yesterday that the president addressed skeptics of his health-care plan. >> it seemed that way. >> i am pointing out that at least yesterday afternoon, the perception among many of the stories was that the president had addressed some skeptics. . i guess the republican was one of those two.

there was the gentleman -- i think the third question about medicaid and lipitor. again, that is at least three of the eight questions that were in some ways skeptical. what i'm saying is i do not -- i'm not assuming that the audience was not in some ways representative. again, i cents disappointment that he did not get yelled at -- i cents -- i sens disappointmente that he did not get yelled at, but i think there were a number of people in there that had concerns and wanted to address the president. i think we are going to pick people randomly that will come to a town hall meeting, and they will raise their hand, and the president would ask.

>> as i understand it, a number of the tickets go through elected officials. to democratic lawmakers. would you consider, for example, in montana giving to the republican caucus? >> i think the president feels very comfortable with the fact that he is having a representative discussion, despite people's disappointment that he was not yell that. -- yelled at. >> fi you look -- if you look at the protests we saw outside the building yesterday, as a continuum from tea parties and become -- the birth certificate issued, and the gates/crowley episode -- >> i did not go in the front door.

i'm saying i did not see a representative sample of the size. >> i was just saying this is a president campaigned on the notion that we could get beyond the ugly partisan warfare of the last 16 years, and there could be rational discussion that could bring parties together. i wonder what happened to that. why did the post-partisan presidency not materialize? >> i do not know if you were outside or inside, but i say there was a rational discussion -- i think there was a rational discussion about issues, not based on ideology or party, inside the town hall. it is not for me to -- i cannot tell you why somebody believes, despite all per province of the evidence, that the president was born -- despite all

preponderance of evidence, that the president was born here and not somewhere else. i have stopped trying to explain that. i did see a poll yesterday where 8% of people did not know if hawaii was considered a state. >> about a quarter of the people that identify themselves as white collar workers identified themselves as feeling very -m -- negative toward this president. there seems to be an emergence of a core group of people who feel very strongly negative, whereas at inauguration, i think it was only 6% who said that. >> i do not think the president

ever believed that all of the people were going to agree with him all of the time, or even certainly that all of the people would agree with him even the majority of the time. i think you can have the effort to talk about issues differently, to disagree on issues without being disagreeable about it, to have those types of discussions, to talk about how we deal with the different issues that have not been confronted for years and years. you are still not going to get 100% of the people all the time. you may not get most of the people all of the time. i think the president will continue to reach out to democrats and republicans for ideas. both in washington and outside of washington. continue to find a way to bridge the differences that we have and seek common sense solutions. i think that is what he has tried to do.

>> what individuals or groups do you think are the biggest purveyors of disinformation or misinformation? >> i don't know. i think you have seen certain elected officials give out information that was wrong. you have seen -- sarah palin gave out information that, i think, many of you pointed out was wrong just on friday. there are certainly cal was others. >> [inaudible] >> fair enough. i promoted her, i guess. obviously, there are -- i watch tv. you watch different groups that are coming to these meetings that are saying stocks -- saying stocks -- saying stuff that just

is not true. the president wants to address that. i think that is a positive thing so that people that want to make an informed decision will have all the information they need to. >> what if he wants to stay lower the temperature of the debate by doing what he did yesterday and going out to the midwest? >> i think it is just a way of discussing this and understanding that, agree or not, people rightly have questions, and the president is happy to answer those questions. again, he has always seen this as a way of -- town halls as a way of doing that. i think the president also came into office understanding and be leaving that, as i have said here many times before, that whether people agree with you or

not, he thinks it is important to say why he is doing these things, why he is making decisions that he is making, why the issue that we are dealing with is important for our long-term economic growth and laying back foundation. i think he believes that that type of continued dialogue with the american people is tremendously important. >> following up, it has been reported that the executive compensation proposals that they made will be made public at some point but done in a way that preserves the privacy of the individuals at these firms. >> i don't know. i think the question was where the proposals that were handed in by the deadline of friday simply going to be made public. i doubted that, but you guys

should check with treasuries on the specifics. at some point, as i understand it, mr. feinberg has up to 60 days to review and make decisions about those. obviously, at that level -- at some point, the decision will be made public. >> [inaudible] >> i did not say that there was not concerned for that. i said i did not think people begrudged people making money if they are doing it in something that is not based on a risk that is going to put somebody else's tax money in danger. i think people do not want the president of the united states making every business decision and every economic decision. i know the president believes that. >> [inaudible]

>> that is why the president talks about it. the president came at this up said, as many taxpayers were, in reading this -- the president came at this upset. >> [inaudible] but what he would like to ultimately see, some of the goals, and with the government having a vested interest now in the firm's [inaudible] as the president talked about needing to balance compensation restrictions with making sure they are not at a competitive disadvantage. >> i don't know that i have heard it enumerated quite like that. obviously, we have had a number of discussions about executive compensation, more in a way of ensuring that we do not have

compensation that is based on outsize, irresponsible risk taking. >> competitive this is not a top concern? >> i have heard it mentioned, but i do not know that i have heard the president discuss it. >> is it important to see that these firms remain on a competitive base? >> obviously, we have a monetary tax payers -- taxpayers have a monetary interest in ensuring that places like gm and others do well. that is not his a backboard -- that is not to say that they are going to cut corners, but we have seen banks this year repay money. we have seen them repaid with interest. warrants on stock money have been sold in order to get money

back to the government, and i think the president wants to see that money brightly returned to the taxpayers. >> will chairman bacchus be with the president at the event in montana? >> yes. >> so they will be their jointly? >> he will be in attendance. he is not a participant. i guess he has been prescreened. >> but he will not be answering questions or anything like that? he is just there. yesterday, the president said the aarp has endorsed a plan. the aarp said they have not addressed a plan. -- they said they have not endorsed a plan. >> they said they are supported and have been for years on a comprehensive health-care reform. i do not think the president

meant to imply anything untoward. i think he discussed the notion that aarp is supportive of an agreement that would fund filling the doughnut hole for seniors as part of medicare part d. >> the president is doubtless aarp has not endorsed the house or committee legislation? he was not trying to mislead anyone, but he just misspoke? >> is sure -- sure, i do not know if it has happened on certain subjects, but yes. >> within the range of the discussion, something can be wrong, but not necessarily intentional? >> yes, i think most of what the president has addressed, though,

has been in many ways intentional misinformation. >> that you are trying to correct. senator isakson put out a statement yesterday also describing issues he takes with the president describing his involvement in the legislation in the house. do you want to amend what you or the president said about that, because mr. isakson has a completely different interpretation. >> let's take what i talked about on the back of the plane. let me just read the question, a series of questions and answers. how did this become a question of euthanasia? "i have no idea. i just had a phone call where someone said sarah palin's website talked about the house bill having death panels on it where someone would be euthanize. how someone could take a

directive as that is nuts. you are putting authority in the hands of the government. i do not know how that got mixed up." "you are saying this is not a question of government. it is for individuals." "it empowers you to make decisions at a difficult time rather than have the government make them for you." >> i believe those are answers in response to his amendment in the health bill, not the longer and more defined involvement of these end of life panels in the house bill. >> i would ask those people to interpret. i just had a phone call with someone said sarah palin's web site had talked about the house bill having death panels on it

where people would be euthanize. how someone could take an end of life directive for a living will as that -- or a living will as that is nuts. not my words. >> the president saying that the senator had some role in helping craft or develop implied that he had some support for it. >> again, i do not think that is what the president was implying. the president mentioned he may have been in the house. that may have been the confusion. he did represent atlanta suburbs before becoming a u.s. senator from georgia. again, what the president was trying to say was in this, was it a question about some of the misinformation, asked specifically about euthanasia and death panels.

i think what the senator says in addressing that misinformation could not be more clear. that for someone to take -- as he says, talked about the house bill having death panels on them where people would be euthanize d, having someone come up with that is nuts. >> he does not support the language in the house bill. you can have differences over the role of end of life counseling and be clear to understand that neither of them calls for any of them approaching euthanasia. setting that aside for a second, he thinks that that house language had no role in it, and believes that yesterday there were comments from the president that indicated that he did. >> i did not say that, so to interpret it that way would be nuts.

>> he is too sensitive about it? >> i read what he said in an interview on the "washington post" web site yesterday. if you look at some of the amendments he has offered and co-sponsored, but he has authored and co-sponsored other amendments with senator rockefeller in dealing with this. i think whether this is uncomfortable and i, i think he and the president agree -- whether this is uncomfortable or not. >> i want to go back to the earlier question. what he said was aarp would not be endorsing a bill that was undermining medicare. can you explain to me what he meant to say? >> i think he is conflating is -- and i think if you ask aarp this, they have been supportive

of comprehensive health-care reform for a long time. they have not, as they said, endorsed a specific piece of legislation. they are supportive of healthcare reform, and they are supportive of an agreement that the finance committee and pharmaceutical manufacturers have entered into that the white house agrees with that would use $80 billion to partially fill with reduced price prescription drugs. 50% of the doughnut hole that seniors fall into as part of medicare part d. as well as some of that additional money for savings in a comprehensive health-care. >> but he left the impression twice that aarp supported this, and he used it to rebut the questions about whether medicare benefits would be cut.

>> the president is going to continue to say the bill does not cut medicare benefits. i think he was talking about the finance committee. >> [inaudible] >> generally? sure, why not? >> the president complemented grassley and snow for trying to -- the president complimented grassley, bacchus, and snow for trying to get a plan out. the president said he hoped to get a plan out, but he wants to get this done. does there come a point where he wants this bill out regardless of whether there is bipartisan support? >> i do not want to get into those dates, except to say he is

an appreciative that those senators on both the democratic and republican side are working together. they are making progress, as they said, toward an agreement, and we are hopeful that they will do so. that is the last of the committees of jurisdiction, to finish a bill and ultimately to go to the senate floor. the house has done their work, and hopefully, it can go there as well. >> i wanted to ask you about the medal of freedom, and if you would talk about if you have had any conversations with the president, what he has told you about. selecting an array of people that have made their mark on american society and perhaps have made a mark on him as well. i wondered if you would specifically talk about the impact on the people and why he chose them.

>> the president wanted to pick those individuals who are agents of change. obviously, senator kennedy is somebody who for decades in washington has worked to improve health care, to improve education, to help millions send their children to college. i do not think there is a piece of legislation that has affected health care or legislation in 40 years that does not bear some imprint of his effort, in making the lives of millions of americans better. giving them opportunities that would not have normally existed unless you are a member of a

certain family or wealthy. obviously, there are others in this category i think the president is honoring today. obviously, i think it means a lot to recognize the efforts of many of these individuals, somebody like senator kennedy who has had such a profound impact on our public policy debates. again, as i said, the outcomes of so many pieces of legislation that had made a genuine difference in the lives of so many people. >> p > poitier? -- what about poitier? also, is there any chance senator kennedy would not be here in person to accept the award? >> his daughter is here to accept the award on his behalf. obviously, somebody like sidney poitier is someone whose actions

broke barriers and paved the way for so many others in so many aspects of life. obviously, the president is enormously grateful for those efforts did and for many that he will be recognizing today. >> any thoughts on mary robinson? >> i think the president is recognizing her for her leadership on women's rights and equal rights, and as i said before, he does not agree with each of her statements, but she is certainly somebody who should be honored. >> you are talking about people who are breaking barriers on the racial aspect, but this health care debate has boiled down to in some parts of the country into a racial issue. has the president gone into that

matter, but added -- at -- as the president gone into that matter, looked at it? has he spoken to david scott? >> i would say -- i think i have said this year before. i do not think there is a single act or event that we are debating or discussing right now or have for at law -- at least as long as my memory goes back to that should or could be compared to the tragedy of the holocaust. i think whenever that is offered up into a public debate, it is a sign that things that have gotten, for those that enter

into it, completely out of hand. it has absolutely no place in the dialogue that we are having. we ought to be able, as the president said, have conversations with one another, not over one another, and the notion that we are having a public policy debate at the end of a spray paint can i see it is ridiculous. and i think anybody, again, who offers that sort of analogy ought to be ashamed of themselves because they could not be more wrong. >> should there be more sensitivity not just on the jewish component but also on the ethnic component as well, talking about black and hispanic? >> i think the president will tell you, as he said countless times, we ought to be able to disagree without being disagreeable. we ought to be able to have a

conversation, even in did -- even in debate, that ought to results in discussion and not the type of degrading comments or actions like you have referenced. thanks. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> today's white house briefing with robert gibbs. you heard quite a bit with -- quite a bit about health care. our coverage from livingston, texas, gets underway at 8:20 p.m. eastern time. more coming from the white house this afternoon. a medal of freedom ceremony. 16 recipients to be honored today, including senator ted kennedy, a tennis player billie

jean king, and scientist stephen hawking. >> bill clinton kicks off the 2009 netroots nation bloggers convention. friday, panels on health-care reform with howard dean, pennsylvania politics with arlen specter. making change happen and reshaping the supreme court. >> now, a discussion on swine flu preparedness. richard hatch it is the director of medical preparedness at the white house. this event runs about an hour. >> thank you. good afternoon, everyone. i hope you enjoyed your lunch. we are going to start our

luncheon discussion today, and it is my pleasure to introduce our next speaker, dr. richard hatchet. he is the director of medical preparedness policy on the white house national security staff, and he is here to teach us more about the h1n1 virus, to provide some historical perspective, and to discuss what goes into community resilience. in addition to his role in the white house, he has also been the assistant director for radiation countermeasures research and emergency preparedness at the national institute for allergy and infectious disease, overseeing a program that develops drugs and devices to mitigate the effect of exposure. in 2005-2006, he served as director of biodefense policy on the white house national security council. dr. hatchet previously served as senior medical adviser at the u.s. department of health and human services' office of health

and the emergency preparedness, where he worked on a broad range of issues, including the delivery of medications to urban populations, the development of disease contaminant strategies, and the role of modeling in the formulation of public policy. he completed his undergraduate in medical dedication -- education at vanderbilt and a fellowship in medical oncology at the duke university medical center. as you can see, we are in very good hands. we are extremely fortunate to have him with us today. i gave you dr. richard hatchet. [applause] -- i give you dr. richard hatchet. [applause] >> thank you for that very kind introduction, and thank you to fema and the deputy administrator for inviting me to address all of you in this very

important topic -- on this very important topic. unfortunately, this is the only part of this conference that i have been able to attend. it looks like a fabulous conference. i have been to the conference for the medical reserve corps on a couple of occasions in the past, and i always found this to be terrifically inspiring. great opportunity to learn, to hear from people working in local communities about what they were doing. i'm sure that this conference will fulfill that same function for all of your. -- for all of you. i'm sorry i will not be able to participate going forward. it is really inspiring. thinking about the conference and looking over the sessions, i was reminded of the, that the only title in our democracy superior to that of president is that of citizen. all of us are citizens, and all of us contribute to the well- being of our communities and

ultimately to our nation. that is what i am going to talk about today in the context of thinking about h1n1 influenza, the unfolding pandemic that we have been observing for several months and that we have anticipated will result in increased illness and unfortunately death in our communities in the weeks to come. at the national security staff, i belong to something called the resilience directorate, a new directorate within the national security apparatus that focuses on preparedness and response to disasters. in this case, public health crises. resilience has been a but what -- buzz word for several years now, but it is not necessarily something that is easily defined. we talk about it a lot. we tried to foster it. we hope to augment it, but we

often do not have a terrifically clear idea of what we are talking about. i want to just start my remarks by referring to an attended definition by the director of the center for earthquake engineering research at the state university of new york in buffalo. he has devised a nice frame work talking about resiliency. he talks about robustness as the ability to withstand stress with minimal degradation or loss of function. he talks about redundancy as the availability of substitutes, things that can be switched in if a particular aspect or component of a community or critical infrastructure sales. he underscores the importance of resourcefulness, the capacity to identify problems and mobilize responses. finally, he talks about

rapidity, which is the ability to address priorities and accomplish goals in a timely fashion. i think we will have to draw on all four of these elements as we move into the fall, and i'm sure that all of your organizations and the constituencies you serve will contribute in their own unique way to enhancing our capabilities in this regard. could you advance the slide, please? a little bit of technical difficulties. they advised me that blackberries could interfere with the remote. i sense there are 700 black

berries in the room. [laughter] that does not bode well. please bear with me as we move through this. i'm going to talk about four things. i'm going to give you an overview of the current situation. what i will not do is make predictions. as anybody who is in the flu business knows, it is inherently unpredictable. it is a dangerous business to be in the prediction of -- to be in the business of flu prediction. i will tell you have these things have unfolded in the past in the hope it will inform your understanding of what we should be prepared to face potentially. i will spend some time talking about the vaccination program. it is by no means the only part of our response, but it is a very important part of our response, and it is likely to be a part of the response that many of you and your organizations

may become involved in in a volunteer capacity going forward. and then i will just conclude with some overarching thoughts and comments. so the current situation -- i'm going to show you a couple of maps. i will walk you through them individually. they have been prepared by w. h. of -- who. they illustrate the remarkable speed with which the virus havs spread. the circles represent, according to the legend, the number of deaths that have occurred in each country. you can see that to date, the virus has spread globally. the blind spots in africa are in little different to interpret. africa is a very surveillance- deprived area. the fact that those countries have not been colored in does

not necessarily indicate that the virus is not there. the western hemisphere is -- has been most affected to date, not surprisingly because of the origins of the virus in central america probably in the spring. this is a chart that was prepared by who, and i draw your attention to the fact that the data is only from july 19. ordinarily if i were standing here and presenting data from july 19, i would say that this is very fresh data. in this case, it is almost an eon ago in terms of this pandemic in terms of how fast it is changing and spreading. you can see that there has been widespread disease, particularly in the western hemisphere. almost all of it has experienced

widespread disease. at the time australia and new zealand were not colored, but there is now widespread disease in australia, new zealand, thailand, and certainly, great britain. this is a slide that represents an effort by who to illustrate the intensity of spread, meaning the burden of acute respiratory disease that has been observed in the affected countries. lots of countries are not reporting, so this is sort of an incomplete map, and again, this is data through july 19. again, you can see that the united states has been deemed by who to have low or moderate intensity. we have had lots of disease, but we are a very big country. except for a few local outbreaks like in new york city and the

outbreak in milwaukee, the general transmission intensity that we have seen has not been overwhelming yet. canada has seen a little bit more. mexico certainly had a very large outbreak in the spring, and they are now seeing increase in disease transmission in the southeastern states. in particular, the nations of the southern hemisphere have demonstrated very high intensity of transmission to date. that is not surprising. the flu seasons are reversed seasonally, so they are in the middle of their high transmissions lucy's and right now -- high transmission flu season right now. we have been watching the south american nations that have similar social demographics and similar standards of living to the united states, trying to discern patterns that may help inform our planning and

preparedness for the fall. we have been paying close attention to the disease domestically, but we are also trying to learn what we can from the experience of other nations. some of the nations in the southern hemisphere have undertaken quite aggressive responses, and we are also striving to learn from their responses. argentina, for example -- most of the nations in the southern hemisphere, i should say, have a winter break that would correspond more or less to our christmas break, and most of the nation's take that break at some point in july for a couple of weeks. people go skiing and do the sorts of things that you do in the winter. argentina took a quite aggressive stance in terms of their winter break. they extended it. ordinarily, it would have been about two weeks. they started early on july 6 and extended it through august 3. schools were out for almost a month in argentina.

they have gone back into session, and we continue to watch. they are still in their high transmission season. it will be interesting to see what happens going forward, so we continue to observe that closely. i should warn you, before we get too much further into this talk, i belong to the band of what we call flu wonks, and we like to put lots of curves of lines going up and coming down, so you will see lots of curves of lines going up and coming down, and i will explain what those mean, but it is an unfortunate habit of people like me. you will have to forgive me. a little bit about what is going on in the united states. we have had disease transmitted

in the united states really since early april. the first cases of h1n1 influenza, in fact, were diagnosed in the united states in california and texas before the mexico outbreak was recognized to be an influenza outbreak. the samples were collected in early april, so we have had several months of transmission. flu transmits very rapidly, with an two to four days. at this point, it is difficult to know how many cases we have had in the united states. the cdc some time ago publicly estimated that there had been greater than 1 million cases. if you talk to people in the flu modeling business, and there is a minor industry, you will get various estimates as to the number of cases we have seen to date. i have heard privately estimates ranging from 1.5 million to 2

million cases in united states. no one knows for sure, but it is a lot. we now have cases in every state, every jurisdiction. as of august 6, we have seen about 6500 hospitalizations where h1n1 has been confirmed, and we have also seen 436 deaths. that suggests to us, given the estimate of the cases, that the overall case fatality rate of the risk of any given individual actually perishing from flu is quite low, which is reassuring, but the aggregate number as the disease spreads through communities and the nation will grow in a way that we unfortunately will not like to see. one of the defining characteristics of this virus is

that it seems to be targeting our younger populations. the attack rates in younger populations -- rather, not the attack rates unnecessarily, but the percentage of a tack rates in younger populations is rather high. this is a chart showing cdc data, showing that about 60% of the cases have occurred in people younger than the age of 24. influenza is a disease more easily transmitted among younger populations for a variety of reasons. even in seasonal flu, we see more cases in younger people, but not necessarily more deaths or hospitalizations because the people who tend to have a problem with influence our people with other -- are people with other problems.

there are greater concentrations of those people in older age groups. but this is very striking. what is particularly striking is the very low number of people, even after the virus has been transmitting efficiently in the united states for months, over the age of 50 who have been documented to have the illness. the informed scientific speculation -- there is some data to support this, but the informed speculation is that people born before 1957 likely had exposed to previously circulating h1n1 viruses, which appear to be more closely related to this particular virus than the h1n1 viruses that have been circulating since 1977. just to be very clear, h1n1 viruses have been circulating in the united states for 30 years, but this is a very different h1n1. it is genetically quite distinct from the h1n1 virus is we have had circulating for the last 20

or 30 years, and immunity to viruses that have been circulating does not seem to provide a great deal of immunity to the virus that is certain now -- that is circulating now. that may explain why the attack rates are so low in all the populations. -- in older populations. that same phenomenon might explain why we have seen a disproportionate number of hospitalizations in young populations. as i said, seasonal influences, the usual pattern that we see is the burden of severe disease, the burden of mortality tends to cluster at the extremes of the age spectrum -- as i said, in seasonal influenza. both for hospitalizations and for deaths.

what we are seeing for this virus is that among those hospitalized, the largest portion -- about 50% -- are younger than the age of 24, and that there are a substantial portion in the age range of 25 to 49, who are also being hospitalized. this does not necessarily mean that the absolute numbers of those people in those age groups who are being hospitalized is greater than with seasonal influences -- influenza. we do not know yet. this is something we will figure out retrospectively, but there is a striking absence -- or not absence, but a striking reduction in the number of hospitalizations and deaths are occurring in older populations -- and deaths occurring in older populations. to give you a sense of burden we

have seen to date and that we may see in the fall, this is some data from new york state. the four curves represent the number of hospitalizations by week. week one is the first week of january. so on and so forth. week 52 is the last week of december. number of hospitalizations by date in new york state was confirmed influenza -- with confirmed influenza over the last four seasons. up until the spring, it had been a relatively mild year in new york state. 2007-2008 was a bit more intense in new york state, and you had more cases of influenza hospitalization, mostly occurring in the early

february-march timeframe. this is what happened after h1n1 came out. new york city had a particularly large public. the new york city department of health and mental hygiene, based on some surveys they did, estimated that about 10% of the population of new york city actually fell ill with h1n1 during their spring outbreak. you can see that the large outbreaks in the new york city area that spread into other parts of the state resulted in a striking increase in the number of people who were hospitalized. just a reference point, we normally would expect somewhere in the order of 5% to 15% of the population to develop influenza during a typical seasonal flu year. they had about 10% roughly. again, these numbers are not certain.

they are our best estimates at this point. that is almost like a winter's worth of flu in the spring. historically, when we look at previous pandemic, we have estimated that the overall attack rate, the overall percentage of the population that will become ill during the course of the pandemic, is somewhere in the range of 25% to 35%. the outbreak in new york state, while it was substantial, does not really compare in its extent or intensity with what we have seen in previous pandemics. as i said, i am not going to hazard any predictions because of influenza is inherently -- because influenza is inherently unpredictable. come to the issue of the mortality rates we are seeing, as with hospitalizations, we are

seeing an unusual distribution of mortality. i want to underscore that that is distribution of mortality. i do not want any of you to walk away saying that we know we are having more deaths in aggregate with these age groups, but looking at the total number of deaths and which age groups may fall into, this is not a pattern we see with a typical seasonal influenza. this is a slide from mexico comparing h1n1 distribution of mortality -- again, not absolute numbers but the distribution of mortality -- with the last two seasonal flu years. those are the black and white bars, and they should be very typical pattern of seasonal influenza mortality were roughly 90% is observed in the people

who are 65 and older -- where roughly 90% is observed in the people who are 65 and older. as you can see with the orange bars, which represent the distribution of h1n1, that is not what we are seeing with this virus. the last issue that i want to touch on is certainly the issue that everyone is most sensitive to, which is that if this is a virus that is largely affecting young people, unfortunately, it is also causing some deaths in the pediatric populations. typically -- and i showed this slide to illustrate what we have seen to date with what we have seen the last few years -- this is cdc data. cdc has undertaken trying to keep track of pediatric influenza deaths as a result of

the 2003-2004 flu year. there were stories about an increased number of deaths in children from influenza that year, and the vaccine was late. there were some scarcity issues, so it produced a lot of anxiety. in 2003-2004, we had 150 or so deaths in children that were directly attributable to influenza. the average number we see during a typical seasonal fluk year is somewhere in that ballpark. the curves in purple and the one yellow's lot represent the pediatric deaths that have been reported to date for h1n1 virus,

so we have had roughly 29 or 30 pediatric that's -- deaths so far. again, we do not know how large an outbreak we have had and how large an outbreak is coming, but there is reason to be concerned we will see substantially larger outbreaks in the future. we do not know where this number will end up, but these are very poignant deaths. they attract a lot of attention. they are typically reported in local or regional newspapers. this is something we'll be keeping a very close eye on as we go forward. it certainly contributes to public perceptions of severity of the outbreak, for obvious reasons. i want to talk very briefly about some of the social disruption that we saw in the spring. wendy pandemic began, the

reports that work -- when the pandemic began, the reports emerging from mexico initially work concerning. we were hearing about hundreds of thousands of young people becoming seriously ill, requiring hospitalization. many young people with the leaders, many young people dying -- many young people with ventilators. it was not clear how large the outbreak in mexico was. and so cdc took -- they erred on the side of caution in terms of making recommendations about school closes, and they recommended that schools close at relatively low burdens of disease, and the blue curve represents the number of schools closed on a day-by-day basis in late april and early may. it peaked at around 726 schools closed because of influenza, affecting almost 470,000

students. this was obviously quite disruptive. i have to say that cdc is to be commended for working very rapidly to gain a better understanding of the virus and to understand that the disease was much more widespread than we had initially understood and that the actual average case of h1n1 disease was much less severe than we had initially feared might be the case. so taking that context, they adapted their guidance very rapidly, and i believe on may 4 and may 5, released revised guidance saying that it was not actually necessary to close schools at the first sign of influenza. you can see the sharp decline in the number of schools that were closed. that kind of contextualize adaptation is going to be very important as we go forward in

the fault -- that kind of contextualized adaptation is going to be very important as we go forward in the fall. cdc work very quickly to see what was happening and provide the best guidance that they could. as many of you have heard, they released their new school guidance on friday, where the goal will be to keep schools open but states -- open but safe and focus on ways to protect the general student population and particularly the vulnerable population within schools. we will continue to revise our guidance as contexts change, and we will continue to adapt, and you in your local communities will have to do the same. you need to be ready to adapt in that rapid fashion as circumstances dictate. i should point out that one other interesting thing about

this chart is that even after the guidance to reopen the schools was released, it was still necessary all the way through may to close some schools. there were reasons to close the schools. the number of students or teachers absent was simply too high to allow useful education instruction to occur, so school closes were observed throughout the rest of the spring, but at a much reduced rate and with much less social disruption than we witnessed in the early part of may. i would anticipate that we are likely to see, even though the guidance is to try to keep schools open and make sure that they are safe environments for our students, i would expect that we will see some school closures in the fall, and i think it is important for all communities to anticipate that that will occur and to work with students and families with the educational community to try to ensure that useful instruction can continue if parents are able

to adapt if and when they need to in the event that a school here or there or perhaps a school district closes. being prepared does not mean having to implement it. it just means something may be forced upon us by circumstances. just to summarize, that is kind of the end of the situation update. the good news, if there is good news, is that the overall case fatality rate appears to be quite low. we cannot really put a fix on that, but it seems to be somewhere in aggregate in the range of what we see with seasonal influenza. the challenge is that we may see a substantial increase in the disease, so it is not to seek -- not to say that we are out of the woods, but we are not dealing with the andromeda

strain. what we are also seeing from our surveillance both domestically and abroad, sequencing new viruses and see good thing to do once we have seen before, is that the virus is not mutating in any significant way with either increasing severity or transmits ability -- or transmissability. .

predictions, i will talk about our historical experience. these charts -- it is complicated and i hope everyone can see. can see. got the arrow or wil the chart as illustrations of the epidemic occurred of the last four pandemic spurted this is in different locations. there was a pandemic in 1989. there was a pandemic in 1957 and one that started in 1968. pandemic spar multi-wave, multi- year bonds. we are heading into what will likely be the full weight of the 2009 pandemic. previous pandemic have returned to increase and has mortality, higher rates of hospitalization and death over several years.

the 1957 pandemic, you can see and the lower left corner, in the fall, there is a sharp spike and a fairly dramatic decline in the number of deaths that were observed and returned the spring. we need to mentally prepare ourselves for the duration of the campaign we are about to face. we are racing against a full weight in an effort to develop a vaccine that we hope we can get to people to protect large part of the population. even if the fall wave because the vaccine, it does not mean that we are too late. this is likely to be an event that will occur -- we may see spring wave or one next fall, we don't know. the effort to immunize the public will be critical, even if the virus happens to get here before the vaccine does.

we're moving as fast as we possibly can to make sure we have a vaccine available. it is not all about the fall. to illustrate another issue about epidemics -- this is deep into the wonky part of the talk. in previous pandemic is, so that you know, we have seen this same skewing of attack rates towards younger populations. it is very characteristic of in- flu-enza because of the social environment we live in, because of the social environment that our children live in that attack rates are higher in children. there is nothing peculiar about this epidemic accept the amplitude of the case burden we are seeing in younger populations. the reason i show this to you is the blue curved represents the

age-specific clinical attack rates of the 1957 virus. it was different in 1918 and 1968 by recess, the red and green curves in the striking propensity for attacking younger populations. 1957 was a pandemic that was triggered by the opening of the schools in the fall. many of us are looking to the 1957 pandemic as a potential guide to what we might expect because of the way this by received a bb rating. instead of looking to 1918, which is the worst-case scenario, many of us are now trying to learn more about the 1957 town -- pandemic and try to understand the dynamics of that event. many of the slide-will show you relate to the 1957 pandemic. i am sure you have seen a lot of 1918 pandemic before.

these are mortality curves predicted that -- the top line represents mortality. the solid line represents mortality in the united states. this points out the fact that this is likely to be around. the 1957 pandemic caused a higher rate of mortality for about seven months, wanted actually started. the 1957 and 1918 are important examples historical because they were the two pandemic where we knew that the pandemic fires was circulating in united states in the spring and early summer and percolated through the summer. in 1957, as this year, there were a number of outbreaks in camps, boy scout jamboree is, that was observed throughout the summer.

i had the opportunity to spend a couple of hours with dr. d.a. henderson. in 1957, he was the chief operating officer at the cdc and perform epidemiology and research. he gave a wonderful metaphor for what they experienced. he said it was like the virus laid down a bit of routes throughout the summer and then, when conditions were right, in this case when schools reopened, the virus came up like the grass in spring and, everywhere at the same time. he said it was overwhelming how quickly it happened. that is a useful analogy. it certainly is governing our efforts to prepare for what we might see in the fall. we cannot know anything for

certain. this is a chart to illustrate how quickly the virus spread. this is how they tracked its spread in 1957 in real time. they counted the number of counties that were reported outbreaks. this chart shows how the virus, over september and october, petrine the week of october 19, rapidly spread to hundreds of counties and each county would have an outbreak that lasted up to 10 weeks. but it on your the peak, you were looking at 1800 counties that were having simultaneous outbreaks. that absolute diffusion of disease would place insurmountable burdens on the federal government possibility to respond to all the communities at the same time. the communities will have to draw deeply on their own resources if and when this

actually occurs. subsequently, in 1957, through the use of survey tool, they went back and tried to recreate the actual case curve. they estimated that the week of october 19, the week when the epidemic peaked, about 12 million people actually became sick and had to stay home in bed for at least one day during the peak week of the 1957 pandemic. that was over a denominator of the total population in the united states of about one under 70 million people. that was about 8% of the population becoming sick and one week. -- in one week. this is a complicated chart. it shows absenteeism in schools. this is an issue that people will be concerned about this fall. in 1918, there were actually very few cities in 1918 that let their schools open.

only three that i am aware of, n.y., chicago, and new haven. chicago kept the best records and a look at absenteeism in the different parts of the city over time. you can see that absenteeism in the chicago schools peaked around 40% that was at the peak of the epidemic. it peaked as the number of deaths were peaking. because deaths are delayed by a week or more after cases, a lot of the absenteeism in the schools was driven by parental fear and anxiety, not by student illness. those anxieties and concerns were dramatically reduced in 1957 because that virus was much more lethal and its effects. absenteeism in 1957 peaked in most schools around 30% in the schools that were studied. it was higher in high schools and elementary schools. it was not a clear pattern as to which types of schools were

affected first. there was a slight preponderance of bicycles that were expected before elementary schools. it is likely to be a mix, this fall. at&t was one of the largest industrial concerns in the united states in 1957. they went back and looked at the average absenteeism for them across the nation over the course of the 1957 pandemic. the average absenteeism spread out across the whole country and peak at about 3% above baseline. that was average across the entire country. in specifications, the sahaptin see is some -- basal absenteeism about 18%. -- they saw absenteeism about 18%. but the top of the vaccination programs. -- let me talk about the vaccination program.

i will talk briefly about three programs. one of the most famous ones is the 1947 smallpox vaccination program in new york city. a traveler can back from mexico, developed a model form of smallpox, it was not as easy to diagnose. he moved around the city for several days and cost more cases of smallpox and implemented a crash program to vaccinate the entire city. new york city succeeded, the population was probably about 8 million people, they claim to have maximum of about 6 million people in one month. there are others who have gone back and thinks that may have -- they may have only backs and 4 million people. it is part of our collective memory and c. -- memory in emergency preparedness.

is an incentive to be vaccinated. another example that bears scrutiny is the 1954 polio vaccine field trial. it was the largest credit clinical trial ever conducted in united states. it involved 1.3 million students in the spring of 1954. a book was written that won the pulitzer prize for history and 2006 all about how this field trial was set up. it was an interesting study. it is not a perfect example. it was a successful campaign. it was a clinical trial. there was lots of additional record keeping. i should say that in standing -- setting up a vaccination program where your target many students, they had to get the assistance of 50,000 positions,

almost 200,000 volunteers to stand at trial up. that gives you a sense of the magnitude of what we might be facing going forward as we talk about trying to vaccinate 150,000 or 2 million people or as many people as want to be vaccinated. the last example that we have looked at, many of you have heard or will remember this swine flu fiasco as it is known popularly, in 1976, there was the h1n1 outbreak at fort dix. a young soldier, 22-year-old died. it was the first time that h1n1 had been seen in the population. that was since the late 1950's. it was thought that the fires that broke up was related to the 1918 virus. it was a tremendous amount of anxiety that we might be facing a recurrence of the 1918 virus

with the terrible mortality that we saw in 1918. there were some questionable decisions that were made. it is not my intention to review the decision making process. we have studied it. the president of the institute of medicine and a historian at harvard actually wrote an interesting study in 1978 about the decision making process. it is extremely interesting reading. for some of us. [applause] [laughter] that is not why i am bringing the example of. it was perceived to be an emergency and there was an effort to rapidly back to make the american population. the effort in 1976 focused on the older population. we succeeded in actually vaccinating 40 million people in

about 2.5 months. that was a remarkable accomplishment. if you dig down into that accomplishment, you can see that the vaccination rates were quite variable. some suspects in its 60% of the target population and some facts and it only 20%. it was affected by the people in the local communities. also the commitment of public health officials. it is important to bear in mind that about 85% of the vaccinations in 1976 were done through public health clinics. we envision a different mix in terms of our vaccination strategy for the fall. fortunately, the only example we have to turn to that even approaches what we're attempting is what we do every year, which is our seasonal flu vaccination

program. we tend to vaccinate around 120 million people per year. most of those vaccinations take place in high-risk individuals, the elderly. there are increasing numbers and children. most of it goes through the power -- private health system. thus the vaccinations occur before in-flu-enza begins to circulate. with seasonal flow, most people only need one shot. there are striking differences with what we're looking at in the fall for it will likely to be in a middle of the vaccination program while a lot of influenza is circulating. this may be an incentive for people to come in and put a strain on the delivery systems. the advisory committee on immunization programs has issued a high priority which covers 159 million americans. we are aspiring to vaccinate a much higher number of people that normally backs make for seasonal flu.

we are in the middle of clinical trials and studies but because people have never been exposed to this virus before, it may require two shots. that will oppose -- impose additional pressures. i will not be later this -- delivering the vaccine is only part of it. we need to track the vaccine and how much we have and how much we use. we need to make sure we track the safety of the vexing. that was one of the unfortunate outcomes in the 1976 situation that it had an unfortunate side effect. some people came down with a rare neurological disorder and about 30 people died as a result of the vaccination program, unfortunately. tracking the backs mission going forward will be a critical effort. the largest challenge will be coordinating the delivery. that is where your organizations may play a very

important role in helping us at the local level delivering the vaccine to people who need it. we have to reach out to be hard to reach groups. we had a discussion earlier about the challenges that they face in reaching groups that predominantly live in a number -- but in another language. we have to be mindful of everyone in the community. this is a slide showing that people get vaccinated and a bunch of different places. we hope to utilize and leverage all of these locations as we move forward. we are still working on this. we certainly welcome the input and assistance of people at the local level in terms of helping us figure out how to deliver the

vaccine most efficiently to those who need it. finally, these are the high court groups that i mentioned to the advisory committee. there has been a lot of press about women being at high risk. health care workers will be on the front lines. children younger than six months of age, the vaccination is not licensed for them. we want to? and if the people taking care of infants. that is because of the disproportionate incidence of disease in children, they are at high risk. pregnancy, lorton -- a neurological disorders, pulmonary disease, that will be in the population retarded. -- we target. this is a chart showing our coverage rates for seasonal flu.

in normal risk populations, the coverage rates are actually not as high as we would like them to bigger they are higher in groups that are identified as being at high risk. we certainly want to aim to achieve higher rates of coverage, even more than we have achieved here. this will be when the big challenges for the fall. let me conclude by going back to some of the box i brought up earlier about adaptation and social resiliency. this is a chart we have shown frequently. many of you may have heard this story, comparing philadelphia and st. louis in 1918. philadelphia was one of the cities that was to quit early. -- that was hit with early crediearly.

they had a terrible outbreak and you concede the death rate. philadelphia is the blue curved. st. louis, on the other hand, had a couple of weeks of all viet thanh. the observed was -- a couple of weeks of lead time. the health commissioner in st. louis was arm in arm with the mayor and other public officials and voluntary organizations and they implemented a broad and re -- a broad array closing schools and banning public gathered to get in place for six weeks. you can see that the death rate in st. louis was dramatically lower, as a result. i bring this up to talk about the adaptability of an entire community with a little bit of lead time and effective communication from its elected leaders, volunteer organizations, was able to

adapt to a very challenging circumstances. st. louis saw its first case only a few weeks after philadelphia but yet they were able to act very quickly. it is not just on a city by city basis. in 1995, chicago had a terrible heat wave in the middle of july. you can see the mortality pique over a few days in the middle of july when temperatures spite to 95 and high rates of timidity. almost 75 people died during this time. was import about this curve is not what it shows but what it does not show. there was another kitwe that the end of the month with almost the same direction, almost the same temperatures and you consider what happened in the city. having lived through the terrible heat wave in the middle of the month reacted very quickly. they sent people around knocking

on doors in poor communities where the death rates had been high and they actually prevented a recurrence of the high rates of mortality that we saw just a couple of weeks before. this kind of adaptation, rapid adaptation, rapid response to what is happening in your community is what we will look for from you in the fall. human communities are composed of people and social and political institutions and activities and infrastructure. getting a handle on this contextualized adaptation, this ability of individuals and groups to draw on sources and their own ingenuity to solve problems is our biggest challenge, what we will be tested on in the fall. i would offer to you that our capacities in this regard to

adapt quickly should not be underestimated. such adaptation is much easier when a community is magnetized by an external threat. extra month threats are wonderfully effective -- external threats are wonderfully effective at removing bureaucratic obstacles and the like. we should go into default realizing that we can draw on this. if i can offer some the to the general discussion, i would call this but dunkirk effect. all of you know the story. the british expeditionary force was on the european mainland. it was essentially the entire british army in 19 -- 1940, 200,000 men. they ended up being# trapped wn the king of belgium surrendered his army. the germans were coming in from both sides. they were treated to the beaches

of dunkirk. when the evacuation started, on may 26, churchill thought that they would be lucky if they get 50,000 men out. the problem was that the british destroyers that you can see in this picture, their drafts were too deep and could not commit to the shore. men had to go out into the water and had to stand neck deep for hours at a time for a couple of days later, on may 28, the british ministry of shipping put out a call for all boats with shallow drafts, pleasure craft, a private yacht, fishing boats, merchant marine vessels, more than 700,000 vessels without arms and ask for assistance. with the help of the small boats, in one week, all of the british expeditionary force and about 140,000 men from the

french army were evacuating successfully. after things get organized, this is a wonderful example of contextualized adaptation, churchill called the evacuation a miracle of deliverance achieved by ballard, but perseverance, but perfect discipline, by full-service, by skill, and by incomparable fidelity. he reminded his colleagues in parliament that wars are not won by evacuation's. [laughter] i want to conclude there. i want to draw any personal experience. i was a civilian up until 2002. i had the privilege of responding to ground zero after the attacks of september 11.

it was an utterly like to experience. -- like changing experience. the volunteers who supported the rescue and search workers changed the direction of my career. that is why i am standing in front you today. it instilled in me a terrific confidence in our public and their ability to respond. i am confident going forward, looking towards the fall and whenever we encounter that those same resources will be drawn on by you and your organizations and you will draw on the public in your communities to meet the challenges that we have had a boss. with that, i would like to thank you for your service and thank you for inviting me to speak to you. [applause]

>> i want to thank dr. richard hatchett for presenting such a wealth of information in a clear and slightly wonky way. we are awfully glad that he holds the position he does. please join me in thanking him once again for being here today. [applause] i last announcements are to please use the next three to sign up for the workshops if you have not already. we will be serving desert on the independence level. thank you again and we will see you in a bit. [no audio] >> bill clinton picks up the 2009 net routes mentioned blogger convention for the coverage starts thursday night, live at 8:00 eastern, on c-span. friday, panels on health care reform with howard dean, pennsylvania politics with arlen specter, making change happen

and reshaping the supreme court. >> and reported this month" washington journal talks with authors. we will be taking your calls, e- mails, and tweets this friday morning on c-span. >> how is he spent on the? >> by donations. >> federal funds are grant funds rate >> private contributions. >> honestly, i don't know. >> i would say from commercials. >> advertising? >> something from the government. >> how was he spent on the dax 30 years ago, america's cable companies create cspan as a public service. it is a private business initiative with no government mandate, no government money. >> in about 40 minutes, we will take you live to the white house for a medal of freedom ceremony.

16 recipients are to be honored today, including senator ted kennedy, a tennis player billie jean king, and scientist steven hawking. you could see it live at 3:10 p.m., if you're on c-span. one of those receiving the medal of freedom today will be nobel peace prize winner muhammed yunus. this is about one hour. we will show as much as we can until the ceremony at the white house begins. >> we will go ahead and get started. i want to welcome each of you to the national press club for this morning's news maker. i am mark scheff, i am the chair of the newsmakers committee. i and the washington correspondent. we are pleased to welcome professor mohammed yunus.

he is known as the father of micro finance. he won the 2006 nobel peace prize for his efforts to alleviate global poverty through small daughterlow-interest loans directed at indigent women at a banking founded in bangladesh in 1983. today, he is in town to pick up another prestigious prize. he will receive the presidential medal of freedom this afternoon at the white house. first, he will talk to us about the growth of the u.s. organization, gramein america.

they have lent over $2 million to over millions of bar wars. it is my honor and pleasure to welcome to the podium, prof. yunus. [applause] >> thank you. back to very much. good morning. it is a very special day for me today. there is a big ceremony waiting in the afternoon. we are getting ready for that. it is also special because my daughter is here. monica. and her husband. this is their first official meeting they are attending as a married couple. the to get married on the 14th of june. this is also very special for me. anyway, i may very lucky person to be on the list for the presidential medal of freedom. out of 16, this is to occupy one

slot. it needs a lot of luck to make that happen. i am very happy and honored that the president has given me that slot. it is also very special because he is probably the most admired person globally. he has inspired the old world. to be on his list, i share the admiration that he has created for himself. hopefully, some of his admiration will go to me for being on this list. all the issues that i have been raising in the past about poverty and how it can be overcome, how we can almost set a date that it is over and finished. sometimes people pike -- people

think this is not achievable. i feel very strong about that is achievable. i will talk about this being over. and we can move on with our life, the real human life because poverty does not represent real human life. it is a sub human life. it is almost like animal life. there is no reason in this day and age that we should be carrying on this legacy of this poverty. this is one issue, with the recognition that i get, being on the list, that makes it known to many people who might not have known in depth before. they would like to know what i represent. i also talk about issues along the way. poverty is not created by poor people. poverty is greeted by the system

that we build all around us. how do we change the system? the timing is correct for this award for me because the whole world is going great financial crisis. inside, everybody feels the system is not right but they don't know what would be the right one. i kind of get my views of what could be the right one. this is one occasion where we should pay a lot of attention to how to redesign, retool system so that we do not follow the same old way of making our lives proceed. rather, we need to create different structure so that we do not fall into the same ditch over and over again and make it worse every time. this is a call but i get. this is the deepest of the crisis but this is the greatest opportunities. the opportunity part have to be

emphasized. this is forgot most of the time because we're so busy trying to fix things. it is not good to get back to the same old blankets as to redesign the system so that we go to the new beginning rather than going back to the same normalcy that we are used to. we should not go back to the normalcy again. we must create a new normalcy. that of reach -- that is the point of like to make. on the financial side, the talk about making the financial world different and making financial service available to every single human being on this planet i keep talking about credit as a human rights. it plays such a fundamental role in human life that should not be just left to the business people as to who should get it and who should not get it. this is something we have is a framework that we must adjust it

as a human right. we need to establish it for all. this crisis should lead us to that same basic conclusion that instead of having a in exclusive financial institution for specific people, we should have inclusive financial system so no one is excluded from that system. this is the version that we bring out and demonstrate. we do this in bangladesh and we need it replicated all over the world. today, not one single country would be available where you do not have micro credit programs. it is done all over the world. it is doable and it works and it works in a sustainable way. the key word is sustainable. it is not a charity. it can be done in a with a people benefit. at the same time, it recycles money. it is not charity money that you depend on. this is one issue, fixing the

financial system. the other one is the business world to be fixed. today, the business world is devoted to making money. that is the only kind of business and the whole world. profit maximization is the single mission of the business world. that is too narrowing of a human being carried to endings are selfish. this is a basic element of human beings. the same time, all human beings are self less. that is built into the human being. that part has been completely ignored by the economic world. that is where we went wrong. we build a world where we are all running to make money because that is what the theory says we should be doing. that is a very narrow way of building our own world. we have ignored one basic part of our human being, being self less. being able to touch the people by our individual actions. i am using to selfless part of human beings to build a new kind

of business, using that part of human beings that i am calling social business. it is the business to change the world, to impact a human being's life without any intention of getting money for myself. is all for others. nothing for me. contribute to the existing business were nothing -- or everything is for me and nothing for others is wrong. we can create those businesses along the way. we can make the world a better place for all of us. micra finance can be one of them but health care could be another. environment could be another social business. there are many many things, housing, nutrition, you name it, it can be done in a social business way. it becomes important because health care is a big issue in the usa. we are trying to address health care in bangladesh in a social business way, creating social businesses within blank --

bangladesh. we have also -- we have already created i guess care hospitals. -- i-care hospitals. owners say it should be available to the people. nobody should suffer from eye problems. this is the case of a social business. we are building up many health care programs in bangladesh in association with the university's and companies here. universities like emory and university of pennsylvania and john hopkins and harvard university and the mayo clinic, trying to build these pieces together. this is the basis of the social business. we are creating small health management centers and the villages where our focus is on keeping them healthy people

healthy. that is our main focus. we want awareness to become an important element of this health business. also how to keep help the people healthy and then detect at an early stage any deviation from health. early detection and early treatment since we cannot keep the doctors in the villages because doctors ever were want to live in the metropolitan city, which i don't blame them, we)y. have to find a way to brig the health service and the technologies available for us that we can do that. that is because of the availability of the internet and is a huge platform of mobile phones. that is a common things and people all carry them in their pocket or whatever way they can carry a mobile phone. it is also an internet facility.

we are trying to build diagnostics, tools so that at the village level, the tools are used and make it very simple and the village girls can be trained to use the diagnostic tools and to plug into the mobile phone, trans that all the images and all the data, all the information from the household to the specialist dr.. that could happen wherever they live, most likely in the city and then communicate through the mobile phones and give prescriptions. this is something we are in the process of building. it is a social business. that is another area we want to build up. along the way, the replication began in new york city in america. in new york city today, in jackson heights in queens and

now expanded to manhattan, which has crossed the 1000 mark. we have now over 1000 borrowers in the program. women getting together and taking the loans and being responsible and create their own employment and make a living for themselves and they are proud of their ability to handle that. the repayment has remained over these years from january, 2008 until now. it is near 100%. it is amazing. we did it in omaha, as well. i hope to see the same kind of excess repeated their. other cities are inviting us. from san francisco, los angeles, north carolina, boston, baltimore, so we are hoping that

we should be starting programs there, also. those are the kind of things that i try to focus on with the intention that we can overcome all these problems. unemployment can be overcome. as unemployment continues to increase, we can create alternative formats of employment like self-employment. wycombe also create employment for social businesses -- we can also create social employment. that aspect has not been addressed before. i am trying to bring that to attention. i will stop here. today, we have nearly 8 million borrowers at gramein bank. we went out over $100 million per month. all this money comes from the deposits that are collected by each branch. the local money, taken as a

deposit, and lent to the local poor women and then the branch and its profit. the bank is a profit-making company. it is owned by the borrowers themselves the dividend goes back to the bar was as a shareholder. it is a complete circle. the money given out is paid back with interest and the company, the bank makes profit and profit is distributed back to the bar worse. -- borrowers. this is being done in many countries and they are very happy now. we have been launched in a big way in china and inner mongolia and szechuan. the interest of the chinese government, they have invited us to start the program. we can start the program this year. thank you very much. [applause] >> we will take questions.

identify yourself and your organization when you ask a question. who has the first question? >> i am from new york. what is your reaction about you receiving the award from the u.s. government? >> as i said, i am very lucky. it is a very exciting moment for me. this is a big recognition for the ideas that i have been promoting, trying to let people pay attention to it. this recognition brings a lot of attention to those ideas so i am happy about it and it is important personally for me for being recognized by such an important person in the world, a most admired person, possibly the most admired person and the world and a person who inspired a whole generation of young people all over the world. with his inspiration, with his great capacity to draw

admiration and people's attention, to be on his list saying that some of us will probably run to my ideas and inspire other young people to make that happen in the world so that we can start believing that we can create a world where not a single human being must suffer the misery and the indignity of being a poor person. that is very exciting and exciting for bangladesh being recognized out of many countries and the world that someone from bangladesh is being recognized. this gives us lots of happen is among the people of bangladesh. -- happiness among the people of bangladesh. we can contribute to the world. we can make a goal in our life to make changes, to make a distinguished nation in the community of nations.

thank you. >> what is your message today for all bangladeshis all over the world? >> the message is that what we do in bangladesh is not just a local bank. -- thing. it has a global implications, including the united states, which gives bangladeshis a lot of confidence in their lives that we can do things in on the global stage. we are not just a poor nation. we get used to knowing we are a poor nation and we get ignored. we are not neglected and ignored. we are a significant nation. we have the ability to not only make an impact in our life but to contribute a globally. this is a recognition of that kind of thing.

i am not being recognized for things that other people have not done better. in a way, this is a very contradictory situation. i stand in contrast to everything that is done in the usa. business sells everything here. if you make money, that is good for the nation and that is it. i am saying, no, that is not it. making money is not the goal that will pursue. we're not making this change. -- we're not money-making machines. we need to compete in a social business. social business is a contradiction to the money- making business. the money-making businesses everything for may and nothing for others. in the social business, we are saying nothing for me and everything for others. it is a big contradiction within the usa. at the same time, i am being recognized by the president of

united states. that gives a big recognition to being different and that the same time being a tent -- being paid attention to. i have always said that the welfare system is wrong. there is welfare but it should be temporary. it cannot be a permanent solution to people's lives. it to be very temporary the animal welfare should be to help people get out of welfare. -- the aim of welfare should be to help people get out of welfare. i am saying things completely different. it is not something back goes along with the united states. i am saying exactly the opposite. i am saying that the health care system could be done in a social business way. that is not the u.s. health-care system that these americans have in mind. the usa is the world capital of the banking world.

you are making money so you keep on making money and, in the process, the greed takes over and all crisis happens. i am saying we can build a new kind of system, a financial system which can work just like we do in jackson heights, getting people "would never be able to open a bank account, they put their money into the bank and no bank will accept that. we're doing that. this is something where we do everything in a contradictory way and at the same time, it draws attention because people see sense in what i do and what i said. but you. -- bank you. -- thank you. >> in the current severe recession, many of the biggest banks in the world have had their own survival question,

including the likes of citibank. hull has your bank been affected by the recession where are you recession-proof? >> i would say we are recession- proof. it did not affect us all for several reasons. gramein bank is very close to the real economy. when we get a loan of $100 or $200, against that long, there are some chickens. there might be goats or cows. it is a relationship between money and the cal. it is a tight relationship to the real economy. it is not paper-based where you create a fantasy world of finance. that is what created the crisis. we do not belong to the fantasy world. we belong on the ground. the bank is grounded solidly. this is one reason.

the second reason is, we are not exposed to the financial hubs like new york where you can transmit the crisis to other people. since we are not connected, we are very locally based, it as much as bangladeshi money. it is local money in a very pure sense at the village level. your money should come from your neighborhood and that money should go to the poor people. the transmission mechanism did not work for us and we are happy that we did it that way. we have to insulate ourselves from the financial crisis and works well even in jackson heights, nobody is telling us -- we take weekly payments but no bar wars have said that they

cannot pay us back because they are and have a financial crisis. even in queens, they are crisis proved because this is well grounded to the real economy. it is their work, their money, and they pay you back. >> back in the back, right there. >> i am from voice of america. congratulations, again do you foresee any constructive role of your bank in countries like afghanistan if there is any democracy? >> already, there are many micra finance programs in afghanistan. there's a nationwide micro finance program. it has a role in all countries. we have done micro finance close

above -- in kosovo. we sent our staff at the invitation of an italian organization. we went there and set up there. there was no government in that country where there was the currency. they were using deutsche marks. there was no bank. we started gramein program. there is no government, no rules, no financial system, no banks. it worked and it worked beautifully. it is still working in kosovo. i say it can be done in a worse situation because life goes on. you need to support that life, what ever liked there is so that it can build your economy. it becomes more important because the national system will break down. you build your local economy by

yourself. it will be very important to build up the program. >> i am a freelance reporter. can you explain why you have targeted women and is that a key factor in your success? >> i would say it is a key factor. we started out focusing on women on a 50/50 basis. men and women should be equal. that came as a reaction to the existing financial institutions at that time and bangladesh. i was very critical of that. i was saying that date are anti- women, the banks. i was making a big noise about it. i was showing them how their rules were screwed up.

there were always focusing on men. but women with their husband to come with them. but the man never asked the wife to come along when the husband is the applicant. when i)z began, i wanted to make sure that i did not make that same mistake. i wanted to let the boris women said they did not want to know anything about money. my colleagues suggested that we should move on with men. when a woman says that i cannot handle money and i don't know about money and give to my husband, i said this is not her voice. it is the voice of the history which greeted her. we have to peel off the fear that has been generated and the sense of incompetence and inability to do things for herself. once you pull that off, the real person will come out. that is the person we're waiting

for. we waited pretty long. we waited for six years to make that happen 50/50. we got money to the women and their families. there is an amazing difference between money going to the family for women and money going to the family per man. the impact to the family is way better when it goes to the women. we ask why a are we going to the man at all? we switched our policy. we want to focus on women. that is how we did that. the positive things that happen at the bank was because of the decision early on. people learn from us and replicate that in other countries. they immediately concentrate on women. micro credit, microfarads became synonymous with small loans to the poorest women. they don't talk about other options.

>> i am interested in knowing what inspires you or who inspires you personally to do what you do. >> my basic inspiration comes like any of the program. the impact that to make on people's lives, when i am depressed or criticized or attacked and i wonder whether i am doing the right thing, i go and visit the villages and talk to the women and sit down with them. you get totally agree charge. you get recharged but on the right track. one smile from a young woman or a young daughter or son in the family and what they have done with their efforts with what little money and the role it played in their lives, you get recharged. that is the most inspiration you can get.

these days, inspiration comes when i go around after many years, you see the young generation coming up in those families. it has been 33 years now down the road. you see young girls and young boys who grew up with their family and their bank and they are going to school and college as an going to university. some of them have completed them. some of them are doctors and uc side-by-side the mother who is totally reject you talk to a village kid and say -- and see that he is an engineer. poverty is not accredited by the person. the mother could be in the same situation but she never had the opportunity to go to school. her word created the opportunity for her son or daughter to go to school and become a doctor or engineer. .

>> it is not their fault. we never let them open up the gift and make the difference and the difference on others. >> i cover all of your events.

do you have any message to the bangladesh government? if state government appointed u.s. special envoy -- you are one of only 8 million people, now 145 million people. if the government appointed you to a special envoy, then what? >> any assignment the government would like to give me would be an honor. i would be delighted. what ever i can do. i keep on saying the same thing. i would probably have a bigger platform. that would be a good opportunity for me. there's no reason anyone in the

right mind would say no. i would say yes. i will do that as long as i can do that. i always say that should be done. poverty in bangladesh is not 90%. it is weighed less. the latest figure is 40% of the population is under poverty. poverty is declining steadily. we're hoping to reach the goal by 2015 by reducing poverty by half. in that way, it has been doing well. of course, it can do much better. lots of things have to change to do better. one, the financial crisis held us back. many of the things to do in bangladesh would be affected by the global crisis. we still hope that poverty will

be reduced by half by 2015. we continue to achieve that. when you say 8 million out of 150 million, there is a little correction. it is 8 million families. if there are five people in the family, that is 40 million people. when you have 50% of the population under poverty, you're not too far away. it is only one factor in microcredit. there are many other factors. together, i think we come to about 80% of the poor families covered. our goal is to make sure we get to the 100% as soon as possible. probably in three or four years. >> muhammad yunus, one of today's recipients of the presidential medal of freedom to we leave this recorded the event

to take you to the medal of freedom ceremony at the white house. the nation's highest civilian award goes to 16 individuals, including senator ted kennedy and former supreme court justice sandra day o'connor. live coverage on c-span. [applause] [applause] >> joseph madison edicinecrow. stewart milk, excepting on the behalf of his uncle, harvey bernard milk. [applause] sandra day o'connor.

[applause] sitting 40 aidney . chita rivera. [applause] mary robinson. [applause] janet davidson rowley. [applause]

archbishop americus desmond tutu. [applause] muhammad yunus. [applause] stephen hawking. [applause] ♪ >> ladies and gentlemen, the

president of the united states and the first lady, michelle obama. [applause] >> thank you. thank you. please be seated. there are many honors and privileges bestowed on the occupant of this house. few mean as much to me as the chance to award america's highest civilian medal to the recipients that are here today. this is a chance for me and for the united states to say thank you to some of the finest citizens of this country and of all countries. the men and women we honor today

have led very different lives and pursue very different careers. they are pioneers in science and medicine. they are gifted artists and athletes. they have made their mark in the courtroom, in the community, and in congress. what unites them is a belief that most -- forgive me to those of you that are not americans -- what we consider to be the most american of police. that our lives are what we make of them. no barriers of race, gender, or physical infirmity can restrain the human spirit. the truest test of a person's life is what we do for one another. the recipients of the medal of freedom did not set out to win this or any other awards. they did not set out in pursuit

of glory, fame, or riches. they set out guided by passion, committed to hard work, aided by persistence, often with few advantages. so let them stand as an example here in the united states and around the world of what we can achieve in our own lives. let them stand as an example of the difference we can make in the lives of others. let each of their stories stand as an example of a life well lived. one of the last things susie and did before she died was made her sister a promise. she promised she would prevent other families from hurting the same way evers did. what began with two hundred dollars and a list of friends has become a global race for the care.

it has saved the lives of millions around the world. nancy lay awake at night thinking about the promise she had made and wondering whether one person could really make a difference. nancy's life is the answer. an intern at the jackson memorial, dr. greer came across a patient in a coma without a name or address. the doctors searched for clues about the patient's life. deciding that the homeless of miami deserved better, he founded a clinic that now offers care to over 4000 poor and homeless patients. it is a life that might thbe

distilled into a question he asked all of us, if we do not fight injustice, who will? professor stephen hawkins was a brilliant man and a mediocre student when he lost his balance and tumbled down a flight of stairs. diagnosed with a rare disease and told he had just a few years to live, he chose to live with a new purpose. happily in the four decades since, he has become one of the world's leading scientists. his work in theoretical physics, which i will not attempt to explain further, has advanced our understanding of the universe. from his wheelchair, he has led us on a journey to the farthest and strangest reaches of the cosmos. he has toured our imagination and showed us the power of the human spirit on earth. told he was too small to play college football, jack kemp

became a pro quarterback. he led the buffalo bills to two championships. he once said football give him a good sense of perspective about politics. it makes me feel better. a conservative thinker, a republican leader, and a defender of civil rights, he was the rare patriot who put country over party, never forgetting what he learned on the gridiron. it takes each of us doing our part and all of us working together to achieve a common goal. it is a lie from which we can all draw lessons -- is a life we can all draw lessons. after purchasing an $8 tennis racket, billie jean declared the goal to be the no. 1 tennis player in the world. what we honor are not simply her

12th grand slam titles, 101 doubles titles, and 67 singles titles -- pretty good, billie jean. [laughter] we honor what she calls all of the off the court staff. what she did to broaden the reach of the game, to change how women athletes and women everywhere view themselves. and to give everyone, regardless of gender or sexual orientation, including my two daughters, a chance to compete both on the court and a life. as she once said, we should never, ever underestimate the human spirit, nor should we underestimate billie jean king's spirit. born and raised in jim-crow alabama, the rev. joseph lowery is a giant of the moses generation of civil rights leader. it was just a few people huddled in montgomery that laid the

ground work for the bus boycott and the movement that was to follow. the founder of the southern christian leadership conference, he was later asked to serve as president. he agreed to serve for one year, but wound up serving, as he puts it, for 20 1-year terms. [laughter] some have called him crazy. one of my favorite sermons that i heard dr. lowery once delivered, he said there is good crazy and there's bad crazy. [laughter] sometimes you need a little bit of that good crazy to make the world a better place. born just a generation past the battle of little bighorn, a grandson of a scout for general custer himself, dr. joseph madedicine crow was the first member of his dtribe to attend

college. he completed the four battlefield scenes that made him the last pro were chief. historian, educator, and painter. a good man. his life reflects not only the warrior spirit of the crow people, but america's highest ideals. his name was harvey milk and he was here to recruit all of us to join a movement and changing nation. for much of his early life, he had silenced himself. in the prime of his life, he was silenced by the acts of another. and the brief time in which he spoke and led the, his voice for the aspiration of millions of people.

he would become one of the first openly gay americans elected to public office. his message of hope -- hope un ashamed could never be silenced. he said it best. you have got to give them hope. when sandra day o'connor graduated from law school near the top of her class in two years instead of the usual three, she was offered just one job in the private sector. her prospective employer as to how well she typed. and told her there might be work for her as a legal secretary. i cannot know how she would have dared as a legal secretary, but she made a mighty fine justice of the united states supreme court. [applause] a judge and arizona legislature,

a cancer survivor, a child of the texas plains, sandra day o'connor is like a pilgrim in the poem she sometimes quotes that has forced a neutral and build a bridge behind her four young women to follow. it has been said that sydney does not make movies, but he makes milestones. onscreen and behind the camera on films such as "uptown saturday night" and "lilies of the field" for which he became the first african-american to win an academy award for best actor. the child of a tomato farmer, he once called his driving purpose to make himself a better person.

he did. he made us all a little bit better along the way. delores knows the difficulty that comes with a difficult game. i can relate. [laughter] known to the world by the name that has lit up broadway marquise, she impressed the choreographer jerome roberts, who would make her famous as anita in "west side story." chita rivera revealed the ability to overcome when she recovered from a car accident that shattered her leg. she won a tony award.

she has shown that life can be bright in america. the only girl in a family of four brothers, mary robinson learned what it takes to make sure all voices are heard. she was the first woman elected president of ireland before being appointed u.n. high commissioner for human rights. when she travelled abroad as president, she would place a light in her window that draw people of irish descent to pass by. mary robinson has not only shown a light on human suffering, but eliminated a better future for our world. after graduating from the university chicago school of medicine in 1948, janet ragot married and gave birth to four sons, making medicine a hobby and making family her job.

a decade later, she discovered hunched over her dining room table that leukemia cells are notable for changes in their genetics. it showed cancer is genetic and transformed how we fight the disease. all of us have been touched in some way by cancer, including my family. we can all be thankful that what began as a hobby became a life's work for janet. it is familiar to us all, but the signature quality of archbishop desmond tutu is a readiness to take unpopular stance without fear. perhaps that explains what led the arch to preach amid teargas and police dogs. and later when they freed south

africa needed a hard enough to forgive its sins, archbishop desmond tutu was called to serve once more. a trip to the downtrodden voice of the oppressed, kantor of our conscience, he possesses the sense of generosity, that spirit of unity, the essence of humanity that south africans know simply as. 35 years ago, a young economics professor at university in bangladesh was struck by the disconnect between the theories he was teaching in class and the reality of the famine outside. determined to help, muhammad yunus left the classroom for a village and discover that just $27 with free dozens of partisans, offenders from that -- dozens of vendors from debt. he founded a bank that has

dispersed over $8 billion, lifting billions of people from poverty with micro loans. muhammad yunus was just trying to help the village. he somehow managed to change the world. there's a story ted kennedy sometimes tells. it is about a boy who sees an old man tossing starfish, stranded by a receding tide, back into the sea. what difference can your efforts possibly make? there are so many to the old man studies the starfish and tosses it to safety. he says, it makes a difference to that one. for nearly half a century, ted kennedy has been walking that beach, making a difference for the soldier fighting for freedom, that to refugee looking for a way home, the senior searching for dignity, the workers driving for opportunity, the students aspiring to college, the family

reaching for the american dream. the life of senator edward kennedy has made a difference for us all. these are the 2009 recipients of the medal of freedom. at a moment when cynicism and doubt too often prevail, when our obligations to one another far too often forgotten, and the road ahead can seem too long or hard to tread, these extraordinary men and women, these agents of change, remind us that excellence is not beyond our abilities. and that justice can still be one in the forgotten corners of this world. they remind us that we each have it within our powers to fulfill dreams, to advance the dreams of others, and to remake the world for our children to is my distinct and extraordinary honor to ask each of them to come forward and receive their awards as a military aide reads

their citation. [applause] >> drawing strength from tragedy, nancy goodman brinker. when her sister was diagnosed, most knew very little about the disease. nancy promised to challenge these norms. she founded susan g. komen for the cure in honor of her sister. her unique passion and determination have been a

blessing to all those whose lives have been touched by breast cancer. [applause] >> pedro jose greer, jr. he has devoted his career to improving medical services for the uninsured. a native of miami, he followed his passion for helping others to medical school and found it the camilla's health concern. today, it treats thousands of homeless patients per year, serving as a model clinic for the poor, and inspiring physicians everywhere. his tremendous contributions to the south florida community and our nation as a whole stand as a

shining example of the difference one person can make in the lives of many. [applause] stephen hawking. persistent in his pursuit of knowledge, stephen hawking has unlocked new pathways of discovery and inspired people around the world. he has dedicated his life to exploit the fundamental laws that govern the universe and he has contributed to some of the greatest scientific discoveries of our time. his work custard the imagination of experts. living with a disability and possessing an uncommon ease of spirit, stephen hawking's attitude and achievements inspire hope, intellectual

curiosity, and respect for the tremendous power of science. [applause] joanne camp, excepting on behalf of her husband, jack kemp. a statement and a sports icon, he advocated for his beliefs with an unwavering integrity and intellectual honesty. on the football field, he earned the respect and admiration of his teammates for his judgment and leadership. as a public servant, he placed

country before party and ideas before ideology. jack kemp saw bridges where others saw divisions. his legacy serves as a shining example for all those who strive to challenge conventional wisdom, stay true to themselves, and better our nation. [applause] cara kennedy, excepting on behalf of her father, edward kennedy. for more than four decades, senator edward kennedy has boldly fought for equal opportunity, fairness, and justice for all americans. in his tireless quest for a more perfect union, senator kennedy has reaffirmed our schools, strengthen our civil rights,

help seniors and working families, and worked to ensure that every american has access to quality and affordable health care. with volumes of laws bearing his name and thousands of lives touched by his passion, he has accumulated several lifetimes worth of achievement. the united states proudly recognizes this fractious edison, about public servant, and the giant among men. -- righteous citizen, public servant, and giant among men. [applause] billie jean king. [applause] through for example and advocacy, billie jean king has advanced the struggle for greater gender equality around the world. in an age of male-dominated sport, her pioneering journey to

occur from long beach, calif. to the international tennis hall of fame. her athletic and command is matched only by her own way green defense of equal rights. with billie jean king pushing us, the road ahead will be smoother for women. the future will be brighter for lgbt americans and the nation's commitment to equality will be stronger for all. [applause] rev. joseph e. lowery. [applause] rev. joseph lowery has marched

through life with faith and purpose, carrying with him the legacy of a movement that touched america's conscious and changed its history. at the forefront of the major civil rights events of our time, from the montgomery bus boycott to protest against apartheid, he has served as a tireless bacon for justice. he has co-founded the southern christian leadership conference and championed the cause of peace and freedom around the world. united states proudly honors this outstanding leader. [applause] >> joseph medicine cro.

-- joseph medicine crow. [applause] as a warrior and living legend, born on a reservation and raised by a traditional grandparents, he became the first member of his tribe to earn a master's degree. he was awarded the status of crow war chief. his work has been critical to our understanding of america's history. he is a symbol of strength and survival and the united states honors him for his dedication to this country and to all native americans. [applause]

[applause] >> stuart milk excepting on behalf of his uncle, harvey bernard ofmilk. he dedicated his life to shattering boundaries and challenging assumptions. as one of the first openly gay elected officials in this country, he changed the landscape of opportunity for the

nation's gay community. throughout his life, he thought the discrimination with visionary courage. before his tragic death in 1978, he wisely noted, "hope will never be silent." he called upon americans to stay true to the guiding principles of equality and justice for all. his voice will forever echo in the hearts of all the carry forward his timeless message. [applause] sandra day o'connor. [applause] sandra day o'connor has paved the way for millions of women to achieve their dreams. completing moscow in just two years, she graduated third in her class -- completing law

school and just two years, she graduated third in her class. when grace humor, and tenacity, and intelligence, she rose to become the first woman on the united states supreme court. her historic 25-term tenure on the court was defined by her integrity and independence. she has earned the nation's lasting gratitude for her invaluable concretions to history and the law -- and valuable contributions to history and the law. [applause] sidney poitier. [applause] embassador and actor, sidney poitier has left in indelible

mark on american culture, rising from the tomato farms of the hamas, his talent led him to broadway, hollywood, and global claim -- tomato farms of the bahamas, his talent led him to broadway, hollywood, and global acclaim. he brought us the inspiring reconciliation, and the simple joys of everyday life. ultimately, the man would mirror the character. both would advance the nation's dialogue on race and respect. [applause] chita rivera.

[applause] from stage to screen, she has captured america's imagination with her magnetic presence and greedy and voice. over a career that has spanned a half a century, she has received numerous accolades for her performances, including two tony awards, six additional tony nominations, and the kennedy center honors award. as fearless as anita in "the west side story" she has broken barriers under broadway's lights and inspired a generation of women to follow in her remarkable footsteps. the united states honors chita rivera for lifetime achievement as one of america's great artists. [applause]

mary robinson. [applause] for mary robinson, the fight to end discrimination and suffering is an urgent, moral imperative. she has been a trailblazer in crusader for women's rights in ireland and a forceful advocate for equality and human rights around the world. whether courageously visiting conflicts stricken regions, or working for human rights in business and economic of the element, mary robinson continues this important work today, urging citizens and nations to make common cause for justice. [applause] janet davis anon rowley. [applause]

she was the first scientist to identify a translocations as the cause of leukemia and other cancers. considered among the most important medical breakthroughs of the past century. after enrolling at the university of chicago at the age of 15, she went on to challenge the conventional medical wisdom about the cause of cancer in the 1970's, which has placed little emphasis on chromosomal abnormalities. her work has proven enormously influential to researchers, led used for discovery to identify genes that cause fatal cancers, and to develop therapies that have revolutionized cancer care. the united states honors this scientist. [applause]

archbishop america's desmonarchd tutu. [applause] with unflagging devotion to justice, optimism, and an unmistakable sense of humor, he has stirred the world's conscience for decades. he has drawn the respect and admiration of a diverse congregation. he helped lead south africa to a turning point in modern history and with an unshakable humility and firm commitment to our common humanity, he helps heal wounds and lay the foundation for a new nation. he continues to give voice to

the voiceless. and give hope to those who thirst for freedom. [applause] muhammad yunus. [applause] with his belief in the self- reliance of all people, prof. muhammad yunus has altered the face of finance. as an academic, he struggled with pervading economic theories and their effect on the people of his native bangladesh. yearning for a new way of lifting people out of poverty, he revolutionized banking to allow low-income borrowers. access. -- access to credit. he as an able citizens of the poorest countries to create

profitable businesses, so for their families, and help build sustainable communities. in doing so, muhammad yunus has unleashed new avenues of creativity and inspired millions to imagine their own potential. [applause] >> before we break up, why don't we all give an extraordinary round of applause to these remarkable men and women. [applause]

thank you for joining us. thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> ladies and gentlemen, please remain seated at this time. guests are invited to the reception. thank you. guests of recipients are please asked to remain seated. thank you.

>> our coverage of congressional

health care town hall meetings continues tonight with republican kevin brady. he heard from constituents earlier this week to we will show you that meeting tonight three years a preview. >> 1018 pages to read this was given to us on the ways and means committee at 3 minutes before midnight. we asked to vote on this at 9:00 a.m. the next morning. 1000 pages. no price tags. most members had no clue what was hidden in that bill. what really brought it home for me was two weeks ago, we met with the leaders of the texas medical center of houston. the largest medical center in the world. . 160,000 patients per day. some of the brightest minds in the country. their message to us that they

had no idea what was in this bill. they did not know how it would affect the patient. and no one had asked their opinion. you have to wonder. if some of the best minds in the country, those delivering health care to americans, do not know what is in this bill, who is writing this bill? what do we need to know? we're going to talk today about this bill and answer questions. let me say something. we are reading a lot about all the mobs at the town hall meetings. >> here we are. >> yes, here you are. the last time we had a mob here, we were talking health care. we started three years ago working on how to make healthcare better. we did the initial 50 ideas to improve health care. we got great ideas. they use examples from the livingston town hall all the time to be incorporated some of

those ideas in our reforms. today i read an editorial that said, from the speaker of the house, it said it was un- american to challenge your lawmakers about this bill. what i think is an american is -- un knows this american is to encourage people to spy on their neighbors and report to the white house. it seems to me that washington is getting very arrogant. it is almost as if, how dare you challenge our bills? how dare you asked to read this legislation? the truth of the matter is we all had loved ones who have fought in wars to ensure we're all here today. i am thrilled you're here. no one in america knows what this bill does. we asked the joint economic committee.

i am the lead republican in the house on that committee. i asked our economists and health care people to go through this bill provision by provision and show us how this works. this is how it works. [laughter] >> see this town hall meeting in its entirety tonight on c-span. congressman brady is one of many members hosting a town hall style meetings discussing health care, the economy, and other issues. we would like to hear from you. if you have thoughts to share regarding the various health care proposals debated around washington, share your experiences and thoughts on video with us. send your video files to c- span.org/citizenvideo. >> bill clinton kicks off the 2009 net routes nation convention. friday, panels on health care

reform with howard dean. pennsylvania politics with senator arlen specter. making change happen and reshaping the supreme court. >> every morning this month, "washington journal" talks with top nonfiction authors about new summer releases. guests include baer, and dan balz. we will be taking your calls, e- mails, and tweets. >> now a discussion on the defense department budget for the next fiscal year. it is hosted by the center for strategic and budgetary assessments in washington. >> good morning to i want to welcome everybody to the center for strategic and budgetary assessments. i am jim thomas, the vice president here. we are pleased to release three publications today. the first is an analysis of the

fiscal year 2010 defense budget request. the second is a background on classified funding in the fiscal year 2010 budget request. the third is a report on the impact of the wars in iraq and afghanistan on the u.s. military's plans, programs, and budgets. as you know, this is a very important budget year for dod. were finding is heavy in a new direction as the war shifts from iraq to afghanistan. personnel costs continues to rise, especially under the strain of rising health care and equipment costs, and a number of programs have been proposed for termination and reduction. all of this is happening at a time of record federal deficits, as well as during a severe recession. tough decisions lie ahead for

the department of defense and for the congress. further increases in defense spending are not likely. there's a need to be balanced forces to address critical security challenges, including continuing to confront radical extremism, rising powers, as well as the specter of further proliferation or the use of weapons of mass destruction. i am pleased to introduce todd harrison, our fellow for budget studies. he brings a wealth of expertise to the topics we have before us. he will offer a presentation on the fy 2010 budget. following a briefing, we will be happy to take any questions. if i can ask everyone two things. please hold your questions until the end of the briefing.

in the q&a, please identify yourself and your organization before asking a question. thank you. >> good morning. i am taught harrison. i would like to start by going through the briefing we have prepared today. i would like to give you an overview of what is in the three reports we're releasing today. focusing mostly on what is in the fy 2010 defense budget request. looking at an overview of the defense budget request, a total of $668 billion is requested for the department of defense. $4 billion is in mandatory funding. $130 billion for the wars in iraq and afghanistan to the base budget is up 3.4% this year in real terms, adjusting for inflation. this makes it the highest level since world war ii.

the plan for the future that the administration shows in the budget shows that it will remain funded at this high level in the years to come, although it does slow the rate of growth. it will only be growing at just enough to keep up with inflation. this means that president obama's plan for the base defense budget over the coming years puts him on track to spend more on defense in a single four-year term than any other president since world war ii. i want to start by highlighting some differences in this budget from previous years. despite a lot of the tension that has been given to program cuts and terminations -- despite a lot of the attention that has been given to program cuts that secretary gates announced, funding for poor treatment is up by almost 1% in real terms. personnel costs is also up. research and development funding is down slightly, although, it

does remain near historical highs. for the first time, one of the significant differences is that it includes funding for a full year of the wars in iraq and afghanistan. it is not included in the base defense budget. it is a separate part of the budget. it shows projections for future years of funding. we will talk about that in more details in a few minutes. the budget also move some items that were previously funded through supplemental appropriations back into the base budget. these are items that the administration deemed not directly related to the war. this includes some procurement money for modernization of forces. it also includes part of the cost for increasing the size of the army and the marine corps. it had been funded through supplementals. that is now in the base budget. this totals about $13 billion. that's part of the reason for the increase in the base budget. another difference is that the

budget does not include the future year defense plan. the reason for this the administration has given is the defense review is currently in progress and that will derive some changes in next year's budget. they did not feel it would be valid to produce the future year defense plan at this point in time. this budget also includes for the first time a separate section called terminations, reductions, and savings. the administration went through the entire federal budget looking for areas that they could cut programs that were not affected, wasteful spending. they identified a total of $17 billion in the federal budget where they could save money and this is in 121 different programs in the federal government. this is a cross all agencies. 16 of these programs came from department of defense programs in particular. you can see the slides.

you can see the list of these programs in order of dollar amount per savings. at the top of the list is the f- 22 program not continuing to procure any more aircraft with a savings of about $3 billion. a number of these proposals do appear to be going through congress without much problem. there are a few that have not count -- are a few that have encountered some resistance 3 i will highlight those three the presidential helicopter -- the president has asked to end the program and look at requirements, and start a new program in the following year. the house appropriators have added back money for that and a veto has been threatened over the presidential helicopter. the joint strike fighter alternative engine is a second engine for that fighter jet that would basically be used to

reduce technical risk in case something goes wrong with the primary engine that is developed. but also to help drive down costs by having some competition between two different engine providers. the pentagon has requested in previous years and in this year to cut the funding for that in order to save money. the house and senate are both considering adding funding back for that tree in the two has been threatened over the joint strike fighter alternative engine. c-17 program, the administration wanted to end the current number of aircraft in the pipeline. it looks like the house and senate are considering adding that funding for that. the house appropriators are putting in money for three additional aircraft. the white house has not threatened a veto over this item. a program that was cut in this budget that was not included by the administration in this list of savings is the kinetic energy interceptor, which is a missile defense program.

it is basically a rocket with a high acceleration that can impact a missile in flight. the program experienced technical challenges and cost issues. .

>> if you look at the funding currently in afghanistan and iraq, each of those operations on their own exceed the $50 billion projection. and looking forward, right now we're still in the process of building up additional troops in afghanistan. by the end of this year, the number of troops in afghanistan are already planned to be double the number of troops that were there at the end of last year in december of 2008. so as you add more troops, as the operational tempo increases, you would expect the costs to continue to increase and not to

decrease suddenly, as this budget shows. so what this means is the administration will likely have to come back in their next budget and raise the projected funding for future years for these operations. all right? >> so military personnel funding, $136 billion is included in this budget. that's up significantly from funding in the past. part of that is due, as i mentioned before, to some of the personnel costs that had been funded in supplemental appropriations for the increase in the size of the army and the marine corps. that's now being put into the base budget. the total amount for increasing the force by 92,000 troops is about $14 billion a year going forward. and so that's now -- the full cost of that is included in the base budget. this budget also halts the reduction in the size of the navy and the air force that had been planned. it's going to keep them at about their current level. it all gives 2.9%

across-the-board pay increase for members of the military, and congress is actually considering increasing that to 3.4%. and just to give some perspective, inflation right now is projected to be about 1.5% for 2010. the bureau of labor statistics projects that the average wage increase next year will be about 2% or a little less. so this is well above, you know, the pay increases that people are seeing in the overall economy. part of the reason for increasing personnel costs is actually health care related. health care totals about $4 $47 billion in the defense budget for 2010. it's about 1/10th of the total defense budget. and at the rate it's currently increasing, military health care costs will nearly double every ten years. so if you put this in the perspective of future funding as projected to remain essentially flat for d.o.d. in future years

and health care spending is growing, then that means that it will be necessarily crowding out other areas of the budget. part of the -- the reason for the increases in health care costs for the military are, well, first of all, increased benefits that have been enacted by congress, such as tricare for life, tricare for reservists. also, there's increased usage of the system. currently, there are 9.3 million americans that are covered under the military health care system. that includes active duty, retirees and their dependents. so it's a lot of people in are in the system. and, of course, the overall rise in health care costs that we see in the general economy. and part of these health care costs are actually covered under operation and maintenance accounts in d.o.d. about $28 billion is included in o&m funding for health care, for the defense health program. o&m is the largest title within the defense budget. it's about 42% of the base

defense budget, and if you look back, it's been increasing over time. if you go all the way back to 1990, actually, o&m costs are higher now adjusted for inflation than they were ther t, even though the size of the force has been reduced by almost one-third of the part of the reason for this is that o&m depends on more than just the number of troops we have in the military. it depends on the cost of operating equipment and training, the ops tempo, as well as the costs of maintaining infrastructure and all the bases that d.o.d. maintains around the world. and the lagging pace of procurements that we've seen really over the past two decades has meant that equipment that the military uses is aging and that does make it more costly to maintain. but it's not just your weapons systems. it's also true for bases and fiscal infrastructure that -- physical infrastructure that d.o.d. maintains. and that makes operating costs -- peacetime operating costs here much more expensive.

the brac process, the base realignment and closure commission that released their findings several years ago, that process is continuing, bases are being closed and realigned. there are some savings that are expected for that the future but we're not yet at the point where we're seeing savings. it's still costing $7.5 billion to fund the brac closures in this year's budget. if you look at weapons systems funding, there's two different stories here. if you look at the r&d side of things, research and development funding is down slightly from last year but it actually is still near historic high. last year was actually the historic high for r&d funding. if you compare it back to previous years, the previous peak in r&d funding was back in 1987 at a level of about $61 billion adjusted for inflation. so compared to the $79 billion in this year's budget, it's still a very high level of development funding. procurement funding, on the other hand, is going up this

year, up 4.6% to $107 billion, but at the same time, procurement funding is still far below its previous peak. the previous peak in procurement funding was in 1985 at about $175 billion. so procurement is relatively low from historic standards. development costs are relatively high. and what this represents is a longer-term trend we've seen in defense funding. the ratio of procurement dollars to r&d dollars ha has been fall. so back in the 1980's, the d.o.d. used to spend about $3 on procurement for every dollar in r&d funding. well, now that's changed and we're only spending about 1.4 dollars on procurement for every $4 in research and development spending. what this means is we're spending more on developing increasingly complex weapons systems and that means we're not able to then fund the procurement of these systems in sufficient quantities, and that's what's led to part of the backlog in procurement that we've seen over recent years and

the aging weapons systems. looking at classified funding, classified funding accounts for nearly $36 billion in this budget. that's 17% of all acquisition funding. it includes both r&d and procurement. we're at the nearest -- we're near the highest level of classified funding that we've seen since 1987. about 80% of all classified funding is through the air for force, although not all of that money stays with the air force. part of the fund -- part of the air force's funding is believed to go to fund n.r.o., n.s.a. and c.i.a. programs. in terms of -- of classified programs, there's been a mixed record of success. you know, there's notable ones like the f-117 stealth fighter. it's proved to be a pretty successful weapons system. the b-2 bomber, while technically successful, ran into budget problems, earned the

nickname billion-dollar bomber and congress wasn't willing to continue funding it and so it stopped at only 21 aircraft, far short of what the air force had intended to procure. and the then the other end was a recent program the n.r.o. was running called the future imagery architecture and they ran into problems with the electrooptical satellite part of that component and it's reportedly at a loss to the government after canceling the program and didn't get much out of it. so there is a mixed record of success for classified programs. but it does make up a significant part of d.o.d.'s budget. another thing i want to point out in this year's -- part of this year's budget process is the unfunded priorities. and every year since 1995, the services have been asked by congress to submit these lists of their unfunded priorities. this is kind of a wish-list, sometimes people call it unfunded requirements. but what the service do's is

they put together a list of items -- services do is put together a list of items that did not quite make it into their budget, they are things that they wanted to include but they were not a high enough priority to make it into the funding. this year, the secretary of defense did something a little different. he asked the services to just review their submissions of unfunded priorities with him before submitting them to congress. if you look back, there's a reason for this. in previous years, the total amount of funding requested for these unfunded priorities have been growing by leaps and bounds each year. it had gotten to a peak of nearly $36 billion in fy 2008. and what we saw this year, after the secretary asked that people review their unfunded priorities with him, is an order of magnitude decrease in their unfunded priorities. and so you see now the total is less than $4 billion compared to almost $36 billion a couple of years ago.

the air force makes up about half of this request at $1 $1. billion. and if you look at what's in their unfunded priorities, the air force includes things like funding for shortfalls in the f-35 program, some post-production support activities for the f-22, assuming that production line is closed down. they include a couple of classified items at a combined cost of $331 million. the army, their largest item included an unfunded priority is something called force provider. it's a containerized base camp system. it provides climate-controlled dining, hygiene facility for troops when they deploy overseas. marine corps included a number of small items. an example is $23 million for a combat vehicle repair facility. the navy included funding for a ship depot and aviation depot maintenance. and these items are already partially funded in the base budget. the navy said that if they had this additional funding, they

could do more maintenance -- depot-level maintenance. the special operations command also include includes an unfund priorities list. they included their largest and highest priority item was actually $85 million for modification of additional c-130 aircraft. and so in conclusion, this -- the 2010 defense budget request actually represents the highest level of base defense funding that we've seen since world war ii. it's 4% higher than the previous peak in defense funding back in 1985, when you adjust for inflation. but what it does is it slows the rate of growth. in future years, we're expecting that we'll only see defense budgets that are just keeping up with inflation. so we'll be maintaining basically the same level of funding into the future. so if you put this in context of what's going on in the overall federal budget, you know, we see that the federal budget situation is significantly worse than it was eight years ago at this time.

c.b.o. eight years ago projected a five-year surplus from 2002-2006 of $2 trillion. well, it actually turned out that over that same period, we ran a deficit of $1.5 trillion. so it's a change in $3.5 trillion from projections. so the budget situation has gotten a lot worse. right now, c.b.o. has estimated based on this budget request, looking out into the next five years, so 2010-2014, they're projecting a $4.4 trillion deficit. that's a significant issue in the federal budget. it's got a lot of people concerned. and furthermore, if you actually continue out this funding for ten years and if you're assuming, you know, defense funding stays at about the same level, keeping up with inflation and deficits continue under current budget policy, in ten years, the interest payments on the national debt will actually exceed defense funding for the first time in modern history that we've seen that. so what this means is that

further increases in defense spending above what's already planned seem highly unlikely that we'll be able to do that. and that means that underlying trends within the defense budget are going to constrain how defense money is spent. if history is any indicator, we will continue to see personnel, health care, and peacetime operating costs increase, acquisitions, which have already been insufficiently funded to keep pace with systems that are becoming obsolete, are also likely to continue to experience cost growth, as we've seen in the past. so what this is going to lead to is some really hard decisions in the department of defense. pressure will mount to scale back some of the modernization plans. pressure may mount to scale back the force structure. but one thing is for sure, the sooner action is taken to correct some of these budgetary issues, the less painful these decisions are going to be. so with that, i will open it up to questions.

>> margery with inside the army. you talked a little bit about the projections for future budgets maintaining the same level of funding. do you think these plans are reasonable and feasible? >> i think it's going to have to be. you know, given the situation in the overall federal bug, there', there's not a loft room for continued growth -- a lot of room for continued growth in the defense budget, at least. you know, looking out, it's looking about a 2% growth per year and inflation is expected to be about 1.8%, so it really is just keeping up with inflation, maybe a little more. so there's just not a lot of room there. so can d.o.d. maintain funding within that level? sure, they can. it's just going to require some hard decisions. you know, with things like health care costs continuing to grow at, you know, up to 7% per year, that's going to force other things within the budget to -- to be cut back a little.

>> are you differentiating between the base and the supplemental, do you think that that's going to grow? >> so the war funding, looking at that, i think there's probably no -- no choice but to grow that. it's only projected in fy 2011 and beyond to be $50 billion a year, and that is far below what we're spending today just in afghanistan alone. we're spending, you know, projected for next year spending $65 billion in afghanistan, and there are calls for further troop increases above what's already planned, bringing the total up to nearly 100,000 troops in afghanistan. so it looks like that -- that level of funding, higher level of funding in afghanistan for sure will need to be maintained going into the future. iraq does seem to be coming down but, you know, given the situation on the ground, we don't know how fast that's going to happen. >> thank you. >> jim wolfe, reuters. which programs do you expect to be the bill payers? >> in terms of acquisition programs? >> yeah, uh-huh. >> well, you know, without

naming any programs in particular because i wouldn't want to hazard a guess there, i know that the q.d.r. is looking at trying to find $60 billion of funding to reallocate within the defense budget to programs that are needed coming out of the q.d.r. review. and those are programs that are relative to the full range of conflicts coming out in the future. ranging from regular warfare all the way through high-end asymmetric programs on the other end. so i think programs that are really just only applicable in the middle of the spectrum, that is, head-to-head conflict with, you know, adversaries like we've seen in the past like with iraq, you know, before 2003, you know, those types of programs that are only narrowly applicable in that type of situation. >> can you give an example or two of programs that you think are in the middle of the spectrum? >> one example would be like the

expeditionary fighting vehicle, the marine corps's vehicle. so that's a craft that will ferry marine corps troops from the ship to the shore and then operate on land. and if you look at the design of that vehicle -- well, first of all, it's got a relatively flat bottom so it's not going to be suitable for conflict like we're seeing in iraq and afghanistan, irregular warfare where you'd be exposed to roadside bombs. so you wouldn't want to use it in those types of situations. but then if you're going up against a more sophisticated adversary who has antiship cruise missiles, weapons like that, our ships aren't even going to be able to get close enough to the shoreline for the expeditionary fighting vehicle to deploy so it won't be useful there either. so it's really one of those programs that's tailored for this middle-of-the-spectrum type of conflict that we're not likely to see in the future. >> secretary gates has busted up future combat systems and is taking a new look at the ground vehicle component in particular, but what do you project for that

$160 billion or so that were projected to go towards future army chief modernization programs? >> well, all indications are right now that they intend to keep that money set aside that was going for the manned ground vehicle portion of the f.c.s. and that they do intend to restart that program and it will just look different but the funding is supposed to still be there. the challenge really is there were some fundamental problems with the design of the manned ground vehicle systems and how they were going to be used in the overall system of systems, and so that's something that they're taking a look at right now. and, you know, i guess it will be a challenge to come up with a new design and be able to get started working on it within the next year or two. if they aren't able to get a new design going and start spending that money, then it becomes an issue of how do you park -- you know, how do you keep a wedge for that funding in future years without it going to something

else or just getting cut. so as long as they can maintain that wedge in the budget, they should be able to continue that level of funding in the future. >> emily ross. some lawmakers have said that there may need another supplemental war funding bill in this fiscal year, despite the obama administration's efforts to no longer seek war funding that way. do you think that from what you're seeing, that will be needed this year? and also, is that wise? >> it's really too early to say whether or not $130 billion will be enough to cover the entire year. it depends a lot on what we see happening on the ground. you know, general mccaskill is coming back pretty soon here with a report here on whether or not more troops are needed for afghanistan so it will depend on how things like that shake out over the coming months. but in general, supplemental funding, it's not new to use to fund a war. if you look back at the vietnam war, the first few years of

vietnam were funded almost entirely through supplemental funding. the reason for that is when you start a conflict, you don't know well enough in advance to work it into the budget. the budget takes a whole, you know, takes a couple of years to work through the whole budget process for d.o.d. to get something in there. so you don't know in advance, and then when you do, you aren't really sure how long the conflict is going to last and so you keep putting supplemental in year after year. of course, over time, and the vietnam war this happened, we realized we were in this for the long haul, this needs to be -- we need to start including this with the budget request every year. so we saw in the late 1960's that the supplemental funding started to decrease for vietnam and more of it started to be included in the base budget. and by 1970, i believe, almost all of the funding for the vietnam war had been included in the base budget. so, you know, i think we're seeing a transition like that right now, but you can't always rule out the possibility that you might have forecasted something slightly off and additional funding will be

needed later in the year. i don't think that there's a big issue with doing that as long as you do make a good-faith effort each year to forecast how much you're going to need and to put that in with the budget request. >> the army is planning a temporary troop increase of 22,000 troops in three years and gates has said they will not request additional funding in fy 2010, they'll look for that within the budget. but that's estimated to be about a billion dollars. where might that come from? >> well, you know, it's a $538 billion base budget so there's a lot of places to look for a billion dollars. but with that said, it obviously is going to be a little painful. it could involve cutting back on acquisition programs here and there. a lot of times there's funding in the current budget year that is not getting obligated that, you know, may not be needed and they could use some of that. in previous years when we saw

gas prices dropping rapidly, d.o.d. had a significant amount of savings from that, although now gas prices seem to start going up so that's not going to be savings that you can draw from. so there's a number of places that you could look, but, it, of course, will always be difficult to try to find it. >> so you haven't heard any -- >> i haven't heard any specifics about where they're going to take that money from. [inaudible] >> we hear about potentially programs but things like the long-range bombers and things that aren't yet under contract, do you see any room in the budget for that moving forward in the next five years? >> well, you can always make room. it's a matter of rebalancing between your acquisition programs. i think a lot of that is going to be done coming out of the q.d.r. and, you know, right now the services have been requested to look within their budgets where they can fund some of these additional items that the q.d.r. is recommending.

you know, that can total up to $60 billion. in terms of something like the long-range bomber, that's, you know, just at the initiation stage right now. the initial funding for that would be relatively low. it would be doing some of the early technology work and what technologies are needed are what is at risk in those areas. so for programs like that, in the near term, the funding would are relatively low compared to something like the joint strike fighter. and so you could work in a wedge for that and then grow it in the future. >> mark, given the constraints in the overall budget, how much do you expect there to be restrictions placed on the growth of the classified budget? >> i -- i haven't seen anything in particular that they're talking about restricting classified funding as separate from restricting other types of funding, so i don't see that

they'll be anything along those lines. you know, in general, classified funding is a mixed bag for d.o.d. and for congress. you know, because it's classified and some of them are very highly classified and compartmentalized information, it doesn't get as much review within d.o.d. and within congress. at the same time, though, it gives a lot of flexibility to the services to acquire things rapidly, and we've seen like the f-117 fighter can come out pretty quickly because they're not subjected to all these different types of reviews that go on. so it's a mixed bag but i don't see that there's any specific restrictions on classified funding. >> so you think potentially the classified budget will grow at the same rate? >> i think it will probably keep at around the same rate, the same proportion of acquisition funding that it is now. and, you know, look back at the graph of that, it's kind of leveled off in previous years around -- hovered around 17% to 19% of total acquisition

funding. it is notable that in the war costs, there was a pretty significant amount of procurement funding that's gone into the war supplementals in fy 2007 and 2009 -- 2008, a lot of that was for procuring items like the mrap vehicles. a lot of money went into that. you did not see a similar spike in classified funding in the war supplementals. so it does appear it to be, you know, fairly well insulated from what's going on in the war. [inaudible] >> you mentioned the health care costs crowding out other areas. would you say that health care is the fastest growing account right now and what other accounts are growing that fast? >> i don't know if it's necessarily the fastest growing account. it's definitely one of the fastest growing areas within the defense budget. you know, operating costs are also going up relatively fast, but health care is kind of a, you know, big, looming problem for d.o.d.

when anything in the budget is growing at this rate, you know, growing above inflation at a rate that it will nearly double every ten years, you know, that's an issue. and it's a challenging one to deal with because, you know, the overall rise in health care costs is not something unique to d.o.d. it's not something d.o.d. can solve. of course, there's the big talk around d.c. nowadays is trying to rein in health care costs. but part of it also is the added benefits that congress has enacted, and some of these were enacted back before september 11 and they just have gradually taken affect and started to grow health care costs for the military over time. and so it's difficult to rein in those types of costs when congress keeps enacting more benefits. [inaudible] >> i mean, yeah, the health care part of the defense budget is no different than the rest of the budget.

>> tom bitter from -- inaudible] has d.o.d. adequately budgeted for the rising costs -- you expected they're supposed to rise 5% to%, they could rise more -- 5% to 7%, they could rise more, who knows, or is this kind of a hidden store that they don't have a grasp on how it might squeeze other parts of the budget? >> well, because they didn't release a detailed future years defense plan, you can't really see how much of their budget they are allocating in future years for health care programs in particular. what we can see is that they expect the top-level funding for d.o.d. to remain flat and they state themselves that they expect to see health care costs continue to grow at 5% to 7%. are they budgeting for that? we can't see. we'll have to wait until 2011 to see if they're actually budgeting for that. but d.o.d. is well aware of this. congress is well aware of this. so i don't think that this is really a surprise to anyone. but it is a looming problem that

is going to have to be dealt with. >> you've got essentially a flat budget over time. you've got growing health care costs. you're probably going to have more force structure costs. you've got the $60 billion to start with that they're looking for. are we likely to see any new programs start of significance over the next five to seven years? >> what we have seen is, if you look at the r&d funding, and that's a good indicator of, you know, what's going to happen on future program starts, there's been a shift within r&d funding from early r&d activities, like applied research and advanced component development, towards later development activities like operational systems development. so what that means is that there's less money going into the early technology activities that would -- that you would normally do to start new programs. there's more money going into the later development activities which is what you would do to continue development of programs

you've already started. so that does look like there's a shift in emphasis towards just continuing the program as that are already in the pipeline versus starting new ones. but in terms of, you know, a major shift in, you know, number of new program starts, can't really see that yet. i think we'll know more once we see the detailed future year defense plan come out. >> a follow-up to that and a little bit to the question earlier on aviation equipment. do you see that affecting the overall philosophy the military makes in regards to new technology as -- in a sense of relying on it? it seems like over the past several decades we've had this belief that if you just put out the f-22, the virginia class submarine, whatever it is, the new technology itself is the great whiz-bang. >> i think we are seeing a shift, especially in comments by secretary gates when he was cutting a lot of these programs, he -- part of his complaint with many of them was that they

relied on explicit requirements. basically, you know, in normal terms, that means that they were trying to do -- trying to have capabilities that were far beyond current technology, that were very much reaching and trying to get new technologies that we did not currently have. that's been a big problem for d.o.d. i know the g.a.o. especially slammed them for this in previous reports, that they're proceeding with programs with immature technology and that tends to run up costs. so i think we are starting to see a shift away from the very, you know, very complex exquisite solutions, as secretary gates would say, towards programs that are less ambitious although, you know, not necessarily low-tech by any means but less ambitious in terms of new technology that would be required to develop. and that would save costs in the long run as well.

>> two questions. one, just on the historical. you're saying it's the highest nominal inflation adjusted since world war ii in terms of the base budget? >> yes. >> and how does that compare with g.d.p. as a percentage? and also, to what extent do -- how big is that wedge between the $50 billion placeholder in the out-years versus what you guys actually expect to be spent on iraq and afghanistan? >> the first part of your question, the base defense budget is the highest level adjusted for inflation since world war ii. if you look at it in terms of percent of g.d.p., it is not the highest level and it's not really that close to it. part of the reason for that is, you know, since world war ii, we've seen some, you know, fluctuations in the g.d.p. as the economy's grown and retracted. currently, the percent of the g.d.p. for the base defense budget is actually up significantly from last year, not because defense spending went up that much but because the economy crd contracted.

contracted. and when you include war costs, it's that much higher. i believe it's over 4% if you include the d.o.d. budget. but in historical perspective, world war ii, we were spending way above that on defense spending, upwards of 40% of our g.d.p. but, you know, it's a different time. our economy has grown quite a lot since then, and the economy over time does grow faster than the defense budget. so over time, we do expect to see that percentage would decline. and the second part of your question in terms of future war spending, i wouldn't want to hazard a guess at this point at what will actually be required in the future. but it does seem likely that it will be significantly more than the $50 billion that has been put in the budget right now. it depends a lot on the situation on the ground, especially in afghanistan, and what the generals are going to request in terms of additional troops that we move over there because that adds a lot to the cost.

[inaudible] >> i had a basic question about your rate of growth that you have in here. you say 3% to 4% in inflation adjusted. i'm pretty sure, almost 95% positive that the pentagon is saying the real growth is 2%. how do -- do you use different deflaters or why is it so different? >> we do use slightly different deflaters. i'm using a g.d.p. deflater. the defense department computes their own deflater. i don't think that is the difference that we're talking about in one year, though, because it's a very slight difference. and the different in deflaters would only really show up if you're looking over an extended period of time, 20, 30, 40 years. but what i've heard the department of defense saying is that the inflation-adjusted growth will be less than 2% in future years. what i've heard them say for this year is around 4%. >> i've got to go back because i'm pretty sure they said 4% and then 2% inflation adjusted. the other thing is it's a 73%

increase in the defense budget from 2001 through 2009? in past years, your predecessor would have laid this out, it was like a 43% increase. does yours include supplementals where his did not, it was just base increases? >> no, that's looking at -- well, i'd have to look at the -- i believe that's just looking at the base defense budget. >> the 43% figure would have been, the low number? >> i'm not familiar with that. >> because that was what we've used a lot in the past. this must mean supplementals but it's a little bigger growth. >> we can look at that. >> okay. >> any other questions? >> so you have the baseline budget and then a war -- call it what you will -- spending request, two separate bills sent up together, not all rolled into one. so we should be thinking 660, 670 a year? >> it looks like what the administration plans to do, you know, budget-wise is include the

d.o.d. budget and then a separate part of the budget for overseas contingency operations, they're calling it. it's in the section right after the d.o.d. budget but they're submitted at the same time to congress. that's what they did this year. it looks like that's what they intend to do in future years. so i would expect to see that again in the future. and then, of course, as we talked about before, if they, you know, did not estimate it adequately, then later in the year they might have to come back and ask for a supplemental on top of that. >> okay. >> mark, ai, "air force magazin" to what extent have some of the future year high-dollar procurement programs, particularly in the air force and the navy, been migrated into the classified budget? is there an indication that that has happened? >> migrating programs in the classified budget? i have not seen any indication of that happening. >> the next-generation bomber,

for example. >> well, you know, this came out publicly at a congressional hearing that in the air force's unfunded priorities list, one of their items in there was for some early funding for requirements work for the next-generation bomber. it was listed as a classified item. one of the members of congress outed it during the meeting so we know that that's there. it's not necessarily that it migrated into there. it may have already been there in the classified funding line in previous years but we don't know because we can't see into those details of the budget. but i don't know of any, you know, broad trend in terms of migrating unclassified programs, programs that were previously unclassified into the classified. i haven't seen that. >> for years, missile defense spending has been the single largest d.o.d. weapons development outlay. how do you see that evolving? >> what we've seen this year in

the missile defense budget is the secretary has taken a different tact. overall, their funding is down relatively significantly. and what he has -- what he said back in april was that he wants to shift towards funding more theatre ballistic missile defense systems as opposed to national missile defense systems. so he cut funding for things like the test program for the airborne laser, is not buying a second aircraft to continue carrying out tests there. he cut the kinetic energy interceptor, and he stopped fielding the -- the interceptor missiles in alaska. he's capping that. he's capping that at the current level. so that all taken together, it does result in a net decrease for m.d.a. at the same time, though, he's buying another aegis destroyer equipped for missile defense and he's buying more of the thad

systems as well. so, you know, it is a shift within m.d.a. but overall it's a reduction in funding. so those programs look like, you know, the theatre missile defense ones are good to go. they may see increased funding in the future. the more high-tech national missile defense systems look like they're not going to grow that much, at least under the proposed budget. >> you mean the b.m. -- the g.m.d.? >> right, ground-based mid-course defense. >> regarding procurement and o&m, many see a future crunch coming in regards to the fact that we're buying fewer new items and yet we continue to use o&m as a bill payer for other needs, especially with reset and recapitalization costs suddenly growing. do you see a particular time in the future when this comes to a head? is it three years, five years? >> well, you know, in terms of reset and recapitalization costs, you know, it's been

funded in the war supplementals in the past. there's, i believe, $17.6 billion included in this war funding measure for reset costs. but, you know, it's kind of tricky in how you define what is reset costs versus modernization programs and replacement of equipment with more capable equipment. so in the past, the defens defin had been getting broader in what was allowed in the war funding for reset costs. in this budget, we've seen it get narrow again. in particular, i believe funding for fy 2009 was around $23 billion. we've seen it drop to $21.6 in 2010, and the reduction is really just do to a reduction in replacement, procurement for replacement vehicles and weapons systems. and that -- that funding line got cut in half within the reset costs. and part of that is that procurement items that were for

modernization initiatives just got moved back into the base budget. it's not that they actually got eliminated from the budget. so i think, you know, we're seeing a narrowing of what is defined as war reset costs. the military has stated in the past that their reset costs would run about $17 billion a year as long as the conflicts continue and then for several years after, two to three years after the conflicts subside. so i think the challenge will be for d.o.d. is that after the conflicts in iraq and afghanistan do subside, that they've got to maintain that level of reset funding going into the future so there's not additional funding for the war at that time, you know, who knows, this could be pretty far into the future, then that could be an issue if they're having to fund that out of the base budget. >> that issue set aside, even with the redefinition of modernization or what accounts for modernization, do you have any concerns in regards to the decreasing or -- or the pinching of o&m and the rate at which we

buy new equipment? >> there's definitely concerns with the rate at which we buy new equipment. because, you know, it's a longer-term trend that we've seen, started, you know, in the early 1990's and it's continued through to today, even though, you know, at the same time defense spending has gone up significantly, procurement of new equipment has not kept up with the aging of equipment that we have in the inventory. the air force has said that the age of their aircraft is around 24 years right now and that's going to increase up to 27 years out in the future. so we're not buying, you know, in the air force's case, we're not buying new planes at the same rate as our planes are aging. so we are seeing older weapons systems. that then does drive additional o&m costs because the older something gets in general, the more expensive it becomes to maintain. and so that -- that is forcing a difficult situation for d.o.d. and that's part of the broader budget issues that d.o.d.'s

going to have to address in the future is, you know, if we keep funding, you know, increasingly complex weapons systems that are very expensive to develop and then we end up not having sufficient funding to procure them in the quantities that we need, then we can't upgrade our force like we want to. you know, if you look at the s.c.s. program before it was restructured, the costs have grown to $160 billion. by some estimates, it was going to grow significantly more. it was not even that far along in development. that was only enough equipment to -- to equip one-third of the active-duty army, not to mention the guard and the reglerves. so, you know -- the guard and the reserves. so, you know, programs like that, we aren't going to be able to modernize our entire force if they're that expensive. so that's a real issue d.o.d. has got to look at to try and bring some of these costs under control. >> you mentioned this wish-list. you seemed to hint that because they'd been reviewed by the secretary of defense, they may have gone down this year. i was wondering if there was any -- if you guys have taken any look or analyzed anything

about the impact of disclosure requirements on capitol hill on defense earmarks and whether anything similar has been done? >> well, you know, it's a little too early to say for this year. you know, there are new disclosure requirements. what we have seen so far, i believe it was in the senate bill, that a number of earmarks got put in as not being allocated to any particular member so that does seem to skirt some of the intent of the rules. you know, the ainge of the earmarks i've seen, you know, could be an additional $3 billion to $9 billion in the defense budget. in the grand scheme of things, it is a relatively small percent of the defense budget but it is a lot of money. and so i think that that's going to be a concern for the administration. they've talked about, you know, earmark reform and given some of the items that are already being added back in, not as earmarks but as things like, you know, the presidential helicopter, the joint strike fighter engine, you know, a sufficient confluence of those things could result in a

serious veto challenge to what congress is putting in the bill. but, you know, a lot of that remains to be seen how it's going to work out and what will actually end up in the final authorization and appropriation bills once the congress gets back in session and they get to conference on these. >> the secretary just added 22,000 more new soldiers. how -- how big is too big for the force in terms of cost and budgeting over, say, the next five or ten years? >> well, you know, whenever we add more troops to the size of the force, there are long-term budget implications with that. you know, if we go back to 2007, when there was a decision to increase the size of the force by 92,000 troops above what it had been, the c.b.o. estimated at the time, you know, there's a number of start-up costs of getting those troops in and getting them trained and equipped and everything, but the long-term operating cost of an

additional 92,000 troops is estimated at about $14 billion per year. every year added to the d.o.d. budget. so, you know, every, you know, 22,000 troops, every, you know, 10,000 troops that we add, there's this long-term cost. it increases not just, you know, pay and allowances and all of that for the troops, but health care costs, retirement benefits, the accrual payments that we have to set aside in the budget for retirement. but then also, you know, you have to have more -- you have to have larger bases, you have to have family housing, there's all of these additional expenses. the equipment to equip these troops so they have something to do when we have them in the force. that all adds to the defense budget and it's a very long-term cost. you know, we're looking out 10, 20, 30 years that this cost will be around if we keep the additional size of the force. so i think that's going to be a real challenge, continuing to increase the size of the force within a flat defense budget and with all these other issues going on in the budget that we've talked about.

something d.o.d. is going to have to look at is once these conflicts in iraq and afghanistan do subside, can we afford to maintain this higher troop level that we have right now? if we do make the decision to keep the additional troops, well then where does the money come from? so i think that it is a big issue. [inaudible] >> kind of the same issue, let me ask it in a different way. is it fair or accurate to say that it's generallily -- generally cheaper to prepare for conventional war versus counterinsurgencies? is there a way to kind of -- when you think about manpower and legacy costs on one side and, you know, operational costs and big-ticket platforms on the other, can we say one way or another? >> you know, i wouldn't want to hazard a guess, you know, which is more expensive. i mean, there's definitely different types of costs. you know, like when you look at

conventional warfare, high-end type of warfare, your costs are shifted more into the weapons systems, increasingly complex weapons systems that you need to counter different threats. you look at irregular warfare, like we're seeing in iraq and afghanistan, it's much more manpower intensive. but there are also weapons systems costs that go there, you know, things that we hadn't expected in the past, like the need for the mrap and now the matv that we're building for afghanistan. some of those costs as well. so it really is a mixed bag on both ends, and i don't think either is cheap and especially when you're trying to prepare -- you're trying to create a force that's able to respond to the full spectrum of conflict, you know, it's going to be a challenge. >> over time, as you look at this relatively flat budget, what are -- i know you're a budget guy, but what are the strategic implications for the united states? >> hmm, you know, one of the

things that we're seeing coming out of the q.d.r., and maybe jim could talk to this some more, is that, you know, we might not be able to afford a force that can be prepared for two major theatre wars at a time. and that's, you know, been kind of a tentative planning in the past. and if we -- if we aren't going to size our force for that, then, you know, that does have strategic implications. it looks like what we may be aiming for now is one major war and one maybe smaller ongoing contingency like we're seeing going on right now in iraq or afghanistan. i don't know if there's anything you want to add in terms of strategic. >> yeah, i think when you look at both the -- the pressure on the top line and the d.o.d. budget as well as growing entitlements, particularly in items of d.o.d. health care, you're really getting pushed from both -- from -- from both the ceiling and the floor.

and we are going to have to make some very hard choices as we look ahead. and it may be in terms of how we think about our force planning construct in terms of not only how we -- how we size but also how we shape our forces. and traditionally, we've tried to create a force which is really optimized for the middle of the spectrum, if you will, and hope to be able to swing and cover the extremes. as we look ahead, the types of conflicts we face, we see that we're going to be in an era of persistent irregular conflict and that's for sure, but he we also see some high-end asymmetric that's are out on the horizon. so it may be more of optimizing our forces more bimodally for both poles of activity and then think about how we reduce some of the risks in the middle. which i think is a different approach as we go forward. but i think the days of being able to salami slice and just make some -- some cuts around --

around the edges of the program and nipping and tucking, i think the days of nipping and tucking are coming quickly to an end. >> what does that mean? the days of nipping and tucking are coming rapidly to an end and what lies ahead? >> i think we're going to have to think about position trades. it's no longer just a question of really looking at particular modernization programs or particular elements of our force structure, but we're going to have to have a more strategic level discussion in terms of the emerging missions that we see on the horizon that u.s. forces may be called upon to undertake as well as other mission areas, legacy mission areas which we -- we can certainly see cases in the future where you might call upon the forces but it's an area where we as a nation choose to take some risk. >> era of persistent conflict?

outside of iraq and afghanistan, no one can -- can list for me where we might do this persistent irregular conflict. can you maybe take a swing at that? >> well, sure. i mean, i think what you see today is you have a number of states in the world that are -- that are very fragile in terms of their governance and their ability to police themselves effectively. and so there's the potential that they become petri dishes for terrorism, that -- and terrorist activities can emanate from within their borders to the -- to the outer world. and the estimate that d.o.d. has is that there are about 30 to 40 countries today where there either is or may need to conduct activities, counter terrorist activities, counterinsurgency

activities as well as foreign internal defense activities in support of those nations. so it's really -- this is going far beyond iraq and afghanistan but you see a number of initiatives and efforts underway, whether it's in the trance saharan or regions of -- transsaharan or regions of south africa and the philippines or in other places, and cooperation with the government of pakistan and with other countries around the world for counterinsurgency. and i don't think there's any sign of -- of this abating with a drawdown of forces in iraq, and even looking ahead at, you know, a future withdrawal or drawdown of forces in afghanistan. >> a lot of the impetus on u.a.v.'s in the last year -- two years has been because of gates'

personal interest in the subject. when he retires, will the momentum he's created do you think for u.a.v. spending drop with his retirement or is it such -- now it's a culture and in part of the pentagon budget going forward no matter who's secretary of defense? >> i think u.a.v.'s are definitely around to stay. you know, the military has seen, you know, quite a bit of utility from them in the current conflict. i don't think it's just secretary gates that likes them. i think secretary gates was frustrated at first that he couldn't get the air force to spin up production faster and to, you know, get more involved in u.a.v.'s. but what we've seen is they've, you know, proved invaluable in iraq and afghanistan. not only in terms of providing intelligence, surveillance, reconnaissance but also in strike missions. they have a lot of advantages over manned vehicles in terms of range and loiter time. you know, we can keep, you know, an orbit of predators over a target pretty much indefinitely,

keep swapping out the aircraft and they keep going. and they're relatively cheap. so, you know, they're slow, they can be shot down and we do lose them from time to time, but, you know, number one, you don't lose a pilot; and, number two, you don't lose, you know, that much of an investment in them. so, you know, i think for those reasons, you know, we are going to see u.a.v.'s around for the long haul. and, you know, others in the air force, others in the navy as well are very interested in pursuing u.a.v.'s, particularly unmanned aerial combat vehicles in the future. so, you know -- >> your group has a special -- the navy of drones, a broad area of maritime systems they felt was in jeopardy. it was tom aerhardt and another analyst. have you followed up on that? is that system in jeopardy within the navy or has that solidified where it's got some support? if you don't know, that's fine. >> yeah, i haven't seen anything

in particular on that recently. i don'>> i don't know if you're referring to -- to bans but the naval unmanned combat air syst system. and there this is an issue that's being looked at in the q.d.r. currently. >> and i believe some of the advantages of that is it gives you a lot longer range of strike off a carrier. you know, you're looking at future threats, you know, getting within range of our current fighters, like the joint strike fighter, could be an issue. we might not be able to get in range where those fighters can be really effective and so having the longer-range strike platform like that is something that, you know, the navy is really going to look at. >> on the joint strike fighter, what do you predict for its future? >> [laughter] well, you know, we've seen a lot come out in recent days. you know, definitely with the f-22 production, looks like it's going to end. then in terms of future fighte fighters, that is the future for the military. it's the largest acquisition

program right now and it's the largest acquisition program in the history of d.o.d. supposed to go over $300 billion. challenges for the joint strike fighter in the near term are trying to finish development and stay within cost and schedule. d.o.d. set up a joint estimate team and they reported back in september of last year that their independent estimate -- still within d.o.d. but independent of the joint strike fighter program office, they thought there would be about a two-year schedule flip and a $15 billion cost overrun within the next five years. in the fy 2010 budget, d.o.d. did fund closer to the joint estimate team's cost projection for fy 2010 rather than the program office's projections but, you know, we don't see a detailed application so we don't know if they've bought into the high estimate for the future years as well. now, a slip in the production of

it by two years, you know, that's going to exacerbate some problems that already exist, like a projected shortfall of fighters in the navy in the coming years. so, you know, the joint strike fighter, a lot of eggs are in that basket. i think it's a program that has to succeed, one way or the other, and so, you know, that's -- that's definitely going to be something we look at closely in the future, whether it's staying within its cost estimates or not. any other questions? all right. okay. >> thanks, todd. >> thanks, everyone, for coming.