they have in july of 2009, when he says to him, look, if you want israel to take certain risks they need to know you will be standing next to them. he comes back and says, look, for eight years the bush administration allowed no daylight at all, and we get nothing for it, and look at where we are. so he drew that lesson. that lesson in a lot of ways was aa misplaced one because ariel sharon withdrew unilaterally from gaza, and he presented a proposal that actually went farther than the parameters and did not draw a response, but that was, i think, think, again, the kind of mindset and instinct was in some ways because i am so good and really mean it, that makes

it easier to be able to establish some distance. clinton's attitude was just different. their view of the world was different, their view of israel and the place in the world was different, and it did not mean that president obama did not feel that it was not in israel's interest to be isolated. in fact, they would say that , but he also saw a benefit and being prepared to establish some distance when he felt there were real disagreements. >> you work so closely with both. >> i think him as i said earlier, i do do think that the context is entirely different. remember, then prime minister netanyahu was succeeded in 1990. preceded. preceded. >> prime minister after the assassination. >> right. so the context was entirely different. the us position in the middle east was entirely different. and the politics in israel was entirely different which i think is a fair point.

succeeding and moving toward camp david prepared to make unprecedented offers to the presidency for palestinians. after the decade of the two thousands the politics were very different. the politics of the coalition that the prime minister put together was very different than the politics in the 1990s and much more difficult, frankly, to make the kind of progress that president obama sought to make. let me ask you both. i think the government from 1996 until 1999 was a narrow -based right-wing government. the government that is established when he is elected in 2,009 has barack and it, so there was a center, they said.

what is different is that arafat is prepared between 97 and 99 to do limited deals, not the whole deal. but we are looking toward in 2009 clearly is the whole deal, not a limited deal. that is a difference. it is fair, and in every chapter i show the context which does affect choices, so it is a combination of the context that affects choices, but the instinctive presidents and the.of departure is important. >> let me ask you about the concept of no daylight no surprises. this idea is so otherworldly the idea that truman, eisenhower, very far away from each other, but in the

last decade or two, this concept has entered the lexicon of the relationship. is this a legitimate and reasonable standard? is it something that could ever be fully implemented? how would you implement and execute that sort of approach? >> well, i think that it is a principle, and it is implemented through a deep and consistent engagement, not to say he won't have differences, but i think it is a fair assumption to have in the relationship. yes. >> i do, too. the major thrust of the book , and i point out an exemplar of this, you do

best in the relationship not only from the standpoint of mutual interest, but on those issues were we will have differences. there will be ups and downs, but what binds us is much stronger than what divides us. and the key is in a sense having those people in key positions who are perceived by the israelis as well as israel to do something, the something, the perception is, is asked her perspective of understanding the israeli predicament fun doing it because there is a genuine belief that what we are asking is genuinely believe is the right thing to do and not because somehow it will gain a something with the arabs. when you ask israel which is something i.out over time, when your asking them to do something, it is difficult. they need to know where you are coming from. when you are perceived as

genuinely having their best interest at heart and not being driven by concerns about where the other side is, you are more likely to draw response. we are going back to the 1st administration and would constantly talk about what we would do: we would do it as a way of trying to prepare for decisions, even in contemplated circumstances. one of the things i try to point out, having those relationships makes a big difference not only in terms of the overall relationship of managing the areas where the potential for differences are real and i describe it is a very good example on an issue like he ran where we had the same objectives but often times my look at them through a different lens. they managed them in a way that kept us closer

together, and so i draw a distinction here. no surprises. no daylight, if you manage atit the right way you can have differences without daylight. >> the key to this, it does not happen as much as you would think. to have a completea complete and thorough understanding of the other side's perspective and depth, understanding of the other side's perspective. take positions for a reason. and particularly with so moving parts it's important to understand the motivation in the history and for the other side to understand it as well. with that background, i need to ask you about the iran agreement and the new world in which the us israel relationship is now entering. up until july 14 and the

approval of the iran nuclear agreement we were essentially partners with the israelis. we may have had our tactical disagreements, but we were partners. we are now in a detailed agreement to which the israelis not only are not partners but are opposed. and they are not bound. when you think about the future of this relationship and dealing with this complex issue and the implications, what sort of knew understandings, new procedures, new approach to the alliance do you think needs to be put in place to manage this totally new and uncertain moment in the us israel partnership.

tom, let me start with you. >> first is that we end israel have a deep joined interest in seeing implementation of this agreement. the agreement will, in fact, prevent iran from acquiring nuclear weapons. and most directly over the next decade and a half. so implementation is absolutely critical. it has to be the case that having a decade and a half of a roll back and a freeze has to be in the interest of israel and the us going forward. implementation is critical. second, they're should be understandings as to the consequences of violations, and those kind of conversations are important

among the parties enforcing the agreement between the us and israel. third, the agreement is properly seen as transactional and focused on the nonproliferation security problem and not some sort of transformational kind of event and ia relationship between the united states and iran, which means that the us needs to pursue in detail and aggressively confronting uranian behavior and other aspects of its behavior in the middle east. it means that the united states needs to put in place in detail a set of deterrent steps to ensure that iran complies with the agreement, and if it doesn't, and sees what the cost will be.

deterrent steps obviously include our capabilities and are declaratory policies, which are important in the region but also include broader steps like a much deeper and set of relationships and assurance with the gulf cooperation council countries. we had a start at the camp david meetings, we need to work much harder including, including, in my view, thinking harder for things like extended deterrence. they would agree on all of those points. it has obviously been disagreement but i don't thinki don't think that negates the five or six points i laid out here with respect to a common interest going forward. >> are very much agree with what thompson and would amplified in the following ways. the deal buys you 15 years. the focus should be what can

the united states and israel due to take advantage? you don't sit back and say we have 15 years. now do something about it. what i would likei would like to see emerge from the presidents meeting with the prime minister is a decision to create a joint consultant of committee where on the one hand we would focus very much on the kind of things that could be done to enhance deterrence, bolster deterrence both at the level of a ran understanding that after 15 years there is a firewall between where they are and moving toward a weapon and what is done in the region, and so i would like to see that focus on the issue of implementation. tom will recall in the year 2009 we had extensive discussions with the israelis on how to plug the holes in the sanctions regime. many suggestions we got we been acted on. well, the same thing here.

no one willno one will have a higher state of the israelis and the implementation of this deal making sure that they are caught and we should have discussions about what those might be, what you do about it. the other thing that is important under the rubric, israel is now facing what is a very different kind threat in syria. the russians without question reduce israel's freedom of action. yes, they have created some channels but we have already seen in one case where there were some firings out of syria and israel complained, put in came back quickly and said, there is no interest in pretty much pooh-poohed the kind of response. i would like to see a discussion between us and the israelis on if, in fact, there is any effort to

transfer what is the crosses that line. what is our position? what is our position about the fact that there is now a revolutionary guard whose position is opposite. what is our position? that is something that we should be talking about. the fact is, we all along have the same objective as it related to her and not having nuclear weapons. all along we have had the same objective that therein is destabilizing activities in the region need to be countered so that the regional balance is not shifting is our mutual interest. it alsoit also happens to be the interest of the gulf cooperation council. if anything, there are more reasons to be working more closely together, not fewer, which is another reason in the end when i conclude i offer an explanation about

if anything the relationship is down to five bound to be closer because if you look at the region the state system is breaking down. the nature of conflict is over the very issue of who defines and shapes and controls identity. nothing is more basic in terms of conflict than that. the one state that stands out having institutions, the capacity to deal with its problems is israel. this is hardly the time we will unravel our relationship with israel. >> i need to ask one more question. which concerns some of the headlines that emerge from the book and from all beds that dennis has written about the impact of your own departure from the white house where it has been written that with your departure there was an increase in the white house of suspicion about israel,

the idea that we give but don't get from the israelis and the demise of true strategic dialogue with counterparts in the israeli security establishment. i know that this was a great complement the dennis paid to you, but i would appreciate your observations on the impact of your own departure. >> on the principle impact is i get a lot more sleep. [laughter] my service at the white house included 850 morning briefings with the president. >> but he was counting. [laughter] >> right. but with respect to israel, the principles that undergird the us israeli relationship come from the president and the president's absolute bottom line axiomatic commitment to

israeli security, if not in any question, and i don't think the united states has done that. my own approach we talked about earlier. my own approach was to have intensification, engagement not just at the political level but at the professional level, if you will, professional intelligence and defense counterparts in israel. my approach was not to let things faster but to engage, if they're seem to be misunderstandings at the political level to engage those and address them as quickly as possible. a significant disagreement over the iran accord,, but i think the way dennis and i have described it here we now need to look at what we have in common, the get -- the goals that we share, and to do these very specific things between israel and

the united states to ensure implementation, deterrence, accountability command to take into account a number of the circumstances, absolutely correct, chose to have more shared interest. a situation in syria is complicating and dangerous. and it is dangerous for practical perspective. ongoing every day in a small space. life with the possibility of a mistake, miscalculation, accident. this also impacts israel with respect to the freedom of its operations and the threats that it has from syria as well. we share a tremendous amount.

i think that the core fundamentals remain in place, and those emanate from the president. i also had a lot of experience with israel for i came into this administration. and i brought that as an asset, i think, and tried to build that while i was national security advisor. >> anything further? >> look, i was not trying to single anyone out, although obviously there was an interpretation that i was. i was highlighting the contrast between tom and his successors approach to dealing with the israelis, including the dialogue. the, i wanted to highlight the mindset that exists on the part of some is a mindset that is a very traditional one, not unique, not unique to this administration, has been in every administration from german until today.

and one of the things i try to highlight in the book is, that perspective that sees that if you do not partner with israel, somehow you are better off, one that i try to show analytically and repeatedly actually does not serve your interest with the arabs, does not benefit you there, makes the israelis more suspicious, and the very behaviors that frequently we don't want to see a repetitive throughout history his enemies. make unilateral israeli actions more likely if they have many more doubts about you and the nature of your readiness to work with them and what is driving you in the region. and so what tom embodied in my mind, exemplar of how the most senior officials ought to be working with there israeli counterparts.

when you look at american politics, changes in american attitudes, the changes in the middle east. >> if you look at the fundamentals, yes. a deep, shared interest. ensuring strategic goals. there are political circumstances with stronger relationship in different directions and on occasions their personalities that come into play as well. i do think that it was of late a mistake to in any way drive the debate over iran

to a partisan place. that was a mistake because one thing that has been consistent over the decades the dennis describes is a bipartisan commitment to the us israeli relationship, command we saw some damage to that, frankly, through the way that the debate unfolded on the iran agreement. i agreement. i think it was unfortunate and should be corrected going forward and we have an opportunity to correct some of that. >> there are a number of suggestions that i make about where we go from here, and one of those is to reinforce what has in fact been the key underpinning of this relationship, aside from shared value and interest in threat, israel has been an american issue, not a republican or democratic issue. historically we have seen the pendulum swing.

george hw bush got 11 percent of the democratic vote end of the time democrats can 11 percent of the jewish vote in that election, easy for me to say , and there was never a ploy on the part of democrats to try to exploit that. when you do that, it is clear that you have a political interest related to a party ina party in mind, but you do not have the us israeli interest in mind, and that is, in ais, in a sense, if you want relations to stay on a solid footing, it must be on a nonpartisan basis. >> it is interesting. president obama personally has become a fiercely analytical person, as you know. and the arguments that he makes on these issues in the discussions on the peace process and other things that he had were kind of

from two points. one is a commitment to the us israeli relationship, but additionally coming from a deep consideration of the analytics and the facts. >> okay. very good. we will end our conversation and open it up to your questions. wewe start over here with my colleague david and moved to peter. stand up and ask, have added. >> fascinating conversation. just to pick up on the last points about how much you separate the overlay of the relationship and principles from the kind of, strategic objective and kind of a recent iran example going forward, quoted in israeli

media, i think the "wall street journal", not from him but other saying that israel was not informed about the talks and really was a turning point. do you think that that was a mistake? going forward, is that same distrust, and even though they share, strategic objectives, no one wants a nuclear iran, despite what has been said, the more i share with the israelis who knows if it will be used to unravel the iran deal. we could all make the opposite argument. the more they will be embedded in it and committed to it, but you could see that argument going forward that says in the last year of obama i want to keep israel, iran implementation, not talking about has below and the regional stuff, but

on iran nuclear implementation, i want them at a certain distance because i am not sure where the prime minister is at. regardless. i want to ask you to look back and forward on these two examples and give some 2nd thoughts on what happened in the past on that .? >> with respect to moving forward here, it is in the interest of the united states, in my judgment, to have the kind of consulting group that dennis describes to have an accurate, fact-based, solid, analytical assessment asked implementation. it is a -- it should be the platform upon which we continue to talk about. that is my strong view command i think that it should be done at the professional services level as well as the political level.

in both countries the professional intelligence and military services are quite professional. they give their leaders their best analytical advice , and i think that the way to have a common view with respect to whether or not iran is complying are not complying with there not complying how bad they are noncompliant and have these join consulted to professional level exchanges. at the end of the day the political leaders have to look to their analytical teams to give them the information on which they might base very serious decisions with respect to how they might -- with respect to actions they might or might not take. the line that was drawn was that we needed, the united states needed to ensure that there was a conversation

that would be held, and once there was we would certainly brief in the engagement the israeli government on the substance. with respect to the 1st point on wasn't real, we had to -- and there is a long history to this, as you all no with respect to negotiation or talks between the us and iran, and it was absolutely incumbent upon us to ensure that the people we were talking to her authorized, that this was a real conversation, authorized not just by the state government but the authority of the supreme leader's office, and prior to that, prior to our testing that was fidget through a series of interactions, prior to that we kept -- we this says a private channel, but the

line after that when we get into substantive negotiations the united states engaged in -- my understanding is pretty deep and consistent and intensive briefings and information sessions with the israeli government including getting reaction from the government with respect to positions we might take in the negotiations. in the 1st instance it was important for us to test and see whether or not this was real, authorized are going to go anywhere, do they have the kind of authorization not just from the governmental entities, but also from the supreme leader. having an extended set of negotiation and conversation about substance with a bunch of folks who were -- might have been authorized by someone in the foreign ministry with the supreme

leader stepping back and not taking responsibility and having complete deniability, that would not have been a productive path. that is a little bit of insight into their mindset. >> no 2nd thoughts on that. peter in the middle. >> the last year of a two-term administrative, the time of energy, alsoalso a time of opportunity, as you both know, for getting things done and getting difficult issues off the table in advance of the successor coming in. we have seen about the consultative idea. are they're twoare they're two or three other ideas or issues or problems that can be addressed in the waning days of the obama administration given that facts on the ground, the context of the relationship, anything that comes to mind about things we have not talked about that might be good to get off the table?

>> the president in his letter made a commitment to finalizing in mlu. the obama administration inherited it from the bush administration and it would be nice for the next administration to inherit the same ten year mlu. that would be a good want to get off the table. you know, i hope that on the peace issue with the approach of the administration, it is going to be rooted in what i call what is possible. i think that it would be aa big mistake to adopt a posture that our choices are to do nothing or solve everything. if we doif we do that we will end up doing nothing because we can't solve the whole thing right now command when you do nothing you create vacuums. if are going to be doing something command i hope we will, we take practical approach.

we focus on how you restore calm, how you can do different things on the ground, how you can begin to try to restore believe between the two sides because it is the level of disbelief that i think is so problematic. we need to think about whether or not you can bring the arabs into this, whether it will be possible i don't know, but the palestinians are at a point of such dysfunction and weakness that they can do little. with an arab umbrella they might be able to do something. from an israeli standpoint the ability will be minimal. i think there needs to be a kind of effort at least a practical efforta practical effort on this command i hope the administration will adopt practical approach. >> i agree with all of that. one, we should work through the next iteration of the defense understandings with the israelis.

we should make every opportunity between now and the end of his term. second, the issue of interim are partial versus trying to solve the whole problem because this can lead to -- this leads to disengagement by the us. the history is that when the united states is disengaged and a vacuum emerges, things go in a negative direction, and the is filled by the forces who are against cooperation. so a set of ideas around, you know, certainly political horizons but the practical steps that could be taken on both sides to build confidence and to show joint interest and continued calm and cooperation would be, i think, an important set of steps. third, it is important for

the administration to work through this implementation and to have the mechanisms in place after the initial and mentation which could take -- we are now in the beginning of november. this could take another six or eight or ten months to put in place. there are number of things that have to be done. having that in place and the oversight mechanisms up and running is important for the administration to finish. max is, i do think that the united states needs to develop and articulate a comprehensive anti- isi -esque strategy and implement the next phase of that, and we seem to have done so and to have taken some concrete steps, and the effort underway in northern syria to move is an important kind of step to

break the narrative of success. this is the recruiting talent, the recruiting tool that this organization has which is a narrative of success that took on the leaders in the region and the rest of the world's successfully, and it needs to be broken. if at all possible, to work through a political next up, and i do think as i said earlier, it is important for us to put in place the kind of reassurance that we need to have with the gulf cooperation council state. >> clearly we need to have a strategy on syria. needs to be coherent. the risk right now is if we are carrying out more attacks, which makes sense at one level, and the russians are attacking the non- isi is opposition everywhere else, we run a

grave risk of undercutting the thing we most want. one of the ways you destroy the narrative is by having them be seen as being unsuccessful, but they cannot appear to be the only ones for protecting the sunnis. if there is a parallelism where we are getting isi isiasis, and they are hitting the non- isi -esque sunni opposition, we run the risk that in a sense we will instead of discrediting them add to the appeal. if we want the sunnis to be part of the effort to discredit them they have to have a more coherent strategy than we do today. >> is it fair to say from the answer you both gave that neither of you think the last year of the obama administration will witness a major push to settle the israeli-palestinian conflict coming from the white house? >> that last qualifier is an important one.

i don't see an enormous appetite within the white house to do a major push. i just don'ti just don't want that lack of appetite translate into doing nothing. and i worry that if you create a binary choice, the instinct not to do a big push translates into doing nothing. at the state department there is a different instinct to be active. again, the key is be active in the right way. what we don't need a more failed initiatives. we don't need failed initiatives between israelis and palestinians because there is already too high a level of disbelief. we don't need failed american initiatives were we need to look more successful i say they are always different echoes from earlier time frames. he describes after qaddafi

boosting interest in libya. every single leader from an american friend in the region, every single arab friend sends a message to president nixon in which they are basically saying, look, the radicals are on the rise here. there are shifting the balance of power against your friends and you are being completely passive in the face of this. it sounds rather familiar. interesting enough, the one thing that changed for us in the region was the aftermath of black september because when the syrians sent 300 tanks and jordan and we moved some, but principally it was getting israel to mobilize, aside does not commit the syrian air force and the jordanians are able to expel. it looks like an american friend. we need a manifestation right now, and it will

translate, you get a disproportionate payoff. again, doagain, do not want to failed initiative, but do not let your fear of failure prevent you from doing something. >> the administration has a lot of things to do between now and the end of the term. in the middle east and elsewhere in the world, and it is confronting the breakdown of really the arab states system, if you will. we have seen the reemergence of great power competition and disagreement. we have seen one of the great powers moved to a posture of active hostility. we have a lot to finish in asia including finishing the transpacific partnership agreement. so in terms of a major initiative it was determined

on an assessment of what is possible. but dennis is exactly right. i am pretty certain that this is not where secretary kerry is, but a disengagement will lead to a vacuum in the lead to a worse situation facing the next president of the united states. we need to get beyond this binary structure that we are in the middle east and the israeli-palestinian context. >> congratulations for your knew book. you both touched on the question command i want to push it a little bit. especially given the timing. observing the anniversary. my question is, is he dead?

if not busy on life support and what will it take to revive him? interim steps, the baby steps, but there is a bigger picture. it doesn't seem like there is much on either side right now. >> thank you. look, i would say the following. the structure still exists. he may say that he is not bound by it, but that does not mean he is not implementing at least on the issue of security cooperation. it goes on now. and from an israeli

standpoint as far as i know they are still transferring revenues that they are collecting, and you still have the designated areas of a, b, and c. so the structure still exists. you don't have an active peace process right now. what you have is something that is a wave of terror violence. it is not organized the way the 1st or 2nd was and is being carried out by those who are 15 to 25, being driven by incitement in social media, a lot of the videos go viral and portray the result after aa young palestinian stabbed in israeli and that palestinian is killed. they don't show the stabbing but the result. the puts this false narrative out there what you

now have is an agreement that obviously we contributed to between the prime minister, the king of jordan which is going to put cameras on a 24/7a 24/seven basis on a way of showing the status quo is not being changed, and i would like to see more done in that regard , more done in terms of spelling out in explaining what the status quo is not repeating this over and over, doing more to highlight this and getting them to acknowledge that this is what the reality is as a way of trying to stop what is right now a kind of level of terror that has taken on a life of its own. because it is not organized that is the good and the bad news. is more limited.

it is hard to bring it to an end. so 1st things first, you, you will have to find a way to calm things down. the 2ndthe 2nd thing i would say, and you said it at the end of your comment. anyone who thinks a binational state is a prescription for anything except what you are seeing right now should look again in the mirror. there is no place in the middle east where there is more than one identity that is at piece. and the kind of conflict you see is terrible. the worst form of bloodletting. and the idea that a one state outcome is anything except a prescription for enduring war is an illusion. that is exactly what it will produce. so, you know, if you are a believer in the state of israel, believer in the us israeli relationship, the idea of a jewish democratic state, you needed to state outcome.

i do not see how you produce a two state outcome right now because on the palestinian side in particular i don't see the capacity to make decisions. he will have to bring them into this. you can pursue an arab initiative in public. he hadhave to create a context which requires a change of reality on the ground. and so you start by creating calm. i don't call it baby steps. for the last four years this has been a siren song. both sides have been able to restrain their enthusiasm for this idea. but i think one of the problems we face is that very few people in israel believe they accept a two state outcome. and very few palestinians believe they will ever accept an independent palestinian state. and you need to be able to

construct an approach even if it's coordinated unilaterally where each side begins to take steps maybe in response to us that demonstrate, no, look, when we say we are per -- for two states, two states for two peoples and would be good to see some actions that reflect that. one way to show he believes in two states for two peoples would be to declare i am not going to build outside the blocks, build and what would be a palestinian state. the border has to be negotiated, but this is my demonstration that israel believes in two states for two peoples. it would be nice on the palestinian side to either show that they would put israel on a map which would be nice, or that they could, you know, the idea, if you

don't want to say jewish state at least say to states for two peoples because there are two national movements. diagnostic is such a thing as a jewish people. a very interesting article where he explained why it seems so hard palestinians to acknowledge. one way to demonstrate there is a commitment to asked to state outcome is for each side to even if it is to us take those actions that would do that. if you begin it is not going to transform things overnight, but what it will do is create a basis to take a 2nd look. if we were guided by a strategy that is designed to transform the situation so that what is not possible today can become possible tomorrow, that is the way we would approach it. >> in a future negotiation would be based on the structure. >> i don'ti don't think starting from scratch is in the cards. indeed, the practical things that go on our under the

structure and continue today. i agree, as you know, fully with taking interim steps which reinforce a path toward an ultimate agreement. it is an important question to ask why it takes the us secretary of state to go to them on for there to be concrete steps taken to reassure on both sides with respect to maintaining the status quo in terms of access to the holy site. why is that? >> it shouldn't. that is an important conversation for us to have. >> i will add, given the climate right now can even there is a capacity to communicate directly, sometimes inside is the excuse that the united states provides, and right now what secretary kerry provided was an umbrella for communication to take place, and that contributed to the

outcome. it is a reminder that we have a role to play, but we must structure it in a way that has a chance to succeed. >> thank you. in front, right here. >> five. i wanted to ask, and light of prime minister netanyahu's visit and in light of the bitter debate over the iran deal comeau what do you think is the best tone for the prime minister to strike and aei a mistake or not in terms of trying to heal the wounds that might have been created >> what matters is what he says, not where he says it. so i hope that, you know, the prime minister will take account that this has been a partisan issue command it should not. i hope he reaches out in a way that is unmistakable to democrats and republicans alike, but emphasizing the

nonpartisan nature of the relationship, and, and i think that i would expect this meeting actually will go well. the primethe prime minister has an interest, and also the president has an interest. do i think that in the aftermath there will be the closest of friends? do ii think that the chemistry will be perfect? no. i think they have different worldviews, but they recognize the points of convergence, the common needs right now, and both have an interest in elevating that at this point. you know, comes back to thinking about those things that bind us and particularly on the issue that divided us. one of the things that we used to always say, we knew our objectives were the same the tacticsthe tactics might not always be the same, but

the objectives were the same a threshold has been crossed. an agreement will be implemented. how will it be permitted? .. eastern and

pacific on c-span's q&a. >> following secretary lew's remarks, ken conrad follows up.

>> good afternoon, it is good day for bip bipartisan. in the interest of leaving time for the secretary who agreed to take questions let me introduce and welcome to the bipartisan center the 76th sectary of the treasury, the honorable jack lew. [applause] >> thank you, bill. and thanks to the bipartisan partisan center for hosting this event today. for nearly a decade the bipartisan policy center has been an important forum for discussion across party lines for a variety of complex issues. i want to thank the center for the important work that they have been doing on the debt limit in particularly highlighting the contributions of bill hogan and steve bell.

the auto industry was strengthening, and deficit were on the decline last time i came. i called for leaders to be part of the solution and end the crisis that imperiled the crisis. we found ourselves at a pivotal moment for the nation. today is a fitting time to be speaking. leaders reached a significant bipartisan compromise on the budget. it would fund the government for two years and raise the debt limit so the country can meet its obligations. it will increase security through investment, infrastructure, schools and public health and keep our

country safe. these core public sector investments are necessary to create a strong environment for business and economic growth and they provide the certainty that gives companies the confidence to remain on the cutting-edge. the analysis of the previous suggests it will lead to 340,000 additional jobs in 2016 alone. these important investments could be paid for in a balanced way by insuring entities like hedge funds, oil and gas producers and pipeline companies and private equity verb firms pe taxes they own. it avoids cuts to medicare and protects programs that working families rely on. this is a significant accomplish and a step toward ending the pattern of short-term legislating that has become the norm. i urge congress to move forward

to provide stability to the government and raise the debt limit. in order to continue the leadership in the world, i urge congress to imelement the quota and governance reform. failure causes other nations, including allies to question our commitment to the imf. we remain committed to finding a vehicle for implementation of these reforms as quickly as possible. congress is always making bipartisan support on exports and jobs that help level the playing field for our businesses. xm supports 164,000 jobs last year and nearly 90% of xm's transactions directly supported america's small businesses in 2014. with the economy strength knowinstrengthening,

now is a pivotal time for the action. jobless claims are close to 40-year lows. and our economy has created $13 spa 13.2 private sector jobs. we should be working together to continue this momentum in our economy. while progress on a deal is very encouraging, time remains short for congress to act on the debt limit. treasury as only one week before we run out of borrowing authority to continue to meet the obligation. i am confidant the congressional leadership will act by then but it is important not to lose site of the time frame. i urge congress to act as quickly as possible. with that i thank you and look forward to answering a few questions. >> thank you, mr. secretary.

the secretary will take three or four questions. >> this is an opportunity to look at the debt ceiling. any way you would like to see it changed so there is not this game going forward when we come about it in two years? >> i have said for some time, if this agreement passes, it will be about future administrations, that the debt limit does not make sense as a way of controlling spending or policies. we make commitments, congress makes commitments and we implement them, and the debt limit just determines whether or not you are authorized to pay for them. i believe that there is every reason to look at how we handle the debt limit. now may not be the moment to do it. but i hope no administration every finds themselves in the

position where it faces the prosspect of nut being able to pay bills. if the limit could be voted on an easy, non dramatic way it is another step in the process. if is a regular event of brinksmanship and getting to deadlines where interest rates are reflected and confidence is starting to reflect, it starts to do harm. so clearly we have a lot of policy that is appropriate to negotiate over and that is what this budget agreement reflects. it is the kind of give and take you get in a bipartisan agreement. paying our bills is not something that should be bargained over. >> yes, sir? >> if congress appears on track and like to pass a deal that

will procedurally go beyond november 3rd, will you be able to provide market assurance or guidance? >> i have been clear with all of the dates we have given that it would be irresponsible for the government of the united states to operate without borrowing capacity. the uncertainty is many. we have done our very best to share information so that independent analysis could be done as well as our own analysis. it all confirms that we are going to run out of borrowing capacity when we say. and in some very short period of time run out of the ability to fund the operations of the government. we can't go there. we have never gone there. this couldn't and shouldn't be the first time. >> yes, sir? >> robert with use news and world report. given with part of the stuff tat

that made it deal possible was speaker boehner's lame duck status. how sanguant are you about moving forward in the future in regular order and not have any more debt ceiling crisis? >> the two-year agreement provides a path where congress won't, if this is passed, need to act on the debt limit until 2017 where there will be appropriation caps in place for this year and next. i have to be clear, there will still have to be appropriation bills with bipartisan support and can be signed into law which means they have been clean bills and they cannot be the kind of bills that create the con fronitations that could put us back in a very difficult situation. but there is a month or more for that process to work through.

what is important about this agreement, and all of the recent bipartisan agreements is when you let the majority work their will, you can get bipartisan agreements to do things still. that is an important principle to remember not just today as this agreement is being completed but as congress moves forward. >> additional questions for the secretary? >> i have one more. >> sure, please. >> thank you, mr. secretary. so your previous question you said there shouldn't be any poison amendments that will need to be passed. if there are any amendments that will appeal parts of the dodd-frank fact do you think the president should veto? >> we have been clear the financial reform and the

dodd-frank has been central to rebuilding the economy and min taining that is important. we would strongly oppose any effort to undermine this. we look forward to working with congress on the kinds of appropriation bills that can get bipartisan support. >> now we know there is not going to be any social security cost of living increase next year can seniors look forward to anything in the way of health going forward? >> yell, i think if you look in this agreement, there are provisions that address the medicare premiums, which would have been very substantial increases for some people on social security and that is lessened and spread out over a longer period of time.

i think our focus here is to make sure we can run the other aspects of government that provide critical services to old people, young people, working people. things that just get turned up side down if you have either shutdown or default crisis. so there is an awful lot of things we do in this country that are important to the american people and if this agreement is passed it can continue in an orderly way without interruption. there is a lot that is important to people on social security as well as the rest of us. >> thank you, mr. secretary. >> thank the bipartisan policy center for staying focused on an issue that a lot of people come and pay attention to periodically. we appreciate there are real experts that are partners ebb e ebb n when it is not in the headlines -- even.

>> thank you. >> i hope -- could the congressman weber, senator conrad, senator nickels join us no? we have time for a few more questions. i realize it is 4:30 almost. we have a ball game coming up tonight. i don't think you can make it to -- is it kansas city, tonight? i don't think you can make it so in the interest of time i will not go through the bios on all of these distinguished public servants but let me highlight all three have long careers in the congress. senator nickels and weber serviced in elected leadership for their respected caucuses. and of course, along with senator conrad, they all worked tirelessly on many of the budget issues that remain relevant today. i have a couple of simple

questions for each of them and will open it up for you to query them. one of the questions has already been to some extent asked but i will ask it again of the distinguished guest here. let plea let me begin with the house of representatives where the bill is originating. you were in the house leadership, congressman weber, you know how the house functions. would this agreement been possible had speaker boehner not agreed to give us his position? >> no. >> can you elaborate. >> i thought you wanted to get to the ball game. no, i think speaker boehner for a last month has lived under this threat of vacating the

chair. the anger against speaker boehner on the right from the freedom caucus is the far right of the party, or just the rebellious right of the party, was intensifying and we can talk allni night about why that was. if he delivered this agreement, i believe they will have acted on the threat to way kate the chair. i will defer a little to kent but i cannot imagine the democrats coming to the rescue of a republican trainwreck that at that point. i don't think he could have done it. i think it is good thing that we did it. i think it is a good thing he did it. after he is out of this job, i think he will get a lot of credit for showing leadership at a critical time. >> good. thank you. senator conrads, you had a

chance to look at this proposed -- conrad -- agreement. is it a good deal? >> you know, none of these deals are perfect. but this deal is important. and it is important because it avoids what could have been a disaster. if we would have failed to meet the requirements of the full faith and credit the united states, if we would have put in jeopardy, the full faith and credit of the united states, that would have been a serious thing for our country.

we are speaking though this agreement is law, so senator nichols you were number two in command of the senate republican leadership. he remained a close friend of majority leader o'connell. some of your staff is working for former staff is still there with you. what is your prognosis on the budget package being adopted quickly in the united states senate? you have a number of republican senators who are up for election as well as so many of them that are seeking the presidency next year. what is the outlook in the

senate assuming it makes it over to the house? >> while one i want to compliment speaker boehner especially but also senator mcconnell and the leaders as well for coming together. i think it's important to do it. there has been very little bipartisan work. interesting although comments secretary lew said about the repercussions but the debt limit brought us together. i think john boehner would have gotten this deal done. i think paul ryan would have gotten this deal done. this is very important. that limits do make the vote. they get your attention they get the administration's attention. the administration, and john boehner gets credit for this. nobody gives them credit for that frankly was responsible, primarily responsible for the deal in 2011 that frankly has brought spending down significantly. the president takes credit for

it. he passed the 10 million-dollar 10 million-dollar -- bill and the 2011 agreement is basically amended to a debt limit extension. it was the first thing to curb that growth in spending and that brought spending as a percentage of gdp from 26 down to 22 and going lower so that was premised on negotiations that the speaker led that was tied to the debt limit and so sometimes he @, but it does, it does influence things. i think it would pass the house and i think it would pass the senate. think the presidential election with a couple of members in the senate who are now campaigning may be trying to get headlines from it but i don't think that they will prevail. >> do you expect it will be

filibustered? >> they may try but i don't think there are any workloads to talking about it for very long and i don't think it would be very well received. in the senate you do need to be able to cooperate to get some things done. i don't think they filibuster on this package, the this package does a lot of things are not always perfect but it does curb entitlements. and entitlements by the very definition you have to pass it through both houses to reach bipartisan support and they are filing doing something with social security disability which was in real trouble. anyway i think it will pass the senate and again my compliments to the leadership and finally there was some communication with the white house. the white house hasn't exactly been reaching out to congressional leaders. saying let's make a deal and you have to make some deals to make this town work and to make our government work.

>> coming back to the disability insurance program but let me go back to congress and -- congressman webb. the freedom caucus had a list of nearly 21 demands many of them that called for a wide range of changes in the house rules. how do you think mr. ryan will fare with our caucus or will he be subject to the same tensions that plagued speaker boehner? >> that's a good question bill and i don't think we know the answer for sure. john boehner who also is a good friend of mine got tired of dealing with the freedom caucus and the far right of his party and chokes the last several months maybe longer. he was quite public and saying very critical things all of which is to say a part of this

is not procedural or rules driven periods about personality personality and paul ryan at least started with the goodwill of folks on that end of the party spectrum. that's why he got the support of 70% of the members of the freedom caucus. they like him and they trust him and they think he's an honest man and they unfortunately have come to the conclusion that they didn't like john boehner. if you want to be hopeful in my judgment more because of the personality changes and maybe a honeymoon. mcafee will that paul ryan which exists because he doesn't have a deal. the barn has been cleaned out. >> the barn is being cleaned out but let's not make a mistake in thinking that underlying dynamics that have caused polarization and dysfunction in the congress are on the mentally change. they are not fundamentally changed and he's going to have to show a lot of skill and leadership in moving forward to deal with the very fractioned caucus.

we have a chance now. my great fear becoming speaker in having to deal with this right off maybe he would have succeeded but maybe not. he surely would have had a hard time dealing with other things coming down the pike like ttp which requires a huge bipartisan effort in my view. >> senator conrad my cat a little bit of a difference of opinion that this is the bipartisan policy center. congress seems to operate under the gun to the head a lot. defaults, sequesters. is this the standard order of the legislature today? to either parties parties benefit from these kinds of things? do we have to have a self-imposed crises to get government to work? >> you know it's my great hope when i was there that we could do things that clearly needed to

be done without these self-created crises but i'm not so sure anymore. in this climate with congress especially the house as it is, it seems like the only time you get across the finish line is to have a deadline and a deadline that has got real consequences to it. >> when we were involved with bowles-simpson or simpson-bowles, some of us thought there was the opportunity for a grand bargain to get the country back on the fiscal path that would really get our debt down, that would put us in a much more sustainable position but at the end of the day we couldn't get that across the finish line despite five years when you put bowles-simpson and it was quite

an effort so i wish i could say this was just a passing phase and we will get over this. i'm not so sure and i'm also, with respect to the debt limit i confess, i used the debt limit to get bowles-simpson and that's how we got the commission named. but we never threatened, never not to extend the debt limit. we were arguing about how long the debt limit would be extended. they would never would put the country in a position of default because that's a disaster for everybody. my god if there's one thing we should be able to figure out its defaulting is not an option. >> i hesitate to raise this but maybe i will anyway and that is is their deficit reduction and this package?

>> you know the acoustics are very bad in this room. [laughter] >> i saw your lips move but i don't see this as a deficit reduction package. this to me is a package that kind of reorients deficit reduction artegon and frankly deficit reduction to me wasn't done very well. yes sequester lead to deficit reduction. as senator nichols indicated we have gone from 26% of gdp spending 26% of gdp down to less than 22%. that's a substantial reduction in spending but how did we do it? we did it all on the domestic side or virtually all, virtually all of the domestic side which will be at a 50 year low. we didn't do it on the side of the budget which is really seeing growth that really has to be reformed. so to me this kind of reorients

that a little bit. does take a nick on entitlements which is to me a positive development. hopefully it opened up a broader discussion because if we are going to be serious about getting the country back on track i believe we are going to have to reform entitlements and reform the tax system. if you sat down and were going to decide -- design a of bad tax system it will be hard to beat this one. >> taking all the cuts that we made out of the domestic discretionary budget was never a good idea. maybe it was the only way we could get by and i think he knows the budget better than anyone i know and if he says it's not by go along with that but it points in the direction of the tells the congress you can't anymore pack away at the discretionary spending when that is not the problem. >> as i would like to say here you mean the seed corn of the

future. i want to pick up a little bit and give a little bit of a shout-out here to the bipartisan policy center center. we have a task force led by senator domenici and david haughey who has become chief of staff worked over the last year or year and a half and one of your former staffers was involved in that focusing on ssdi. a difficult difficult issue and i think your absolute correct there were some major proposals and reforms in this particular package going forward that are needed to deal with ssdi. i think there are some elements quite frankly there are also elements in the agriculture area >> senator nichols can i come back? you have been on this one, some people would say the meal has been eaten, paid the bill. don't walk out of the restaurant

others argue that as you have heard the only way to get the attention of the president come you made this argument, is to address, to have this gun at your head. are you still in that particular position and had this not come about had it not been for the debt limit? >> this deal would have never happened in my opinion if we didn't have the debt limit, no way. and kid and i go way back in the senate. i looked at all the debt and i will tell you the toughest vote i've ever had in the senate was the first time i voted for debt limits. i had ronald regan call me at home. glad to have you on this one. i was as conservative as anybody and that caused me, i remember being troubled on that. i was 32 years old and i did

want to increase the debt limit. i have looked back and i voted for the law and voted against the law. a lot of it depends on what was happening at the time but as i grew in leadership in capability i found it as a great tool. we passed the congressional review act that became law. we passed a big budget act and 97 and did a lot on the budget. on the debt limit extension some major pieces of legislation sometimes having carried because we all know. at the end of the day the responsible legislators know if it's going to pass. it was a question of what they did on it they can get signed and now congress has to pass an appropriations bill. that is absolutely hogwash. the constitution says congress

shall appropriate and members of congress have to negotiate. okay what can we get in there. we are not going to get the administration from the republican standpoint everything they want. congress gives the rights the appropriation bills. what can we get the they will eventually sign so you have the give-and-take and that's through negotiation and maybe you find out if he vetoes the defense authorization bill was vetoed for the worst time. my guess is that fixes this. now with them with some plus-ups my guess he will find it and he's not going to be happy with guantánamo. that same restriction has been there for three years so this idea that the administration did dating to. they claim --. >> that pre-negotiation is not

going to fly. congress is not going to give him that kind of authority. >> i have to assume because of this agreement, assuming it is enacted and the president signs it that they have no worry about basing a shutdown issue in december. i shouldn't go that far right now? >> one of the best things about this is congress for the last six years has not done the appropriations process. and the senate complements thad cochran reported every bill out of committee. that's the first time that's happened in years so they are pretty ready to go. there will be some plus-ups and changes and they figure out what would be the trio to p allegations so they will divvy those things up and come up with it and i think almost every bill out of the senate appropriations subcommittee were reported on bipartisan way.

those won't go but i can tell you they are not claims. they have lots of things. i am kind of i guess not offended that congress will pass those bills and the president may or may not veto them and a tb test them some departments are not open for a period of time that's his choice in congress can go back and say we want to fix fix it or not fix f. so that's all good. it's going to be good to see congress working and the legislative process working not just for this event for next year. >> i was not an appropriate or except for a very brief period and i was invited to a lot of the appropriations committees. i would say i have never seen a clean appropriations bill. it means not having something on it you don't like. we all know how the appropriators operate. they put the things on their that they want to achieve.

so i understand the secretary's wanting to set the ground rules here though we all know that congress is going to pass appropriations bills with things in there that you may or may not agree with and the question is what happens at the end of the day? at the end of the day the president has to sign it. >> one of the positive aspects of this from my perspective visits two years meaning we basically are voting for something we have been appropriating for some time. we have got this band. listen i want opened up to the audience and i know it's late in the afternoon. so identify yourself when we come around for a question. yes sir, back here. >> i'm zach israel. i have a question regarding an issue of the glass-steagall act and if you are watching

democratic debate this issue came to the forefront. i know that senators voted to repeal that back in 1999 to repeal glass-steagall and my question is do you regret having done that and do you think bipartisan legislation in the senate john mccain and elizabeth warren reinstated -- voted to reinstate it. i believe you both voted in favor of repealing glass-steagall. >> i would have to do a little more homework on it. on the financial side, and i don't even own a number that vote. i should but i'm familiar with the fiduciary role that the administration is trying to jam through now that basically rewrites it. my first trip to washington d.c. was on a restaurant and they are trying to rewrite it. i think that congress and house are trying to stop it.

>> that could be a rider on one of these appropriations. >> a should be a rider. that's my point. they are trying to redefine a fiduciary. i was the fiduciary of a pension plan. i know something about that. i don't know about that glass-steagall act. i think what the is trying to do, i don't like executive branch legislation and that is clearly legislation what they are trying to do so i wouldn't be a bit surprised if you see a rider on an appropriation bill and i would support that 100%. >> conrad do you remember your voter glass-steagall? >> yes, i do. because i had quite a debate and discussion internally when i was deciding how to vote. of course there were a lot of other things involved there in that legislation as you know. that was not an easy call and

you know i'm not now speaking and don't intend to again but i really have not devoted the kind of study that i would want to to tell you how i would vote or just a question of glass-steagall. you will recall that when we go back to those days we were dealing with an entire package and there are real issues that are enormously complex that involve our financial system and i would want to spend a lot of time and hear a serious debate before it reached a conclusion again. >> any questions? a question over here. >> my name is dave.

i was wondering the legislation and the provisions that do seem to be the hot-button issues are that planned parenthood, obamacare and some environmental riders specifically the two gentlemen with gop backgrounds. do you see the agreement perhaps making people willing a little bit more to get along or are you still seeing this as a flashpoint? >> i don't think we have eliminated the flashpoints. i think we have maybe taken a small step in the direction of comedy and bipartisanship but only a small step. the issues that you mentioned are not going to go away particularly planned parenthood. i'm glad that it wasn't in the context of the debt ceiling to default but there is going to be a fight over it. people feel maybe justifiably

very strongly about it and i think that they would be ready to allow a part of government to shut for a period of time because of the importance of that issue. >> i think in each appropriations bill you have democrats and republicans to work on those issues a lot. i was on an appropriations committee before a graduated and went to the finance committee but in those areas that you have become expert and this is your domain you spend a whole lot of time and democrat and republicans will work to try and figure out okay most of the bills in the finance committee will find are reported out with good bipartisan votes and it's mainly because the chairman and ranking members no matter who is in digital usually they work fairly well together. harry reid i was chair of minute he was ranking or vice versa.

we always came up with a bill that we both supported. now we have hotspots but we could kind of work them out and we kind of knew what wiki get through. and we did some things maybe the administration didn't like sometimes but we knew what could be signed in you also kind of know what can't be signed. sometimes you test the limits. more often than not you work it out in a way because you are both bested and you work all year to pass these bills and he wanted to become law. you don't want it to be tp'd and not go anywhere but it needs to run backtrack and happen. but that's part of the legislative process and frankly it's a good process. it's not perfect but it's a good process and i'm glad it's finally going to start working because b. look at what congress does they raise some money and they spend a whole lot of money.

they haven't been doing that last portion. it's been on automatic pilot for years and now the committee is going to have a chance to work so there's going to be a lot of amendments on the floor. i'm assuming speaker ryan and certainly leader mcconnell, they believe in regular order. that means you'll have appropriations bills that will have lots and lots of amendments and i think that's kind of a healthy process and it's a good process and i think most of the bills they sign, maybe some of them will be vetoed. so what? we veto the defense authorization bill my guess is congress will pass it and it will be fine. >> a question over here. >> looking at here crystal ball about the affordable care act, four or five years from now for the country -- country be settled in with it and will it be significant revisions or will

we still be fussing and fighting about it? >> i think it would be significantly changed. no matter who is president, if the republicans present, none of the would-be repeal the replace that it would be very close to that. it will be significantly rewritten if a republican is elected president. >> the provision as it takes away the employer mandate paid. >> the penalties and the taxes and the co-ops there are a lot of disasters. >> you're hitting close to home when you talk about co-ops. senator conrad that was your provision. >> i thought those were pretty good.

the co-ops have a proud history in my part of the country and health care policies that are hugely successful and even health care cooperatives under the affordable care act. a guy just e-mailed me from montana as a part of a health care co-op there are so they were doing well but they were you know frankly subverted by subsequent steps and what has been implemented are two different things. but look on the affordable care act i think the affordable care act is with us in substantial, substantial amounts. you know the affordable care act never has a chance to go through the regular legislative process. it never had a chance to go through a conference committee to come back to the house. never had a chance to go through the whole house process because

as you overcall senator kennedy died and so there are lots of things that need to be fixed in the affordable care act. i'm a democrat. i voted for it, proud to have voted for it. i believe it was a step or words for americans health care. millions of people covered. i think it has played a role in keeping down increases in health care costs that there are lots of problems with the affordable care act whether you are a democrat or republican, for or against the original legislation that could and should be fixed. >> it would be really fun to see an amenable form and the senate. the senate really never had a vote on individual or employer mandates are being able to keep your health care plan if you like it or are the excise tax on devices. the never have those votes on a

bill that was going through. it would be nice to see that happen. maybe not a markup on the floor but it's going to be rewritten fairly significantly if that chance prevails in the future. so that would be -- those. >> i think it will be rewritten but i don't think you will be all done it once but i think the president is a smart guy but one of the dumbest thing i've heard him say is i want to solve the health care problem once and for all many times. we are never going to solve the health care problems once and for all. >> to your point larry i guess i think a little more than don does that it's kind of getting institutionalized in a don't think it's going to get ripped out great but i do think we adjusted every year and we are going to legislating about health care and that means about the affordable care at just about every year or every congress because things change. demography is, technology, the

finances of the country and everything else. i think it's going to be adjusted over time and i do think as we elect as president republicans are going to have to vote on something that looks like repealed but it will vary quickly replaced at least in many measures because it has become institutionalized to a substantial extent. the first cooperative was in my senate district. >> thank you very much. we have asked you to come in on afternoon we appreciate you taking the time. thank you very much senator, congressman. i want to call mac and i'm an optimist because i don't see the point being anything else. i think today i will be an optimist and we have a bipartisan agreement as we go forward. thank you all for joining me this afternoon.