>> ladies and gentlemen, senator patrick leahy and first lady, michelle obama. [applause] xxxxr

>> ladies and gentlemen, the president of the united states, and justice sotomayor of the supreme court of the united states. [cheers and applause] >> all right.

good morning, everybody. >> good morning. >> and welcome to the white house. [cheering] >> i am glad all of you could be with us today as we honor the newest member of our highest court, who i'm proud to address for the very first time as justice sonia sotomayor. [cheers and applause] >> we are also honored to be joined by justice sotomayor's new colleagues. we have justice ginsburg, who is here, as well as justice steve stevens. [applause] >> so i just want to thank both justice stevens and justice ginsburg, not only for being here today but for your extraordinary service on the

court. and i know you'll be giving justice sotomayor some good ti tips. [laughter] >> i also want to thank everyone who's worked so hard to bring to us this day. i want to thank especially our judiciary committee chairman, senator patrick leahy. [applause] >> as well as our senate majority leader, harry reid, for their outstanding work to -- [applause] >> for their outstanding work to complete this process before the august recess. i want to thank senator schumer, senator gillibrand, both of whom are justice sotomayor's home state senators, for their extraordinary work on her behalf. i want to thank all the members of congress who've taken the time to join us here at the white house event.

and i want to acknowledge all the advocates and groups who organized and mobilized in support of these efforts before the very beginning. your work was absolutely critical to our success, and i appreciate all that you've done. so pat yourselves on the back. congratulations. [cheers and applause] >> two members of congress that i just especially want to acknowledge, senator bob menendez, who worked so hard, on the senate side. [cheers and applause] and congressman nina vasquez, who is our chair of the congressional hispanic caucus. [cheers and applause] and i think we all want to take a moment to recognize the woman who, in so many ways, truly made this day possible, justice sotomayor's mother, selina

sotomayor. [cheers and applause] >> mrs. sotomayor is here with her husband, omar, and justice sotomayor's brother, juan, and other members of their family, and we're thrilled that they could join us here today. and, by the way, i don't normally do this, but let me also just thank my extraordinary white house staff who helped usher this stuff through. we're very proud of them. thank you very much. [applause] >> of course, we're here not just to celebrate our extraordinary new supreme court

justice and all those who've been a part of her journey to this day. we're here as well to celebrate an extraordinary moment for our nation. and we celebrate the impact justice sotomayor has already had on people across america who have been inspired by her exceptional life storymen story. we celebrate the greatness of a country in which such a story is possible. and we celebrate how with their overwhelming vote to confirm justice sotomayor, the united states senate, republicans and democrats, tore down yet one more barrier and affirmed our belief that in america, the doors of opportunity must be open to all. and with that vote, the senate looked beyond the old divisions and they embraced excellence. they recognized justice sotomayor's intellect, her integrity, and her independence of mind, her respect for the proper role of each branch of

government, her fidelity to the law in each case that she hears, and her devotion to protecting our core constitutional rights and liberties. now, justice william brennan once said that in order for government to ensure those rights for all its citizens, government officials must be attentive to the concrete human realities at stake in the decisions they make. they must understand, as justice brennan put it, "the pulse of life beneath the official version of events." "the pulse of life beneath the official version of events." justice sotomayor understands those realities because she's witnessed them firsthand. as a prosecutor, a litigator, and a judge, working to uphold our laws, keep our communities safe, and give people the chance to live out their dreams. work that she she has done with devotion, with distinction and with an unyielding commitment to giving back to this country that

has given her so much. and she understands these things because she's lived these thin things, because her life is one of those only-in-america stories. raised by a single mom in the south bronx determined to give her every opportunity to succeed, propelled by the talent and hard work that would earn her scholarships and honors at the best schools in the country. driven always by the belief that it doesn't matter where you come from or what you look like or what challenges life throws your way, no dream is beyond reach in the united states of america. and with her extraordinary breadth and depth of experience, justice sotomayor brings to the court both a mastery of the letter of the law and an understanding of how the law actually unfolds in our daily lives. its impact on how we work and worship and raise our families, on whether we have the opportunities we need to live the lives we imagine. that understanding is vital for the work of a supreme court

justice, as justice stevens and justice ginsburg will testify. the work of applying principles set forth at our founding to the cases and controversies of our time. for as visionary as our founders were, they did not presume to know exactly how the times would change, what new questions fate and history would set before us. instead, they sought to articulate ideal as that would be timeless, ideals that would accommodate the ever-changing circumstances of our lives and preserve for each new generation our most sake rid right -- sacrs and freedoms. and when justice sotomayor put her hand on that bible and took that oath, we took yet another step towards realizing those ideals. we came yet another step closer to the more perfect union that we all seek. because while this is justice sotomayor's achievement, the result of her ability and determination, this moment is

not just about her. it's about every child who will grow up thinking to him or herself, if sonia sotomayor can make it, then maybe i can too. [applause] >> every mother or father who looks at the sacrifices justice sotomayor's mother made and the successes she and her brother have had and thinks "i may not have much in my own life, but if i work hard enough, maybe my kids can have more." it's about everyone in this

nation facing challenges and struggles in their lives who hear justice sotomayor's story and thinks to themselves, "if she could overcome so much and go so far, then why can't i?" nearly 80 years ago, as the cornerstone was laid for the building that became our supreme court, chief justice charles evan hughes declared, "the republic endures and this is the symbol of its fate." justice sotomayor's rise from humble beginnings to the height of achievement is yet another symbol of that faith. faith that the american dream still endures. faith that equal justice under the law is not just an inscription in marble but an animating ideal of our democracy. faith that in this great nation, all things are still possible for all people. this is a great day for america and i know that all of us here are proud and honored to have been a part of it. and so with that, i would like to introduce the newest member of the united states supreme court, justice sonia sotomayor.

[applause] >> no words can adequately express what i am feeling. no speech can fully capture my joy in this moment. nothing can convey the depth of gratitude i feel to the

countless family members, starting with mom and my broth brother, and the many friends and colleagues -- so many of you who are here with me today, and the others who aren't -- who have helped me to reach this moment. none of this would have happened without all of you. mr. president, i have the most heartfelt appreciation for the trust that you've placed in me by nominating me. and i want to convey my thanks to the judiciary committee, led by chairperson leahy, for conducting a respectful and timely hearing. and to all members of the senate for approving the president's selection. i am so grateful to all of you for this extraordinary opportunity.

i am most grateful to this country. i stand here today knowing that my confirmation as an associate justice of the supreme court would never have been possible without the opportunities presented to me by this nation. more than two centuries ago, in a constitution that contained fewer than 5,000 words, our founders set forth their vision for this new land. their self-proclaimed task was to form a more perfect union. to establish justice, and to secure the blessings of liberty for themselves and their posterity. over the years, the ideals at the heart of that document have endured as subsequent generations have expanded those blessings, these rights and

freedoms, to more and more americans. our constitution has survived domestic and international tumult, including a civil war, two world wars, and the catastrophe of september 11. it draws together people of all races, faiths and background from all across this country who carry its words and values in our heart. it is this nation's faith in a more perfect union that allows a puerto rican girl from the bronx to stand here now. [cheers and applause]

>> i am struck again today by the wonder of my own life and the life we in america are so privileged to lead. in reflecting on my life experiences, i am thinking also today of the judicial oath of office that i first took almost two decades ago and that i reiterated this past weekend. to judge without respect to what a person looks like, where they come from, or whether they are rich or poor and to treat all persons as equal under the law. that is what our system of

justice requires and it is the foundation of the american people's faith in the rule of law, and it is why i am so passionate about the law. i am deeply humbled by the sacred responsibility of uphold be our laws and safeguarding the rights and freedoms set forth in our constitution. i ask not just my family and friends but i ask all americans to wish me divine guidance and wisdom in administering my new office. i thank you all again for the love and support you have shown me, and i thank president obama and the united states senate for the tremendous honor and privilege they have granted me. thank you.

[cheers and applause] >> well done. you're going to be great. best of luck. [applause]

[applause]

>> i am claude butterfield, scholar at the american enterprise institute, and i would like to welcome you to what is our second annual what the hell is august and we're going to hold a conference anyway. somebody reminded me of this this morning. it was just a year ago that w we -- two weeks after the collapse, the fifth or sixth collapse of the doha round talks. we decided, well, we should really take a look at what happened and maybe not wait until september. and the thinking was, well, what is hell, are we just going to have a couple of us sitting around a table because will anybody be here? well, my faith in the trade mafia was -- was sustained by the fact we had 150 people sign up, which is just about what we had this morning. so we had a very successful morning a year ago and i'm sure

we will this year. we have an excellent panel and i will introduce them in a minute. i'd just like to make a couple of preliminary remarks stepping back a little bit and seeing trade policy in a larger conte context. before i do that, i have to remind myself and we should remind our speakers this morning and you that with the obama administration coming in in the midst of a huge financial crisis, the deepest recession since 1930's, problems in afghanistan, problems in iran, hillary clinton going off -- up the wall yesterday in africa, or a couple days ago, it seems like these people have been in office for some time. but we have to remind ourselves, this is a six-month assessment. and, indeed, to be fair to the administration, ron kirk, the u.s. trade representative, still doesn't have his full staff. i think the senate is holding up one of his key appointments. and so i think there are

preliminary judgments to be made, we should be careful. that said, of course, this is washington and this is a think tank and we have speakers who write on these things. we will make some preliminary judgments. i'd just like to make three -- points in three areas. relating to the -- the limitation -- potential limitations, the barriers, the challenges and also the opportunities that president obama has moving forward in the trade area. the first relates i'd say to the political situation he faces and the political situation he faces within his own party. as i said in a couple of earlier remarks that others -- at other venues, it going back to the pogo cliche, "we have met the enemy and he is us." so mr. obama's first set of challenges go right to the congress and specifically in the

house of representatives where i think there is a substantial minority -- and i'll leave to the others here -- of democrats who are really -- have come to office and, indeed, been elected on platforms that are substantially antiglobal or globally -- or skeptical of global trends and events. we have to be very careful. i don't think this is necessarily protectionist. it's certainly not that they are protectionist in the sense that they are going to go out and push for smoot-hawley tariffs. but it certainly does say, at least in the house of representatives, there are a group of congressmen who really think that we ought to have a wholly new trade policy and think that the president was actually on their side when at least part of his campaigning, and certainly in the primaries, that he also espoused this cause. i would just point out to you the relatively new democratic working groups in the -- in the house. the so-called trade working group, which has about 60-odd

members, the populous caucus. a number of these members, by the way, were elected in 2006 and 2008. more than half, about 60%, 65% of the democrats who came in after the 2006 election had run explicitly on antiglobal platforms. when they turned -- when they talked to pelosi, they could say, you know, we didn't hide what we stood for. the other thing -- the other point politically i think that's important, they often were in districts that were -- that had been previously republican districts, remember that marginal districts that pelosi and the leadership really wants to hold onto. so they have some power. i don't want to go -- i don't want to push this too far. just signing up for a caucus or just putting in a bill as the -- the house trade working group did in june, which is the bill -- the so-called trade bill t-r-a-d-e, the normal cute ack nymphs that congress is fond of, which really calls for big changes in u.s. trade policy.

just signing that bill is not inevitable that people will work for it. but it is important that the trading group got over a hundred and now i think it's 125 democratic representatives to sign on to that bill. that leads me to a second point and to go back to 2006. the democratic era in trade did not begin in 2008 with the election of president obama. this may be true in other areas, but certainly in trade it began in 2006. and the house leadership as well as the senate leadership for the two years before obama came into office were used to making judgments on policy, and particularly in trade, on their own, without guidance or having to pay attention to a white house. in fact, they were at odds always with the bush white house. and so you have a situation where the congress has already begun to take the lead, and

without going into detail now, as you know, the house forced the bush administration to compromise on the trade promotion -- new trade promotion authority rules for free trade agreements. phil levy, my colleague and i, were called over to the ustr because we opposed that compromise and we were accused by sue schwabb -- not so much sue but her lieutenants of being ideologues and rigid. we thought, as it turned out, the administration was not going to get anything out of it -- they didn't -- but in any event, you had a major change in trade policy, at least in items of the t.p.a., even before obama got in office. and i would say that behind that -- and this is what's going to be interesting to see play out -- is an increasing restiveness in congress that is i think bipartisan to a degree with the grant of authority that the congress has given over the last 50 years to the executive. this transcends the partisan differences. it was hidden under bush because it was the congress versus bush.

now in some cases it may very well be the congress having a different view -- excuse me, a view of things than the executive. and we will see how this plays out. there are proposals kicking around for an independent chief enforcement officer. the key will be when the obama administration, if it ever does -- and i think it will -- goes back to congress for renewal of trade promotion authority. what will congress ask, how will it want to increase its own part of the process and what will be the reaction of the bush administration people? i remember, again, phil and i met as the loyal opposition to a number of the transition people of the bush -- of the obama administration in late 2008 and early 2009, and one of the points we made to them was hey, it's your government now. it's going to be your president the congress may come after in terms of congressional authority, and that's going to be the challenge to you. it's not -- you no longer have bush to kick around, as it were,

any longer. and that leads me to a final point in terms of the congress versus the president and that is president obama's own leadership style and what that portends or may not portend for trade. there's a very interesting article this morning i just noticed before coming up here in the "wall street journal," the point of which is that in terms of his own personal staff, particularly the economists on his staff, obama is a detail g guy. he wants to get in, he wants to know all kinds of things about the implications of economic policy that are -- that he and his administration will propose and what the -- what are the arguments against it. that struck me as an amazing contrast with the way that he has handled major issues since he's come in office and in dealing with congress, where his style of leadership has been not to get involved in details, to hang back, to let congress sweat the details. now, just as a footnote, my colleague, norm ornstein, wrote

a piece about a month ago challenging pieces of clive crook in the "financial times" and others in the "post" have written criticizing the style of leadership. norman argued that given what h called the dysfunctionality of congress, it was better for the president to hang back. i then wrote a piece that said, i won't challenge you -- though i don't agree with you, i won't challenge you really on the stimulus package or health care, but in trade, if the president hangs back, it's going to be a disaster, because particularly in the house, i think there's a lot of mischief that will come forward. and we've seen this -- i'm not going to go into details, some of my colleagues here may talk about this -- we have seen this with such things as "buy america," with the amendment that cut off the -- the small programs with the mexican trucks and coming down the road of equal and more important i think -- and we don't know how this will play out -- is a direct challenge to presidential authority on the climate change bill, where the proposed tariffs down the road really are the --

the way they're implemented really greatly constrict the president's ability to intervene in the national interest. so that you have i think as a background these three points, at least in my view, to look at. the one, the political situation he faces. second, the institutional. and, third, his own style of leadership and what that means for trade. let me turn to our -- to our panelists and i will go down in the order that they're going to speak. we'll be led off with an overview actually by chris -- by bruce stokes, who is the international economics columnist for the "national journal." he is also a senior fellow at the council of foreign relations and i think currently also a transatlantic fellow for the german marshall fund. my colleague, phil leavey, who's a resident scholar here at the american enterprise institute will follow. phil, before he came to a.e.i. in 2006, was a member of the policy planning staff for the

secretary of state, and before that he had been a senior economist on the council of economic advisors, and before that he had taught economics at yale. third, ed gretzer, is a senior fellow at the democratic leadership council. he has also been -- i don't know whether this was a joint appointment earlier -- the democratic leadership council and the progressive policy institute. before that, the last two years of the clinton administration, he was an advisor to the u.s. trade representative, charlene barshefsky. and before that, he had been a trade advisor or staff person for senator max baucus. finally is don murphy, who is the vice president for international affairs at the u.s. chamber of commerce. he has been at the chamber for awhile. before he was vice chairma vicer international affairs, he headed their division for latin america, and before that, he had been a staff member at the republican -- at the independent republican institute.

so why don't we get started. we'll go with all four of our speakers and then we'll go for questions and comments. >> thanks, clyde. it's a really pleasure to be here. and i, too, am impressed with the turnout or the crowd. you should all be proud of yourselves for turning out on an august morning for a discussion about something as arcane as trade, something we all love and near and dear to our heart and obviously is near and dear to your heart. so it's great to see you all here. i see my task this morning is to lay out, if i can, a bit the political environment in which a trade policy debate will take place, assuming we actually get one eventually. as claude mentioned, we really haven't had one yet in this administration. and i think the -- the shorthand story there is that the narrative that we have come to know and love about public attitudes towards trade is only

half right. i do not think there is evidence of rising protectionism. in fact, among the body politic, it may be just the opposite. but certainly if it's not the opposite, at least there's some openings there for this administration to do some things. so i will i think confound some of your presuppositions about public attitudes. unfortunately, i will confirm some other of your presuppositions about public attitudes about trade. so it's a mixed message, at the very least. and then also i'd like to talk just briefly about what i think are some -- should be some of the framing concepts of new trade policy, if and when we ever get one. but let's start with the public attitudes first. this is the story we've all come to know and love about public attitudes towards trade using data from last year. basically, the public thinks

that trade leads to job losses. this is coming from the pugh research center surveys. nothing surprising me there except that it's disturbing that there's been such an increase in just two years in terms of concern about jobs. the public believes that the trade lowers wages. i would point out to you that their experience over the last generation is that their wages haven't increased and that in economic theory, if you dump several hundred million more people into the global labor pool, in fact, it should have a depressing effect on wages. so as much as we might lament this concern and quibble about the details, the public may actually have their -- have a sensibility about some of the impacts of trade on their livelihoods that those of us who are more immune from this don't fully appreciate.

this is probably the most disturbing statistic from 2008 and that is that the public basically -- a plurality of the public, not a majority, a plurality of the public basically rejects the economic argument that trade lowers consumer prices. one of the arguments that we've all come to know and love is that globalization helps consumers because it lowers prices. the public may be wrong about this but a plurality of them believe it doesn't, and i think this is something that shapes and frames the political debate going forward. this is an indication, though, that something's happening out there in the public opinion around trade issues. notice these are 2009 data. it's a survey by cnn, and it shows a dramatic increase in the

public's view that trade creates an opportunity for the economy. notice that it had been going down from 2007 and 2008 and then jumped back up in 2009 right at the time of the april primarie primaries -- no, i'm sorry, a year after the april primaries in 2008, when trade was taking a pretty bad rap. something has happened here. i think we can attribute it to a number of things. this is probably mostly the obama bounce. people trust obama. if oh bam man obama pursues tran maybe we can trust it again t. creates an opportunity for the economy. i'm surmising this -- we don't know this for a fact -- but to see that kind of increase in change, we have to think what else was happening in the economy at the time. the economy was getting worse, so what else was happening in the body politic. we had a new president that people believed in overwhelmingly. but it may also reflect the fact that in bad times, as we knew in

the recession in the early 1990's, in bad times, people actually became desperate and they were looking for anything that could help bowie the economy. an-- could help buoy the econom. we can't draw firm conclusions about this but i think this is a good sign for the administration and for the country. this is from a "new york times" poll, again, in april of 2009. trade good for the u.s. econom economy -- note there's been a jump from march of 2008. this is not what one would have expected given the trajectory of the overall economy during that period. it confounds the narrative we've all come to know and love. but i think we need to integrate this data. we have to understand that our simplistic assumptions about public attitudes are just that, they're simplistic. there's more turmoil out there in public opinion than we'd like to accept. this is from pue data, the pue

global attitude survey done this summer, so it's even more recent data. again, you can see that there's been a dramatic increase in the number of americans who say that trade is good or somewhat good for the country. you see a similar bounce in pue data when they ask a second question, which is "is it good for you and your family?" now, there's two ways to interpret this data. the u.s. in 2008 had the lowest percentage of its population -- barely half -- who said that trade was good for the country among 27 countries that were surveyed. in 2009, we were still the second lowest but it had jumped up to 65. it had gone from basically half to two-thirds. so we are still significantly below european populations in our appreciation for the value of trade. but things have rebounded in a very significant way. and whether that's because

people are desperate and they're looking for anything to buoy the economy and they're looking for trade, or whether it's because they have faith in obama and they didn't have faith in bush, is at some point probably i relevant from the viewpoint of the obama administration. there's an opportunity to do things here that didn't exist in bush's last year. a second opportunity. this again comes from pue and they ask the question: "are free trade agreements good for the united states?" and bear in mind, this is slightly different from "is trade good?" in other words, this is an act of the u.s. government. this is a policy that congress has to vote on. and, in fact, there's been a sharp increase in the percentage of people who believe it. a plurality now believe that free trade agreements are good for the country. last year a plurality believed they were bad for the country. it's not overwhelming. it's not 70% or 80% think

they're good. it's probably not what economists would like to see. but, in fact, there seems to have been a turnaround in public opinion, again an opportunity has been created here that the administration may want to try to take advantage of. one final myth i want to try to explode in this presentation and it's this one. let me find it. it's not moving. fine. the slide that's not up there that i would be happy to send to all of you, is again a slide again from the pue data of this summer. democrats now believe trade is good for the country more than republicans or independents. now, this doesn't speak to claude's point about the dim i e democratic composition of congress, which, of course, is the initial issue.

but again, this perception that democrats are somehow isolationists and have their head in the sand is not borne out by the data. and i can tell you from other data that has yet to be released, democrats are less likely to support "buy america" provisions than are republicans. so it does seem to me that there is an opportunity here for the administration to make progress. final point and that is what should be, it sometimes me, the lessons we learn from the great recession as we go forward to shape a policy in the new obama administration? after the great depression, after the mistakes of smoot-hawley, in the post-war era, we used those lessons to shape american trade policy that shaped american trade policy for half a century, for two generations. it does seem to me there are lessons we may want to draw from the great recession to shape policy going forward. one is, we have to have a trade

policy that supports a sustainable current account deficit. our current account deficit of 5% to 6% of g.d.p. was unsustainable and, as herb stein used to say, things that are unsustainable aren't sustained. we had a crisis. we're now moving towards a current trade deficit of 2% to 3% of g.d.p. most economists believe that's more sustainable, so we have to have a trade policy that supports that. i would be the first one to point out, trade policy is not the main way to support that. there are all sorts of other ways: currency policy, domestic policy. trade policy is not on one element. but that should be one of the framing policies. the goal should be to have a sustainable current account deficit. it doesn't have to be zero but it should not go back to 5% to 6% of g.d.p., and if it does, we're courting trouble again. to do that, i would suggest that we need to think more about reciprocity and balance of benefits in trade agreements. these are both elements of the gap which have not been afloyd

to past trade a-- applied to past trade agreements because we thought they were -- did not serve our interests. we may want to rethink that. and, second, we need a trade policy that convinces both industry and the people that this trade policy will benefit them. to that extent, it seems to me we need a trade policy that's based on standards, technological standards that ensure the competitiveness of american industry. the chinese are pursuing these kind of standard-based trade policies. we need to be in that game. i would argue we need to be in that game with the europeans. and we need a standards-based trade policy that convinces consumers that imports are good for them. and i think this raises the issue of health and safety issues primarily. we need to convince mothers out there who are feeding their children vitamins and imported food that it won't make them sick. economists' argument that over time, labor rights will improve

if you just give a couple -- give a country a couple generations, or environmental standards will improve if you just give a country a couple of generations doesn't help that mother who's worried about what she's feeding her baby today. and we need a trade policy that assures that mother that, as globalization proceeds and more and more of what she puts in her baby's body is imported, that it's safe, that it meets the highest possible standards. none of those pillars of a new trade policy are going to be easy and they're all fraught with potential abuse, but it does seem to me that that's the lesson we need to learn from the great recession and from the public unease about trade that we see in the data. thank you. >> thank you, bruce. a great start. and some food for questions and back and forth in disagreement later. phil? >> all right. thank you. and good morning to everyone. in my remarks, i'm going to touch on some of the theme as that claude and i put forward in our recent international economic outlook, "in search of

an obama trade policy," which is available on the event web site. the four themes that i'm going to touch on are, first, the useful ambiguity of president obama's stance on trade, both as a senator and then a presidential candidate. second, the way trade policy in this administration has been shaped not by any grand strategy but in reaction to prompts from others, particularly the congress. third, and claude has mentioned this a little bit already, the constraints that the administration faces at home and abroad in dealing with trade policy. and then i'll close a bit with some upcoming events and decision points that may tell us more about the administration's plans on trade. okay. first, trying to discern where the president's true sympathies lie on trade. well, for the last several decades, you could figure out roughly where a president was going to stand on trade from the positions they held held in theiin theircareers and campaigp to the elections there. would be the occasional surprise

on the way they approached a particular issue, but from both parties, they were broadly committed to trade and globalization and they governed that way. president obama was somewhat different. one of his great political achievements actually was to persuade both protectionist interests and committed multilateralists in this country that his true sympathies were with them. he would rate eloquently of the benefits of trade and describe himself as a free trader. then he would stand before the assembled masses in ohio and argue that nafta had cost a million jobs. he'd argue for a friendlier, more multilateral approach to the world and assert that we should listen better to our allies and stop bullying them. and then he would oppose free trade agreements such as the one with colombia unless the colombians would do just what we told them. from a political standpoint, that ambiguity was and remains exceedingly useful. there are strong risks within the democratic party on trade. some within the republican party as well. but in the democratic party in particular, it can be a touchy topic. were president obama to take a clear stance, he would run a serious risk of offending a group that he needs for his

other ambitious endeavors. of course, the president could attempt to heal that rift but that would take substantial effort on his part and he he prefers to devote his energies to other matters. the difficulty, of course, is that presidents are often compelled to make decisions and even inaction can sometimes have serious implications. so with that, let me turn to my second point and here i'll paraphrase the bard. some come to wofs a trade policy. some craft a trade policy when they get there. and some have trade policy thrust upon them. the obama administration falls into this latter category. i think the administration probably would have been quite happy had it been able to pass through all of 2009 with trade remaining quiescent. instead, within the first weeks of taking office, they had to deal with congress's push to limit stimulus found american producers. the notorious "buy america" language. i won't say too much about this since i know that at least one of my colleagues is going to address -- on the panel is going to address this but let me just

offer one corrective to a common interpretation of that episode. in the common telling, congress began foaming at the mouth and slabbering about protectionism. president obama then calmly and cooled reined congress back in by supporting an amendment requiring us to honor our international obligations. the problem with this version is that five days before the president made his position clear, his vice president had spoken on the issue on cnbc. and vice president biden said, i don't think there's anything that's anticompetitive or antitrade in saying when we're stimulating the u.s. economy, the purpose is to create u.s. jobs. i don't view that as some as the pure free traders view it, as protectionism. i think it's important to have buy america provisions. vice president omitted honoring w.t.o. or nafta. that came later. president obama's modest effort to rein the fervor applied not only to congress but also through his administration. i bring this up on how the schizophrenia on trade policy

has persisted as the administration has gone up. there are free traders in the administration and more who take a more skeptical view. the buy america episode was followed by others, as claude mentioned, notably the killing of the program to permit mexican trucks to operate across the border, a nafta obligation, and restrictions to imports of chinese chicken, which they've challenged at the w.t.o. in each case, congress took the lead. in some of the cases, the president expressed his discomfort with the protectionist act but signed them into law, nonetheless. this pattern seemed to repeat itself on a more threatening scale when the house passed its cap-and-trade bill a month or two ago. the administration was deeply involved in negotiations over what that bill would contain, presumably the administration has some clout with a congress completely controlled by the president's party, yet the legislation emerged from the house with strong trade protection requirements. the president quickly denounced those in "the new york times" but this apparently had not been a red line for his team dealing with them on the hill. now, there had been some positive signs in the

administration on trade despite explicit campaign pledges to the contrary, the administration chose not to label china a currency manipulator and the u.s. trade representative ron kirk came out in may with a very forward-leaning speech or series of speeches in which he advocated moving forward with stalled trade agreements. shortly after those speeches, however, the white house clarified that it was ready to do no such thing, drawing criticism from both senators baucus and grassley of the senate finance committee. so the ambiguity on trade persists. the third category, to be fair to the president, he is fairly hemmed in on trade. his party has spent a decade and a half espousing the view that trade agreements are only acceptable if they have strong labor and environmental measures. here, i would just note, by the way, as a card-carrying economist, that the reluctance to -- to go for trade environmental measures has nothing to do with whether one requires food safety.

>restoring that authority be a simple act of resuscitating what was allowed to lapse earlier. in the rush to kill the -- or to forestall at least the colombia free trade agreement, the house demonstrated the old approach to trade promotion authority was fundamentally inadequate. so that would be a difficult challenge even should the administration decide to move forward. let me move to my final set of points and that is what does all this mean going forward, what can we predict about administration trade policy? well, i think it's clear that

this little or near-term likelihood that anything will happen on panama, colombia or south korea. the administration has said as much. instead, i think we can focus on three potential battlefields where we could see some action: enforcement, administer protection and doha. first, enforcement. this summer, the administration announced that enforcement was going to be a central element of its trade policy. this plays to a belief that the bush administration had failed to enforce the u.s. rights under existing agreements. now, it's not yet clear whether this enforcement policy is going to rely mostly on more asituation or new dispute cases. either approach is going to face difficulties. more assuation presumes that the critic holds the moral high ground and that may not be how the u.s. is perceived following the first six months of trade policy. if it's new dispute cases, there are several hurdles. first, there's the gap between what existing agreements say and what we wish they said. we saw this in part -- or in the parts of the case that the u.s. lost against china on intellectual property enforcement not long ago. second, one needs a complai comt

to push a case and that was a long-standing problem in cases involving china in particular. and finally, a raft of new dispute cases likely to strain the w.t.o., particularly if this represents a policy of litigation in lieu of negotiation. so some difficulties on the enforcement front. on administer protection, of course the big case to watch is the section 421 case on chinese tires. this is a case filed not by domestic tire producers but by labor interests. now, if you were trying to discern a couple of rules to explain obama administration behavior, two that have ruled reasonably well in the past is one, don't annoy the chinese, after all, they're playing for the administration's grand plan. and two, don't annoy labor interests. after all, they're the political base. here those rules kind of come into conflict. both labor interests and the chinese have highlighted the upcoming decision on chinese tires one, as an opportunity to write past wrongs and pursue a more balanced trade policy. the other is a test of whether the administration is really protectionist. and we'll know by mid-september when the president's tire decision is due which -- which

constituency is going to win out. finally, on doha, the president has joined repeatedly his g-20 and g-8 colleagues in calling for a successful conclusion. but how do you get there? will the president take the lead in arguing for scaled-back agricultural subsidies? that would be a reversal from his campaign stance but he's shown his ability to do that before. and how would he deal with the diminished enthusiasm of key service and manufacturing industry groups for the deal that was on the table last summer? that would take a substantial investment of political capital. so far, the administration has not done a great deal beyond stating the goal of a successful conclusion. that neglect has actually been noted abroad. there was one story of how last month a leader in brazil suggested his country would focus more on regional agreements in the e.u. since the u.s. had turned away from doha. perhaps one might argue that the time is not right this year but maybe next year will be better t. may be, though i haven't heard an awful lot of people argue that election years in the u.s. are the ideal time for passing broad trade agreements.

i don't want to ends on such a down note. i'm sure ed will explain why things are really okay. but let me just offer my own feeble attempt at optimism. so i think the president was entirely sincere in his desire for warmer relations with the rest of the world. summitry of the g-20 or three amigos sort is likely to demonstrate the importance that the rest of the world places on trade relations. so my hope is that this may prompt the president to step up his game on trade policy. and with that, i'm concluded. >> thank you, phil. there's another event that may or may not be interestin be actg and that is the president is hosting the g-20 summit in pritsberg. the administration has promised at various times in the late snraing they had a trade policy review that was supposed to go through the spring. it's now finished but we never heard anything about it. in relation to that, they said, well, the president's going to make a speech, a big trade speech sometime the end of the summer, early september, and they have pointed to the time

before the pittsburgh meeting. so we'll see. that's certainly something that will be noted if he doesn't do it. our next speaker is ed gretzer. i should say before i turn to ed, phil mentioned we don't give out the paper of -- or papers these days but if you'll go to the web site, the event web site at a.e.i., each of us has papers on trade policy. and what i mentioned before i introduce ed, he's just done i think in the last month a paper for the democratic leadership council called "more growth, less gridlock toward a new trade agenda. : recommendations to the administration on trade policy." i'm sure he'll be talking about that now. ed? >> yeah, thank you very much. thank you so much for inviting me. and i echo my colleagues on the panel, thank you all for coming out this morning. i think i'll start where phil left off, with, as he said, a couple of reasons to think things aren't so bleak, as dr. levy was portraying them, and also one reason to think

things are much more bleak. the reason things are much more bleak is that we're living really through a once-in-a-century event in the world's trade. since, you know, this morning, u.s. census released its monthly trade data. this shows the first six months of trade in the united states. they showed that last year, the first six months of 2008, we imported $1.3 billion worth of goods and services. this year, $0.9 billion. the first six months of last year, we exported $0.92 trillion worth of goods and services. this year, $0.75 trillion. this is a decline in trade that has not happened since 1937, did not happen during the second world war, did not happen during the crisis -- economic crisis of the 1970's, did not happen in the early 1990's. so u.s. trade has contracted in

a way that none of us now living can remember. so the real world of trade for people who buy and sell things is pretty bad. . this has been the pattern in every administration. the last three republican administrations have done it all safeguards.

the things that the obama administration and congress have done so far have caused unhappiness abroad because of the academics. but they are pretty small and do not affect much trade and don't be seen -- and do not seem to be setting precedents for the future. the important thing that president obama has done is during the debate over buy american, that america needs to do its best to stay compliant with the obligations that they have taken on. during the period of the collapse in trade and unemployment in america rising by 500,000 people every month, that is a real wall against the closure in the world economy that has been built up. i think it will serve the country pretty well over the next four years. then we move on to the policy agenda. i think when you look at the administration, you see a group of people who have a real sense

of mission. you feel that they were elated to do some things that are big and important. they need to oversee a recovery from the financial crisis. they need to improve the american standing in world in general and reshape our standing with the muslim world in particular. they feel that we need to give the american people some additional sense of security and stability in a time of economic crisis and some long-term changes in the economy that are troubling. when global economy policies fit into those priorities, i think the administration has been bold in facing down opponents within the public and within its own party. i would talk to the launch of the china and u.s. strategic dialogue, some substantial revision, and the revision of food safety programs. that effort is in the face of

pressure to keep world markets open. you'd think that this is globalization policy writ large, i think that they're doing pretty well. if you think of trade policy as narrowly and purely, it is an open question and a work in progress. the big problem that trade at its face and the problem the administration is trying to work through is that the agenda it has before it does not relate that the national priorities very well, is not all that ambitious, and it's not when you conducted the public with and say this will make your life better or serve national- security needs very well. let me run through it. three free trade initiative -- agreements inherited, with south korea, colombia, and panama. i would also say that the centrality of fdta has not all -

has not been net productive for us. the fta's -- there have been 14 relationships and eight agreements, something like that. they have covered about 8% of u.s. as -- exports. on the export side, you see some good growth but it is a marginal contribution to our overall portfolio. on the other side, there is a loss of share. they now have 3.7% of u.s. imports, those countries. they have not been all that effective. as a tool to help the u.s. economy in general, they have been marginal. as long as that the economy, the countries that we have most of our trade with, china, japan,

and india, and brazil, as long as they are there, been the fta problem is marginal. and then you have done doha round, it essential to poor countries and i think american farmers and ranchers have a bad case that their industry is more restricted and limited by foreign trade and any other. but agriculture is 8% of american exports. it is not going to grow even if there is a successful doha round. i think the administration goes to the public and say that we want to push for doha just as it is, the public should say the president is a smart guy and we trust him. given that trade is a dissident and difficult issue within the democratic party, i think that if the administration is going to make a big push for trade and

spend capital on it, it has to have a different agenda that will do more for america as an economy and do more for our national security goals as a nation. let me give three points from my paper that i would like to say. one is, we need to look harder at ourselves and our own policies. they are not very good. if you look at the american system, we collect $25 million of tariffs every year. that comes from textiles and shoes and luggage. industries that employ very few people here by our of overwhelming importance to the exports of some very core countries in asia such as cambodia and bangladesh and so forth. and to some very security sensitive countries, pakistan in particular. pakistan has $3.5 billion of exports in the u.s..

reimpose a penalty on those products every year. meanwhile, the ministration is trying to get congress to get at this time $1.5 billion each year to promote growth and job security and job employment there. but one industry that is absolutely producing jobs today. this is not a sensible or reasonable approach. we need to look at ourselves and fix our policies that are damaging to our foreign policy goals and our national security needs. second, i think as an economic modern trade policy needs to be oriented away from fta's and toward the large industries that have employers here and our main trading partners. i point in particular to information and media, to environment and energy technologies. that would create employment and growth. industries like health services

and medical technologies. these are areas that americans look to as big employers and to secure america's leadership in the future. i think that they need to replace the fta's. this should be through the doha round and if not, and then modeled on the information technology agreement of the 1990's. and it needs to do more to look to the future. we will have in the decade many new industries that we do not have now. they in there -- they emerged from the internet and nanotechnology and biotechnology. they will arouse new and difficult issues. we've seen a lot of the beat about technology and privacy. we should be working now, particularly with europe, japan, and australia, probably with korea, to define a set of

standards and product approvals and so forth that will allow these industries to grow and contribute to much -- to us in to the rest of the world as they should. and if we have that sort of set of issues to deal with in trade, things that will really help us deal with our great security problems and national press, will contribute to the hopes and growth in employment, then the administration can go to the public and congress and say that it is important that we do something difficult because the work -- the rewards will be very great. i think the burden is on trade advocates as well as the administration to develop the ideas and policies that will allow us to do that. this trade policy will be worthwhile. >> thank you. >> it is a pleasure to be here this morning with this

distinguished panel to think about the obama administration's trade policy so far. as you have heard, the president will outline his vision for a new framework for trade in a speech at some point in the weeks or months ahead. but while we have been waiting for the speech, trade policy has not been dormant. this is not been a good thing. there have been concerns about creeping protectionism and the cost of inaction on the pending trade agreements and negotiations. i will try to briefly assessed these issues from the perspective of the business community and offer some thoughts on a hopeful trade agenda that eight -- that perhaps the obama agenda can -- the obama administration can believe in. what protectionist measures have been undertaken by the obama administration and the 111th congress? what has captured the attention in an alarming way for the business community? this has been a terrible

recession and pressures for protectionism have risen. a couple of months ago, the world bank reported that the nations that had pledged not to engage in protectionism, they had none the less done so. to cut to the chase, it would be an exaggeration to say that the world has been descending into the maelstrom of protectionism. we should be vigilant as the cost of isolation can be high, but this is not 1930. we are in general seem the wto rules and the other trade agreements serving as an effective brake on protectionist impulses. so far those rules are being respected. there are a couple of dangerous exceptions and i would like to zero in on one of them, the buy american mandates and recovery act. as you dig into it, you see how serious it truly has been for many people in the business community. due in part to objections from

the business community and major trading partners such as the european union and canada, the recovery act was indeed amended so that the buy american mandates were limited. it had to conform to u.s. commitments under the wto agreements and others. that result in large part of the difficulty at the federal level. however $280 billion in the recovery act spending is being channeled to states and municipalities. many of these are not constrained by those international agreements. outside of road building, states and municipalities have never been forced to comply with buy american rules in the past. nonetheless, the office of management by judgment -- the office of management by asman at issue and guidance for them to comply fully with buy american mandates. this is unprecedented. at a time of economic crisis and

a stimulus package intended to spend money and create jobs quickly, this is retarding economic recovery. this is not been a huge shot to the system appeared similar roles have been around for 30 years. it is elsewhere that we see the problem. there is a $130 billion north american market for water and wastewater treatment and equipment in infrastructure, and there we have a real mess on our hands. canadian arms are being excluded for u.s. miscible contracts and retaliation could result in lost business for u.s. companies. also the buy american rules are being interpreted in a way that bar at manufacturers for bidding on projects. that is because many u.s. manufacturers regard -- rely on global production change that in a great components from all round the world.

if american manufacturers are finding it difficult to comply with buy american rules because it is impossible to avoid outsourcing at least a portion of their content from other countries. the recovery act included $7 billion in funding for municipal water and waste-water projects. the house transportation and infrastructure committee reports that each billion dollars in infrastructure development creates about 35,000 jobs and an additional $6 billion in economic activity. do the math. that means that more than 200,000 jobs that this portion of the recovery act funds could save or create, if they were not tied up in red tape related to buy american rules. it is also more than $40 billion in economic growth that is being left on the table. most of the recovery act spending related to housing and school construction is not online yet but you can be sure that when it comes along, we will be hearing more about the

cost in the sectors as well. i wanted to take a moment and focus on buy american, because it shows that whether we like it or not, trade policy happens. or as bill says, it is thrust upon us. in this case is happening in a damaging way with the job losses in a growing threat of retaliation. on monday, president obama was in mexico any comment on buy american. he said, "we have not seen some sweeping steps toward protectionism. this is no way endangered the billion dollars of trade taken place between the canada and united states." in general, that is true. but it is a very serious problem. we have profiles of some small and medium-size companies, aquarius technologies of wisconsin, that are definitely facing lost sales and potentially a large lay off due to buy american rules.

i am highlighting this because it is not too late. the omb has received comments from the business community on its interim guidance and it can fix this. they are due to issue their revised guidance shortly. that that list the blind -- lift these binding rules, so fingers crossed. i will turn briefly to what the new administration has not done in trade policy. namely, its failure to move forward with the pending fta's. i will spare you a survey of the benefits of these agreements. the chamber believes that they will boost sales and bolster important allies. from the business perspective, the foremost goal of trade policy should be to tear down or and barristers -- foreign barriers to u.s. exports as these three agreements propose to do. they are alive and well and may

pose a major competitive challenge to american agriculture and industry. in july the world economic forum issued a report which ranks countries around the globe according to their competitiveness in the trade arena. once the reports rankings gauges how wide that terrorists are in that country's exports face. leading that pack is chile with a massive number of trade agreements with more than 50 countries. i am reaching for my visual aid. while the united states found that it did well in a number of area, we rank up but that 114th out of 121 in terms of tariffs faced by our exports overseas. in other words, american exporters face higher tariffs of brought in nearly all of our competitors. it may be a truism that 95% of

the world's consumers live outside of the united states, but what are we doing to lower the barriers that prevent americans from selling to them? the last time that congress voted to lower barriers was 2007 when congress approved a free- trade agreement with peru. since then, the house has voted six times to lowest u.s. tariffs on imports. why is it that so many in congress are pleased offer foreign workers free access to our markets, with 300 or 400 house members voting in favor, but they oppose helping american workers by lowering tariffs on as reciprocal basis? i have been wondering what to call this philosophy. mercantilist policies encourage exports and discourage imports. but there reigning philosophy and congress seems to be roughly the opposite, to encourage imports and exports happen as they may.

i went to google and tried to find the opposite of mercantilism. i found that the best label for this exotic philosophy may be laissez-faire capitalism. but i would not want to insult anyone. do not misunderstand me bring that chamber is not calling for the united states to raise barriers to imports. many grassroot ideas about lowering high tariffs that the u.s. imposes on some developing countries are measures that our members would strongly support. but this is not sustainable. and that which is not sustainable will not be sustained. this contradictory position is a particular threat to the democratic party. on more consistent and logical position would be to embrace reciprocal trade agreements, adjusted democrats have already

embraced one-way free trade coming in. it would be more consistent to oppose trade liberalization consistently. this is a threat as well as an opportunity. most democrats are already pro import. a great communicator like president obama could find his way to be pro export as well. i would like to differ a little bit with ed's restrained performance -- assessments of the performance of fta's. at a of a report came out on monday which says that of four of their recent agreements, they have exceeded expectations. growth in two-way trade route fro -- group. they were all higher than pre- fta growth rates. several areas of the economy made substantial gains in market

share versus suppliers from other countries. i can tell you firsthand that the business community has found it extremely helpful. to close, i would offer three brief recommendations for trade agenda that i think the obama administration can embrace. earlier this year, the chamber issued a report entitled "international engagement." it will be on the web site in an extended version but i will stick to my three points. first, though on the offensive. the administration will be stuck playing defense against buy american measures until it devises a trade policy of its own. the best defense is a good of sent -- offense. yet the administration had already did that, would be absurd trade act put forward by congress have attracted more than 100 supporters in house? of course not. the internationalist to run the

administration, larry summers, ron kirk, timothy geithner, they understand this. the silence from the white house has left a vacuum, and congress like nature of voids of -- of course of backing. -- abhors a vacuum. the united states cannot stand still in the international economic sphere. we need to revitalize our exports and international trade leadership by moving forward on a multilateral, regional, and bilateral marketing opportunities. second, clear the decks and pass the fta's. if you want to build a growth oriented international economic policies, as the administration has said that it wants to do, korea and the ftawith korea is the place to start. if you want have any type of

engagement with the moderate governments of south america, and a columbiombia and back ftas the place to start. finally, embrace multilateralism. ed is just one of the number of trade experts who have suggested that the big new trade deals of the future should be the glory- lateral sector agreements. also the proposed environmental goods and services agreement which would do away with a surprisingly high tariffs and non-tariff barriers facing green goods and services. but you cannot get there without doha. abandoning doha would deal a severe blow an embittered major trading partners around the world.

the only way out is through. in bracing multilateralism seems a natural path for democrats and it is not clear why this has not already happened. a couple of months ago, jim bacchus spoke on climate change. he is a former congressman and a former chairman of the wto body, a unique combination. i wrote down a " of his. "it puzzles me that my party, the democrats, but inconsistently and in a principal fashion embrace multilateralism but rejected in the one area, trade, where it has been most successful." the obama administration has a sterling opportunity here to change that. ladies and gentlemen, our economic circumstances are making trade more important, not less, and the chamber looks bored to working with the administration, congress, and many of you here today to it bans the trade policy that avoid

protectionism, that wellcome's imports, and advances the export interest of american workers and companies. >> there are a lot that individual points and questions from the individual presentations. but i want to turn to the audience. one general questions, the worst-case scenario. it is not where i started from in this. and i know that the answer to this will lead you to conjectures about the overall political situation around the united states. but it seems to me that there as a plausible case to be made that if you go right to 2011, and i am picking up on things that people say. ed has made the point and others had made it that the administration says that they need a much better base internally, and that means domestic reform.

initially they have said, and a late bush years, if we can bet -- -- if we can just get a big trade adjustment program. and still the administration goes on that any health care reform and other -- boosting up the social base in the united states. they seem to have decided in may or june, we have not talked about this, that everything else will stop until then. they have not made that announcement but they have basically pulled everything back. i don't see when that starts again. the fta's are a big problem, much bigger than doha. doha itself presents a problem with the major interest bridge in the united states have been told what is not acceptable. some people argue that if you go to 2010, it is too late because of the midterm elections.

the administration at the moment is making heavy water on things like health care, finally making it better, but i can see is going into 2011 without much happening. and then you face 2012. what is the likelihood of something like that happening? >> now plays my bed and your projection. -- i would place my bets on your projection. as much as we need a social safety net in the united states, and certainly the public support for globalization and trade in europe may impart reflect the fact that the competition created by globalization is not as endangering to individuals in europe as it is to the united states and the livelihood of their families and so forth. the administration's argument is really a delaying tactic. people are not going to

overnight lose work. let's assume that in fact the premise is right and you need a stronger social safety net to build support for globalization in the united states. it will take years for people for that to say again, to understand that if they lose their job because of trade they are not going to lose their health care, and they will in fact it retrain when they used to not get retrained, that in fact and employment might not be as onerous in the future as it is now. and the obama administration has done nothing to improve the underlying basis of unemployment insurance in the united states. i agree that it as a delaying tactic. even if all of this stuff gets passed, which is highly dubious, it would still take time for public opinion to change on these issues. so much of this is out of their control.

progress and doha depends on our trading powers, the chinese and others, being willing to move, too. we have no evidence of that as of yet. >> ed has written about this in an article that i've often quoted, the differences within the democratic party. we have to stop trade until we get a better social safety net. i dunno which are turned you on that is. >> to answer your direct question, there will have to be some -- it is very likely to be some trade policy fairly soon, and that several of our trade preference programs are going to go -- to lapse, blank out of existence at the end of this year. congress will have to decide whether to continue them, particularly the anti trade preference act. they will probably continue them

so that will be some continuity. there is probably a window for the fta's early in the next year. it goes much lighter than that, it will be difficult. i don't think the wto m members had been talking about doing this. they're talking about completing agreement sometime in 2010, a vote in 2011, so i do not think that there will be no trade policy activity. but either it will be fairly small and limited to preference, or what the preference + fta, or some other sort of thing. i think a really big trade legislated event is probably like nine -- probably not likely until 2011. >> the kind of things that you recommend about the secular agreement are moving toward new

advanced technologies, that is something that someone will think about as a second obama administration. is that fair or not? >> when i was writing the paper, i was thinking about a four-year term. what can be reasonably accomplished within a four-year term? you can to the support for them -- you can do this support for muslim countries and poor people this year. fta's can be done as part of doha. the information technology was about six or eight months' work. it had a lot of background. it would take longer to do something that was in other industries and it would take longer to is something that was really serious and involves services and non-tariff barriers as well as tariffs. but this is a reasonable four- year program. i was not thinking about a decade or an eight-year program.

>> you ask a question, does the obama administration had a plan to broaden its base? how important is that nice? i would argue that the base is probably as support for trade. and that is not that bad. the free-trade agreement passed by at 2-1 vote, probably one of the most bipartisan buzz that we saw in the last congress. trade adjustment assistance is probably a problem, but it was the one item that was negotiated at a bipartisan and bicameral basis. how big can that base grow? you can do all kinds of things to try to entice a dialogue with the working group, but will you ever win them over? this administration, if they are going to make it contingent on

moving forward, they need have support of that magnitude, up to 400 house members. that is a very high bar and it becomes very difficult to accomplish. >> please identify yourself. i am perfectly happy to not only accept questions but deck relations. but as long as they are reasonably short period cannot write an article here in front of the audience. we have a microphone going around. let me start right here because the microphone is here. >> thank you. i am a chinese reporter. thank you for all of you coming here. my question will be addressing that china case.

based on a panelist observation on the limited record on trade policy, what kind of decision you think the president is going to make on this case? >> we're away from the big principles right to the nitty gritty. >> if i had to guess, i would guess that there is some remedy. but it is really hard, and here's why. i tell you a story that goes in either direction. i did say, it is a similar conflict when it came to the decision to name china a currency manipulator. it was repeated, and it was the same conflict between the -- what the chinese government clearly wanted, and he opted to net -- not name china of

currency manipulator in april. on the one hand, if you could say that that is really telling us where they're true preferences log. again, they will face similar choices. or you could say that put them deeper and hot. they need to make sure that -- they need to do something to appease their political base. ipod toward that ladder, but you could tell either store -- i oughpt for the latter, but you could tell either story plausibly. it was a low hurdle that the u.s. could put import restrictions on china with a minor injury occurring to domestic industry. there are a number of such cases under the bush administration. i could participate in a couple of these decisions. it is a bilateral problems -- of

bilateral policy in a multilateral world. great public concern about trade with china. there was pressure to do something. the problem was that whenever we look at the situation, what became clear was that if president bush had chosen some of these earlier cases to that, it would meant that imports coming from china would have come from other places, vietnam, india, or brazil. even if we had only been worried about u.s. workers and not u.s. consumers, this would not have done anything for u.s. workers. these are some of the same discussions that we're seeing now. the problem is that there were strong philosophical approaches which said that the reason the bush administration did not do this was this ideological commitment to free trade and they are willing to sellout u.s. workers and things would not be any different. that premise would make it very hard to say, we just checked and there are more countries out there than just china and this

might not actually do much. >> of political comment, because none of us are confident the deal with the technicalities of this particular case. as phil mentioned, surge protection was part of a deal to get congress to deal -- to mix at dublin's -- wto admission for china. whether or not any of these cases merited its use, a lesson that people in congress who made this deal will clean from what the bush administration did -- and let's assume that the obama administration rejects the case as well -- is that you cannot trust these kinds of deals with the american -- with the executive branch. that makes trade agreements harder in the future because this was a face-saving measure of how people concerned with china coming into the wto. there is a political consequence that has to be considered very strongly. secondly, somehow we have to

have an adult conversation with beijing about the fact that we can all walk and chew gum at the same time. we can fight over things and still work together. the chinese want it to be all or nothing. we have cases with the europeans on very difficult issues all the time. it does not impair our discussions with the europeans on a whole range of issues. we tend to, whenever we have a trade fight with the chinese, find out that the chinese will not show up for meetings or talk in the meetings when we have them. their noses are out of joint. the chinese have to learn that in the real world of global trade politics, you cannot -- you can fight and talk at the same time. and again, purely diplomatic reasons, we send another signal to beijing that we do not want to upset to hear you will retaliate. we enable that dysfunctional behavior by the chinese and we

should avoid that. >> bruce is right. rightly or wrongly -- and this could be bipartisan here -- a decision that goes along bowlines of bush administration, which i would support for other reasons, would feed into the skepticism of the legislator about the executive branch. i have to can see that. -- i have to concede that there the president wants all the details. congress is going to come after you more. that would try to cut your off party, you're leeway, your discretion. i also think in terms of china, i think the chinese are finally beginning to be more comfortable with wto cases. we had this situation with the democrats beat up on the republicans. they had not done enough cases -- initiated enough cases

against china when they knew the dirty secret. everyone had agreed, wto members, in order not to swamp the wto with cases, he would ease off. only after 2006 with the china -- they're all obligations. the chinese reacted as if somehow this respite that they had was the way things ought to go for a long time. now they have realized that they are better off if the united states and the europeans and japan or whoever goes to wto than the alternative, which is unilateral or some sort of combination. i'll come right here. if i miss the on and on the back -- if i miss any on the back, please raise your hand. >> i am with the department of commerce. i was very intrigued by several speakers' comments moving on the

concept of the information technology agreement. the trade environment in the world is quite different than it was windy fta was imposed in implemented. what d.c. as some of the political challenges to sectorial agreements? at a think our major trading partners and bric countries would react? >> i will take a shot at it. i am skeptical of the secular approach. i am not sure that the problem is domestic problems, because you can pick your sectors. if we are setting the agenda, we picked a sector where you do not have those domestic political problems. the difficulty is finding a sector where you have lots of countries around the world to all see themselves as gaining from an agreement. in particular circumstances,

information technology, although i have heard from some participants that they think that they were an error, that they should have been holding out concessions to get something unrelated. i completely agree with the premise. i think that deal is stouck and we need to think about different things. we often need that to try to find a balance deal where you have the right number of participants. that would be the question i pose. i'm skeptical that you would find those types of alignments on the international scene. >> those are reasonable concerns. i would say that there has been no multilateral trade agreements in 1998. there is reason to be skeptical about almost any initiative. trade hot -- trade policy is hard. it's hard to get countries to agree to anything and there are always reasons to say doha and

agriculture is too hard. they're not many countries that want agricultural reform. that could be the fate of an environment and energy agreement. the path that we have been on since that is one where we have not had many agreements. if someone has a better idea that will create as much growth and employment here, i welcome it. the path that we have been on doing gold standard fta's, pushing at her watch what -- nicaragua on the issues has not been productive. he and thinking that the big countries in the big industries will be productive. >> the dirty secret is that the only way that we will get many of these guns is if we abandon

the multi nation principle. that is apostasy in the trade theology. what i am struck with in private discussions with trade people all over town, is how often they volunteer the fact that we need to rethink that. i think that that is one of the challenges we are going to face, intellectually and politically, going forward to enable that strategy, which i think is the right way to go. that is one of the obstacles we will have to wrestle with. >> one observation. i am not so convinced of that. if you look at the world as the industries, we get -- reticulate technologically sophisticated ones, there are only 10 or 12 countries that are participating. the others are bystanders. having an mfn-based policy was fine because it include all of them.

i am not so convinced that you would have to make that choice. beyond that, because of all our preference is, we had made it already. we do not have many mfn policies except for those that wear white ita. -- that were like ita. >> i am a lawyer in town. i was struck by the fact that working for the aba and trying to open markets for american lawyers, it has proven to be quite difficult. in fact, to the extent that we're successful, it is because we ignore the rules in other countries that would otherwise keep us out. i was struck by the fact that also -- all those services are 75% of our economy, all of this discussion of trade rest on the exchange of goods and farm products, and very little attention is paid to the services sector, which is such a

significant part of our economy, and the europeans as well. i wonder if the same dynamics that are affecting production of goods will also affect services, which is the big growth of our economy. >> this is a very good point. $9.50 trillion and manufacturing, $2.70 trillion and natural resources, $1 trillion in agriculture, and $3.50 trillion in services. in general, services are about one fifth of trade. for the u.s., it is more like 40%. we have won a bid heaviest service-trade portfolios in the world. any trade policy that does not have services as part of the objective is not serving america

very well. >> i agree with that. we had a big breakthrough in services and the real political muscle was from services companies. they did not get everything they wanted but it seemed to the world and it seemed to them that they had gotten a lot. as you got to the doha round, it did not get a lot of interest. and this was did doha development around. people paid little attention to services. belatedly, the service industries in the united states and around the world have awakened to the fact that they have been ignored. as a matter of fact, i think the bush administration was guilty here until the last year or so, when it finally began to say in the wto negotiations, if you cannot ignore services. that put forth proposals about ending the round last year which put services off as a second-

class citizen. it stirred the services and stirred the administration. i cannot believe the obama administration is attuned to looking for political support without getting some in the final package, some advance in some sectors. the bad news for that is that it's very tough. it is coming to light. the bricks have reacted against the united states, saying that you do not have to tell us what you will do, but we want something on the table with services. that is another point that the obama administration faces as well as manufacturing. our major is industry groups are saying what is on the table is not adequate. i will not see how that plays out. i am one keep going. [inaudible] >> barbara whitman, a trade economist who serves as a policy

corners and -- as a policy coordinator. the striking point that i welcome from ed this morning is action on both preferences. john murphy talked about our standing as 114 out of 121 countries. that's a fact that there have been six agreements to pass lower tariffs. the final point that we have been addressing for a good long time, is that if we were very nice and gave poor countries access to our markets, and what has been the goal of all that reciprocal agreement, a one-way street to a two-way street. it would demonstrate our excellence. the general comment about fta f --ta's -- f.fta's and

partners, i have worked both sides of the partners in its brief you get there one by one. you have to do with fta's but for having a common basis of understanding of having worked together. what i am looking at now in the fall or early next year -- we have to deal with those programs in the fall. the problem with the preference programs [inaudible] they go on and on what that pattern were washington gives away our markets without getting any exports. part of that reason is that -- >> please get to the question. >> part of the reason is that we have a lot of people saying that is the way to do business in the

washington. [inaudible] nobody seems to be convinced that we want a permanent reciprocal agreement. they want to be able to punish countries and take away their programs said they don't want to give them a permanent agreement. yesterday canada signed an agreement, and we have one pending with panama. it's very likely that canada will ratify there's before ours. t think that this can put some pressure on our agreement? when we look at our competitive ranking, we did very badly. canada has jumped the market on us with several countries where we could not get it free. does anybody think yesterday's action will help us? >> no. the constraints are big enough

that weather is the eu would call real or canada with panama, i have a hard time seeing that as a factor that will make the administration realize that trade is important. >> i disagree a little bit. i don't disagree with the administration but -- the eu- korea agreement, yet because through will set off, i think, at least some pressure. and if you go with other middle sized -- it continues and there are a number of middle sized countries that will get to the point -- from a mercantilist point of view, which drives politics in the united states, there will be a reaction. it will be just like 2001. they will come to the caterpillar company and led general motors -- general like trick, whatever -- and say that we have got all these greatc dealsthesehile has that 15%

tariff on tractors and we're getting screwed that we have to get paid now. how will work out, it may not be enough pressure. but when it gets to the point said ed made, we're getting to the point that you were talking about economies that are fairly large. in the future, whether it is bilateral or we go to regional, the dynamics will change and the numbers would change about the impact on the u.s. economy. >> i hope the clock is right. -- claude is right. the most important thing is that you described a process that has been going on for the last two generations. trade policy has been the handmaiden of foreign policy. we all know as denizens of washington that the foreign-

policy establishment in this town is stronger than the trade policy establishment. that will be hard to overcome. but i do think that one of the lessons of the great recession and the need to have a more sustainable current account balance is that we can no longer afford to always deferred his foreign-policy needs rather and economic needs. they always trump foreign-policy needs and should not. the strongest argument for the pre-fta is a farm policy argument. but at the margin, if we insure ourselves that we have a more current account balance of going forward, it seems to me that there have to be greater priority placed on the economic -- reciprocal economic benefits for the united states. >> i am with mother jones global strategy.

hnobody mentioned he cannot out until the last person. canada being the biggest trading partner with the u.s., i feel like the administration had been ignoring the complaints of prime minister harper about buy american. since there are many of jobs, thousands that were a light on the relationship that we have with canada, is buy american really affecting this relationship or is it a provision that was added to please the labor groups that support obama to be elected? and that it will not have a long-term effect on this relationship? or is the u.s. taking for granted this relationship and always paying attention debt -- to those who make more noise, like china and mexico? >> i think it is not over yet. there is a temptation in this city to think that a trade

dispute comes along, there is a fight, and within a few weeks, you know the outcome. that is not the case in this instance. the funds being dispersed through the recovery act are coming out at a relatively slow pace. we will see them coming out over a year or two. we will hear more and more complaints from u.s. companies and from canadian and european and other companies here, jobs being disrupted, lost. so this thing is not going to go away anytime soon. it is a real threat and canadians are not about to drop it. >> can i make a point on that? they don't protest too much. the real reason is this -- the real reason this is a battle is that there is money on the table. much of what we're doing is legal under any obligation that we have under the wto. not all that, but most of that. i was recently talking to folks at brussels, because they have

begun a free-trade agreement negotiation with canada. i think that would be a real eye opener for us if they actually succeeded. i ask the folks in russell, what did they see as the largest obstacle to a free-trade agreement with canada? they said the by provincial agreements in canadian law. they have a series of buy canadian problems that we have with buy american. but it is easy to pick on the united states. we are a big target. there is a residual anti- americanism that runs through this. it is nice to kick the americans in the shins a couple of times. it is beyond me why we do not kick back. but let's face it -- we are all sinners in this game. the europeans have some of the same by national provisions in some of their legislation. we should take at least some of

this with grains of salt. >> i let the manufacturers alliance. the first comment would be it is it good starting point for assessing current u.s. trade policy. many of all stepped is taking -- many a false step is taken by standing still. my second comment is to agree with you that the fta's with correa, you, with canada and others are going to make it much more urgent that we decide which way we are going to go, particularly on the grain agreement. even the panama agreement -- where is caterpillar here? several billion dollars of building the can now, and caterpillar's main competitor for the heavy earthmoving equipment is a canadian firm. that is why canada is there.

my question is about the doha round. i don't see this moving so fast. in standstill lot longer. people talk about 2010. that is the modality, abstract formulas. in the past negotiations, the tokyo round and others come modalities were hit wonder two years, and then the real negotiations began. exceptions and balancing, on a huge undertaking. my own feeling is that when you talk about the mentality in the late 2010, it is at least a couple of years before you can have a specific agreement with all who are listening, which you need before you can approach congress. i would seem doha round, 2012 or 2013 before congress would have to focus on saying yes or no.

i ask your reaction -- am i being too relaxed about how long it is going to take? >> i think it is a very difficult juncture. the business community in general things that ambassador kirk has got it right. the modalities, such as they are, aren't unlikely -- if we signed the dotted line right now, they would be unlikely this generate significant new market access in any sector. .

so much is built into the modalities. >> the developing countries are interpreting this new obama administration initiative as an attempt to move to the request of her approach. we will see how they react. the initial reaction has been - which is a reminder again that progress in this round is not just dependent on us. if in fact we get rebuffed on moving into a more clarifying request offer approach to the modalities, then who is the onus on? us or the people who refuse to demonstrate more clarity? >> i will partially agree with you. i think the real concerns about how this will move forward, i do not think it is set in stone that is two years after you do

modalities that you make progress. what you need is to prolong u.s. leadership. bruce is right. this is not entirely depend on us. you have an awful lot of will on the part of the administration. it was not the administration's fault that it did not work nor the democratic congress. the other players do matter. however, it is also true that i think u.s. leadership is key if you are going to get something to move forward. the u.s. is sufficiently big and that has prolonged u.s. leadership. i have little doubt that if someone dropped a reasonable doha packet giant the administration's lack they would say that is great and they will work it. it will take a substantial amount of time and effort in working with various groups and that is why it does not work just to say i am passively disposed toward trade. if there is going to be progress on this front, you will have to

have active engagement. the other problem is luring ambition does not work. we can wrap it up there. people who move at different speeds, you're going to push back. i agree that it looks like the long haul. not the modalities that is an insurmountable obstacle. >> we have time for one question. >> thank everyone here for an outstanding presentation. we have to trust the administration to know politically when to make that move to seize the moment. and restore a pro-trade progressive consensus in the u.s.

they are uniquely positioned to do that because they listen to and take input from everybody from traditional business community to the labor unions, which, by the way, are 50% of the democratic electric labor union household and -- and 20% of the electorate. for better or for worse, this has come along and enforcement is critical to the building block of bringing middle class americans a lot like labor union members on a trade consensus. i wanted to ask a broad question to close here. i agree that the larger scale issues like conclusion of doha are easier to get political consensus for then smaller less consequential bilaterals. >> we have to move.

>> the tpp, is that a good opportunity for the u.s. to assert its leadership on? the anti-counterfeiting agreement, critical with all the ip and for some consensus that exists that we need to build on, the u.s.-eu clearing out the underbrush, that can lead to broader initiatives? >> those are great questions and we will answer them in subsequent meetings. this is my libertarian antenna out about trusting any government. i do endorse very much your point that this has been a great panel and please join me in thanking them. [applause]

>> our coverage of town halls continues tonight with kevin brady. he heard from constituents earlier this week and we will show that meeting tonight. here's a preview. >> here is the bill. 1018 pages. it was given to us on the ways and means committee. this was given three minutes before midnight and we were asked to vote on it at nine the next morning. 1000 pages. no price tag to it. most members had no clue what

was hidden in that bill. what brought it home to me was that two weeks ago, we met with the leaders of the texas medical center in houston. the largest medical center in the world. it sees 160,000 patients a day. some of the brightest minds in our country and their message to us was, we have no idea what is in this bill. we do not know how will affect our patients. no one has even ask our opinion on how to make health care better. you have to wonder if some of the best minds in the country, those who are delivering health care do not know what is in this bill, who was writing this bill? what about it do we need to know? we will talk today about this bill and answer questions but let me say something. we're hearing and reading a lot today about the mobs at the town hall meetings.

here you are. and you are a fine looking mob, let me just say that. the last time we had a mob here, we were talking health care. we started three years ago, working on how to make health care better. we did an initiative called 50 ideas to improve health care. we got great ideas and we used examples from our livingston town hall the time and will incorporate those ideas we back then so i am anxious to do this for a long time. today i read an editorial that said it was on american to challenge for lawmakers -- challenge your lawmakers about this bill and what is in it. what i think is fun-american is to encourage people to spy on their neighbors and report to the white house, people who disagreed with parts of this bill. it seems washington is getting very arrogant these days. it is almost as if how dare you

challenge our bilsls, how do you ask to read this legislation? we have loved ones who fought in wars to make sure we have the freedom to be here today. to ask questions about this health care bill. i am thrilled you are here. let's get to it. no one in america the -- knows what this bill does. we asked the joint economic committee. we asked economists and health care people, go through this bill provision by provision and show us how it works. tell the american people how this health care bill works. this is how it works. >> it can see this town hall tonight in its entirety on c- span beginning at 8:20 p.m. eastern. we would like to hear from you if you will be attending a town hall in your community or if you have thoughts to share regarding the various health care proposals being debated in washington.

share your experiences and thoughts on video with c-span. center video files to cspan.org. >> bill clinton kicks off the 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. >> every morning, "washington journal" talks with authors about their new releases. we will be taking your calls, e- mails, and tweets starting this friday morning. >> health care was the main topic at today's white house briefing. press secretary robert gibbs answers questions about the president's town hall meeting tuesday in new hampshire and

protests against legislation favored by democrats in congress. this is about 45 minutes. >> >> how are you? that is one good place to start. let me make two quick announcements. this evening, susan rice, the u.s. ambassador to the united nations will deliver a speech at new york university's center for global affairs. she will detail how the u.s. is changing the course of charts in the world. that is at 5:30 p.m. at the new york school of law.

and the second announcement, on monday, president obama will give a speech to the 110th vfw national convention in phoenix. president obama will be discussing our responsibility to maintain the world's finest military in the 21st century, to give our troops and veterans the care that -- care and its and respected they have earned. that is on monday. and i think i am relatively organized. >> [inaudible] >> we did last year but we do not think the format will be that way. just the speech. yes, sir? >> a report today that ambassador eisenburg said a lot more money needs to be spent, $2.50 billion if there is to be success or progress in afghanistan. we're talking about development of civilian projects. how is that falling in the white

house? what kind of reaction has there been to that request? >> as you know, when the president first came into office, we conducted an initial assessment of our policy as related to pakistan and afghanistan, understanding as the president had center of the campaign that we had under resources are efforts in those areas. he also requested $2 billion in afghanistan -- in assistance for afghanistan. the president agrees that as he said, during the campaign, about our efforts in the afghanistan- pakistan region as well as in iraq, that a military solution alone was not possible. that we have to figure out how, through using all elements and all tools of our national power,

including development assistance, how we can best attain our goals in the region. as you know, the review continues. the president ordered an increase in troops drink living up to the important elections that will be held in only a few days by the afghans. we anticipate that an assessment of -- a further assessment by the ambassador and general mcchrystal will come in september after those elections. >> this request would nearly double -- >> the president wants to as i assume both the secretary of state and secretary of defense want to evaluate not elements of but a package for a different strategy for this region, which the president has long advocated.

we will do that. we will do that as part of an entire package. i will say that again, the president has requested as part of that budget a substantial increase in our assistance to the region. understanding as he said in many speeches at the beginning of this administration that we are going to have to build things. we're going to have to build a civil society and the governing structure in that country. as a way of winning hearts and minds. >> the question on executive compensation. on friday, some big companies like bank of america and gm had to turn in their executive pay plans to the treasury department. well that be made public? >> -- will that be made public?

>> i do not think so but you should ask treasury for the specific answer. i am not under the impression that is the case. >> how concerned is the administration still about executive pay? less than a year after the bank crisis, banks are making money at it seems like they are paying some traders and executives a great deal. is that still an issue of concern? >> as you know, the president -- what he believes is an important proposal to give shareowners essay on executive pay, it has have impact in other countries, it is moving its way through congress and we're pleased about that. that is part of legislation against -- that gets to his desk. that will have an impact. secondly, the president continues to believe as he has long before he got here,

compensation has to be based on -- not on reckless risk taking but on value you are providing and do it in a way that does not jeopardize your firm or taxpayers. that is what the president has talked about. i do not think the american people begrudge that people make big salaries. as long as they are not jeopardize thing -- jeopar dizing the goodwill of the public and that will be the test. >> i do not know if you think is unfair to say. it occurs to me that if president -- the president finds himself at a town hall meeting telling the american people that he does not want to set up a panel to kill their

grandparents, that perhaps they are at some point -- the president has lost control of the message. i am wondering if you have seen in the last few weeks is one of the reasons why it is so important to the president earlier this year to pass health care reform in the house and senate before the august recess. is everything that is going on right now what you feared would happen? >> no. a lot of ways to take this question. i could say yes and go to the next one. that is one way of doing it. let me split these up a little bit. i think there is a tremendous amount of disinformation out there. we have seen it. let's be honest.

you all, the media, tend to cover x said this and y said this and some of you do an investigation about whether what x said is true. not everyone is that we. -- that way. i do not think everyone has called them false. everyone has done stories -- it is he said, she said. i do not think there is any doubt that in some ways -- some of you were disappointed that the president did not get yelled that, sure. i do not think there is any doubt about that. >> [inaudible] >> i was going to yell at him just to make it. >> [inaudible] >> the president wanted to have -- what i think what happened is

a rational discussion about health care reform legislation. i think that is what ensued. did everyone agreed? i think the answer to that is obviously no. what the president said which was important is, let's have a conversation where we talk to one another, not over one another. i think there was some disappointment. a bunch of your stories had more to do with the fact that the side show on each side of the street outside than what was going on inside. inside the town hall. going back to the campaign, we have always thought it more important to take this information that anyone may have may have a proposal -- about a proposal or something the president is trying to do then address directly that misinformation.

-- than address directly that misinformation. that is the most important thing. the notion that do we always expect this is going to happen? i said this before. i do not think the president has done a town hall meeting where everyone agreed with what he was proposing or what he said. the president believes the town hall meeting is a structure where people can discuss those issues. in a way that they think -- that he believes engenders a positive discussion. i think that is what he did yesterday. >> is this what you feared would happen? is this one of the reasons he wanted it passed before the august recess? >> the president wants to get to the process of getting something to his desk because delay now simply means, as the president discussed succinctly yesterday, it means -- delay means more people will get discriminated

against on the basis of a pre- existing condition. more people lose insurance because they get sick. more people will get thrown off their insurance because their employer can no longer afford to pay it. that is the reason the president wants to see this done. as quickly as possible. >> [inaudible] >> randomly by computer. >> [inaudible] [unintelligible] the president asks people to raise their hands and picks on them. >> we saw people are very polite with the president yesterday. they are less than polite with some lawmakers? >> somewhat -- some lawmakers. i do not know how many town meetings you have been to over the summer. >> i have not been to that many but i have watched a fair

number. >> let's address that for second. you have watched clips put up about certain segments of certain town halls in order to demonstrate the consternation. >> the president did not get that kind of treatment. i am wondering -- >> i am asking you to compare that to all the town halls you have been to this summer. >> the president did not get that. our people more polite when it comes to talking to the president? is it something in your -- the way folks are allowed into your meeting? >> again, i am sensing were disappointed that he did not get yelled at. -- your disappointment that he did not get yelled at. i think -- i cannot speak to -- again, i do not want to speak to other tall -- town meetings.

i doubt we are seeing a representative sample of any series of town hall meetings despite the food fight on cable every day. my sense is people wanted to take the opportunity to find out from the president, to have him answer their questions about why he is doing what he is doing and the concerns that may have. that is why when he asked, let's take questions from those who have concerns, at that point, do you want to take that opportunity to have a discussion with the president of the united states about what he wants to see on health care? most people took that opportunity as something that was positive. it was a good conversation and the president thought it was a productive conversation about the issues we were dealing with.

the president went out of his way to bring up some of the misinformation in order to address it. he obviously understands he has a pulpit that is large enough to deal with some of the misinformation that some people might not ordinarily ask or inquire about because they have read it somewhere and they just assume that it is true, even if it is not. >> what is the biggest obstacle to passing this legislation? >> the people that want to keep the status quo. the people that believe that somehow, we have is working for the millions of americans were watching their health-care premiums -- premiums skyrocket. who are watching small business drop coverage. who are part of the 12 and half- million people over the past three years that have been told by an insurance company in

seeking to buy insurance on a private market that they are not eligible because of what somebody has decided there is a pre-existing condition. that is what the president would believe is the greatest obstacle and has been for 40 years. there are people who have a vested and in some instances monetary interest in keeping things as they are. >> is it his fault that he is not getting the message across? >> no. i do not think the president is under any illusion that with his presidency, with the ascendance of his presidency, there would be the end of misinformation. he believes -- i am sure there are communications experts that would tell you, anytime -- if you are explaining, you are losing. the president believes these town halls provide an excellent opportunity to explain exactly what his idea and principles are and more importantly, if he can

affect misinformation by telling people what is not in a piece of legislation, he will take that opportunity. >> in addition to the town halls, would the white house consider other venues to try to correct the record? >> i do not specifically -- we have two town halls leader in the week. one in montana and the other in colorado. the president will be back here for a bit to end some downtime with his family. i do not doubt we will take this battle up in some earnestness in september but there are no specific menu announcements. i think the president believes the format of the town hall in the ability to discuss directly

with people what their cares and concerns are, he finds it tremendously valuable. >> is there any concern that this misinformation machine continues and the record cannot be corrected as the white house would like to be, that it could potentially make it more difficult to get health care reform across? >> if the debate is dominated by something that is not true, of course. i do not think the president believes that when all is said and done, that most people will make their decisions on something that is false and something that has been said as false. -- is false. i rent on cable little bit as you in your exhaling noted. -- i rant on cable a little bit as you in your exhaling noted.

there are people with concerns about the bill. take one of those concerns and address it actually. >> you think now that so much attention is being focused on the myths and bunking the myths that in essence, that will help you? >> i do. if people believe for some reason that this plan is government controlled health care, which is not, if the president can address that each time he goes out there and more people believe the truth, then sure, that helps the prospect of millions to see health care reform this year. >> it seems yesterday the president was soliciting tough questions and casting about for a real skeptic in the audience and not really finding one.

>> i am not sure -- >> there was a republican and the guy at the end. >> i did read that the president addressed skeptics of his health plan. >> it seemed that way. >> i am pointing out that yesterday afternoon, the perception among many of the stories i read was the president had addressed some skeptics. >> he was asking the audience, who was a skeptic? he seemed to be soliciting tougher questions. to be said that there were not as many of those folks president -- present, is there anything that you can do going forward as you approach these town halls to get an audience that is more representative of divergent views? >> i do not have -- i do not know how many were people that,

at least the last two, the republican was one of those two? there was the gentleman, with the third question, who had a question about medicaid and lipitor. i -- that is three of the questions as not being, they were in some way skeptical. what i am saying is i am not assuming that the audience was not in some ways rep. again, i sense disappointment that he did not get yelled at. but, i think there were a number of people in there who had concerns and wanted to ask the president directly. i think we are going to continue to pick people randomly to come to a town hall meeting and they

will raise their hand and the president will ask. >> a smaller faction of the audience, those tickets go through offices of elected officials. >> i think [unintelligible] >> would you consider at any time to have a more open debate? would you consider giving to the republican congressman? >> the president feels confident he is having a representative discussion despite people's disappointment that he was not yelled at. >> [inaudible] >> i do not doubt that. >> if you look at the protests we saw outside of the building yesterday as a continuum from the tea parties and the birth certificate controversy and the anger over the [unintelligible] episode, you look back at that

-- >> i did not go in the front door so i do not know. i do not doubt that. i am saying i do -- did not see a representative sample size. >> this is a president who campaigned on the notion that we could get beyond the ugly partisan warfare of the last 16 years. there could be rational discussion that could bring parties together. i wonder what happened to that? why did the post partisan presidency not materialize? >> again, i do not know of your outsider inside. i think there was a rational discussion about issues not based on ideology or party in the town hall meeting. it is not for me -- i cannot

tell you why someone believes despite all preponderant of the evidence that the president was born in -- was born here and not somewhere else. i did see a poll yesterday were 8% of people said they were not sure if away was the state. that has caused some consternation. >> in the south among self identified white-collar workers, one-quarter of those people identify themselves as feeling very negative to this president. it is one quarter. the vast majority are not saying that. it seemed like there is an emergence of -- >> you said white-collar? >> people who identified as white collar workers. there seems to be an emergence of a core group of people who feel their lease -- barry

strongly negative and at the inauguration, it was 6%. >-- very strongly negative and that theat the inauguration, it was 6%. >> you can have the effort to talk about issues differently, to disagree on issues without being disagreeable about it. to have this types of discussions to talk about how we deal with issues that have not been confronted for years and years. you are still not going to get 100% of people all the time. you may not get most of the people all 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. since he has come into office. >> what individuals or groups do you think are the biggest purveyors of the disinformation or misinformation that you keep mentioning? >> i do not know -- i think you have seen certain elected officials give out information that was wrong. you have seen -- >> who? >> sarah palin give out information that many of you pointed out was wrong just on friday. that is one. there is countless others -- >> [inaudible] >> fair enough. there are -- i watch tv. you watch different groups that

are coming to these meetings that are saying stuff that is just not true. the president will continue to try to address that. i think he thinks that is a positive thing. people who want to make an informed decision about this stuff will have all the information they need to do it. >> to what extent does he hope to lower the temperature of the debate by doing what he did yesterday and going out again in the west? >> i do not know if it is lowering the temperature. it is a way of discussing this and understanding that agree or not, people rarely have questions and the president is happening -- happy to answer those questions. he has always seen this as a way of -- town halls as a way of doing that. the president also came into the office understanding and

believing that as i have had said here many times before -- as i have said here many times before, he says here is why i am doing these things and why i make the decisions i am making. here is why the issue that we're dealing with is important for our long-term economic growth and laying the foundation. i think he believes that that type of continued dialogue with the american people is tremendously important. >> it has been reported that the executive compensation proposals that will be made public at some point a gun in a way that preserves the privacy of the individuals at the firms. is that something -- >> jeff's question -- where the proposals that were handed in by

the deadline, would those be made public? you should check with treasury on the specifics. whether or not -- at some opint, point, mr. feinberg has up to 60 days to review. that will be a public decision. >> people are concerned that these high salaries and bonuses are being given while the tax money is being used. >> i did not say there was not a concern for that. i said i do not think people begrudge 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 in -- and every economic decision. the president believes that. >> [inaudible] >> that is why the president talks about it. the president came to this upset as many taxpayers were in reading this. >> is the president in meetings to find out -- [inaudible] what he like to see the goals and the government having a vested interest in the firms that [inaudible] has the president talked about meeting to balance compensation restrictions to make sure they are not at a competitive disadvantage to? >> i have -- i think he has -- we have had a number of

discussions about executive compensation. insuring that more in the way of ensuring that we do not have compensation that is based on outsized irresponsible risk- taking. >> competitiveness is not a top concern? >> i have not heard the president discussed the like that. >> the economics team at this administration, is it important to see that these firms remain competitive? >> without getting into this specific compensation issues of these firms, obviously, we have a monetary -- taxpayers have a monetary interest in insuring such places like gm and others do well. that is not to say anyone will cut corners but obviously, we have seen banks already this year we pay money. we have seen them repay with

interest. warrants on stock options have been sold to give money back to the government and the president wants to see that money rightly return to the taxpayer. >> will chairman baucus be at the event in montana? they will do it jointly? >> he will be in attendance, he is not and introduce her -- an introducer. he is not a participant. >> he will not answer questions. he is just there. >> he is just there. >> yesterday he said aarp endorsed the plan and aarp said they did not. where are they on the disinformation scale? >> the president said, aarp said they are supported and have

been for years on comprehensive health care reform. the president did not mean to imply anything untoward. he discussed the notion that aarp is supportive of legislation -- an agreement that would fund filling the doughnut hole for seniors as part of medicare part d. >> aarp has not endorsed the house pending committee legislation. he is aware of that? he would not mislead anyone, he just misspoke? >> right. >> is that something that cannot happen in this debate? >> we do not intend to mislead. >> within the range of this discussion, something can be wrong but not intentional

misinformation? >> yes. i think most of what the president has addressed has been intentional misinformation. >> senator isaacson took issue with what the president described [unintelligible] mr. isaacson has a completely different interpretation than what the president and you used today. >> let's take what i talked about. let me read the question, a series of questions and answers from senator isaacson. how did this become a question of euthanasia? >> i have no idea. i and a stand and you have to check this out, i had a phone call where someone said sarah palin's web site had information

about panels where people would be euthanize. you are putting the authority on the individual rather than the government. i do not know how that got some extent. this is not a question of government, it is for individuals. >> it empowers you to make decisions at a different time rather than having government make it for you. >> the policy is the counseling session with your doctor on end- of-life options. >> correct. it is voluntary. >> i believe those are answers in response to his amendment on the health bill. not the longer and more defined involvement of these end-of-life panels that is in the house bill. >> i would ask those people to interpret, i just had a phone call where someone said sarah palin is website said -- sarah

palin's web site said it would be death panels where people would be euthanize. how anyone could take an end-of- life directive or living well as that is not. not my words. >> the president talked about yesterday that senator isaacson had some role in crafting [unintelligible] >> again, i do not think that was what the president was implying. he mentioned mr. isaacson had been in the house. that may have been the confusion. he did obviously represent atlanta suburbs before becoming a u.s. senator from georgia. 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 and i said this also on the back of the plan yesterday. what senator isaacson said says in addressing that misinformation, could not be more clear. that for someone to take as he says, talk about the house bill having death panels on it where people would be euthanized, that sentence is nuts. >> he does not support the language in the house bill. >> what i am saying is -- >> neither calls for anything approaching euthanasia. he does not back the house language. yesterday there was comments from the president that indicated -- >> i did not read it that way and i do not think my comments

-- to interpret it that way would be nuts. i read what he said in the interview that was posted yesterday. if you go back and look at some amendments he has offered and co-sponsored, he has offered and co-sponsor -- co-sponsored other amendments with senator rockefeller in dealing with this, whether this is uncomfortable not, i think he and the president agreed. >> i want to go back to the earlier question about aarp. what he said was aarp would not be endorsing a bill. it was undermining medicare. explain how he misspoke and what he meant to say? >> what he is completing is --

conflating is one, aarp has been supportive of comprehensive health care reform for a long time. they have not endorsed a specific piece of legislation. they are supportive of health care reform and they are supportive of an agreement that the finance committee and pharmaceutical manufacturers have entered into with the white house -- that the white house agrees with that would use $80 billion to fill 50% of the doughnut hole that seniors fall into it as part of medicare part d. as well as that additional money for savings in comprehensive health care reform. >> he left the impression twice sitting in the town hall meeting that aarp supported this.

he used it to rabat the question of whether medical benefits will be cut. >> he will continue to say that the bill does not cut medicare benefits. he was talking about the agreement structure with the finance committee. >> [inaudible] >> generally? >> [unintelligible] for trying to get a bipartisan plan now. >> senator baucus and senator grassley wanted a plan in june. >> now they are shooting for mid september. the president said he hoped to get a plan now. he wants to get this done. does there come a point where he wants this bill out of finance regardless of whether

[inaudible] >> i do not want to get into those states except to say he is appreciative that those senators on both the democratic and republican side are working together. they are making progress as they say. 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 oakmont -- ultimately to go to the senate floor. the house has done their work and can go there as well. >> i wanted to ask you on a different subject. if you would talk about if you have had conversations with the president, what he has told you about experiences with sir -- selecting an array of people who have made their mark on american society and him as well and i wondered if you would talk about the impact of senator kennedy.

>> the president went to pick those individuals that -- 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 education in 40 years that does not bear some imprint of his effort. in making the lives of millions and millions of americans better. giving them opportunities they

-- that would not have normally existed unless you were a member of a certain family or wealthy. obviously, there were others in this category that 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 and the outcomes of so many pieces of legislation that have made a genuine difference in the lives of so many people. >> is there any chance that senator kennedy will not be there today and the president would have an opportunity to present the honor in person? >> i know senator kennedy's daughter is here accepting the award on his behalf. somebody like sidney poitier is,

whose actions broke barriers and paved the way for so many others and so many aspects of life, i think the president is enormously grateful for those efforts and for many that he will be recognizing. >> i their second thoughts on mary robinson? >> the president is recognizing her for her leadership on women's rights and equal rights. he does not agree with each of her statements. she certainly is somebody who should be honored. >> you are talking about people who are breaking barriers on the racial aspect. you are talking about desmond tutu anand others.

the debate has boiled down in health care to a racial issue. has he called david scott? david scott said this was meant for the president. >> i have not seen those comments. i would say that -- i have said this year before. -- this here before. i do not think that there is a single act or a band that we are debating are discussing right now or have for at least as long as my memory can go back, that should or could be compared to the tragedy of the holocaust. whenever that is offered up into a public debate, it is a sign

that things have gotten for those that enter into it, completely out of hand. it has absolutely no place in the dialogue that we're 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 on somebody's in i think is ridiculous. anybody again who offers up that sort body -- that sort of analogy ought to be ashamed of themselves because they could not be more in the wrong. >> should there be more sensitivity not only on the jewish component but the ethnic component? >> the president would tell you as he said thomas times, and i has -- as i have repeated, we

ought to be able to disagree without being disagreeable. we ought to be able to have the conversation or debate about issues out there that do not result in the type of degrading comments or actions like you have reference. -- like you have referenced. thanks. [no audio]

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> bill clinton kicks off the 2009 netroots nation bloggers' convention. friday, panels on health care reform with howard dean. pennsylvania politics with senator arlen specter. making change happen and reshaping the supreme court. >> how is c-span funded?

>> by donations. >> federal funds or grant funds. >> private contributions. >> i do not know. >> from commercials. >> advertising? >> something from the government's. >> -- from the government. >> c-span was greeted from a public service. no government mandate or money. >> next, the scoring in and white house reception -- swearing in and white house reception. kevin brady's town hall. and a chance to express yourselves as we take phone calls live.