>> thank you. appreciate it. a. join american history tv for live coverage of ceremonies marking the 150th anniversary of the surrender at appomattox. in april of 1865, con federal general robert lee met ulis sis s. grant and surrendered his armor of west virginia ending the civil war. we will be visiting the appomattox civil park at 1:30 p.m. today. next, aetna ceo, mark bertolini discusses income and equality and raiseing the minimum wage. his remarks came during and event hosted by the peterson

institute for international economic economics. it's an hour. ladies and gentlemen, welcome back to our previously schedule programming. it is my pleasure to continue from our economics panel according to our practical world. we have as a special treat today, mark bertolini the chairman and ceo of aetna who is going to talk about the role of corporate america in re-establishing the american middle class. that's about as targeted and blunt a title as you can have, which i find very typical of mark. many of you have become familiar with him recently he got him mens coverage in the "new york times" and elsewhere for his leadership. i think it is fair to say the

word "leadership" and taking aetna forward and then amongst other companies in vool tearvoluntary raiseing the wages of its vast share of low wageworkers within its company, something that so far at least none of the other major health insurers in the u.s. have announced. we have gotten to know mark over the last few years. he's been a member of the board of the peterson institute. we always knew he was an interesting provocative real world person. he didn't quite know he was going to do this. he came to us a little ahead of when he was working on this and asked us to think through the economics of not for aetna. i hasten to add. because he had already talked to his managers and shareholders and that's not our expertise. but to think through in a bunch of companies were to follow the example, who would they be, how

much of an impact would they havened and how would this spin out and potentially what are some of the policy encouragements that might go with that. but i want to stress that mark's view has been repeatedly this is about what corporate america can do, which i think certainly doesn't end the conversation there but certainly is a part of the conversation that has to be said. and we're very grateful to have mark with us today to do that. i can go through mark's bio-. he's had a distinguished career at aetna. he was just mentioning at lunch that even though he doesn't believe in the earnings per share accounting, he's done a good job. he's held positions a cigna, select care, he's on the director of the verizon communications mutual life insurance company, a couple of leading charityies including the hole in the wall gang camp. and as i mentioned, he's a member of our board. and aetna supports us but in this case we have something to learn from aetna. with that in mind i invite mark to the stage.

thank you very much. [ applause ] >> thank you for inviting me to speak today. good afternoon, everybody. a little bit about who i am not. i am not an economist. so i'll offer those apologies up front. i am also not your typical ceo. i am probably one of the quickly vanishing examples of living the american dream. i paid my own way through college working for three different unions, the steel workers, sciu and aiw. i came from a union family. my dad and mother both worked part time so we didn't have insurance most of the time. my dad was pattern maker in the auto industry. my mother was a nurse.

it took me eight years to get through undergrad because i was serious about it at wayne university and i was fortunate enough to get a scholarship to cornell where i intended on going back to work in the auto industry in the unions but was enticed to start an hmo with four friends of mine. here i am in front of you to talk a little bit about why we did what we did at aetna. but more importantly why we think corporations and leadership in corporations have sort of lost their way. there is a big story in all of this that we can have a real impact. and when i took this job as ceo at aetna four years ago, i said to the board i had three sort of goals in mind. i'm the 14th chairman of a 164-year-old company. so i have an obligation to make sure that we have a commercial asset that continues into the future, hopefully for another 164 years. the second was that i'm a very

strong supporter of health reform in the united states. it's a shame that we have people that are uninsured in this country. and even though they may have access to health care, it's quite frankly poor access. and i wanted to make that work. i devoted our organization and my time to make health care work. the affordable care act work. we have been behind the scenes as a company and we'll soon be the largest company on the federal exchanges in the united states in supporting the affordable care act. and then finally the last one, which is just a small goal but i thought it would be worth tackling is reestablish the credibility of corporate leadership in the eyes of the american public. and that has been a little more daunting than it thought it would be. people have all sorts of suppositions about who i am and how i behave. i don't summer. i learned that was a verb when i became a ceo. in the hamptons. i hang out with my buddies on motorcycles and cruise around. i'm a pretty straightforward person.

i'm going to be pretty straight straightforward in my remarks. what i want to start with is our mission as a company. the single biggest threat to the financial security of every human being on the planet will be their health status in the future. 75% of the next $10 trillion worth of debt in the united states will come from medicare and medicaid. so when you look at the impact of health care costs around the world, and every country we're involved with and we paid for health care in every country in the world last year as a company. there is a problem that threatens every economy. i tell our folks if we can create a healthier world with healthier individuals, healthier communities where i think health care ought to be based not in large corporations like ours and healthier nations we'd have a better world to live in, a more friendly place to live in and a more productive place. and our view of health is really is that a healthy individual is

productive, a productive individual is economically viable and an economically viable person is happy. we want to create that across our economy and around the world. that's what we mane by healthier world. we've been talking about this number all along. i'm on a couple of boards. we look at household income. it's been flat the last 30 years if you take a look at it. wages are not supporting life styles of the people that do worker for us in our company at the lower levels of our organization. that's 7,000 employees now that are below 300% of the federal poverty level in their household incomes is our latest estimate. we looked at this number. we just don't believe that the income and equality is sustainable. two christmases ago, a year ago this last christmas i read thomas pickety's book and i got

a copy for all of the people on the executive team. i said here's some christmas reading for you because this is a point of view and an alternative. who are we as an organization and executives? what are we going do as a company to find a way to make this different versus letting it happen? do we want to be friends as a company? as a country? and how do we make it different and what do we need to do? that began the dialogue around or organization about whether or not we were taking care of our people appropriately, whether or not we were investing in our employees. so when we look at the amount of corporate cash sitting around the world, it's $3.8 trillion. i kind of find it hard to say. $3.8 trillion in cash sitting on shore or offshore. cash is plentiful. and i'll make the beginning of an argument around business education. we've lost our way in the way we educate our business leaders

because we're normally taught the husband scarce resources and to put at risk plentiful resources. and for some business educations we are told that the scarce resources always capital so we should husband capital. we're going a great job of husbanding capital right now. $3.8 trillion in cash. liken it to the city states during renaissance europe that closed their gates as the plague came by and fattened their lardners when it went away and reopened them when it was safe. we're sitting on huge stash of cash. not willing to risk it because we're taught to husband capital. and the plentiful resource we've always assumed are people. but there's always plenty of people to go around. and i will make the argument that i think that's flipped. when i talked to my board of

directors about the strategy we need to pursue, our single biggest risk is our human talent in the organization to make that happen. we have plentiful cash, we borrowed $2.5 trillion to do our latest acquisition at 1.9% after tax. you almost can't screw up an acquisition that badly to not make a return on that kind of cash. so i've got a few -- these are for those of you that were educated in business schools, these are the numbers we pay attention to. and we're told these are the numbers we get measured by and this is how we get rewarded is that we maximize return on equity, return on invest in capital, that we have to hit our quarterly earnings per share number and that the pe is really sort of a result of dividing the stock price by earnings per share. i would argue that the most

important number on this page is pe, a third, human capital. let me make this argument. we would rather invest in technology and new equipment because we can capitalize and depreciate it than invest in our workforce. because it's all expense. we have been educated as business leaders that we create spread sheets that have numbers on them that is the truth. once the numbers are in the cells, it's true. and we manage our businesses to those variances. in reality, the numbers in those spreadsheets cells are all lies from the get-go because they're going to change as we go through our business. and that what we need to understand are what are the underlying assumptions within each of those spread sheet cells, what are the variances around them.

and when we array all of those variances on top of one another, what are the risks associated with the effort that we're about to undertake. and is it a worth -- a risk worth taking. that's what in sents innovation. not what is true. not what we prove. but what we believe is a risk worth taking as a business in order to make the business work. aetna's total shareholder return over the last four years is over 275%. our earnings per share have grown at 13.5% over that time. so what is the difference? it's the price earnings multiple. what is the price earnings multiple? it's the street's belief as to whether or not we can create a sustainable valuable product that our customers will continue to buy over time.

and i argue that investing in the pe has given us a greater return than investingen the eps. as a matter of fact if you look at the guidance to the street, the last four years it has been well below the 15%. we've guided to about 8% or 9%. we've generated 12.5% to 13.5% but yet our total share holder return is up over 275% over that time frame. it's because we deliver a consistently valuable sustainable product to our customers. it's about growing the top line by keeping our customers. who does that? well, our 11.2$11.2 billion cost structure, $6 billion of it is people. human capital. that number at the bottom which f should really be at the top. so the traditional measures of

success really should be different. and when we look at our employee value proposition, we looked at wages, we looked at benefits and employee engagement, we looked at turnover costs. and you can see these are some of the traditional costs that we could do to put into a spread sheet to come up with the truth to say whether or not spending $26.5 million a year is worth an investment to reduce $120 million worth of turnover costs, which is what our turnover costs are every year, in a $6 billion people budget, it's $120 million a year in loss of productivity, training, rehiring of staff. duplicate staffing in order to cover productivity curves. and our employee engagement like most employers employee engagement has been dropping every year for the last five years. if you look at employee engagement across most corporations, those scores have

been going down. so we realized a new economic model was necessary. and we started this four years ago and we started first with investing in the health of our employees and we started with wellness programs. we started with subsidizing their insurance coverage based on their income inside the company. so we created six different levels of strattyification wages inside our organization where people at the bottom, 45,000 dollars a year didn't pay anything out of pocket for their premiums, i pay 62% at the top. we looked at wages which we found we had about 5700 employees who were making around 12.5 to $13 an hour and we looked at our health benefits which were becoming increasingly unaffordable for our employees as we did what most employer ss did, increased the deductible, the out of pocket, reduced the trend every year by the virtue of the benefits that we offer not really thinking about whether or not those employees

could afford it. this is a trend you see in all organizations. we invest in wellness, let's get them to stop smoking, let's get them to start exercise, keep the wages where we think the market clears and make sure the health benefit cost to us as an employer are reduced. why? because it's an expense. it's in a spread sheet and we run in a p & l model and we can control because all of those employees work for us. we can touch them every day. well what we came to find out -- i sort of asked this question i encourage any of you in your own organizations to ask this very same question. who are the people at the lowest levels of compensation in your organization? do you know what they're like? how they live their lives? asking that question was a much more formidable problem than i thought it was going to be. it took us over a year to come up with the actual profile. and i'll talk about those in a minute.

but what we did was we started to invest first in our wellness programs and we started with eating properly, exercising properly, creating game theory and we also invested in mindful mindfulness and yoga. i'll give you an example. i'm a big yoga proponent. use mindfulness and meditation every morning. of the top quintile of stress in our organization measured by heart rate variability and court sol levels, those employees were spending $2500 a year more than -- on health care. we've now put 13,000 employees through the program. those employees take a 12-week online mindful course or a 12-week yoga course and we've seen 69 minutes a month of higher productivity. seen their health care costs drop by 3,000$3,000. in the first year of the program, we saw our trend in health care go down, the trend go down, okay, it wasn't a reduction in trend. our health care costs went down by 7.5%.

just by investing in their stress levels. we then looked at the wages and we found that this employee population was 81% women in our organization, most of them single mothers who had a portion of their children in medicaid because they couldn't afford our dependent coverage and they were on food stamps, a significant percentage. i said to the team, how is it possible a fortune 400 company, with a 275% total share holder return return, executives who get paid very well how can we sit here and let people be on medicaid and on food stamps and what do we need to do to change that dynamic? so we went through the struggle of the terrorism of the spread sheet. let's put all of the numbers on a page and let's do a calculation.

what can we really come up with. and so the first bidding was, let's go from $12.50 an hour to $13.25 an hour. we went through this dialogue a couple of times. i said, why don't we just try 16 and see what happens. you would have thought we were giving the company away at one point because that was a very big number for a lot of people, about 10$10 million. and then we look at the impact of wages on benefits. if you increase people's wages, they lose their benefits. or those wage increases go to benefits. so we said what can we do to actually manage the highest level of increase in personal disposable income among this population. so 5700 employees, the average increase is 11%. everybody gets at least $16 an hour. for some it's as much as 33% in actual income.

the increase is actually effective today as our annual increase. so everybody got their raise this morning. and their bonus in 401(k) contributions will actually be higher because it's based off of their base wage. the second part is that we will now offer enhanced benefit program for our employees where they'll get the richest medical plan for the least expensive amount. all they have to do is submit an application to a third party who will verify that they're under 300% of the federal poverty level as a family and we'll subsidize their health benefits. and so for a lot of these employees, the savings could reach up to $4,000 a year. and for them that's a significant amount of money. now there is a quid pro quo. we will take care of them if they take care of themselves. so we have a number of screening programs that we would like for them to go through. if they engage in their disease management programs, engage in getting healthier, we'll make that investment in them and

eliminate their out of pocket costs as long as they're taking care of themselves. the goal is to bolster engagement. so i went down to jacksonville, florida, and i wish i had a tape of it for you. i stood in front of our largest group of employees that would be affected by this. called them into a meeting on my way down to the site. it was one of the most emotional events i've ever been at. with employees who were actually crying in the audience. people who were clapping because we had so much challenged their personal lives in being able to put food on the table and make distinctions between whether i put gas in the car, put my kids in school or put food on the table. it was amazing. we have yet to measure the engagement scores which we will do at the end of this year. but this is the program. so benefits, lowest -- the richest medical plan for the least expensive medical costs and $16 an hour as the minimum

wage. so our wage and benefit improvement will cost us $26.5 million a year, that's the full run rate in 2016 if everybody takes advantage of the program. and what we're finding is that for retail customers, which is where our industry is headed so back to earlier comments about whether we should have a single payer system. we will eventually get there. the united states has it own unique way of finding its way. we'll have a bunch of individuals walking around with with their own money and a stipend from their employer or stipend from the government and they'll be buying health care retail. when they buy health care retail 73% of them will make the decision on how much it costs in the first year. and if we honor our promise to them in making it simple, easy to access and having people on the other end of the phone that

take care of them, 80% of it will be based on that relationship with our employees in the second year to renew. for us from an economic standpoint, it's best to invest in these employees for $26 million a year and to get a retention of the customer and grow the top line which will drive more in managing or pe, sustainable product that is consistently purchased by our customers over time than anything else. when we put this first 26$26 million on the page, we had to go through all of the spreadsheet example. in each cell of the spreadsheet we put a number and then we put a credibility next to it. what is the risk of reducing turnover costs, reducing rework, reducing productivity ramps, reducing the amount of investment we need to make to get people up those productivity ramps. then we said, how about rework moving up in the organization to

people who are disenfranchised because they're doing somebody else's work? customer retention, customer satisfaction. our industry currently today has a net promoter score that's higher than congress but lower than cable companies and airlines. not a great place to be. so what can we do to improve the net promoter scores in the way that people feel about our relationship with our customers. if we can get to this point where credibility trust and holistic matters with and they stay with us as an organization, then we've done a lot to improve and make the $26 million a worthwhile investment. we put those all on the spreadsheet and put the credibility factors next to each of them and said what do we need to believe in the way of risk factors. and risk that allows us as the leadership team to take this risk and make this investment. so our view is that company can invest in their employees. we need some changes in economic policy and tax policy.

because if we invest in our 0 employees versus a machine and expense all our machine investment, our machines go out for five years, get depreciated and we then replenish them through the depreciation account. how do we think about investing in our people, what are the economic policies that we need which will ultimately invest in our communities and in the country and around the world. the way the model works is that health care should be local, and people should will taking care of each other in their communities. think of uber for health care. we get to a retail world, we'll be able to invest in those communities, have a healthier economic community where the health system becomes an economic engine in improving the productivity op individuals, increasing their economic viability and making them happy.

so these are the investments aetna has made. we've called on a number of employers to engage in the same dialogue. i can tell you i've talked to a number of ceos. we have a franchise kit that we now hand to folk to say here is how you increase your wages and increase the benefits for your employees. i would say those ceos are finding the same trouble in finding the data about their lowest compensated employees that we are. i think it will take some time. i think there's going to be a ground swell of people who with going to follow along behind this. i was at a recent session where the ceo of walmart pointed to me in the audience saying, mr. bertolini, you've pushed me to do this. i can't get to 16 but i would like to move up on the wage scale for my employees. i believe there are a number of ceos who will come out in the next six months with wage increases that will matter. i hope we can start from the private sector side a dialogue and improve the middle class as a result.

so with that, adam, i will take questions. [ applause ] >> it makes so much sense when you say it. i mean this is the trap any of us talking about things get into, is you see the little light go on and you say, yeah, the accounting system is biassed against investing in human capital. why didn't i think of that. can't we do that. i guess the real question is that we're coming off a ten-year period in which accounting gains along with corporate ceos have not had the best reputation. so you've chosen to focus on

this because it reflects the kind of mind-set that you think underlies a lot of other corporate's decisions. can you say a bit more about as someone who has worked in finance, as someone who has worked in a fortune 100 company about how you legitimate something like that. is it a legislative thing? is it the public -- what's that thing damon is on, the public accounting oversight board. is it just teaching differently in business schools? >> i think there's four factors. first of all, i think leadership needs to start asking different questions about how we're spending our money and where we're investing our money. and it's a difficult dialogue because we have been so trained to -- here's the spread sheet, her's the truth, here's the quarterly guidance we need to hit. guidance doesn't always need to be the highest number you can achieve. guidance needs to be legitimate improvement for the shareholders that they're willing to invest in.

it really needs to come from the very top where i ask the question, i don't want the truth. i need to know what we need to believe. if we believe it, we'll find it, get it, make it work. that's one. the second is you have to deal with your shareholder base and your board. incredibly i have a wonderful board who embraced this wholeheartedly. it was not a decision of theirs but when i talked to them about what we were going to accomplish, they supported it 100%. the shareholder base, a different one. the shareholders, i've talked to all of them, they love it. they think it's a fist mover advantage advantage. they see the $26 million expense say that's not too bad in an $11 billion budget. how are you going to cover it? i say, don't worry. when we return the company on a day in and day out basis. so shareholders support it. but you have to manage your shareholder base. so there are a number of shareholders we've had in the peace where i've suggested that

they might be better invested in something else than what we have in our organization. one of our larger investors said i want a higher dividend. i said you're not going to get one because we need to invest in the company and the affordable care act. her response is what if i don't like that. i said, well get out of the stock. that was painful for three months while she sold off their 26 million shares, but that in the long run, if you're looking at the long run, it's not about whether the stock price moves up over the next three months. i'm a shareholder. i want the long run to work. i'll be a shareholder for a long time even after i'm done with this job. the board and shareholder, the governance that's out there in the community. the third is what can we do in washington to get the right kind of economic policy and support foals support investments in

human capital. that's a slog. i worked with maya and fixed the debt. we've been to washington a lot of times. quite frankly our frustration was nothing will happen in washington so we might as well get something done at the corporate level. because of the impasse. why not step out? instead of pointing at washington saying you guys are the problem, if you could only do it, we could release the $3.8 trillion in cash and invest in the economy. i said, why don't we sort of help everybody in our organization share in the economic recovery and let's make this move and ask other ceos to do it, which we've done. we've asked a lot of other ceos. i belong to a group of of called higher ambition leadership out of harvard that's really focused on how can corporations do good and do well. wh]áu$ings we can do that will make a difference in our communities and with our workforce. started with five of us. there's now over 40. last year we had all of the deans from the major business

schools in the background going what's going on here? who are these people? actually, harvard wouldn't have me as a student when i applied. my hair was too long and i wore jeans and a tank top whenand wore birkenstocks when i went to business school. i think the last piece is your own leadership team, your own employees, how do you engage them in a different way. you have to have a real dialogue. i have my own blog, i'm on twitter. i engage with my employees all the time. we have our own internal social media platform. and we have real conversations. i'm approachable. i don't hide behind security. i don't have a blacked out car driving me around hiding from everybody. when i took the job, i said to our pr team you can't protect me. all you can do is prepare me because i'm going to go out there. we need to do this. i think those four things really need to work together. but it starts with leadership. it ends really with leadership and being approachable to our employees. in the middle we need some help

from our shareholders, our boards and ultimately we do need help in washington. >> let me focus on -- before i open up the questions, let me follow up on two pieces of that. i'm not going to flatter you by saying how cool your leadership is because it is cool. let me focus on what in the sense the hard one, which is the shareholders. we talked in the previous panel about the quarterly earnings. you talked about that at lunch. talked about it here. i got to participate in the support of the foundation part of it is on the way stuff we're talking today. part of it is doing long term foundation. i was at long term value summit that was convened in new york and i think you were invited to that. ultimate ultimately, what things kept running up against was in the u.s. there seems to be a narrow definition of fiduciary responsibility. if i'm voteing shares, i have to

vote shares maybe not quarterly but certainly on an annual return basis. i can't have a broad deaf nation -i can't have a broad definition of shareholder value. now you may or may not think that's fair, but that's certainly something i hear a lot in the investor community. >> yeah. >> is that a real constraint and if so how should we be dealing with that? >> it's interesting, if you talk to the sale side you get a very different story from the buy side, the people who are your long term holders with when you have a conversation with them saying some union funds by the way and here's our thinking over a longer time, we actually get some of buy side to call the sell side saying you guys are thinking about this wrong. we only give annual guidance. wu we still get beat up when their view of what our quarterly results should have been are off a little bit. and i think it's a continuing process. but i think we do need to have a longer run view.

and i think larry fink at black rock would say the same thing. we should have a longer run view because that's where you're going to make the right investments. why should an asset which by the way is never human capital at day 366 be incredibly more valuable than it was on day 365. why should the capital gains tax be 100% on day one and go down to zero in year eight so that we make longer term investments. and have in a sensitive to do it? and why can't human capital be part of the investment cycle including training. we've under invested in education in this country because it's an expense in the municipality municipalities, an eksxpense in the federal government and corporation corporations. we say if we've got to cut expenses to make ends meet, then hit our quarterly guidance this is an easy one. you know because there are plenty of people out there and we'll always find somebody smarter. we've hit the wall on that. we don't have the talent necessary to move our organizations and country forward in meaningful ways.

and not because they're bad people. we just haven't invested in them in a way that's necessary. >> well my last question then before opening it up is on exactly that point, about training. part of what we were talking about today and part of what you were talking about with your numbers, like the $23 million or 26$26 million the worker costs, is an emphasis on the workers you got, treat them better, treat them differently. they'll respond. but you're also mentioning the fact that the workers you have available or may not be the ones that you want in a sense. you need to get more out of them. you've done this initiative on wages. where do you see if you have an initiative on training or education investment? where do you think that goes in the private sector? >> we have to increase tuition reimbursement. so people can go to school. thank god i grew up when i did. i paid my -- i went to wayne state eight years. the credit hours were a lot cheaper then. today i couldn't afford to do that. i would never get out of the hole i was in. >> right. >> i think we've got to find a

way. we've looked at tuition reimbursement as something we need to invest in in our own employees. give them the time to learn and find more room for them to get educated on things that matter. i'm on the skills for america's future which is out of the white house, which is really how do we match up community colleges to the workforce needs of employers in the local community. they don't match at all. >> yeah. >> and so -- even at harvard -hartford, where we need actuary actuaries and underwriters, java programmers and people who work in all of the new computer languages. i'm still stuck in the cobalt days, still programming it. we may even have a few systems that's still run that way. but i think that that -- you know, we need all of that education to happen. and yet we have kids going to community college getting degrees that aren't all that helpful. i think we've got to encourage the dialogue between the business community and the schools about what we need so we can put people to work so they

can charge a legitimate tuition to get value for what they've educated their students with. but i don't think that match is there today. and for us, it's a very difficult and intractable problem. we have to re-educate most of the people that come to work for us because they don't have the skills necessary in written communication. the nuns drilled into me sentence structure and diagramming sentences. i used to take my kids through that. there should be like a run on the store of those books for people so they can learn how to communicate in writing and communicate verbally. it's a big problem for us. we've shortcut everything. >> you know a ceo is down to earth when she's still coding his own four tran. i'm going to open it up for questions. jessica has a moving microphone up front. we have a microphone in the back. the gentleman at the back first and then damon here.

>> i'm eric moore from "the wall street journal." nice to hear about wayne state in a room like this. i'm from detroit. >> great school. >> one of the first slides you showed was productivity and wage growth. do you see any correlation between the productivity line flattening in recent years, since 2007 or so, against the longer term of slower growth and wages? >> i think the flattening of the productivity curve is directly related to engagement. employee engagement. i think people aren't present at work anymore. and when you spend time talking to employees about what it takes them to get them engaged in their work, you have a larger number of people in the workforce that actually come to work not to work. and you know, it's because we've treated them in a way that i just don't think is fair. and i've used that term before. we haven't treated people fairly. we have to find a way to reengage them and that takes a dialogue and leadership from the

very top. ceos who can get away with undercover boss probably shouldn't be ceos. they should be engaged with their employees. that's the only way you get them to buy into what you want them to do to help you achieve what you're trying to do for your customers and for your country. and you've got to make it a bigger mission than if you do this i'll pay you this. so you know, we have 22,000 of our employees that work from home full time. higher productivity, very low turnover, no carbon footprint because they don't have to drive work to. they're in their communities, with their kids and they have 24 hours a day to chew at 8 hours worth of work. so i think all of those kinds of programs that engage our employees in fundamentally different ways are important. i think what we're seeing with the productivity curve is people not wanting to do a lot of work. we've lost engagement of our workforce. >> david? >> first i want to say what a pleasure it was to hear you

talk. i really, really enjoyed it. >> thank you. >> this is david -- >> and secondly i want to ask you a question kind of coming off of something adam said because he said -- my question is to ask you to reflect on both business culture and political culture. adam said that there's this issue of fiduciary duty and i get to show off as a lawyer in a room of economists. the fiduciary duty in this country at any level is long term. anyone who is telling you they can't do x or y that smart is business is telling you because they don't want to. and -- but the belief is wide spread. and this is a business culture question. but it's also tied to a political culture question, because you spoke of what you view as common sense measures in both accounting and tax that would help facilitate investment in human capital. these are measures that there has been wide agreement on, i

think, in some way. the details have never been hammered out. but accounting for investments as human capital as a depreciable investment both in terms of gaap accounting and tax accounting and changing the capital gain structure so it's not a cliff. that's something that there's wide spread consensus among the folks that you think would disagree and yet we can't get it done. so i would ask you to reflect a moment on both the business culture that seems to be in our way in some sense and then the political culture. >> so i'll go back to the business culture and we'll lead to the political culture. in the business culture we have what i call the high school physics experiment problem where we actually run the experiment to get the results we need in order for the experiment to be a success so we can get an a ena -get an a and move on.

we don't do the science. and in business you've got a spread sheet with a bunch of people running a bunch of numbers, people look at the assumption that supports the conclusion they want to sell you. i spend most of my time as a forensic scientists in in my organization to try to see where i'm being -- that's going to get bleeped. sorry. that's the issue. how do we stop the terrorism of the spreadsheet where people search for the right assumption and number in order to support their conclusion versus using the science in the best interest of the company and most importantly the best interests of its customers. we've gotten lazy. we don't ask hard questions. we have no personal courage in saying is this really something we can do. what will we stand up for over the longer run. and then that just bleeds right over into the political climate. because if the leadership of businesses aren't willing to do that and ask those tough questions and have the personal courage to come up with what should be the right answer for

everybody longer term, right, then the political community is going to say, if you aren't doing it, why should we do it. and then with point at them ifwell, if you aren't going to do it, we aren't going to do it. the only way to break the log jam is to have your own personal courage. i look for people with personal courage. am i willing to put my interests secondary to the interests of the enterprise and its customers and ultimately, the shareholders. we take care of our customers, that means we're going to take care of our employees. that will keep our customers and give us that pe we want because we provide a consistently valuable and sustainable product over time. that's the secret. it's kind of crazy, but that's the whole secret. i think this issue is really around whether or not people have the personal courage. i've had many conversations, you're a master of the universe i get it.

what you say goes but in my world, i don't get re-elected if i do this, right? then we have people that call people names because they say your point of view is different than mine, i'm going to point you out as a bad person. not, argue the point. i'm going to say you're just a bad person. and therefore, nobody should listen to what you're saying because you're an idiot and i don't want anybody to listen to what you have to say because that means we have to have a dialogue about what's right in the longer run, which that means there are all the multiple points of view. we've lost the incivility of our dialogue has been built around who's right who's wrong and points of view that are just irresponsible. >> mark you made several -- >> identify yourself, please. >> fred at the institute. mark, you made several references to the affordable care act. you didn't say much about it. i know you have worked hugely to make it work, make it better.

what's your assessment at this point? how is it working? what more needs to be done? how to make it most effective? >> it started out of the whole program was built around a level of mistrust between the industry and the government because everybody thought there was some sort of game to be had on this and i have to tell you, the prescription drug program which the republicans kicked off and democrats hated was really a very good public private partnership. i had to demonstrate our technology worked in order to be part of the program so we have this mistrust that caused the government to believe they needed to build it all in order for it to work and that got off to a bad start. which i think put a pox on the program that was not fair because we do need to give people access to insurance. the other part is because it's such a third rail issue, nobody's touched it since it was passed.

medicare gets toucheded every year. f like it or not. congress interestingly enough runs medicare. and it gets toucheded every year. yet we can't touch the affordable care act because if we touch it we make one change to it, everything gets opened up and we have a dog fight over the whole thing, so we need to fix it. there are a lot of things that could be done to fix it that could make it better and give more access to people, but right now because it's stuck in limbo we can't do anything with it other than try and make what we have work which i think people are doing a good job at given what we've got to work with. so, there are a list of things, i think whoever runs for president next is going to have to you know, regardless of party, is going to have to make some promising to the american people that it's going to get better and so that list of things is pretty common, quite frankly, between both sides. more power to the states it's a little more flexibility around benefits.

probably are the biggest pieces. >> please. jessica. nancy. >> hi, i'm nancy donaldson with the ilo. i'm just interested you know, the social irresponsible investing sector is now including with sovereign funds, over a trillion dollars in investment. and i would just interested to know whether you if this critical mass builds of your fellow ceos and companies and the harvard group you mentioned, high ambition leaders are in discussion with that community because if they get further into the definition of governance i think it could help push it faster. >> i think what we need to do is to have more trillions not a

lot. unfortunately if you think about it. is not a lot. we do engage with the sovereign loan funds on a regular basis and we're engaged in a lot of other places. when we go to europe to meet with investors, they love it because they can't stand the dialogue here in the states when they come here to our meetings because they get shut down by the investors at the other tanl. they actually get embarrassed, stop talking about the strategy stuff, we need to talk about what's going to happen next quarter for the commercial medical benefit ratio. i was just over in uk and met with a number of investors to have that very conversation. it was refreshing for them to have a dialogue. i think we need to find the venues to do it. i think we need to get our policies. we used to offer shares to all of our employees who wanted everybody to engage in growing with the company. we can't do that anymore because iss won't let us issue enough shares.

so fewer and fewer people get shares over here. and so we've got this, we have policies in the interest of good government quote unquote that actually work against sharing the wealth. my salary hasn't increased for six years, but yet],ófñ my wealth hasn't increased edd and i'm growing with the company as a result. we have a place that combines shares, but they don't get them. we can't give them to them because we can't issue enough shares as a company to make it happen. >> anyone else? let me pose another related question to you, mark. we've tried to do our bit on thinking about which sectors which kinds of companies can follow your lead in this area. and you've spoken about it in general moral terms, but we talked earlier about mcdonald's or walmart. things like that. how much do you see what aetna

has done as your consumer facing company and inherently do midwestically oriented sector. >> i think generally it's so it, i will say for this reason. and it's not $16 an hour and it's not the benefit change. the real opportunity here is having the -- i can is ask a number of ceos and i have, do you know who your lowest compensated employees are and they don't. and so it just, it's about taking the journey to understand who these people are. and how are their lives. they're the people needing your customers every day. how are they living their lives? do you feel good about how they're living their lives. it's in that search and arraying it that you start to say, well

what's fair? and having that dialogue with your own team. i can tell you, our team, they were all ready for it by the time we got to the final move. they said what are we doing with the social contracts with our employees? how are we engaging them in different ways because we didn't do all the work in the see suite that's for darn sure running a $58 billion company. doing the homework and having the courage to do the homework. people in our organizations, the level ceos -- you've got the fight through all those layers and be informed. looking at it doesn't seem right. there is no truth. $16 an hour may be 12 or 20 elsewhere, but what is the right

thing for us to do in the way we're leading our organization and engaging our employees to be part of our success. >> so you i should know this, but i don't. you are mostly, you're the u.s. corporation and you have some international employees, too. i don't know what the slit is. one interesting question in this sort of international institute and comparative is there a difference from how you have approached this dealing with u.s. employees or non u.s. employees? maybe you don't have maybe the base adjustment process has been primarily a u.s. phenomenon, but it would be interesting to know, at least for me to know whether there are some differences about how you've been doing this aspect of your business around the world. >> the embarrassing fact is that we treated our international employees better than we treat

domestic employees because we were growing, investing in those markets. we had to get the very best people so so we were changing wages more than once a year. there was a different number. there was no number we put on it like 2, 3, 4%. we said what we need to do in southern china? in in india. the middle east. an argument with the team over it because we're building out around the world, how do we find the right people. i was a bit embarrassed by the fact i could have that dialogue with them, but internally it was a spread sheet number that put the operating budget together. what should the merritt increase be. so we treated our international employees probably better than our domestic. >> gene sterling. if you might reflect a little bit from government policy, which might have been a better question previous panel and from the business perspective

between the breaks between the larger employers and the smaller employers and then simultaneously, between the full time and part time employee because a lot of the breaks here come when we try to enforce something or maybe we shouldn't do it. just like your reflections on those programs. >> our programs for all of employees, so, a break between full-time and part time. we've not been able to yet tackle the issue of more smaller suppliers that work with us. we've encouraged everything to take a look at it, but everybody has their own set of issues. particularly, the smaller suppliers, so i think the smaller employer market is a much bigger challenge in dealing with some of these because of the ability to pass prices through. how do we think about the plier base and being able to do what

they should for their blowemployees. that's a next level next generation. >> jake kid. i was wondering if you could elaborate a little bit on how to spread message and not from the perspective of what you as a ceo can do but how the public, whether we are you know just interested as individuals, research institutions guided investors or unions, how you can promote the kind of corporate change that you've seen. what kind of, what are the questions that you ask of your peers in other organizations in terms of transparency. you mention thought it was kind of interesting, ask him the question, what is your lowest rated employee and how does that person live. so, are there more of those types of questions that should be basically placed by the

public and is there, was there a role for the media here? >> we obviously have a real for the -- >> this is one of the reasons is what we're holding this is not because of some problems in the community that we needed to do it. i reached out to adam before we went live with this, said, okay, this is really for our employees, but it's going to get out into the public domain. what do we do to protect the effort and how can you help me think through is attacks from the right and the left as a result of making this investment. which we were able to minimize. for all intents and purposes, even the u.s. chamber of commerce supported us in our approach. so, we were able to minimize that by doing some proactive outreach. i think the other part is the ceos hang out together all the time. and so there are a lot of conversations at dinner going, why did you do it how did you do it. we have an information package we can send out to my fellow

ceos to look. i've had some come to me and say, i don't know who they are and i'm embarrassed to say it. i'm embarrassed i didn't think about this first. so, it's raised a level of awareness among ceos about what's happening. t often we get the distilled spread sheet number that says here's the range based on these assumptions assumptions, what do you think? it looks pretty good. but in there is a number that says we're going to give the employees a 1.5% merritt increase, but that's wrong. you never get to it on the detail. getting ceos to understand there's a commander that people need to understand in order for them to do their jobs better and well. it's not, it's not poorly intended. it's well intended. they're trying to do the right thing by the company. but what the commander needs to say is that these people need to be taken care of. we can't continue to do what we

have we've been doing this tome. them. when you send that message, the 1.5% doesn't sneak into the spread sheet and the last time it did, i said to my time, we're dwoipg to move it back up to 3.5 and the rest is going to come out of the executive incentive pool. if we find it throughout the year, i'll put it back in the executive pool. so if the ceo doesn't know to ask, they won't find it and it will roll up into a number and if they don't say by the way, here's what we need to do as a company, they have the courage to send that message, then there are plenty, $11 billion operating budget, there are a lot of other things we can do to solve that problem. and so, we need to, we need to be looking at it. $26 million. i think that's kind of a number we can solve for. and if we do, more engaged, sustainable top line. a growing bottom line.

we all win in that equation. our customers do first and our shareholders do next and we're shareholders. and that's where we ought to win. >> i think that may be the rousing note in which to end it. it's been terrific to have mark with us today. it's been terrific to have this dialogue between the active leadership and the enter lek eventual background, which mark has kindly encouraged and put in the time to let us have. and obviously issues where aetna and mark are going to be continuing to set an example and push and there are going to be issues that we here are continuing to research and push. and maybe there is a higher place we can get to.

join american history tv for a live coverage of ceremonies marking the 150th anniversary of the surrender at appomattox. in april 1965, robert e. lee met grant in the village of appomattox courthouse and surrendered his army of northern virginia effectively ending the civil war. we'll be live from appomattox courthouse national historic park today at 1:30 p.m. eastern and sunday at 1:00 p.m. here on american history tv on cspan 3. each night this week at 9:00 p.m. eastern, conversations with a few new members of congress. >> and as a result, i try to stay disciplined in my message. in a football sense, i try to

stay between the hash marks. i understand that i represent everyone in montana and montana's one congressman. i represent not only a republican side, but the democratic side the independent side, the tea party side, the union side. i represent everyone in montana and i think if we take that value set forward, congress represents america. articulate the values and needs, the desires of your district. but the purpose is to make america better. >> five newest members of congress talk about their careers and personal lives and share insight about how things work on capitol hill. join us for all their conversations each night at 9:00 eastern on cspan. >> president obama travels to panama today to take part in the sempbt summit of the americas. next, a preview of that summit from assistant secretary of

state for western hemisphere a affairs affairs. recently, she touched on a number of issues including diplomatic relations toward cuba, u.s. sanctions on venezuela and energy security. this is just over an hour. >> america initiative here and the foreign policy program and i'm happy to introduce today's event and our speakers on summit of the americas. prospects for american relations. as you know, next week, we will have the seventh summit of the americas in panama city. and much anticipated because of the developments around a host of issues including the first time that the government of cuba will be attend inging and it will be president castro sitting with heads of state and sitting with president obama at this gathering. of course, it's not just about

cuba. there are many, many issues on the agenda. i think there's a key moment of opportunity for not just the united states, but for the entire region to craft what it faces. we have today a program that will help us understand better what's on the agenda and what we will see in panama and we will start with opening iraqs. roberta and i first started working today in the '90s in the clinton administration and it's been fascinating to watch her career develop and u no, holding this very senior position.

then a decision by chair and senior fellow director of the latin america initiative here. he came to us from the naval post graduate school where he was professor for security affairs in monterey and we will also be joined by richard feinberg from the university of california san diego and a nonresident senior fellow here at brookings. richard is really the god father of the summit process was the senior official at the white house for the first miami summit. the americas in 1994. and has attended every summit except for one, will be going to panama along with roberto and many, many other people next week. so, we look forward to their comments and roberto, please. i should also mention if you haven't gotten copies, you'll hear more today, but please grab a copy of the latest report on

better than you think reframing american relations. roberta. >> good morning, everybody. thank you, ted. i appreciate the introduction. mostly appreciate you not reading my bio, which gets longer and people think that's a feature of being very distinguished. i think it's a feature of being very old. every time it gets read. i'm really delighted to be here this morning talking about broad range of hemispheric issues. i'm delighted to be back at brookings and i'm thrilled to be working with ted again. we have worked together on and off on things hemispheric. i'm glad to see some of my colleagues from the region here. we've been working together steadily on things preparing for the summit, but i must say most of all i am happy to be here with the god father. who over the last number of

years, preparing for summits and birthing the first one has consistently made offers that people could not refuse. in prepare inging for summits for presidents and really has brought us to a moment when summitry itself has evolved and some to one i think will be quite remarkable in many ways and will produce things that don't always make the headlines. i think in some ways has always been the news out of a summit. i want to start by pointing out that three very smart people have really written this fantastic paper about the region. couple of years ago i wrote a piece for america's quarterly, which was kind of about the idea

that latin america and the caribbean has changed and it was sort of an idea that it's not your father's western hemisphere hemisphere. ten things you don't know about latin america and the caribbean. like most policymakers, it was very compact. short, kind of punchy. it had no data to back it up. but it was based on the idea that a lot of old think and old sort of myths about this region persist when it has moved beyond many of those old impressions and it hascdw)÷ become a region of camable capable and equal partners. what this piece that they have done wonderfully titled better than you think, reframes inter-american relations and i've already told harold and richard that i will be shamelessly utilizing that phrase, better than you think,

in many of the piece, the substantive parts of the piece. with this piece argues is just that idea. that there is a lot you don't know about what's happened in this hemisphere and how well it has gone for u.s. policy. and the maturity of those relationships is really quite developed. but it does so with all of the data to back it up and that for me is is extraordinary. so, ipg thank you for that contribution to the debate and the support for the notion that president obama bought to trinidad in 2009 to the fifth summit of the americas where he outlined a desire to forge equal partnerships in this hemisphere bit on common values and common interests. that we won't always agree on everything, which is precisely what this paper says but that

we agree on so many things that are in our mutual interest that we can have 21st century relations. i think this summit in panama will showcase a lot of very important issues that deliver on that promise of equal partnerships in particular what he promised in 2009, which was an updated architecture for cooperation and partnership based on shared responsibility. truly shared responsibility. by the united states and by our partners. one of the most important things i think and i'll talk about this a little bit throughout the substantive portions of our priorities at the summit one of the most important things in that new architecture as seen in is summit developed since 2009, we saw it in 2012 in cart hey na in colombia and is the ceo

dialogue that you will see, which is going to look in some ways very much like what colombia did. but the preparations for it do not look the same. because what has developed, which is exactly what we hoped for, is the america's business dialogue and a permanent forum for the private sector, the engaged with leaders in bringing to government, their priorities, their, the way they see the private sector and the economies working and a way for leaders to interact with the private sector in a more permanent manner between summits and at summits. so, that has really developed into something that will be a more constant dialogue along the lines of apeck, which is what we had intended. at this summit, we want to take that next step in another nongovernment alia. which is in the civil society

area and try and develop an institutional mechanism for civil society to have that perm permanent dialogue. being here with all of you today is part of the dialogue with civil society. each country should be having that dialogue. we will have the civil society dialogue taking place in the various floor at the summit, but that also needs to take place on a more or less constant basis between summits and in some ways, by definition civil society is disorganized. it has to figure out a way to have a mechanism that keeps it connected and that keeps it more or less interacting with leaders in between summits. so i think some sort of a mechanism will also be, would be a huge benefit coming out of this summit.

our own priorities with this summit fall into four categories that are part of the basic priorities in the hemisphere that we have and they are democracy and human rights. global competitiveness social development and energy and climate change. they fit very well within both panama's theme selected for the summit. which is prosperity with equity and they fit well within the eight sub themes developeded for the summit. let me go through them briefly and we're going to have a good conversation. on democracy and human rights, there's been a great deal discussed about some backsliding, some concerns some angst, i would say about whether we are stepping on democracy and human rights throughout the hemisphere but

in many ways, this summit must confront that issue, both in positives and some negatives. this is of course the first summit that will have all 35. that in itself is moe men tuss, but has to be followed up by a robust conversation among leaders and with civil society groups who are there. the president has committed to being at having a conversation with the hemispheric forum on a civil society because he thinks that is critical, that leaders be held accountable by their civil societies, including obviously the civil society participants from the united states as we interact with our own stakeholders all the time to try and be held accountable. and to be transparent. there are four side events as you know to the summit. they are on youth, education the ceo summit and this civil society summit.

they are feed back loops. ways to be held accountable by various fora of citizens outside of government and unless we have that, then we're living our own eco chamber frankly of leaders without getting the input we need from our citizens. we also applaud the governments around the hemisphere that have supported that more robust civil society role. i would say that obviously, there's been a lot of attention focused on to particular issues in the democracy and human rights area. they are cuba and venezuela. cuba obviously being at the summit for the first time is going to steal a lot of attention. i think the president's policy change in december gave a huge amount of lift to the issue of engagement on cuba.

it was something he felt was long overdue and takes a huge irritant out of our policy in latin america and the caribbean. something that we will continue to move forward on. in the coming months and years. because full normalization will take years. i would argue there are very real challenges on democracy in venezuela that the entire hemisphere needs to be concerned about. not just -- the neighbors of venezuela and certainly not just the united states. it never has been. and won't be a bilateral issue. it's a hemispheric issue. but most of all, it's a venezuelan issue. for venezuelans to resolve. i think that the issue of sanctions on seven individuals frankly has been blown way out of (ná)

if you don't have institutions of governance that are transparent, responding to the needs of citizenry, that present justice systems, that are equal, accessible to all and provide a level playing field then your own economic growth is going to be stymied as well and expansion of opportunity is going to be retarded, so there is a direct connection between those thipgs they cannot be hiveded off and separated. we will focus in this summit because macro economic numbers especially during the commodity boom, have been okay on the whole. and certainly this hemisphere has gone through the macro economic reforms that many other countries are struggling with around the world. we will focus a lot of our attention on small business. generating huge number of jobs. and not necessarily always

getting the support that they need. support in credit, access to credit support in job training. we know that the small business networkó[ of the americas has now fostered huge numbers of job creation in the hemisphere. there are over 4,000 small business development centers that have been created since we launched these partnerships with small business development center centers in the u.s. and small business development centers in the countries of latin america and the caribbean. in colombia alone, these efforts created nearly 6,000 jobs and increased some business' sales over 50%. even in the united states under 2% of small businesses export. but the minute you can connect small businesses to markets elsewhere, even if those are neighbors next door, you can hugely raise their capabilities while remaining obviously small and medium sized enterprises and

i've talked about the america's business dialogue, which i think is going to be essential as a continuing forum for movement on the economic sector. but i also think that we need to continue to press in the economic sector and among our business leaders for attention to equity issues and inequality issues. access to justice and judicial reform, which are important for them as they are for those who are shut out of the justice system. because of resources or socioeconomic reasons. on social development that's my segway into that one and the issue of inclusion, i think this

remember how many people were left out of that process, whether it's because of geography, whether it's because they're invulnerable population groups, women, that push to get tsl h people has to be doubled. has to be made more real. and that brings us to issue ofkgç]nch&mñd,+çn?g!kvzçólp[zsá!uhu÷rr education where we know there is a huge deficit in the region. the region's higher education institutions remain not up to

we know that connecting universities and colleges to universities and colleges will raise the number of students who go on these exchanges, faster. than funding individual scholarships. we've seen this numbers of students rising over the last couple of years. by 12 to 13% in each direction. already. we have to get that up even higher.

we know that these models work and they work not just as the harvard yale and stanford. in fact, it's much more important that we focus on community colleges in the united states and on a growing number of countries that are looking at this model for their own use. technical colleges in mexico and other things that are training students for 21st century jobs that aren't and i'm a deeply committed social science person and humanities person, but that aren't necessarily going to make them unemployable with an anthropology degree or a degree in one of the sciences social sciences that they may not be able to use. an example would be a woman namedname ed myra from honor durs who obtained a degree from iowa through seed the scholarships

for education and economic development, where we are going to be putting $50 million for 1300 students. she established when she went back to honduras, the coffee company, which helped a group of traditional small coffee farmers export to the united states, tripling their profits. back to return more than $30,000 to farmers through its profit sharing and social welfare program, which is really, really powerful. the last thing i want to talk about is energy and the environment because the other impediment we know keeps areas of this hem steer from realizing their full potential. is high cost of energy in some places. and what we are looking at in this hemisphere on the other side of the issue on climate change is huge energy resources to be exploited. enormous enormous wealth in the energy sector. but the possibility of doing it

responsibly and sustain bly as we face climate change crisis around the globe, especially when we look at increasing weather events in central america, an obvious concern in the caribbean and to island states. more than 31 million citizens in this hemisphere lake affordable energy and we expect electricity demand in this area to double in the next decade, which is why we launched the energy and -- and connecting the americas 2022 to promote renewable energy, efficiency, cleaner fossil fuels, resilient infrastructure and intercommunication. interconnection rather. there are a number of examples i could give you on this, but we are seeing much greater connectivity among countries, cpac in central america has

completed the connection in 2014 that connected 37 million consumers. we know that energy costs, electricity rates, energy costs in central america and the caribbean are way above what many other countries pay, especially wh we pay in the united states and that is holding back. economic progress. unless we can encourage connectivity and the ability to move energy from the places in the hemisphere that have it and are developing it. to places in the hemisphere that will never be self-sustaining on energy, at least not in the short-term, and bring those costs down we will never be able to overcome cycles of economic difficulty and with it, cycles of migration, poverty and violence, such as we see in central america and the caribbean until we tackle those

energy prices and those structural problems. so, i think in all of those areas, we have initiatives that we will be bringing to the summit. ways to tackle pragmatic problems that frankly aren't based on ideology and that are willing to engage on with every country in the hemisphere every country, any country that times to partner with us. because they're in all of our entries and that's the way the partnerships should be based because that's the way most countries should struck theirbecause that's what makes them durable. so let me stop tlchlt i think it's going to be a very god summit of the americas. and i look forward to the conversation. thank you very much.

just want to start out by thanking you for joining us here at brookings. it was wonderful to have an opportunity to talk about the state of inter-american relations especially as we look forward to the summit and events beyond the summit. i think you'll find we have a large number of friends here in the audience. i see people with great experience and including matt carty and -- >> another god father of summits. >> i was going to say the other god father of summits. >> so, thank you. >> all of them. >> so i think you can expect some very informed questions from the audience, but we're going to start off with a little conversation among us before going to the audience. some things that richard and i, we thought would be important to talk about as we look forward and i think one of the things is, i think i agree with you that if we think back to the 2012 summit, the restriction

around a number of issues. president obama received criticism on issues relating to everything from kind of narcotics to cuba to immigration policies. the administration has taken initiatives in all these areas, that really have sort of cleared the deck in many ways of the kinds of things that were sources of friction in the past but now as we look forward to this summit that's coming up, are there still some flash points or problem areas that you see like the initiative for the president next week? >> no i think there always are individual issues. i don't know that i see them as really broadly based. there are always the concerns that we aren't paying enough attention. that they are so many crisis elsewhere that we really should pay more attention to this part of the world. there are i know that there are

concerns over the actions that were taken on venezuela and the sanctions. i think those have been explained pretty well and i think folks understand that they were the result of language that is always used. they are not a prelude to innovation. we have no desire to overthrow a government. but i on the whole i don't see the large sort of systemic issues. if you look for example even at counternarcotics, i believe that the administration's message on taking a public health based approach at home has been much much better understood in the three years since cart hey na than had been going into it. and if you look around the hemisphere at the experiments take ing taking place, whether it's in ur guy or elsewhere and you look in the the united states, clearly, we're all wrestling with the same issue of what works so i

don't see the big systemic issues. we're focusing on getting tpp done. but even those who don't support a particular free trade agreement are looking for ways to deepen engagement on trade. so i don't know that i see, someone in the audience may raised issues with me that i'm not outlining but i do see that we still need to, we still have a lot of work to do. we have a new secretary general at the oas. we're going to hopefully be working on revitalization of that. architecture and organization. but i don't see as many big complaints, i guess. >> well one issue you did raise though was this issue of venezuela and the issue of the targeted sanctions. seven government officials. and the reactions on this issue. can you talk to us about what

consideration was given for the timing of that decision and was there a discussion about what kind of issues that the president might address in panama next week? >> i think one of the things you have to remember is that that legislation in congress has been pending if for two years. and it has been working its way through the house and passed in the house and then working its way through the senate nor a long time. when it made its way to the president's desk, we had been working with -- for since i guess the mission began soon over michelle's nug ration, which was around the tile ha the discussions were held, so from last march. so there was a pretty long period that we should let the south american countries make that effort. of trying to get things moving in venezuela.

there was a dialogue held between the operation and the government. we really did believe strongly that it was important to let that play out. but we found it difficult to continue to argue that there was a process in place when there were no talks going on and when -- itself at least for quite a few months, did not have a michelle going back and forth. so it was difficult to see where there would be a process that was engaging from externally. nor was there a process internally in venezuela. and there was quite a bit that was, that looked like it was not move ng the right direction. additional detentions and so forth. no releases to speak of. there were one or two because people were not well et cetera, but not major releases. concerns me honest over the upcoming elections and whether

the structure for that election was beginning to be adequate to have a free and fair election. i think the hope was that we needed to move ahead to send a message. these were very, very targeteded. not a lot of people at all. and they were people that we felt very strongly we could not allow access to our banking system. obviously, these actions had been taken previously but there was a desire not to have this be as much of an issue in the summit and therefore, to do it before. clearly. the language that is in the standard executive order was considerably more neural jik than i think some realized, but

i think it was also also whipped into a bit of a frenzy by venezuelan leadership and i was a bit i will confess disappointed that there weren't more who defended the fact that clearly, this was not intended to hurt the venezuelan people or the venezuelan government even as a whole. and did not more clearly explain or elucidate as we did for them in advance because we did talk about advance of the sanctions. that there was really very very narrowly targeted. >> thanks. i know i have some more questions, but i think richard, why doept you jump in here. >> thanks very much. first, thanks very much for your kind words. really appreciate it and congratulations to you on your leadership and miss harold said

for putting the u.s. in a much improved position for going into this summit than we were just three years ago where the president was very much isolated and progress has been made on those and i especially congratulate you on orchestrating the timing of the iranian nuclear accord because between that and the moving forward on cuba the president will ride in to panama in a very enhanced position. he will be the man of peace as a man of dialogue and i think it will be hard for anyone at that summit to really take him on with those accolades on his shoulder, so well done, roberta. so, cuba. what can you tell us about the possible interaction between president obama and president castro in cuba. in panama. and can you tell us anything about what secretary kerry might do in terms of interacting with his counterparts from cuba or

other members of the various delegations. will there be a photo op, handshake, smiles, possibly bilateral meetings can you tell us anything about that and on the ceo summit agenda, there is a line item which says speech kind. trade and investment opportunities in cuba. speaker to be announced. who might be giving that address? >> i think on the last question, probably -- since the igp is helping to set up the, or i think running the ceo summit, but i think you know, someone from a large island in the caribbean would be a good person to give that statement. i think on the question of the interactions, you know clearly, clearly, president obama knew when he made the decision to go to the summit and he knew that

cuba had been invited to the summit. post december 11th. december 17th that there would be an interaction at the summit, the leaders are together a lot of the time. and so, there will be an interaction with raul castro. none of the president's meetings are scheduled other than his bilateral with the president as the host so, i don't know exactly what kind of an interaction that will be. froms but they've already also spoken on the phone as he had said publicly on the 17th when he made the announcement and there's been a lot of interaction since then at a lower level. secretary kerry has spoken with his counterpart. so, i expect there will be contact in panama and it's useful, obviously, to be able to have that contact and move things along. so that we can get things done

and open embassies and move ahead with this relationship. >> good, good. because i myself can imagine raul castro addressing over 700 assembled corporate executives from around the western hemisphere and saying to them, please please now return and invest in trade with cuba. and that would be quite a moment. in inter-american relations. we'll see if that happens. with irony, of course. also in cuba there is a lot of speculation that cuba is actually acting as a moderating influence on the countries in order to keep the contentious issues of venezuela from dominating the agenda. rather that cuba wants to keep the spotlight on the u.s. cuban approach. it would appear that the u.s. these days can get along better, perhaps with marxist states in the hemisphere than a certain rejection of populous states in the hemisphere.

can you tell us anything about what role of cuba might be playing behind the scenes in latin america in order to make the summit overall a success? >> one of the things i think is interesting is i don't know exactly what role cuba may be playing. with venezuela. or with other countries like alba leadership, but i will say we did see this fall at the u.n. general assembly, a notable shift in cuba's language. there was still an antiembargo resolution at the u.n. this fall as there has been for years but there was a shift in language and those of us who have watched cuba for a long time are attuned to shifts in language. it was less personal. les of an attack. including on our representative who was you know, peeking that that day. and obviously, on december 17th

you heard a pretty remarkable statement from president castro about president obama and the steps they were both taking on that day. what you see in the rhetoric of many of the alba leaders is very personal. it's very add homonym. it's really of the sort that makes it very difficult to try and move ahead and we often are admonished that it's just words, that we're a big country and that we need to rise above that and it is just words and we do. all the time rise above that sort of thing, but words also matter. and words matter to populations and words matter to citizens and words matter in foreign policy and so in foreign relations so when you say things may be

easier with marxist governments than pop list ones i don't know that's a general rule, but i want to say that the tone that leaders set is important. and right now the tone that certain leaders are setting in those more populace countries is one of demonizing the united states as the source of their problems. in particular in venezuela, when we are not the source of the problem and so that does make it harder for us to move forward pragmatically and nonid logically. our goal in venezuela is not to overthrow this government. our goal in venezuela is to create more political space as i think all the countries in this hemisphere have agreed to accept cuba in the intraamerica

democratic charter, so we have had a conversation with cuba quite honestly that has not been as has not not been ased a homonym or negative. that said, it has acknowledged and been forthright where we've profoundly disagreed on human rights and universal rights. but we've tried really hard to tone down the level of those personal attacks, and that makes a difference in the ability to get other things done and hopefully makes a difference in our ability even to get some things done in that area. >> in support of what you were saying, i noticed raul castro's remarks, which were critical of u.s. sanctions against

venezuela, he was careful not to directly criticize president obama, but rather defer to decisions made by some of his aides, roberta. >> the last question before we go to the audience? >> okay. thank you. >> we didn't even get to page two. >> i know my colleague too well. >> maybe it took me too long to answer. >> not at all. let me ask you about brazil. brazil, i think it's fair to say, the big country of course, in south america has never really liked the summit of the americas. we'll remember some of our efforts to get the bra zalzilians to be cooperative. they tend to use the summit as a an instrument of u.s. influence. today i think it's fair to say brazil appears somewhat aloof from hemispheric affairs.

nevertheless, on which summit issues that you outline does the u.s. look to brazil to play a helpful role? >> i think it's a great question. i think brazil an engagement with brazil is a really important theme in 2015 for us bilaterally but also for the region. i would note, for example, that brazil has not had an ambassador at the oas for a couple years now. and we're very optimistic that they will very shortly because i think that's crucial. i think as we approach this summit, we look for brazil to be a partner with many other countries, chile, peru colombia, costa rica panama and a lot of others, on some of the issues like social inclusion, where i think brazil really has been very, very much

a leader. i think we look to brazil even -- and i know this may sound strange -- on the economic competitiveness issue. no, it's not a tpp country a free trade partner. but as brazil looks towards an economy that needs restarting, right, it is looking at things that may have been taboo in the past. it is debating openly what comes next in brazi ñ and that'síç healthy. so it may not be looking at things the same way we are but we're all looking for greater competitiveness in our economy, and that, i think, makes them a partner in this, even if not on every single issue. i think as we look towards -- what number are we up to? let's say paris. i never remember what number we're up to 21 22. as we look towards paris and

climate issues, we are not necessarily on the same page with brazil, but we know brazil is going to be crucial, so we want to work with brazil. for the secretary, secretary kerry, he looks at this summit, although it may not be on the agenda, he looks at every summit between now and paris in december as preparation for paris. so he will be talking about climate change issues. they certainly are on our agenda with countries like "$1"lbrazil. and democracy and human rights, i think brazil has a strong role to play. we certainly are hopeful. they've been a major partner with us on the open government partnership. that is going to be something that's discussed. both mexico and brazil were cochairs of that. so that's an area where on governmental transparency we should be working together. brazil is a very vibrant democracy with a robust civil society and a robust press. that's an area where we can work together. so there are lots of i think,

themes in the summit where brazil and we can be working together. >> thank you roberta, for the conversation. i'd like to go now to our audience, where i think we'll get a few more great questions. just a couple points.q6l i'll keep a list. when i go to you, please wait for the microphone since this is being broadcast, before asking your question. identify yourself and your institutional affiliation. for those of you who are friends of twitter #viisummit. i should have!cs mentioned that earlier. hopefully you saw it on the screen. i'll start with steve in the front row and work my way back. i'll try to keep some semblance of order here. >> thank you so much for this rich discussion. one of the really exciting things that's happened with the cuba opening is that there are 85 u.s. universities that have sent over 10,000 u.s. students to study in cuba over the pastw3

13 years. this has always been a very sticky kind of proposition. one of the universities that just won a 100,000 strong in the americas innovation award is western michigan. it will be one of the first universitys to universities to formalize relations, moving students back and forth. what's your understanding of how easy or complicated it's going to be as more and more u.s. universities want to work with cuban universities? >> i think just a quick answer on that is from our perspective, we'd like as many as possible to get into this business of doing more and moreñi student exchanges. i think there's a great deal of interest. there's certainly a great deal of interest from students. i just don't know exactly what the bandwidth will be in the cuban government for

regularizing those. there's maybe a interest, maybe a little slower than we'd like to move, but there is interest. i'm encouraged but i don't know if it will be as fast as we would like it to be. >> let me go toé@ claudia, two rows behind. then over here. i'd like to know how the u.s. intends to put the discussion on venezuela during the summit. also, if you could give us more information about who president obama will meet from the civil society. thank you. >> on the first question we don't intend to put venezuela to discuss venezuela is the the summit. the summit is a regional discussion. it's a hemispheric discussion. it's not our intention to have a discussion of any one individual country at the summit. the summit has eight themes.

those themes are applicable as far as i can tell to every country in the hemisphere. so those discussions will be applicable to every country. leaders will speak to the issues so i see no reason to be speaking to an individual country at all. the issues are applicable to everyone. the standards and the commitments should be applicable to everyone. on the issue of meeting with civil society, my understanding and this really is a question for panamanians as hosts is there will be a meet inging between representatives chosen by the civil society forum. i don't know that the leaders know exactly who they're going to be meeting with for that forum yet. >> on my left. those of you in the back, if you want to ask questions, just

raise your hand. >> larry luxner, news editor of "the washington diplomat." given the location of next week's summit, i'd like to ask you about nicaragua where the chinese investors have announced plans for a $50 billion inter's yannic canal linking the atlantic to the pacific. as you know, this project has sparked widespread protests, some of them violent, throughout nicaragua, and costa rica is not happy either. i'm wondering a few weeks ago a delegation from nicaragua game to washington to air its concerns here among think tanks i'm wondering if you have any plans to take this up with the ortega government during the summit. thank you. >> i think the short answer on that is no, we don't necessarily plan to have a direct conversation with representatives of the nick rag wan government on this, but we've certainly being very clear

that our position on the canal has always been that the most important thing is that it be done in a way that is transparent and responsive to the concerns of the citizens.be done in a way that is transparent and responsive to the concerns of the citizens. those who have already been concerned about environmental issues and land issues and those that may come up along the way. the problems we have seen thus far have been a lack of transparency, both in, you know, sort of bidding and procedural issues and whether all of the concerns are being taken into account that citizens have along the way. >> somebody in the middle. yes, on my right. yes, you just stood up. the microphone is behind you. please. just identify yourself. >> mary alice voice of america. on cuba and human rights, to what extent do you expect this

particular issue to be addressed, either through regular meetings or on the sidelines, and secondly, what will the message be from the u.s. to other governments as -- about current efforts with cuba to lay the ground work for historic human rights dialogue, whether it's to your approach or expectations or priorities. >> thank you. i think that it's pretty clear the president from the beginning has said that our position on human rights in cuba has not changed, that we believe that human rights, the human rights situation in cuba is not adequate, is not what we would like it to be. there needs to be respect for international norms of human rights. that we would like to see that improve. that we will not change our

standards or our willingness to speak out on human rights violations simply because we are now engaging with the cuban government directly. we speak out on human rights violations elsewhere in the world, in places where we have a relationship, a diplomatic relationship with governments. we have relations, and we'll do that with cuba once we have diplomatic relations as well. committed to doing is seeing representatives of civil society from a number of countries in the hemisphere including cuba making sure that the message is clear that in places where either political and civil space has closed in recent years or remains closed such as in cuba, we give support to those who

continue to peacefully fight for that space to be open. he did it in new york with civil society groups from around the world at the u.n. last fall, and he'll do it again in panama. and he won't shy away from that message, whether it's directly with leaders or with the civil society individuals directly. >> yes i see greg in the back. yes, yes. >> jeff. >> jeff. >> thank you for the opportunity to be here. roberta, i want to change the topic, although we've followed cuba a lot obviously. i want to ask about central america. i understand the president is likely to attend the meeting with the central american presidents. united states, the white house has a billion-dollar aid request for the northern triangle countries. there have been a lot of

concerns about accountability mechanisms mechanisms, about corruption on that aid if it goes through. are you expecting that to be a topic in general, and are the central american presidents likely to propose something? specifically, one of the things that's come up is a measure of commitment, the renewable of the mandate in guatemala. i wonder if you have any sense about that. >> thanks, jeff. first of all, just to be clear, the billion-dollar aid request is not just for the northern triangle. although, the majority of the money will focus on the northern triangle because that's where the greatest need is. there's no doubt about that. we also want to be very clear that it's for all of the central american countries because unless we work with everybody together, we will simply end up having to do more in you know, name one of the other countries once you do a good job in the northern triangle. we know that. so it does actually -- there are funds in that amount for costa rica, for panama, for belize, et

cetera. but it does focus on guatemala, el salvador, and honduras. there's no doubt beginning from before the plan, the alliance for prosperity among the central american northern triangle countries was drafted and now through our own request to congress and the implementation plan for their strategy and ours, that measures of effectiveness and commitments on transparency good governance, anti-corruption, have got to be a part of this. on the foreign assistance side they have to be because we have, i would say, a fiduciary responsibility to the taxpayers of the united states to make sure the money is being used wisely and going to what it's supposed to. and the governments themselves have said to us -- and i think this is really a mark of why we have more confidence in this moment working with these leaders -- have said to us we want to use these funds to make

fundamental changes in the way budgets are implemented in our countries, including forcing through accountability mechanisms in a sense using your foreign assistance to make changes that are sometimes unpalatable at home because they need to be done to get the money. and we've seen some of those changes be made already. honduras has already signed an agreement with transparency international to do some sort of work with them on accountability and transparency. there are procurement mechanisms that will be put online. there are things like that, that can be done that i think give much greater confidence to allow people to see how that money is being used. i think it's going to be important for others to emulate if not the same measures similar kinds of ones. i think that the renewal of the mandate is critical. i'm not sure i would put it the

same way you did in terms of as a metric, but i do think that there's very, very strong support for that in congress, and there's certainly very strong support in the administration going forward. >> ambassador. then richard. then we'll come over here. >> thank you very much for your talk. i was wondering if you have in mind how we can get more u.s. congressional engagement in the summits, talking about budget, you know, issues and an agenda that will go beyond certain bilateral issues. you've mentioned -- you've outlined four key areas of interest, of mutual interest, as you put it. but how you see more dialogue. i know there's a representation of congress going and talking to several presidents. but how do you see the summit being a venue to achieve this? >> it's a really good question

because you and i have talked, and i've talked with lots of others in this room, about how we get members of congress more interested in the region and more educated about the region. because even on some of the subcommittees that deal with latin america and the caribbean, there's not that much experience. these are relatively new members. they haven't spent a lot of time in the region. this is true particularly in the house. so i think there's a huge amount -- an opportunity, really, for getting ingting people engaged. i think it's a great thing, for example, that chairman duncan of the subcommittee on the house side is going to be heading a congressional delegation at the summit that i think at last count has at least 10 maybe 12 members. i think that's great. he was at the summit in carte hay that. he's pretty committed to this. the most important thing in some ways i would hope, is that many of the if not leaders foreign minister others will be able to do meetings with this

delegation because it may only be 10 or 12 of them, but they'll come back enthusiastic i believe, from meetings and spread the word. but the other thing is i just think it's really important that we encourage them to visit. i've never seen a member of congress no matter how negatively they may feel about foreign assistance or about, you know, a country's policies going in who doesn'tó[ come back from a visit kind of energized to work in partnership on that country's issues and the bilateral relationship and usually energized to do more and help. they do. they're just convinced of it. and they're usually pretty big supporters of our embassy in the foreign service after they come back too when they see how hard we work. so my goal is just to get as many of them to visit as

possible. i've encouraged every embassy in this town to get up to the hill as often as possible. it's frustrating because they have some on their plate and there's not as much focus on foreign affairs. i think the deal on iran will absorb a huge amount of time but it's also now gotten to a next phase, which is a good thing in a sense. there may be sort of less angst and more work on it that will take up some of them but not all of them. i would also say engagement on the hill has to be done really quickly because we're going to approach a presidential election season and then foreign policy stuff will really get pushed aside. and there won't be -- there will be even fewer travel. so -- >> i think we have time for just two more very brief questions, if you can keep it short. richard and then somebody else who has been patient over here on the left. >> thank you. and thanks for a very interesting discussion roberta.

in the last summit of the americas in cartagena, alba showsshow showed influence, particularly over the cuba issue. now that the cuba issue is somewhat advanced. chavez is dead. petro carribe is also moved back. can you talk about how you see alba's influence not only at this summit perhaps more generally as well. thank you. >> that's a good question. i think one6iju$e things that's interesting is when you talk about issues where you're touching on an issue where there remains strong kind of emotional support for something that alba may lead on, the sanctions being a perfect example, unilateral financial sanctions by the united states, it would not really have mattered how many

are on what subject are not things that the region supports. they really don't. if they're not under the united nations or an international body and, you know, then it's never going to really get support. it may not have been, you know -- there may have been other ways to handle what we did, but it wasn't going to get support even of our friends. it would not have been as vocal. so alba was able to lead on that issue because they were kind of pushing on the proverbial open door, right. even our friends said to us, we don't want to sort of pound you publicly, but you know we hate financial sanctions, right? okay. but i don't see much leadership on anything else right. i really don't. certainly not in the economic area. ifñi you look behind the rhetoric,

bolivia and ecuador are not the same model as venezuela. ecuador has gone back to the imf and back to the world bank and done a gold swap with goldman. it's a very different economic model despite the rhetoric. much, much better managed in their fiscal crisis. argentina, which is not alba, is in very bad shape. it's an example of why that economic model doesn't work. so there's no leadership there on the economic side. onq the political side i don't really think there's leadership there either. defense of democracy by other governments, but i don't see that anybody is defending the

model. so i see that alliance as one that on certain issues when it touches on something that is historically -- that historically is oner solidarity, they can lead, but that's kind of a cheap and easy win. >> i think we have one over here with the pink scarf. >> yes hi. medilla benjamin, writing for "huffington post." since you said words matter, will you say venezuela is not a threat to u.s. national security? also, is thsy u.s. fundingq cubanth dissonant groups to two to the summit and do you know who is deciding who gets accredited as a civil society group? >> you are not going to get me to say words that contradict an

executive order of the president of the united states. i've said that we have no interest in invading and no interest in overthrowing the government, but the words that are in an executive order are the words that outline sanctions. so what they refer to is threats to a banking system or not wanting certain people to enter the country for visa purposes or banking. on the issue of the dissidence, i would have to see about funding. i know that what we had was the possibility of helping civil society organizations like writ large if they needed funding to get to the summit. that was an open possibility, and i'm not sure anybody took

advantage of that. and it was a very small amount of money, you know, through like the democracy human rights and labor bureau at state, which was possibly going to make some money available, and i'm not sure if anybody did take advantage of that. on the last question, on accredit dags that's the host government in this case that makes the decision. they, in fact, i believe were working with pan main yan nongovernmental organizations to make those decisions because in this case it was not going to be the oas that ran the civil society forum. as you know, cuba is suspended from the organization of american states and it would not be fair to have oas rules apply because otherwise cuban groups would not be able to be present. so it didn't use oas rules and the oas didn't therefore do the accredit dags. it was panama with these ngos.

>> well, roberta, thank you very, very much for a wonderful talk and a wonderful conversation with us. please join me in thanking roberta jacobson. [ applause ] join american history tv for live coverage of ceremonies marking the 150th anniversary of the surrender at appomatox in april 1865, confederate general robert e. lee met ulysses s. grant and surrendered his army of northern virginia effectively ending the civil war. we'll be live from appomattox courthouse national historical park in virginia today at 1:30 p.m. eastern and sunday at 1:00 p.m. here on american history tv on c-span3.

this sunday on q&a senior editor for "the weekly standard" andrew ferguson on his writing career, the gop presidential candidates for 2016 and what voters are looking for in a candidate. >> they want somebody who looks like he's stood up for them. i'm amazed now to the degree to which primary voters on both sides are motivated by resentment and the sense of being put upon. those people really don't understand us. here's a guy who does understand us and he's going to stick it to them. hillary clinton will give her own version of that kind of thing. and i don't think that was actually true 30 years ago. i mean resentment has always been part of politics, obviously. but the degree to which it's almost exclusively the

motivating factor in truly committed republicans and democrats. >> sunday night at 8:00 eastern and pacific on c-span's q&a. the blue ribbon study panel on biodefense recently held a meeting on effective preparedness, response and recovery from biological and chemical threats. panelists included former members of the intelligence community, first responders medical doctors, and health policy officials. the blue ribbon panel was established to recommend changes to u.s. policy and laws to strengthen the nation's defense against biological and chemical incidents. the report will be issued this spring. so we invite the first panel to come to the front. i'm going to make the introductions brief. and please join us. on prevent activities and emergency response. chief keith bryant, fire chief of the oklahoma city fire department.

president and chairman of the international association of fire chiefs. dr. matthew minson, senior adviser health affairs, an aggie, texas a&m university. and and dr. carter mecher. former director more medical preparedness policy, homeland security council, and national security staff under both president bush and president obama. gentlemen, the introductions could be a lot longer. we thank you for your service and contribution and chief, let's start with you. >> thank you, governor ridge. >> yes, sir. >> it's an honor for me to be here this morning. and i appreciate the short introduction. that is just fine with me. but as president and chairman of the board of the international association of fire chiefs i represent over 11,000 leaders of the nation's fire rescue and

emergency medical service and it's on their behalf i'm honored to be here and speak to you about the response issues relating to the threat of terrorism relating to the chemical and biological agents -- >> can everyone hear in the back? check the microphone. i notice some people in the back having a difficult time hearing. all right? very good. >> as you stated in your opening remarks and as our previous speaker just mentioned also, the threat of terrorism using biological or chemical agents in the u.s. is very real. we've seen very events in recent years and certainly the availability of the industrial chemicals and toxic chemicals out there in society today represent also a very real threat. and obviously there are different levels of the

vulnerability and in various communities across the country. according to the u.s. bureau of the transportation statistics, u.s. census bureaus 2007 commodity flow survey, 2.2 billion tons corresponding to 323 billion tons of the miles hazardous materials are shipped annually. obviously hazardous chemicals are a vital component to the american economy and quality of life. we must realize that the extremists can take advantage of transportation systems to obtain toxic chemicals for nefarious purposes. we see these things in media reports and on social media that there are pro-jihadist groups, isil, isis, that are commonly tweeting using chemicals for attacks in the united states. and the global islamic media

front published a document known as the "explosives course" teaches interested parties to use commercially available chemicals to manufacture explosives explosives. so again the threat is very real. it's something we absolutely have to be prepared for. in terms of the response for the terrorist attack and the as far as the fire and emergency medical services are concerned, initially that would be treated as any accidental hazardous material release. in that once a release of an agent is confirmed, the fire, ems department in an area would isolate the area, stabilize the area to minimize exposure to the agent, establish safe zones to make sure we limit the spread of that agent to unaffected areas. many cities like my city and oklahoma city would deploy their hazardous material response team. in other areas that might be more of a regional response team that would be in place. those teams would be deployed to use chemical detection

technology to ascertain the type of agent released along with the personnel trained in the signs and symptoms of chemical and biological agents and their effect on people. the hazmat teams and other specialized contractors would be in charge of decontaminating the scene. we obviously would be very reliant on local law enforcement to play a huge role in scene security and begin the investigating activities associated with that event once the incident is identified a terrorist attack. during the response, depending on the nature and the complexity of it, the local joint terrorism task force and other state and federal authorities including national guard units would be alerted and brought in to assist. if the attack involves a

weaponized or biological agent, military support teams may be brought in to respond. also to prevent further panic, emergency responders would have to be cognizant and vigilant about the threat of a secondary device. an importance difference between an accidental hazardous materials incident and the chemical terrorist attack is the necessity of the working with the federal state and law enforcement agencies to preserve evidence and maintain scene security for the criminal investigation. a little bit more complex situation might involved a infectious disease such as smallpox. in that event public health community would obviously play a large role in working with us to manage that incident. it would be important to track down who was exposed to the disease and who came in contact with these patients and that -- this type of event, again, this is where you see symptoms may

not be present or may not arise immediately but in the ensuing days. although each of these incidents, dependent on the agent or chemical involved, might have their own intricacies, there are some commonalities within response to chemical or biological attack. accurate information is one of the most important aspects of that and as stated earlier, one of the goals of a terrorist attack is to cause public panic. it is important that accurate information be relaid to both the public and responding agencies to again eliminate as much panic and eliminate as much confusion as possible. obviously we are in the age of the social media. and initially there will be a rush of the inaccurate information and it will be incumbent on authorities to track that and process that properly. for the reason of trying to get

as much accurate information out there as possible so that we can keep panic down to a minimum. during the recent ebola situation here in the country, you know, firefighters depended on their leadership to provide accurate information about ebola symptoms, what precautions to take when treating possible ebola victims and what steps they should take to prevent them from exposing their families a at home. another common part of a response to chemical or biological attack would be a coordinated incident command structure be put in place. fire, emergency medical services, law enforcement, emergency management will have to coronet these efforts with other fields, including public health as i mentioned and ym possibly military or national guard units. the national incident management

system, or nims, is designed across all disciplines to work and operate together. again during the recent ebola scarce there were questions about which organizations would serve as incident commander and in some cases decisions were made outside of that unified command system and that just tends to cause a little more confusion than necessary. >> nims as been designed across the board to be deployed at emergency centers regionally and nationally. i hate to interrupt, but the notion that off the turf fight continues to perplex me. what was the heartburn?t( >> i think again when you bring in maybe the public health community that ordinarily might not be involved in an emergency, especially in the immediate stages of an emergency type of incident. and again when you are dealing

with something such as ebola, if they haven't been used to it. and you haven't been exercising the nims program in a training environment, every component of that, or everybody that might be brought into to manage that incident may not be used to operating in that type of structure. çó >> appreciate that. sorry. i won't interrupt you anymore. >> that's all right. and another important component of the response is training. it is essential local first responders train for potential acts of terrorism involving chemical or biological agents on a regular basis. these events are low frequency but very high risk, which means there will be few actual veterans of these types of responses. again, from the ebola situation we learn that firefighters will have a better confidence in the response of their leadership if they have adequate information, high quality training and the appropriate personal and protective equipment. and as an example of maybe what

i'm talking about there were a number of youtube videos recently about how to remove your personal protective equipment after exposure to ebola patients, which are to be frank, dangerously incorrect and misleading.é@ and obviously availability and having the necessary equipment as i led into that is essential that first responders have adequate amounts of necessary equipment to respond to these types of attacks. the international association of fire chiefs recommends the local fire departments will able to stabilize situation for at least 72 hours before federal assistance arrives. one concern from recent events is we found there were 6 to 8 week back order of the personal ko protective equipment necessary for ebola responses. in terms of preparedness for a lp