t