soviet term. in the first stage, much -- there was much enthusiasm. there was a revolutionary spirit. no one will deliver us, neither the god nor our hero, but we will do everything with our own hands. .

>> it will be competitive and efficient and modern. we will reconstruct everything we have inherited from the past. this has to be done. that is 16 years. i think the fact that we are alive, we are happy, and given to us from the almighty. we are always forgetting, there is an end to life. tevery life is a happy one.

>> my subordinates are my friends. they do not tell me any jokes. casinos have been closed. we have internet cafes. people are -- closed this evil once and for all. >> these loopholes that are being a used by those who are working in this area of the business. locals in the legislation. -- loopholes in the legislation. if one follows the law by the letter, all of these casinos should be closed. the corrupt local authorities

and the law enforcement agents, we shall take up the bees issue separately. >> how do you the situation? the situation is complicated. it is dictated by certain components. of course, we see different armed illegal gangs. extremist groups, too. this is a fact that cannot be denied. we have been combating this until -- social and economic

nature. we should create new high-paying jobs, combat corruption, and in the caucuses, corruption is rampant. the level of corruption. we should combat the klan aspect. these traditions connected with certain historical phenomenon. this should not prevent us from resolving, from working in all of these directions. we shall achieve positive results. were there was enmity between russia and ukraine, why does ukraine hate us? >> that is not true.

you cannot say that ukraine hate us. i am quite sure that millions of citizens of russia take this attitude toward ukraine. these are people, first of all. that is what the country is made of. we are connected with ukraine by so many threads. the leadership of that country are speculating on the problems and complications of the past and present. they are doing this exclusively for their own personal political considerations. they will not succeed. they will not succeed to destroy the ties between russia and ukraine that have been developing for centuries. >> we have three computers in our school. could you add money --

i will provide computers. we have carried out full campaign of computerization in certain schools, and certain establishments, this program has not been fired up to fall. only in computer classis, not every people has a computer. since you reach me, i feel it my duty to respond to your request. i do not consider myself to be in the category of great people. that is why i do not have these problems. everything will come out all right. you didn't mention how you will

do it. you did not listen to me attentively. we have a program developing russia to 2012. we are speaking about modernization of the economy, innovation of developing the country. development of different branches of the economy, agriculture, restructuring the economy as a whole. we spoke about social development, about education, and so on. all of this is written down. this requires additional corrections of of the present- day realities. we're not turning our backs on this. the report is right in line. together with you and our people, we will cope with everything.

i will think about running in the election campaign. thank you for the honor. this is indeed an honor. i shall never forget their stand in respect during the aggression. they also really up held the interest of their republic and the interest of the whole of russia. >> will rush to help the united states after it falls apart? -- will russia helped the united states after it falls apart? >> this will also affect us. the united states is the greatest power. we have relationships. partners. the world economy is connected with invisible threads to the

economy of the united states. to which someone certain problems -- to wish someone certain problems, it would be better to be in a favorable world than a world of catastrophes. from the bottom of my heart, i congratulate you on your 55th birthday and wish you success. [applause] all the people in the studio support me in my congratulations. i worked at a factory and there are just wishes. i will leave them outside the program. one more question connected

with the invalids who lost their functions. i have spoken about this. i will not repeat this bridge -- i will not repeat this. no one has the right to send in the lives -- invalids to be reassessed. why aren't all labor body people working? i agree with that. tthe gap between the large incomes and the minimal incomes are very great. that is one of the great problems. to reduce the gap between wealthy and the poor, we have a special program to combat poverty. the crisis got it moving, but without a doubt, it shall be carried out in the future.

furthermore, the pensions should be 50% of the salaries. in the european countries, this percentage is about 40%. this so-called remission in respect to the pension in ratio to the previous salary. it shall be increased by 46% in 2010. this should be almost 40%. we are coming close to that figure. what does conversation with the citizens of russia, i have already spoken about my

preparations to gather my colleagues. we are studying a great mass of questions come up request, simply information. incidentally, this information seems to indicate very many people in our country are living in a very complicated situation and all of us face great questions. those questions should try to reduce those numbers. do you miss stupid -- we are coming together to discuss serious problems. what category in regards to this question he placed before me?

would you like to live as long as you want to? would you like to go into eternity as a citizen of the planet? i am proud that i am a citizen. it is quite enough for me. thank you very much. >> last question. i hope that in a year, we will get together in the studio again and continue our talk. thank you. thank you to the viewers and the audience.

>> you are watching c-span. created as a public service by the nation's cable companies. up next, a series of panel discussions from a conference hosted by "the economist" magazine. also, remarks from political cartoonist. >> happy new year. it is a three day weekend on book tv. with new biographies. also letters to michelle obama and this year's national book awards. afterwards, in your times columnist talks about five decades of women's history. best-selling author takes your

calls in sunday -- on sunday. >> after a while, i think, we have lost. you do not own any more. that hurts. my positions are now in a storage bin. >> this week, american casino. their reward winning documentary on the impact of subprime mortgages on minorities. sunday night at 8:00. >> in this next panel, a look at what could be the driving factor to the u.s. and global economy in 2010. we will hear from austan goolsbee, a member of president obama's council. this is just under an hour.

>> we will talk a little bit about the world economy in 2010. now that the world has emerged from the deepest postwar recession, what will the recovery look like in the u.s. and the rest of the war -- world? what happens as we try to exit that? do we risk sovereign debt crisis? was dubai a wake-up call? what will asset markets do? what happens next year?

do we face the risk of bubbles? what happens when a burst? those are the kinds of questions i want to talk about. we will have a discussion and then open up to you and we will end the mornings session with some predictions. some very concrete predictions, i hope. i have to terrific panelist. there bios are in your package -- i have two a terrific panelists. austan goolsbee is the staff director and chief economist of the president's economic recovery advisory board. he is on leave from the university of chicago. we also have carmen reinhart. he is the director of the center for economics at the university

of maryland. she has had a very illustrious career. she is one of the experts on crisis analysis. her work has been at the cutting aid for more than a decade. -- cutting edge for more than a decade. most of this work has been put together in a spectacular new book. i think it is one of the best performing academic books on amazon of all time. i will just read you one of the blurbs from the back of the book. "this is quite simply the best empirical investigation of financial crises ever published ." let's start with you, austan goolsbee. you are optimistic. every time i talked to, you are upbeat and optimistic. people like talking about

recoveries in terms of letters. people talk about a be shaped recovery. where are you in terms of shape? what letter would you assign to the u.s. recovery? >> i have one of those greek letters in my mind. we have been up, down, sideways. i think the trend is clearly in the right direction. remember that in the beginning of the year, they jumped all over the administration and the chair of the cfa -- cea for saying we would see positive gdp

growth for the end of 2009. we're going to have positive growth for half the year. i think the question -- and i do not know the answer to it -- when does the traditional lab come to an end between when the gdp turns around and when job growth begins and how much of the recovery of 2010 is going to be reined in by some of the credit crunch factors? we might grow, but we might reach some peak that is far less than we could be. i am fairly optimistic. end of 2009, it is a lot better

than people predicted it was going to be at the beginning of 2009. i think the beginning of 2010 will be better than what people were thinking of. >> the third quarter of 2009 was 2.8% growth. are we going to be looking at robust growth? >> 3% is a reasonably robust and we are easily going to be in that range for all of 2010. >> what about you, carmine -- carmen? >> hopefully, it is not an l. i have to agree that all the indications point that we have reached a bottom. the question is, how strong will the recovery be it? i do not think the v-shape --

what i was going through the 1992 recession, i was at bear stearns at the time. that was the be shaped recovery. -- v the-shaped recovery. we had a lot of room in monetary policy to bring interest rates down. we also did not have the leverage situation. for those reasons, indebtedness of the household sector, the banks, already interest rates that are zero, i am expecting this recovery to be subpar. not just in the u.s., but elsewhere. >> there are two powerful forces colliding in this recovery.

we also have this big hangover from the huge financial crisis and your work has shown that you cannot have this weekend fresh out of recovery after that. if you put those together, i think of this as a backward square root. we were down far, we came up far, the mayflower and quite quickly. -- we flattened out quite quickly. do we have a different trajectory of recovery than you saw in previous ones? >> i will do good news/bad news. i will do the good news first. the good news is that the policy stimulus has been about as aggressive as one could hope for

and far more aggressive as we have seen in any prior crisis. that has to be worst of it. it is a global crisis. we have not seen that. we have not seen something this synchronous. across the largest economies in the world, but also spilling over to the emerging markets. we have not seen anything like this since the 1930's. let me just throw out one particular statistic. if you look at the postwar recovery, one of the factors that kicks in importantly is export growth. it kicks in because you had a currency crashed in the year of the crisis. it kicks in because you are in crisis, but the rest of the world is not. we do not have that luxury here right now. the average growth in a postwar

crisis situation was a 10% or 12% growth annually. we're not going to get that to help us pull out. that is the downside. >> let's take the two of those. let's start with, observations that traditionally, economists have helped their way out of the post banking crisis situations. how much are you relying on rapid growth? there are signs that they have recovered very quickly. >> remember, the volume of trade and trade finance collapses, we can have a robust growth in trade in general just to get back to some normal level. if i drop a regular square roots

-- the flat is at 3.5% growth. then i have no problem with that. >> flats is 3.5%. >> it goes down. it goes up. instead of continuing booming up, up, up, we just stay at 3.5% growth, that is not the traditional v-shape. if we're not going to get to that, fine. but if we are in some stable robust growth, some export growth, i think that one thing to note that in a world where you can't totally rely on export growth, the u.s. does relatively

well in that environment. we are a huge economy. we have less dependent on international trade than virtually anyone else. if we are in this dark scenario, which is everybody is on their own and you have to figure out how to grow, the u.s. is by far the biggest market for the demand of u.s. production in the u.s. modestly export gross -- export growth -- we can have a sustainable growth without having to go back to household balance sheet where the savings rate is clearly less than zero. i think the stage is set for --

you could easily see the road to moderate growth rate scenario. i think it is hard to see what the road is to super booming growth, but in some sense, we were facing down a horrendous scenario. just six months ago, people were saying, i do not see how you could even talk about getting to the bottom of the recession because all of these conditions are so bad. you are not going to turn around gdp growth for at least a year. we're already out of that. but let's talk about the other aspect -- >> lets talk about the other aspect. we are running eight double- digit budget deficit here. -- we're running a double-digit

budget deficit here. to what extent, one of the most stunning statistics of your book is that public debt, government debt, tends to ride a 80% in real terms after a crisis. how much do you worry about that being repeated in the u.s.? how much do you care about the rise in public debt here? is that going to constrain the recovery? how much of a risk is it? how much should we be worrying about it? >> i have always thought that we should first worry about getting

out of the whole we have been in before we start worrying about medium-term issues. we first want to make sure that the recovery is solid. even if it is not robust, that it does not roll over and do a japan's style scenario -- japan- style scenario. this is the case where stimulus is there and that is something i will come back to later. how worried and my about the medium term? the consequences of high debt? it concerns me. it concerns me that debt overhang does bad things to growth, for example. we're not doing that great. if you looked at the 80% figure,

that is over three years after the financial crisis. we are pretty much on track to come very close to the experience that the uk. ireland is the head of the curve. spain and all the countries that have had financial crises, we are seeing a dramatic increase in indebtedness. >> what -- when should you start the exit strategy? in the u.k., ireland is already raising taxes and cutting spending. the u.k. is about to have a new government starting by june. high on their list of priorities is fiscal tightening. investors will freak out and there'll be a currency crisis in the u.k.

should policymakers' be thinking about tightening policy next year? >> thinking about it, yes. acting on it, no. thinking about it is critical. to avoiding -- having a thought through strategy. one of the lessons that we should be also taking away from the 1930's is that declaring a victory too early can be costly. thinking about it, yes. >> but not doing anything? >> no. >> in beijing, the president said, they put a lot of emphasis

on the fact that there was a risk in not having some sensible fiscal policy. on the other hand, the treasury secretary has focused on not repeating. >> that has been the focus. they're people that are getting confused, i think. in the middle of the deepest recession since 1929, you do not tighten the belt at that moment. that is incorrect. if you did that, it is extremely dangerous. the president was talking about medium run fiscal tightening that we will need to confront the fiscal issues facing the country, which are virtually zero connection to the current financial crisis. the downturn has effected the deficit, but that is not the long run fiscal problems facing

the country. the long run problems facing the country is the aging of the population and the growth of health-care costs. those are by far the dominant things. >> in the very long run? there is a fiscal consequence to the financial crisis. >> there is. we're running a deficit for two- three years. if you look at the balance sheet of fed, that stuff is not effecting the budget window. if you look at the 10th year, the deficit is substantially worse than it was two years ago. if you ask why is that the case, part of that is the way we do the forecast, it has the future -- feature that in a boom time, they come in better than expected.

that is what happened at the end of 1990. -- the 1990's. you kind of want to get into more of a scenario before you can ask about the long term. there is this underlying, the main fiscal challenge facing the country is not paying for the stimulus. the stimulus is almost totally out of the deficit by the time -- five years from now. >> carmen is shaking her head. >> you have additional interest. that is a very small component of the deficit. 50 billion a year. the long run deficits are $400 billion worse than they were forecast two years ago. somehow the obama socialists are

spending this country into oblivion. i defy you to find a program that is increasing the deficit. >> i have to object to that strongly. one of the points is that even if there is a zero stimulus, the consequences of the financial crisis are very severe. even if you have no fiscal stimulus, you still have very serious budget consequences because revenues from property, from income taxes, from any source weakened substantially. i do think that the financial crisis has brought forward the long-term issues that you raise. yes, we would be facing aging population issues, so security issues.

no doubt about that. that has been brought forward because of the financial crisis. >> i am going to move on. we could have this discussion for a long time. i think we can all agree that you both said that it would be wrong to tighten fiscal policy for next year, but we need to worry about the medium term. but there are long-term problems for entitlement and the recession has made that worse. perhaps we can agree on that much. i want to get a couple of more subjects and before we open the floor to questions. one is asset bubbles. how much do we need to worry? six months ago, the whole debate was policymakers need to steer between deflationar or inflatio. now we have a lot of talk about asset prices.

they are looking quite frothy in both the u.s. and in asia. how much is next year? well next year be dominated by worry about asset prices? -- will next be dominated by worries about asset prices? >> i do not think that with the uncertainty about the strength of the recovery and employment conditions in a precarious state of that policy, monetary policy in particular, is going to be dominated by concerns of asset bubbles as the main driver of policy. >> do you think there are as the bubbles? >> right now, where money has been lost searching for high yield at the point of a gun.

we have a search for high yields in the emerging markets. the still emerging markets like brazil have already acted to try to dampen that. there are concerned about the price bubble here and there, including china. i do not think that u.s. monetary policy is going to be primarily reacting to that and it is going to remain focused on employment conditions. >> it is basically a formula of what should the rule of thumb, what should the monetary policy be given current economic conditions? you plug in at the formula and it may change as conditions get better, but now it says the interest rate should be - 6%. that is not the time to be talking about an exit strategy.

that is not the time that the u.s. said to be saying, maybe we should raise rates or pop asset bubbles that are taking place in some other country. in these other places, they may start to -- they may be confronted by the difficult issues that we face of how do you figure out if you are in a bubble? if you are, and you have very few instruments, what will you do about it? >> do you think there are signs of any asset bubble here yet? >> in the u.s.? my basic problem with acid bubbles, -- assets bubbles, if you have assets bubbles plus huge leverage, we have seen that go wrong time and time again. we are now in a major deal leveraging mode in the u.s..

people can argue about whether there is an asset bubble or not, but we are doing the right thing in getting the leverage out of there. elsewhere in the world, that is not necessarily the case. you know places where they have high leverage and commodity prices shooting through the roof. >> one of the big topics that people are pressing about is the dollar. the dollar's role as a reserve currency. do you think that is a question that people should be worried about in 2010? will there be more -- >> will there be more market jitters about the dollar? it is hard to see how there would not be. in a year in which something that does not come up that triggers jitters.

jitters are different from established concerns. if the dollar is going to be replaced by another currency, what currency is it? we do not have a stand in for the dollar the way that if you look back in history, before the u.k. pound was displaced, the writing was on the wall that if it were to be displaced, it would be by the dollar. that natural succession has -- we do not have a unified treasury market for europe. people do not buy euros. they buy treasurys. they buy government securities. i am talking central bank and such. we have agreed to debt, we have

german debt -- we have greek debt. we have german debt. i do not see the euro as having the kind of unified market that is competing with the treasury market. >> what about you? >> u.s. dollar policy is determined by the u.s. treasury and i have no comment to make on it. look, whenever you see any announcement that sparks fear in the marketplace, it is still quite obvious that everybody loves the u.s. treasuries and the u.s. dollar. the argument that people are -- do not see the u.s. government as a -- >> the political economy of next

year -- notwithstanding last friday's drop figures -- job figures, i would submit that we are still going to have uncomfortably high unemployment next year. we have midterm elections coming up in november. it is not a particularly pleasant thing for a administration to have that high of the number. does it put pressure on the administration to come up with policy? the second is something that economist would worry about and that is a risk protection. something that i have long worried about in this whole crisis and have been surprised at how little there has been so far. if you have an environment of relatively weak growth and relatively high unemployment, shouldn't we be worried about

that being the clear ingredient for rising trade tensions? >> you are always trying to scare me. i have not seen any of this massive rises in anti trade sentiment. unlike many previous recessions where there is a nasty anti- immigrant sentiment, you have neither issues of trade or immigration that are central in this debate. that is not central to what happened here. you are -- your insight about the job market is basically correct. even in a normal recession, it takes a lag between when the gdp turned around before it affects unemployment. the huge egos in an order of gdp

growth turned around, then productivity growth, and then hours of existing employees go up, then payroll employment. only after all of these things happen d.c. unemployment come down. the gdp growth seems to be turned around. this past jobs report, you saw hours of the employees start to pick up. maybe soon we will see payroll growth. this was way worse than a normal recession. the unemployment rate could still be going up even if you are generating jobs. they're all these people and the labor force sitting and waiting. -- there are all these people in the labor force sitting and waiting. ultimately, this is going to be

one of these where how much do you think the american people are just being driven by the current day or do they take a step back and have a an understanding that this was a really tough spot. economists now look at the last quarter of 2008 and say, we really were not that close to a depression. if the unemployment rate is high, but has come down some, or if we are actually generating jobs for five or six months, i think there'll be a lot of people in the country who look and say, they took a lot of action. many of the actions were not popular at the time.

but ultimately, they got us onto a path in which you could see us improving. they will say, you lifted a lot of heavy weight. >> when you look at the political economy, does that give you any insight into thinking about what the political economy will look like here of for the next few years? >> no. no, unless you have -- the only patterns that emerge from the political economy that are very clear are those extreme cases where you had a sovereign default in which any administration in place is not going to survive it. apart from that, our sample of crises are drawn from very high grade political systems in a

very different stages of being into a particular administration. it really -- in the political arena, though one general -- the one general theme that we can point to which has political implications is seldom does growth bail you out in terms of the debt accumulation. >it is not often. the odds do not favor you that you will grow. which ever administration is in place post crisis -- >> interesting. i can see that the clock is ticking. i will stop. with the lights, can you with your hands quite a lot? the gentleman right here.

five rows back. there will be somebody with a microphone. >> i just wanted to ask what impact you think the continuing u.s. military interventions in afghanistan would have on the u.s. economy. whether the effect on government expenditure will be offset by the revenues from u.s. companies, defense contracting, the military industrial complex. >> i have not seen the exact budget numbers, but the incremental cost of the change in strategy for afghanistan, i do not think it is going to be -- it is material, but it is not anything like a big chunk of the u.s. budget. i would not think it would have a big impact on economic growth for the recovery.

>> laid down here. -- lady down here. >> i wanted to talk while you were talking -- i think the balance is off. i think you are forgetting the most important thing is people. that the majority of the underdogs you ignore. people go within themselves and then they get angry and you get less cooperation. you need to stimulate the economy by stimulating people and forget about the money. >> thank you very much bridge can we restrict this primarily to questions?

-- thank you very much. >> one of the things we are seeing in the midst of doing large-scale policy to help rebuild the economy, there are a lot of people suffering in communities. i think this is where the woman was going. as people are struggling with unemployment hovering around 10%, with the recovery board, what is it or how are you working with businesses, local nonprofits, to not only help the country get back on track, but to help folks who are struggling right now in the immediate? how can other sectors work with you to help people? >> there are several great issues in that. i am glad you asked that. there are temptations that

anybody is going to face and you see it in congress now. let's just do something. but i do not think it is wrong to be erring as much as you can to create some sustainable job growth scenario. the goal in the stimulus and the goal is what the president has been saying so far, if you are going to do jobs programs, you want to do something where you can -- partly because of the fiscal position, but partly because it is more sustainable. you want to do things were the government can incentivize the private sector. we did you want to do things where the government can incentivize the private sector. in the u.s., coming out of

recessions, a small business has historically been where the rubber hits the road. in recessions, they tend to be the first hit in recoveries. they tend to be the first to come back because the credit conditions are what they are. because banks are weak and the disproportionate source for funding of small business, there is a risk that in this recovery, that engine is just not functioning. we hadñ,#5]evv÷ñ]/rn 's said that small businesses can get any credit -- that is going to hinder our own expansion. i think one of that -- one answer to the question is directed job growth policy. we should be engaged in that. the second is that we have got to crack this not of small-

business lending. >> i think that one area where we can do better is to explain the link between employment, small business, credit availability, and a tarp. -- and tarp. one area where work needs to be done is to light and the toxic asset load of financial institutions more aggressively. why is that important for employment? rightfully, small businesses are dependent on credit. the real estate market is also dependent on credit. until the credit channel is functioning, and don't forget the construction activity is

very implement attentive, an important priority. >> i think we have a couple more questions. >> in the past month, there has been a lot of traction -- they have opposed -- posed some tax on financial transactions bridge -- financial transactions. to do think this is a prudent thing to do right now? what do you think the future of the tax is?

>> let me say this. the tax has a lot of commonality is with the loch ness monster. just when you think the proposal has disappeared, it raises its head. these proposals have been batting around for a long time. one of the things for the tax to work, it has to be globally orchestrated. i mean globally orchestrated because it will create one diversion from one market to another. it is difficult to actually see the political wherewithal, especially in the u.s. and the u.k. they do live -- they derive more of their income than other countries. getting agreement on something of a scale of a global tax, i do not attach a lot a feasibility

to that. yes, it was the case. no doubt in the post world war ii . , we had fewer financial crises. we got to that after two world wars and the great depression. turning the clock back from the era of high capital ability -- we're not there. >> will it happen? >> i would say two things about it. it is clear what would have to be done by everybody. do not overlook the temptation of a bunch of -- i do not know if it would be singapore or somebody else who wants to be a financial center. i think it would be hard.

he was my adviser when i was an undergraduate. he was my hero and mentor. he himself would say, i do not know if it would work. it has to be done -- everybody has to do it together. don't we need a stronger regulatory environment? that tax is serving as a proxy. don't we need a tougher, more robust oversight? obviously, we do. the regulatory oversight also has to be done internationally for the same reason. so there is not just one place we will shift all our money to that. there are things that are equally as important. i do not think anything is more important than that. we have to have tighter, more robust oversight of the financial system.

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>> let me turn to the audience. the bright lights are in my eyes. i may miss somebody. do we have any questions? >make it a short and sweet question rather than a comment. that is the prerogative of the chair. >> we're actually from north dakota. i am kind of looking forward to the climate change. what we are looking for, you mentioned that the government is looking to establish a change in infrastructure and what changes do you think we will be able to do? with this focus on green, how is

the government going to be able to provide something that will help the employment as well as the infrastructure within the united states? >> can you address this gentleman's question? maybe you can talk about green stimulus as well. >> the infrastructure side, this is going back to the population is moving into the city, what we will see is that there will be a lot of telecommunications work along the value chain for design and infrastructure. i think that is where there will be a lot of pickup coming in the future. if you just work -- in new york city, we have a led pilot program. there are benefits like a decrease in traffic accidents.

once you can demonstrate it, you can come up with the policies -- policies necessary. >> the american recovery act, known as the stimulus, included $80 billion and new energy technologies. it focuses on whether is asian, energy efficiency -- whether is asian -- weatherization and the building of the smart grid. you get people who are formally blue-collar workers where you actually can see employment over the next year building up dramatically in these new technologies.

one thing, she did acknowledge green stimulus. it will hopefully be a grain and create these jobs. maybe less stimulating than the summit might think that's a far. the nature of some of these investments will take time to play out. thus far this year, but next year and the next year and a half, you'll see more of this money come into more concrete jobs and projects. it just to put it in perspective, china is putting in 10 times as much in real terms whether the money is spent wisely, whether it will crowd out private investment, whether it will be clipped in a year, what comes next when the green is stimulus comes next, but you still have a wind mill. there are some difficult challenges that the history of energy subsidies and investments that we need to work out, but

there is no question that this kind of investment is a huge part of infrastructure. according to the international energy agency, investment in renewable energy dropped 20% this year in 2009. it would have been a 30% government not had a stimulus package. >> most of the stimulus was counterproductive to the discussion of climate. one of the conditions for all the infrastructure is that plants had to be completed and in the drawer because you had a two-year window to roll them out. they use their stimulus money to start construction around houston to open up more sprawl. there was a portion of its that

tried to do good, but because there has not been a policy in the u.s. that is saying that there has to be a relationship between infrastructure and green out comes, we were not prepared. >> let's have a question from the front row. >> let me put this succinctly. the most of the optimistic forecast i see -- the most optimistic forecast i see is that all efforts eventually are overwhelmed -- and i need overwhelmed -- by simple population growth forecasts. we all should try to do everything we can, but what do each of you have to say about the absence of population control?

>> that is an excellent and direct question. our people the problem? >> people are the problem and people are the solution. talking about the problem about -- as population is kind of simple. people consume in different ways around the world. population depends on where they are and what they are consuming. we have to look at ourselves if we are going to talk about population. look at our own consumption. it is true that we want to empower people to make choices about their families and when they have the access and ability, they do. we need to see people as a resource, poor people in particular to empower and support.

not as the problem. >> when counter intuitive thing i have learned from scientists, smaller numbers of families correspond with higher life expectancy and therefore you have lower birth rates. you would not expect that. it is because people make their decisions about how large the families will be based on whether they have confidence that their children will survive. the numbers of the families -- the other part is the empowerment of women. in afghanistan, 13% of women over the age of 15 are illiterate. giving them power to make decisions about family decisions is going to be a solution, but not the solution. >> if you actually looked at population forecast for the last

30 years, when you have the limits to growth school of thinkers arguing that there was a population bomb, fundamentally, they identified a serious problem. as often happens when one looks at straight line projections and says the line will keep going, you find that it is not actually how it works. you have a dynamic path between price signals, policy response, and ultimately solutions. the problem aggravates, every forecast suggests that we have actually moderated population growth. empowerment of and girls, economic opportunities, as well as improvement in standards have helped mitigate that. as we live in a world of the

globalization, we now have empowered 6 billion people to be innovators in waiting to come up with the solutions. before, it was much more of an elite process. the more people can apply their energies to solving problems that we face, it actually encourages me. people really can be the solution rather than the problem. >> i think back to when i was a co-author of president clinton's council on sustainable development report. there was a section in there about population. it went to vice-president al gore -- he was all for that conversation. it went to the president's desk and got ripped right out and sent back. it was politically impossible to talk about population. it is an issue.

it has positive and negative sides to it. we seem to be much more comfortable about talking about population when it is talking about population in the developed world. we are all consumers. >> to support 9 billion people, we will need to double our food supply. that is a challenge. some people are not consuming enough right now. we have a billion people who shot and not -- who do not have the opportunity to eat. we have a convergence of consumption brit the people at the top needs to think of ways to reduce consumption. >> i have responsibility for a private foundation. some would characterize the u.s. position on climate change and are historical posture on it as

not as a globally purchase of the party -- participatory as their peers. what is the value proposition for the american electorate to be a full participant in global climate change solutions going forward? >> speaking as an input -- speaking has an american voter, what is in it for me? >> speaking from a business point of view, you want the certainty. we are in the middle of the road here. we do not know where we are going. a business need to know the direction. they want to move forward. if you cap emissions an increase in price signal, they know what they can do. they can invest their money into assets that are long term without concern. they can start creating jobs. as americans, we have a huge --

it is critical for us. we all have a generational issues. it matters to us that we get it right in the most flexible mechanism as possible. >> you run a progressive blog. the political problem still remains. we are asking politicians to act on behalf of voters who have not even been born yet or may never vote in this country. how do you surmount that problem? >> the political process is finally moving. the greatest intersection where people need to express their voice is going to be in this next year in the senate debate. we could either seek collapse or a success. it hinges on whether the senate will take action. i am urging people to get involved and it is at that

juncture. we know where the battleground is. we know who the battleground senators are. we need to start working. some states that stand to benefit are starting to change their mind. in the midwest and west virginia, they need a little bit of convincing bridge there needs to be more voices are heard around the country on this issue. >> quick follow-up. i work a lot with the chinese academy of sciences. they say, we are using your debt to invest in creating a green technology and service marketplace that will run the world. the longer the u.s. flitters away at this question, they are gaining a huge competitive advantage. >> one more question i will take before turning this over.

>> my question is about nuclear energy. you do hear a lot about nuclear technology. it seems to me that you have a huge problem with radioactive waste, potential for an accident, or a terrorist attack. does anyone have a strong opinion as to whether this is a good choice or more of a necessary evil kind of a situation? >> there are issues with nuclear, clearly. it is not a bullet to for us as

a solution. in certain areas, it might be necessary to reduce our emissions at the scale and pace that we need. >> you used to be -- do want to give a response? >> i left those days behind. >> i would offer my 2 cents before i turn to the panel for their perspective on 2010. as an old engineer from mit, i looked carefully at nuclear. it is not even the geological disposal. good geological disposal, digging a big hole in the ground and sticking the nasty stuff in there is safe and can be done in a safe way. what bothers me is the economics.

the liberalized electricity markets. the investment for nuclear are so big and so lumpy and so much more expensive and it is a front loaded. -- it is front loaded. it is right up front. it is completely susceptible to regulatory risk, to being sued by activist groups that delayed the project a couple of years. except for some special cases, china or eastern europe, you will not find unsubsidized nuclear power plants being built in any liberalized market. there are cheaper, better, safer ways to tackle the climate problem. that is my particular forecast

going forward. let me turn to the real experts. gary, what is your forecast for 2010? >> by the end of 2010, that there will be a new set of urban indicators focused on health, help equity, social equity, and civility that will allow more of the world population to enter in to the conversation about climate. >> i love the civility point. >> president obama will attend a u.s. world cup match in south africa. the u.s. will lose and president obama will be blamed for the failure. 2010 will be the hottest year in history. >> i predict as as a deep

economic recovery gathers strength around the world, we will return to an economic scarcity with terry rapidly rising prices for natural resources, food, and energy. >> i predict that the population will rally around and we will get legislation on climate and energy and we will get a global deal for 2010. >> we have your predictions. our panel has done their job in provoking and and lightning. please join me in thanking them. >> now a look ahead at 2010. we will show you four parts of this recent conference. this is just under an hour. >> somebody some -- sometimes somebody else's misfortune is your benefit. i am in the lucky position of

being one of those lucky beneficiaries this morning. our science editor was supposed to be managing this panel. i get to spend time with four of my heroes. this is going to be a great treat for me. i hope it will be a great treat for you. if you think about 2010, it is great to think about all the innovation that is going to be happening. innovation that continues to go from strength to strength even as the world economy and the financial system is still struggling. these four people are in different ways reason to feel optimistic about the future. to my immediate left is rob carlson.

dean kamen did not come here by said why -- segway, but would have if we asked him to. it is amazing how many different things he is grappling with as an inventor. he is involved in one of the most interesting companies around. it is both changing the business world and also changing the nonprofit world through a partnership with the rockefeller foundation to solve one of the biggest problems facing nonprofits. lastly, he is the co-founder of guitar hero. i fear i was born slightly too early to really enjoy it. i was actually playing the wii

at the weekend for the first time. there may be hope for me yet. it means that it really has come of age. with no further ado, i will ask each of our panelists what they will be doing in terms of innovation next year in 2010. rob, what is your focus? >> among the things that we will see over the next few years continue to become more important will be biology in our economy. we will rely on clearwater, food. we also rely on materials. enzymes in our laundry detergent.

genetically modified stuff and the u.s. economy has already reached 2% of the gdp. it is a growing. it is growing about 15% per year. there's probably nothing growing that fast in the u.s. economy. we will begin to see more products that are derived from a genetically modified systems in our economy. that includes fuel, raw materials. in particular, i am interested in the world of some -- of oil and biology. the world of oil is enormous. it has to be enormous. biological systems can go directly to those same kinds of high valued things.

from waste food, from sewage as resources. i just joined an advisory board that next year will be introducing perfumes and flavorings and other fine chemicals that are derived from waste using ecosystems to produce those chemicals. that is the kind of thing we will see increasingly and i am actually excited about the prospects for lower carbon, lower oil requirements. >> dean, where will you be spending your time? >> my day job will continue to be medical products, prosthetics. we're building arms. we're building a next generation of dialysis equipment. it will be hugely important to them and more cost effective to a very burdensome system. a whole host of medical projects that i cannot talk about yet.

my day job is still continuing to be primarily there to fund my fantasies which are supplying clean water to the developing world. we are working on a point of use deployable electric generation system for the developing world. we have to villages in bangladesh -- if you guys will help turn it into a format that will be conducive into being a fuel that will make electricity on a distributed basis.

we started to do it for the 4 billion people who do not have electricity around the world, but the 2 billion people who are worried about their bread might find these boxes very convenient -- fotheir grid. why take a 21st century fuel and try to modify it to a 19th century engine? we can burn any fuel you give us, just about. most of all, my fantasy job is convincing the next generation of innovators that they will need to solve the problems that will overwhelm us in one way or another. kids love the competition. it is robotics. it has had quite a good growth.

yes -- last year, we have 14,000 schools volunteering their time to work with kids. we have 43 cities run their events throughout march. we did our final last year in the georgia dome. we hope to be substantially larger than sure. >> what are you going to be focused on? >> we are focused on the innovation process itself. although it has been in and out over the course of years, the world is really galvanizing around a big problems today. energy problems, water efficiency. corporations need to create jobs and need new products to market. there is an urgency for innovation. it is very easy to say that this

is a problem that just happened now. really evil and that whole process quickly around notions -- 2012 is the year that these things come to the forefront. getting a new router technology out on the market for high-tech company. we will see a very rapid adoption of new kind of innovation and there that are put to satori. inviting people from all over the world to be involved in those type of innovation programs. that is the only way some of these problems get attacked. what kinds of problems would our solvers see? we're beginning to see not just

deep technical problems, but big problems. we just ran a challenge, what are the right problems to be solved in water efficiency? >> someone posts a challenge on your web site -- >> we work with organizations running the gamut from procter and gamble -- something that some -- people over the world can engage with. if you ask the right question the right way, that has become of the art and science. when you put it over the internet and you invite people all over the world to solve those problems, today we work individually. you might have 100 individuals or organizations around the world trying to solve a challenge at the same time. we are allowing them to assemble

into teams and teams can find each other and aggregate to work on better building materials in africa were trying to identify better materials to avoid a fingerprint on your psda. we have people who would have never worked on these problems working on these problems. we're getting 7 billion people to work on the problems that matter. >> what is next? in the spirit of today's conversation, 2010 is about going grain. what do i mean? for us, the game industry is going through a fundamental change. traditionally, it has been a packaged food business where we make a product, put it out for retail.

i think that shift is going from bad to digital -- from that to digital. you will see that games are going on line. .

as you evolve, i think fundamentally our businesses have to change, and consumer behavior is starting to change, so i would say that today, the american consumer is more used to or a customs to going to the store to buy their games. we are starting to see that change, and i think we are starting to see that accelerate very quickly. you saw this in the music business in particular where that shift from package to digital happened almost overnight in terms of the store time, that was really, really quick. i do not know how long it will take for the gaming industry to happen, but i think you will see the evolution, and i think it will be faster than people think. how do we deal with that? the first thing we have to do is get people connected. very basic things. for people who play consul

games -- console games, 50% or 60% of people who own those are connected. our number one challenge is let's get everybody connected. how do we do that in the gaming industry? for us, we have to create great games that give people tremendous reason to say "i have to do that. i have to buy this game because i can go online or i have to get my machine connected, which means i have to go to the store, maybe by some type of equipment that can get my console connected." but it has to be great game play that is exciting and fun enough to get people to play, and when you hit that formula, it can be very successful. for us, for example, "guitar hero" as a franchise, we have been releasing downloadable content for the past year. additional songs you can buy to play the game, and over the last two years, 45 million songs have been sold.

it is about trying to figure out how we evolve from the package business to the digital business. how do we get consumers to want to connect online? and once they are there, how can we deliver an experience to them that says they are going to help pay for that feature? >> i want to stick with what you are doing. i suppose there is this trend throughout history with many new technologies -- their adoption is driven by science, and to ask where you see your technology going elsewhere, and when we look at the wii and how that seems to be doing interesting things with hand- held devices -- ecb potential for to move -- fun is obviously so so -- socially useful. >> i am not working on any of those initiatives, but i am very intrigued and i have kept my eye

on all of the things that have been happening. one of the great things about gaming is that the mechanics are extremely engaging. some people would say addictive. i say engaging. [laughter] you get people that want to come back and play, so the great example of engaging game play -- "farmville" which many of you out there had heard of or play. i hear some chuckles out there. or you get a gift from your friends and you cannot understand why you are getting them. it is a farming game that is online, social, played on facebook, and it is free. 70 million active monthly users, and 40 million daily users. 40 million people every single day log on to play that game. it grew by 10 million last month. the game was released just four months ago. so look at the type of engagement. that curve is absolutely amazing. there are very few activities you can do that drive 70 million

monthly active users in a four- month time frame. you take the mechanics of gaming, the engagement factor, how you create things that are engaging and fun to do, and think about how you can apply this to different areas. series gaming is one of the areas that i think is particularly interesting. how'd you take the game mechanics and apply it to different areas? one thing i have seen that is very natural is the military, where the military is actually funding the games so they can encourage and train the next generation of people who eventually will be in the military. how'd you do that? you are making military strategy games where you are learning about strategy, making shooter games that are teaching people what it is like to be in certain environments. another example of that is fitness. many people have probably heard of wii fit from nintendo, one of

the most successful games in years. what is fascinating is most people hates it is. it is just not fun. some people find it, but the majority of people do not find the fun, so how do you create an experience that people actually want to do? over 10 million people in the last year bought wii fit. again, is creating that experience. it is engaging and fun and getting people to do an activity that it would not want to do getting sick -- fit is almost a side effect. another interesting example is in a minute field. doctors today -- there are surgery's that are performed by robots, and essentially, the doctors now control these surgeries through a couple of joysticks, and they are looking at a computer screen controlling a robot actually doing the surgery. they found that the new games and what you have to do in a video game mimics that where you have controllers in your hand. it is all about these little

minute movements that you are controlling while watching the screen, and they found that that is a fantastic way to train doctors in doing these types of surgery, so i think there's a tremendous amount of applications of what we have learned in the gaming industry about how you engage users, how you get them interested in a subject, get them excited about it that can be applied in a lot of different areas. >> the nightmare image of the new military, where someone decides to want to go into the movie industry. i guess all of these things are possible. you talk about the innovation process being about to go through a new face -- phase a productivity increase. what is it about next year that you think makes that a turning

point year? is this something you have learned in the past year is that makes next year and a big deal? >> there are a few things which had just converged, which i think, creates the right atmosphere for this. the enable men of the internet to create a way to communicate effectively with people all over the world has been incredibly important. and certainly, the adoption of internet connectivity around the world and high-speed internet -- those things have created sort of a formal atmosphere to connect people to work on big problems, which make it available, i think, to become industrial strength solutions for innovation. the second, i think, is social network. people today more than two years or four years ago feel comfortable engaging in a different kind of interaction with people all over the world. trust systems are evil and to do that. the third is work systems are evolving. people want to plug into the economy.

it is the free agent nation. they want to participate in the ways that they never did before, which creates a new kind of innovation capacity in the system, and i think the last is the emergence -- you just talked about making it fun. this emergence of crack outsourcing as a legitimate business, whether it is open government or crown source innovation. you know what? let's get people working on things that are fun for them, that talk to what they care about. the convergence of all of these -- technology, internet and it will become a social networking -- internet enabled it -- internet enablement, social networking. the singular catalyst that puts it over i think is the economic crisis. i think what you have now, whether it is looking at it through this capitalistic terms

that you mentioned earlier in the top today, or the fact that companies need to continue to innovate coming out of the recession or that not-for- profit still have neglected disease is to treat. right now is a very specific point in time where i think a crisis is a terrible thing to waste. all of the various aspects of this have converged, and now, i think you see in 2010 a very different way of thinking about innovation on a go-forward basis that shatters the model of the last 100 years. >> we look at the health care debate going on at the moment in america, and the thing that everyone is really worried about is further cost escalations without much improvement. from a political point of view. when you looked at the scientific possibilities, whether it be the use of mobile

phone technology and remote health care or some of the things you are talking about, there seems to be a fundamentally different picture that you can paint in terms of better outcomes and lower costs at the same time. but that does not seem to be happening. is it going to start happening? what are the changes that need to be put in place to actually make the technological dream a reality? >> i am not an economist or a policy person, but i will tell you, listening to this never- ending debate between whinocrats and fearicans, it is astounding to me that one part of their brilliant well thought out analysis -- 4.2% growth, 6.7% for 30 years, and then we are all bankrupt -- where in that great debate were they so accurately predict where we will be in 30 years based on

financial models, do they embrace the one part of -- at least to me, i'm biased -- one part of this human experimental think of innovation and technology, which always saves the day? i can imagine all the people involved in this debate, we are having the debate in 1920 about the cost of health care getting out of control -- it would have predicted we just came through this massive polio epidemic, but technology brought us high and lungs, some people did not die anymore. half the people in the world or the country would be taking care of the other half and were going to live their normal 60 years, but lying down in a giant steel drum with ellis -- something might have affected that great analysis. they did not know that jonas salk was going to come around and give everybody a have -- give everybody an inoculation.

so today, they have this great set of predictions about the crisis in the cost of health care in 20 or 30 years, but today in the united states, 70% of all reimbursement is directly or indirectly related to, for instance, diabetes. the long-term effects, almost everyone on dialysis is because they spent two years or decades as a diabetic. or people are 17 times more likely to have heart disease or blindness, but does anybody in this room believe that 30 years from today people are going to be getting diabetes? right now, is an epidemic. kids are obese, and everything about what we are doing has created this massive problem. i guess i am an optimist. it is inconceivable to me that long before 30 years from today, just as we have a lot of other horrible diseases, we will wipe

that out, and if you did, it affects the entire curve by 30%. almost all the great debate today takes a snapshot of our current set of tools and a dismal view of the future with compound interest being what wipes out everybody. where is the debate about the alternative? but poor resources into wiping out the cancer and alzheimer's and diabetes, and there are just a few of this, all you have to do is change the outcome a little bit, and you make the world a better place. >> are you talking about a manhattan project kind of mentality on these areas? >> when we get serious about solving problems, we saw them, and it is time to get serious about some of those problems. the technology, if properly focus, harnessed, and distributed to the public, will not only give everyone a healthier lifestyle, it will make at least living to our current standards of health more

cost-effective, but in 30 years, there will be another group of people with a crisis because by then, they are only living to 150 and worry about a disease we have not even thought about yet because the consequences of the success of wiping out the ones we are worried about, but that is ok. [laughter] >> i will start to open questions, please be getting some ideas for our panelists. you talked about the biofuels possibility, but the other area we were talking about yesterday was the potential for the food crisis to be solved through technology. we ran and package the other week in "the economist" about some of the things going on in monsanto. the basic calculation is by 2015, the word needs to produce twice as much food and we will probably have to use less land

and water to do it. is biology going to be the answer? >> if you are asking whether biology is going to provide us food, i would have to say yes. is bio technology going to be the answer? is genetic modification of crops and animals going to be the answer? i think the answer is mostly, but land use is going to play a big role. water usage are around the world is going to play a big role. china has to buy presents and of the world's population, but something like 7% of the world's fresh water resources, and it is decreasing every year -- china has 25% of the world's population. there's a substantially contributed issue that has to get addressed as well. the water for chinese crops has to get to those crops somehow. they have to change the way they use water in their economy, and that holds for the u.s. as well.

we have relatively speaking lots of water per capita in the u.s., but we do not necessarily use it as intelligently or as wisely as we could. i was at a meeting for the biotechnology industry organization hearing about some interesting developments in corn. if we are going to have these gigantic on forests -- corn forests -- they're changing the restructure, and crops are double what they are in the field at this point, so the amount of resources does not really concern me so much. it is more how we use those resources and whether we are a bit more clever about integrating them into the rest of our economy. we have all that food available.

if you believe that -- i would just make it conditional. if you believe that carbon is important, in warming, and if you believe that reducing carbon is important, if we have about food available and we are still producing lots of energy and materials from oil, then very rapidly, our biomass situation goes to because the climate is so unstable -- our biomass situation goes to hell. >> here's an interesting thought for me. you talk about china. i come from britain where there has still been no successful trial of a genetically modified crop because the environmental processes crash the field every time. is innovation going to go to places like china where the different ethical approach may make it difficult? is that something you worry

about? >> a great question. i worry about it in the sense that i want to be able to follow what is going on. we are talking about a pretty plausible technology. we can read and write dna now with increasing ease and decreasing costs. those are the curves that i keep track of. a feature of that is that now, students -- undergraduates and high school students -- of participating in a competition mit runs every year, the international genetically engineered machines competition, so students design new organisms, design circuits, right dna from scratch or title pieces off the shelf to snap together to try to make new organisms. that is a worldwide competition. there were 1200 students at mit a few weeks ago. i'm fortunate to be a judge for this, so i watch the may him every year, and i am amazed every year to see what the students come up with. the last four years, the winner was campus this year, slovenia

the year before, beijing the year before that, and slovenia the year before that purify the six years the competition has been running, it has been won by teenagers from outside the u.s., and from usually areas that you would not expect to be a hotbed of biological innovation. so the natural question is -- can people with access to this technology build pathogens? should we be worried about the proliferation? the answer i usually give, particularly in this town, is yes, you should be worried, but no, there's not anything you can do about it. that is the world we live in, increasingly relying on new technology to fight disease, freeze food, freeze fuel, freeze materials, and that is a good thing. we also have to be paying attention to who is using it and how they are using it. as is naturally the response -- or the natural response many times, again in this town in particular, is to try to regulate or somehow control that

technology. it is definitely going to move overseas because there are places where people are less concerned. china, for example, has made it an explicit goal to derive substantial revenues, at least those of the u.s., by 2020 or 2013 from biotech -- 2020 or 2030 from biotech. synthetic biology, as it is called, has already reached the level of incentive. there are challenges out now for better software to design dna sequences from scratch, so that is the world we live in. >> let's take some questions. we have got someone here. as always, identify yourself avoid gasbag comments. >> first of all, i want to say i am a great fan. i look forward to walking out

tonight. i read a piece fell while back, i think in the "new york times", attacking the idea that necessity is the mother of invention, saying that it is actually the opposite. i want to ask the panel if they think we agree with that, and at this time when we face challenges like global climate change and global economic crisis, that it is that that will shifted. >> i want to avoid a gasbag answer. is the question should we be focusing on anything other than the critical technologies that relate to food and water and energy around the world vs. games? was that the question? >> not so much that, just that do you think it is more

imperative now than it has been in recent times. >> is there more of an imperative to invent? unquestionably. the world right now is finally coming to deal with the fact that we are in a race between catastrophe on a global scale on many dimensions, whether it is economic, political, environmental, energy, population -- we are in a race between catastrophe and education in general, and i say technological education in particular. technology and education can continue to stay one step ahead of catastrophe, then it will continue to move the way it has always moved. it has always been the downside. there is always a dark side. the first guy to figure out how to make a flame was wonderful, and then the house burned down. a hammer can be used as a tool or a weapon. but the tools are way more

powerful, and it will be way more potent it used as a weapon, but around the world whether we like it or not, we overdid things the size and scale of the organization and we need to do things so they have a dramatic impact on the world. a few kids in a basement somewhere could make this pathogen, so we are in a race, which requires that we develop better technologies faster and deploy them more responsibly, and i think the only way we will do that is to educate the next generation better and faster. it used to be a luxury and you only needed a few people to be very educated throughout most of history and even the industrial revolution. now, to have a meaningful career, to have meaningful society, everybody has got to participate in creating wealth.

7 billion people cannot be recipients. they have to be part of the solution, and that is going to require advance technology to be properly developed and properly deployed more quickly than ever before. that requires education. >> so we all know the question. down here. as always, when other people can to answer a letter on, you can touch an earlier questions as well. >> question particularly for duane. do you think our current intellectual property rights regime is going to help us with innovation? at its worst, it can be a technological gatekeeper. particularly, looking back to a more collaborative forms. is ipr going to help us, or is it going to be a hindrance?

>> certainly looking back the way the team's work around the world, i do not think it is any understatement. my view is that the systems that are set up today were probably set up to protect industries in the 1950's and 1960's that made massive capital investments, but the reality is we have too much work to do. to waste five or six years for a patent application process just to be challenged. it is estimated that 50% of all patents in the u.s. system that are granted will fail upon challenge. effectively, you have put in place a system that does not accelerate innovation. at this stage, maybe 50 years ago or 100 years ago when the system was put together, today, i think what it does is dramatically dampen innovation

in favor of business models that probably are protected more than they should be by the ip system, so i think it has to change radically. >> i am partial as possible for promulgating the phrase open source biology in the world. it is inspired by the notion of open source software and the notion that we can have tools and technology that are shared in a way that increases innovation. it is actually a rather poor analogy. it is lots of the software, whereas biology, is not so great so far. here's an example of why the concept is important. my company was started in my garage, explicitly to test the idea that i could order genes and other services on the internet and still innovate on a small-scale basically in my house. this is possible in the u.s., not in every country. there are lots of places where

you could not do that because of when regulation or another. and the patents that i had to apply for in order to engage in any kind of market for this thing i was trying to build, so far, has cost several times what the actual innovation costs, so buying molecules, moving molecules around really does not add up to much of the cost. it is all about paying for that patent, and that is a huge barrier to me as a small innovator trying to engage in the marketplace, just as it is for anyone else in my position. the challenge is that each gene tends to have a patent on it. whether it is a naturally occurring gene that's a lot has discovered rather than invented or something they have actually invented, so the thing that i designed was bits and pieces of many different genes, so there is an active invention, but it is still incredibly expensive. i had 10 of those, then i've had a costs would be 10 times

higher, even though the cost of printing the actual object is much less. so that clearly is already standing in the way of innovation. for me, it is standing in the way of innovation for anybody who wants to play with genes, and the question we have to ask ourselves more broadly about innovation and policy is whether that is doing us any good as a society as a whole. forget by terrorism as a threat at the moment. let's just talk about nature. we do not have to worry about stars because the disease is gone, but there will be stars pop up, just as there was the flu this year that came out of nowhere. when stars -- sars 2.0 pups up -- pops up, what will the innovation we face look like? my point is we have a pattern structure that inhibits the way we develop response to threats.

when we are in the middle of the crisis, it will be hard to fix that innovation structure on the fly. we need to be thinking ahead much more than we are today. >> when the whole pattern system goes the way the founding fathers, -- several of the founding fathers were highly opposed to in the u.s. -- >> i guess, is there a better answer that you see for the patent system that we could go forward with that would help us to respond to things like ssars 2.0? >> the reason they exist is to guarantee investment, so why should i put money on the table to build something if someone in china can just make it better, faster, cheaper? the answer is supposedly a patent protection from that. in the world today, it does not protect me from that very often. but that idea of protecting

investment from property right is widespread property right is another version. trademark is another version. we could decide that we protected dna with something other than patents. i think it is fantastic policy innovation. i do not necessarily have a brilliant idea about what it is. i spent two chapters in the book exploring the idea. in the end, i say, "hell if i know." >> is anyone else have a solution to that particular problem? >> we talk about a complex topic, but i think in general, patents are too long. i think there should be the notion of a frivolous patent. blocking patterns, i think, are highly destructive, and i will also say if i think if someone is going to apply for a patent, particularly in the area of public health, and they do not apply in a certain amount of time, at issue expire. i think the notion of open

source patent protection -- there is a vehicle for taking open source ideas and making them available so they can be used, but the whole area is just now being developed, so i think that there is opportunity there. >> you point out the complexity, and i need to admit i was a member of essentially the board of directors of united states patent office for a number of years, as one of the few non- lawyers. sitting in a roomful of lawyers is always a scary and depressing way to spend the afternoon. but on one hand, i think everything you are saying is true. the rate at which things happen, i mean, all sorts of things that are happening today could not have been in the minds of the founding fathers when they wrote articles 1 section 8 clause 8 that gave exclusive rights to inventors and authors. the flip side of that is never

before -- back to the question we had -- has the world been in more desperate need of innovation, and anything that will incentivize innovation is a great thing. this whole stimulus package is nothing compared to 7 billion people being incentivized to solve problems. this is the worst possible time that society should do anything to undermine individuals' incentive to risk your money, your livelihood, your reputation, your career, so there needs to be big changes. make them higher quality. all the changes need to occur. my fear is that in a process of trying to change them, for the convenience of some currently powerful industries, the unintended consequences of what is now being viewed as a reform of the patent system, could leave it neutered, and it would be a terrible thing to remove incentives from innovation. a terrible thing that you will not see until the next

generation lives through it. >> i could go on listening to you guys for the rest of the date is not the rest of the week, but unfortunately, our time is up, so what i have to do now is ask each of you to give your one prediction -- and let's hope it is an optimistic prediction -- for 2010 of any kind. and it has to be in less than 10 words. that is your main criteria. >> the background of the prediction is that we have a temporary reprieve from high food prices and high resource prices that we have seen up to 2006, 2007 because the economy has backed off. the u.s. is importing something like 20% less oil than it did at the peak of the economy, so we have a little breathing room between where we are in resourced production and resource use, food, oil, etc. the consensus seems to be that economic growth is going to come

back next year. maybe slowly, but it will be there. so my prediction, not so optimistic, is that we will start to see a return to higher prices because we are going to run up against production limits again very soon. food prices, oil prices, etc. because is not in 2010, it will probably be 2011. >> thanks for that. >> not sure i can do 10 words, but my team is still education. knowing we were going to be in washington, i could not " scientists and engineers. i will give you a quotation from a political leader on that. i think i'll get the whole thing right. all those that have meditated on the art of governing mankind have been convinced that the fate of empires depends on educating their use -- youth.

was that obama? was that bush? was that clinton? it was aristotle. there's not a lot of news here. we have got to get a lot more people out there innovating, and even the ones that may not go out there -- we have got to get the public at least capable of understanding enough technology that they can rationally figure out what the real issues are. my prediction is the public, down at that individual level now, is becoming more and howard and more educated, and the big slower-moving things like governments and companies are becoming less of the high interest institutions that have slowed progress. i suspect innovation would become faster and more easily acceptable because of the crisis

we have, and that is a good thing. my prediction is things will get better. the >> you know, i think there has been a national and global debate for years, and it has been a slightly different debate in the u.s. and europe and other places around the world. on the need for national and global innovation strategies around -- strategies and policies. too many people are out of work today. i think there are too many diseases that need to be cured. i think in 2010, one more countries get their act together and start driving real reform and real technology innovation policy that addresses intellectual property, jobs, education. i think the time has come. >> lots of serious stuff, and as this plan gains all day. i will collect -- i just play games all day. i will go back to what i started

with. a transformation from a packaged goods business to a digital business. if you just look at what is happening outside of our direct area -- if you look at asia where this model has already happened and will probably -- they will never move back into the type of business that we see here today in europe. if you look at iphone gaming, iphone games is the number one category of downloaded applications on the iphone, and most of those are free, so we are seeing a huge evolution from gains were people typically have to pay a high premium, to games that are now in our industry what we call freemiums, where you start free, and at some point, you get the user to pay through some engagement that they want to pay. my prediction for 2010 is that as the gaming industry transforms from packaged to digital gaming, gaming is eventually going to go free.

>> my prediction is i am going to become addicted to games next year. on that note, i would like to thank the panel for a really stimulating conversation. so thank you very much. [applause] >> now, "economist" political cartoonist year for the next 20 minutes, he shares some of his drawings of the most talked- about and recognizable political figures. [applause] >> how are you guys doing? wow. this is great. it has been so much fun, and i am really excited to be here with you guys today. i am going to talk to you about something that i am extraordinarily -- i find extraordinarily exhilarating, and that is phasis -- faces. i have been watching you guys doing the coffee breaks, eyeballing you close distances. i have noticed one thing consistent throughout the crowd.

everybody here has got a face. [laughter] some of you might even be two- faced, i'm not so sure about that, but you have at least one. imagine if someone had the power to take your face, the when you look at in the mirror with all its imperfections, take that apart and reassembled under their control. that is a formidable character, and that's is what the "economist" has been paying me to do for 33 years if you can believe it. i want to look at a particular face and what may happen to it over the next year. but i think the best way for me to inform you about that face is to talk about some of the faces of the past and of the present, and i am going to literally take your picture -- several pictures -- to that effect, but first, i want to start with a slide show

of some prominent characters. i thought it would be important to kind of inform you a little bit about the work. that is abraham lincoln. my first character from first grade. i did start my life as a caricaturist doing it on the street. this is in london, and it is a great exercise because you see dozens if not hundreds of faces overtime sit in front of you, and you learn about the pattern in the shape and what to look for that is distinct to you as an individual. when i started with the "economist" back in 1998, it was during the era of margaret thatcher, and this was one of the early covers, one of over 100 i have done over my career. other early characters, all of them fascinating and interesting in their own way. and some characters supplied you with more material than others.

and then, of course, you had the opportunity to cover historic events, and big personalities still lead places, and carriage is often help define the way people remember important events throughout history. that is why cartoons are often seen in history books. bush was a cartoon who kept on giving and giving and giving. one thing about this cartoon -- i look at it, and sometimes i get confused. which one is bush? i am not so sure. he was a character who overtime, his face got more exaggerated the longer he got into office. you also had other characters around like tony blair. and of course, his time in office also got him lost it -- a

bit. in addition to doing cartoons, when i draw my characters, when people sit down in front of me, i am also thinking of them in 3- d, so i even so much as a sculptor of george w. bush that i eventually turned into a 3-d digital animated movie character. these are characters from today that we know, okay? and you can see the characters who played big roles in washington here. lieberman, who has made a kind of the resurrection of late, and his face looks like it is made of silly putty. you can just see the flesh moving off of those muscles there. it is really great. and in some people who do not want to go away. thank goodness. the cartoonists were cheering when mccain nominated her. we knew that we would have a good time for a while. now, let's bring us to president

barack obama. as i mentioned before, when a politician first comes into the public limelight, the caricaturist -- caricaturist our actual the close to the actual photograph, and over time, the face gets more exaggerated. last year at this time, when we had the election and post- election, this was barack obama, looking like he is smiling all the time. look at him. in fact, during the campaign, i had made a 3-d model of him. he looked quite useful -- youthful. i was on a tour for a while, and we did it where i could talk to this guy, and he would talk back to me. it was very effective. it was really good. very effective at the time. but when he got into office, things started to change. he became more solid, more serious.

dealing with iran, you could see the guy in the vaccine, "careful, the great statesmen is opening his clock." and when it came time to deliver the stimulus, he had to take on a different position in the government, and he did not look as exciting as he did during the campaign, and then this more recently when it came time to give the new orders in afghanistan. again, and much more serious character. all right, so now, i want to leave this slide up here. can we leave this up here? if i want to show you a little bit of what goes into the drawing of these characters. when i set up to draw somebody first time, the first thing i am looking for is the shape of their head. it is so interesting that you can spot somebody from across the room or on the other side of a football field and you can recognize them without knowing the subtleties of their faces

because of the shape of their head. i want to start with the character of this phase i really enjoyed drawing. he is back in the news now with the copenhagen accord. this is al gore. he has this very distinctive shape to his head a kind of goes one line like this, and then the other line like this. that is where you start with al gore. then you give them this hair, very reagan-esque hair that goes like this. he has the years a spot from star trek. -- the years of spock -- the ears of spock. he has kind of an elvis-like mouth that goes like this. already, you can start to see it is beginning to look like him a little bit, right? but the keep it is people often say he lost the 2000 election

because of florida. a few hundred votes in florida. i say that was not it. he lost the election because he has the eyes of death. that is al gore for you. what do you think? am i right? yes, that is al gore. it does not help with this mole sticking out of his neck right there. so i will sign this one here. here you go. for you. let's get another character with a distinctive bass. john kerry. long face, right? here is the face. the face starts of here. long face. long face. long face. look at that. ok, this is better.

it goes up like this, and up like this, and in his nose like this, and his eyes like this. his hair like this. it goes like this. and his ears. a line here, line here. ladies and gentlemen, what do you think? not bad, not bad. [applause] not bad for a few strokes. who wants john kerry? you, right there. in a white shirt. pass this back to that gentleman right there. right, good way to start a riot. let's go with another democrat while we are on the theme. let's try bill clinton. working from a profile, a profile as a great way to draw somebody. you get the singular line of his face, and he has kind of a turned up nose like this. kind of a little bit of it turned out mouth.

and then the bags under his eyes. poor guy, notice he has more and more bags coming under his eyes, which is really hard because he travels a lot, and a charge for every extra bag. then he has the used car salesman hair cut. and look at this. this is the bit. that is the bit that distinguishes the man. what do you think? bill clinton. all right. yes. he gets to get this one. ok, let's go to h. w. bush -- no, no, let's go straight to george w. bush. the problem is that you really need to be sheets of paper. one for each year. that is kind of a problem, so i want you to use your imagination. the years can never be too big. but the interesting thing about his face is that over time, i abbreviated him so fast i could turn him out in about six seconds. let me show you very quickly

where you go with him. strong flared nostrils. etc parentheses. horizontal line, horizontal lines, then we have a few lines going like this. his chin is nw. then he has the really strong brow like this. then, you have the years. abbreviate them a little bit. one on this side like this. another patent -- parenthesis like this. hair there, little hair there, what you think? george w. bush. what do you think? not bad. great. all right, let's get on to president barack obama. interesting case watching him over the course of time. because he had a very young,

taught -- taut face when he ran for office, and now the combination of gravity and gravitas have worked its toll on the face, as it does. in taxes of any president over a four years, their faces age at an exponential rate. i'm first going to draw president obama from a profile. just to give you some idea of what i am looking at. so he has got a nice round top of the head. the piers are kind of a big portion of the balance of the head right now, but here's the important it. he has a heavy shadow on his eyes, and you do not see the eyes of the distance. they tend to be small. his nose is quite small, has a strong upper left, and you can

see his face start to appear. seeing this style of his portrait from the side, i have noticed something -- all this movement, and i'm beginning to think the more i looked at him, the more i realize i do not think he was born in hawaii. i think he was born on easter island. [laughter] don't you think? we have obama. who is going to take obama? now, i want to draw him from the front, and look at this frame in the back. so you are going to have a look at this in the back. you are going to gain attention, not just from the cartoon, so i think everyone, when you are watching him more and more, you begin to understand the way he moves, the way he talks, and

just like many presidents at about their second year in office is when you start getting the good impersonators. because the cartoon-consuming since your comments get to understand what they look like an act like in all sorts of situations. we get to know those faces and start pulling apart even more. i am just going to two quick versions just to show you where i am now and where it might be going, okay? we are going to start from the front. the ear here, and he has this long v-type shape. we have these strong lines, like we said before. here is the bit that is going to be interested. what i call the oval. this line here, and it is this muscle that you see in the drawing up there that is going to get more and more accentuated, and you will see

that get more and more so and over time. plus, he has got this little thing down there. you see this little muscle down here moving. then this line is also going to get stronger. and ladies and gentlemen, that is the rock obama. that is what he looks like now. let's show you what he is going to look like in a little while. let me get my new pad up. we will take this one off here. what he will look like in the year or so from now will be this part of his head will get a little more rounder. the years will get bigger. this bit will get very strong, but it is this all will thing that you are going to see a lot of accentuation of. unfortunately, you are not going to see him smiling a lot as much as he used to. still with the very long chin,

and you will see that almost at will be enough to be able to find barack obama in years to come. his years will get bigger. his chin with a monitor, and he will have four or five more lines up there. that leads me to a couple of predictions. you are first going to see the president get older and older. i want to show you what might happen. could we get those slides back up for a second? ok. if he is looking like this now, this cartoon took place early in his time as president. 200 days, he is looking a little bit. 500 days going pretty fast. 1000 days -- watch out. coming around now for his reelection bid. this is what we might see, and i think it benefits social security -- this is what we

might see. this new wall calendar that we just came out with for the "economist" which i did, and it has in hand drawn illustrations throw out top and bottom. why is this important? when it approached me and said we should get a calendar, which is put some curtains on the top and is something like that, and i said that today, anybody to do that on their laptop. the digital world is so amazing you can do just about anything. you want to do something special, you have to do something completely hand drawn from top to bottom, and this is true. in a world of cartoons, animation, you are finding that more and more digital work is finding its way in and replacing what was the conventional way of delivering art and inflammation in publication and in animation. now, it is great, though. i think you will also find as

this digital stock moves out some of the traditional hand drawn, hand-painted work, that work will become more and more valuable and more and more appreciated over time, and that is my prediction for 2010 and beyond. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> you are watching c-span. here is what is ahead on your schedule -- up next, a look at immigration reform from "washington journal." that is followed by a hearing on the real id act. later, washington, d.c., schools chancellor on education. >> this week, a rare glimpse

into america's highest court threw unprecedented on the record conversations with 10 supreme court justices. >> the most symbolically meaningful moment for me during my public investiture, and it was sitting in justice marshall's chair, and taking the oath with my hand on justice harlan's bible. it was like history coursing through me. >> our interviews with supreme court justices conclude tonight 8:00 p.m. eastern with a system of justice sonia sotomayor -- associate justice sonia sotomayor and retired justice sandra day o'connor. this is one of many items available at c-span.org/store. >> a look now at immigration

reform with the directors of the immigration policy center and center for immigration studies. from this morning's "washington journal," this is 45 minutes. >> washington journal continues. host: our guests include the executive director for immigration studies, and we are also joined by mary giovagnoli, the policy director at the american emigrations council. we begin with this statistic from the census bureau. an immigrant enters every 37 seconds. who are these people? guest: they are your brothers and sisters, aunts and uncles. computer programmers. they come from every country and every demographic. host: what are they looking for

when they come here guest:? -- what are they looking for when they come here? guest: a better opportunity for their children. some people are getting away from persecution. some people are trying to join their family members. they are all looking for a better life. host: an immigrant every 37 seconds. what is the unique challenge that they propose? guest: the most timely challenge is that we have 10% unemployment. and we admit that when you add and we admit that when you add all this the number of workers that you take every month, adults working as immigrants is more than 100,000 people. we are taking in 100,000 immigrants per month. we have been eliminating jobs. there will have to be some relation, at the very least, between the economic conditions

and immigration, and why we have not stopped emigration is beyond me host:. -- is beyond me. host: it is not really the job of the government to micromanage this. we set a broad parameter. what the government is doing is importing 100,000 people per year. we would do this in the economy. where the immigrants, and the large groups of americans, are in direct competition with each other. host: if you take the economic argument about the 100,000 people, what is your reaction? guest: for one thing, the people who are coming in are coming in for different reasons. people who come in for unemployment reasons are coming

here for a job that is not being filled up by someone in the united states. and you also have to look at the fact that when you are looking at the overall numbers of people coming in, you have to talk about what they are bringing in. the amount of immigration and the gdp, with $37 million every year. this is really changing things. you cannot just look at the number. you cannot worry about people coming in, or people who are here who are unemployed. host: the topic is immigration policy and we will talk to the viewers. democrats can call -- republicans can call -- and the independent callers can call -- we have mary giovagnoli and mark

from the center for immigration studies. we were talking about legal immigration. what do the current numbers look like? is this about 11 million like we heard of? guest: the population of illegal immigrants is now below 11 million people. everyone thinks that this is because of the recession. that is obviously part of this. but the drop in the population started before the recession, when the bush administration permitted the immigration authority to enforce the law. they are people like anyone else and they get the message or they were told, it is okay and there is no problem. when the message changed in a small way, we began to force the immigration law.

many of them got the message. more of the people who were here were leaving. my question is, why would we need to legalize illegal immigrants if the current force of policy is already starting to shrink the total population? host: this is a piece in the "washington *." -- washington times." they write that nearly 27,000 people are facing serious federal charges related to immigration in 2009. the chief justice has a report on the judiciary. three-fourths of the people enter the united states after being sent home before. what about the aspects of this that are against the law, even if this is shrinking? guest: the numbers are in line

with the economic progress in the country. this shows that long before president bush was enforcing this strategy, the numbers would go up and down if jobs were available. the question is what is driving people to come to the united states. the major issue is economic prosperity. when the recession hits, people did not come as much. but we know that this will not last. all the predictions are moving out of the recession. and there will be a growth in jobs. what this means is that if this is killed by the economic needs, then the legal immigration will have to be addressed. -- the illegal immigration will have to be addressed. we have 12 million people who

are involved in the country in different ways and they need to be brought into the system to contribute and pay taxes. at the same time, whatever we do in setting up the new immigration regime, we have to account for the future immigration issues. that is a much more systematic analysis, with a number of immigrants that we allow in. host: there is one comment and one response. guest: what struck me is that there is a need for immigrant labor. we are looking to the past recessions and the estimated population. this was a small drop and this happened after the recession began. what has happened in the current recession is that the population began dropping before the recession, clearly related to enforcement. these are people who will

respond to the changes in the system, this is something that we are not welcoming or accepting. people are getting the message and fewer of them are coming, and more of them are here to support themselves. that is the model for long-term changes. host: we are talking immigration policy. what are your thoughts? caller: i wanted to speak to him before. i certainly agree with everything that he says. we have to talk about the population of the country. we have millions of people in the state of texas who are the legal -- the legal -- illegal. if we keep this up the way that we are going right now, we will

have multiple languages and a very disorganized country. these people are not the honored guests. they are here illegally. they are draining the country. host: she says that they are a tremendous drain. guest: this is so complicated and people are always looking at this from their own perspective. and i respect that perspective. in different places you see different things. if you look at the impact of the immigrants in this country, this is dramatic and this is profound. this is what keeps us going as a nation. if you have issues with the way that people are assimilating in different parts of the country, much of this has to do with the fact that the enforcement policies are not working. it is difficult for people to

find a way to get into the country. and you will get this sort of second-class citizen, a second tier of people who were not able to come together in the way that the caller was discussing. >> this is something to clarify. when she says this is a tremendous strain, there is something to this. the immigrants are not that different from the people 100 years ago. it is not like people from mexico say that they will go here. all americans. the immigrants are now actually very similar to what they were 100 years ago. but the americans have changed. .

before joining the center in february 1995. we are also joined by someone from the american immigration council and was formerly with homeland security. she worked in late senator kennedy's office. our next call is on the line for democrats. caller: that is a very intelligent statement you just made about 21st century mixing with the 19th century. from my standpoint, you are an intelligent debater. i was going to tell the screener

a quick story. this is an e-mail from a family member of mine. she is not a liberal but is probably a political. if you cross the north korean border illegally you get 12 years of hard labor. it goes so on and so on. you basically get thrown in jail. if you cross the u.s. border you get a job, driver's license, social security card, welfare, subsidize rents, a loan to buy a house, and the right to protest that you do not get enough respect. that is an idea that is out there. when naturalized citizens listen to that, what can you say? people feel as though their jobs

are being lost to illegal immigrants. people feel as though their jobs are being lost. no one is blaming the employer. guest: no one is trying to sneak into north korea or cuba, anyway. the point is valid. we do not take our immigration laws seriously. there's a big increase in federal prosecutions. one reason is that the government started getting a little more serious in prosecuting people who have sn uck back into the country after they have been formally deported. they went through the whole process. when they come back, if they come back, they are committing a felony. for years and years, that felony was not prosecuted. it was ignored. only in the past few years have

we started taking our own immigration law more seriously. infrastillegal immigrants will get the message. guest: it is ironic that he uses that example. these are people who are being prosecuted for re-entering after being deported. despite all of the obstacles, these are people who have come back. yes, the government has chosen to prosecute them. they have done it at the risk of not prosecuting drug traffickers and other people who are also engaged in bad activity along the border. we really have to understand that may be a choice of government is making at the federal level, but it does not necessarily out illustrate all the other issues that the caller was pointing out. when people come here illegally, they do not get government benefits. they do not get all of these

things. things. in host: let's move this forward. we understand there is legislation ruling on the hill. the white house prepares for immigration overhaul. there's that word again, overhaul. he subhead it says there are rallying allies to push for a package with better border security. the effort is sure to be a tough sell. what is your stand on what the administration would like to do? guest: my prediction is nothing will happen at all. what the administration wants to do is it to manage the issue politically. president obama just does not care that much personally about immigration. he has the same views as sinister mccain, ted kennedy, president bush. he wants to legalize the immigrants who are already here.

-- senator mccain. it is important to some of his constituency groups. the white house, for one year, has been walking a tightrope of not willing to alienate voters, not wanting to sacrifice more important policy objectives like health care and cap and trade while at the same time keeping their constituency groups that are demanding legalization keeping them happy. at the are walking a very difficult tightrope. i think there's going to be a lot of of fury. there will be hearings. ultimately there is zero chance of a broad legalization passing. host: do you agree with that? guest: i think the prospects are good. i have seen the president speak eloquently and movingly about the importance of comprehensive immigration reform because he does understand that it matters not just for immigration issues

but for the overall health and well-being of the country. he made it napolitano has a lead spokesperson on this. there are weekly meetings on how to manage the immigration issue going forward. i think they're taking it very seriously, as our congress. senator schumer is working diligently. i think this is the year where we will see immigration and people will have to discuss the tough issues. it is coming. have to discuss the tough issues about immigration. it is coming. host: is there anything in the house and senate legislation that you know of that deals with this? guest: not really. the senate bill does not exist yet. the house bill is out there. it is almost a parody of a bill that i could have written tongue in cheek. it legalizes all the illegal immigrants. it has a very small find that

people have to pay. it has one requirement after another that prohibits enforcement of immigration laws. it is the maximalist position that the other side wants. what you will see from senator schumer and senator graham is something that is not as over the top end of served as the house bill. the house bill, hr-4321, really has the agenda that the other side wants. the right wing part of the open borders pro amnesty coalition -- they insist on a very large guest worker program. the house bill does not have that. that will be one of the issues where the right and left wings

of the pro amnesty coalition are kind of at loggerheads. host: anything you want to add about the legislation itself? guest: i think the legislation is filled with passion and filled with ideas that are years and years of frustration with the failed enforcement policies of the last decade. there are a lot of new ideas. there are a lot of creative ideas. mark is right. it will be argued about. some of the will add up in the final package and some of that will not. host: new york city, paul is on the line for independents. guest: good morning. i wanted to talk about the nature of the socio-economic argument. it appears to me that when you have a large number of low- income people come into this country, it will impact of those

people who are low income. that is, those are the people who have jobs in this country legally. they will be the ones disproportionately impacted. it seems to me that the chattering classes -- let's face it, that's what we have on this program today. people will get lower-cost babysitters and lower-cost people to mow their lawns. those people who actually do those jobs who are illegal people in this country -- what happens to them when they are disproportionately impacted from this? so much of the immigration is low-income competition. in many cases, jobs like home

building, carpenters, and landscaping. if you're in the business, you will see a direct impact your ability to earn a living wage. it seems to me there's a large number of liberal high-income people do think those are jobs i do not want and that does not impact me, and therefore, they think there are no low income americans impacted by that. from a supply-demand perspective, when you have so many of the immigrants so low income, those are the americans who will be impacted by that. why are they so unimportant? i do not have a problem with the idea that they might speak different languages or whatever. i think there seems to be a disconnect from who gets impacted by this.

there seems to be an intellectual dishonesty. host: thank you. mary giovagnoli? guest: sometimes when you're analyzing the social economic issues, it is sort of counter intuitive. if you think that people come in, they must be displacing other people. there have been a number of studies over the years that have shown that immigrants tend to locate in areas where there's not high unemployment. for the most part, immigrants are not taking jobs away from american workers, but they're complementing and helping to create new jobs. it is complicated. it is an issue with many layers. oftentimes, if those immigrants were not in those jobs, they might just disappear. that raises a legitimate point. that is, how we make sure that everybody is lifted up in the process?

i think what we found over and over again is that when people are here legally, it brings up the wages for everyone. it gives american workers the opportunity to be able to compete with jobs that maybe they cannot compete for right now because people are paying under the table. there was a study in new york city that showed in 2005 about one in four of the construction workers were paid off the books. that was costing in terms of payroll taxes, social security, medicare, and things like that. that was causing new york city millions of dollars per year. it is a costly process. it is not necessarily because the people are there. host: mark krikorian? guest: legal status is not the problem. it is a small part of the problem. the problem is the supply shop with so many low-skilled workers pouring into the economy all at once. when they look at the

immigration for the entire economy, they find a small economic benefit. where that small economic benefit comes from is distributing that benefit to the rest of society, to the chattering class'. is the right to cut the wages of low-skilled americans in order to reduce the price of tomatoes by 3 cents? my response is no, it's morally unjustifiable for us to do that to our fellow americans. guest: and consequently the growers in agriculture have been together to create ag jobs, which is a process that would insure a legal work force. guest: a cheap, controllable work force. host: dallas, dan, republican

line. caller: good morning. i just find this in tige entirel immigrants situation -- unless you live amongst them, it is hard to understand. when you live someplace like i do, in dallas, texas, in the southwest, and see with your own eyes that much of what mary has been espousing this morning is under bladder. they will show you the food stamps and welfare benefits that they collect fraudulently. it's a huge, huge problem. not to mention the money we spend on education, our hospital emergency rooms, and all the rest of it. all this empty rhetoric about illegal immigrants being good

and contributing -- what ever they contribute, and by the way most of them are paid under the table and do not pay taxes -- but what ever they contribute is outweighed many times over by the benefits that they suck out of our system. host: it seems like a good time to inject health care into this a little bit more? if you look at the front page of "the new york times" this morning, there's a story about illegal immigrants and health care. it says she went back to mexico, where she now struggles to a for dialysis, but this was the treatment she was able to get in the u.s. at taxpayer expense until the clinic shut down. mary giovagnoli, a question for you. what are illegal immigrants able to get health care-wise, and how might that change under the new legislation?

guest: the primary thing that people who are here on an undocumented status is emergency health care. everyone is entitled to receive that care. a number of people who use the emergency rooms for dialysis and other things -- they may fall into that category. that is primarily what people are entitled to. i think what people forget a lot of the time is four million children in this country are u.s. citizens to one or more parents are undocumented immigrants. those kids are entitled to benefits. many times they do not get them because the parents are afraid to come forward. it is not a one-size-fits-all issue. there are a number of difference scenarios. the illustration you gave is only one of them. host: mark krikorian? guest: the immigration issue is central to health care. when you look at the uninsured population, 1/3 of all people

without insurance are either immigrants or the young children of immigrants. immigration is responsible for 1/3 of the uninsured problem. it is responsible for virtually all of the increase in the uninsured population over the past decade or more. in a sense, what our immigration policy is doing is creating the health care crisis that then, through other means, people are calling for changes to. host: mary giovagnoli, are you doubting those numbers? guest: yes, i am doubting those numbers. a number of immigrants who do not have insurance tend to be younger. there the very folks that would bring down the overall cost because they would not use the system as much. there's plenty of evidence to indicate that by cutting people out of the system, regardless of

their status, you are not doing anything to help the overall population to be able to afford health insurance. that's really critical. in the senate bill, illegal immigrants would not be able to pay into the exchange. in the house bill, they would be able to pay into the exchange. one thing that will have to be figured out in the conference committee is what to do about that. host: savannah, ga., steve on the democratic line. good morning. guest: i am an immigrant, as you could tell from my accent. host: where are you from? guest: i'm originally from nigeria. i know nigeria has been in the news lately. i'm not a terrorist. let me say that first of all. everything i've heard from that gentleman today is nothing but xenophobia. you had on steve forbes the other day, and i was surprised

other day, and i was surprised to hear that his grandfather the gunman then called in talking about how he talks with these people -- works with these people and has insights, to me that is nothing. they mention the technology. coming from a nation that is less technologically advanced and to assimilate into this society, i find that offensive. it is extremely offensive. host: should there be a change in immigration policy? caller: of course there should be. this smacks of nothing but the xenophobia. i am a human being. this is the same way your grandparents and great grandparents immigrated to this phone call. guest: he only used the term is

xenophobia twice. the use that to try to shut down debates. my grandparents were immigrants, too. i did not even speak english until kindergarten. i grew up speaking armenian. i did not know all people spoke with that out -- spoke without accent until high school. with that said, immigration policy has to be based on what is good for our grandchildren including the ones of legal immigrants we have taken in late. in the past, rather than a sentimentality about the lower east side of manhattan is about our grand children not our grandparents. to say that criticism or skepticism is unnecessarily xenophobia is to shut down or delegitimize debate.

to support amnesty is the opposite of that is hemophilia. it is a preference to foreigners over americans. -- to support amnesty is the opposite of the xenophilia. it is illegitimate unless there is an unequivocal evidence. host: mark on the independent line. caller: i live here in new jersey. i am going to be a congressional candidate for congress. i work as a contractor and have health problems. it is hard enough to go to work every day, but if you live with what they have done to the trades you really do not understand. this is a left-wing, progressive movement that is continuing to devalue the american people. progressive movement.

host: mary giovagnoli, a lot of passion there. guest: in 20 of the 22 cases where anti-immigrant sentiment was a critical issue, it was not the anti-immigration candidate who won the race. you need to be careful there. this is the problem. this feels passion because people feel this is about their livelihood. that is an important and legitimate issue to lay on the table in a critical and thoughtful way. unfortunately, the debate is filled with a lot of hate. we need to be careful in how we talk through these issues. when you look at the real numbers, the people who are taking jobs away carnauba immigrants. it is a system that has created a need for workers. guest: i just wanted to comment

on one thing that several callers have brought up, that this is somehow a left-wing agenda. it is true. there's a large portion of the left which is opposed to immigration enforcement. we need to understand that there's a right wing part of this oftoo. the immigration skeptics cross right-left borders. this is not something that splits nicely like taxes or abortion or something else. there are conservatives and liberals on both sides of the issue. one caller said in a come-left- wing chattering class is. there is a high in come right wing chattering class'. host: the color from nigeria and reminded us that the country has been in the news. bombing reports start trickling into obama. will there be an impact on the

immigration debate? do you see a connection? guest: clearly. the secretary of homeland security said that are screening system worked very smoothly. she said that the system to keep out terrorists worked well. obviously, it did not. this is the same secretary who will oversee any future amnesty to screen out gangsters and criminals from the amnesty fulp. we saw what happened in 1986 freed one of the people who was legalized as a farm worker was a man who was able to travel to afghanistan, get his terrorist training, and help lead the first world trade center attack. he did this because of an overwhelming wave of legalization applicants in a system that was not qualified to screen them. and the number of illegal

immigrants now is double now. guest: there's not even time to go into all of that. let's start at janet nepal atono. we need to make a distinction. i do not think that the immigration system itself necessarily failed. the intelligence systems did not work. you cannot necessarily blame that on immigration. when the conference of immigration reform comes up, i think we will see intense interest on the part of some members of congress to add in a number of screening functions that may not be there right now on various security measures. that's part of the mix. whenever you're talking about immigration, you have to talk about all the different aspects

from coming into the country, to staying in the country, to the number of people we need. do not blame the secretary for one statement. look at the issues that you have to address. host: i want to bring up one other thing. it is called a real id. a headline just recently said the states will get more time to comply with real id. guest: it is primarily a mechanism that requires you to have a state issue driver's license that complies with various federal requirements and biometrics. it is designed to make sure everyone has legal status in the united states. host: the headline from december 19 said the administration is abandoning the december 31 deadline and moving it to.

. host: mark krikorian? guest: it creates a basic federal standards for all of the state driver's licenses. we have a national by the system. it is not run by washington. it is run by the state. this sets minimum standards. it will take awhile to implement. i'm not even of worried about postponing the date. the story does not tell you that there was a strong push by the secretary to repeal real id. the push to repeal it failed. what they really did in compensation was pushed the compliance date out by another year or so. that is probably not unreasonable. host: we will show you a hearing from earlier in the year on real

id today on c-span. last call for our guests. johnnie, republican, good morning. caller: good morning. . i could go off for an hour about the things that are wrong with the legal immigration. i have been in construction myself for 35 years. it is a new strain to the bulk of the door four or five at a time. maybe one can speak a little english. they have documentation in the hands of, and whether it is real or not, you have to exempt it when they walk and the door. you have a guy who comes in the door and clams the maximum dependents, who actually might live in another country, and you

cannot investigate. that is a big drain. in the state and an onion, almost weekly -- in the state i'm in, you hear about people killed in accidents almost weekly. illegal aliens, no documentation. there's no way you can pursue any kind of illegal activity against them. you have loss of life, loss of property. guys thrown in prison or sent back to where they came from. my wife and my daughter both were in school -- probably 35% of their classes were made up of hispanics. my wife was a teacher. most of them cannot speak any english.

host: mary giovagnoli? guest: these are difficult issues. you have to ask -- what are the resolutions? the port 12 million people at a cost of $600 billion? we do not have the money to do that, nor are we necessarily going to be helping our economy. for everything that people talk about immigrants draining the system, immigrants also have tremendous buying power, and do things that help. we need to address the concerns by making sure people are here legally, that they pay taxes, that they pay their fair share of the various burdens that society faces. if we do that, we can start to level the playing field, get better jobs, and better pay for everybody. we can really address our immigration system overall. guest: we do not face this false choice between the importing all the illegal aliens tomorrow and driving them to the desert like

something out of the 10 commandments, or legalizing all of them. that is a false choice. the real choice is enforcing the law across the board consistently. through that kind of attrition, we shrink the problem, and then decide if we want to live with a smaller illegal alien problem as a nuisance, or do we then want to have an amnesty debate, but not now. guest: enforcing the law is destroying towns and going on major work site raids that the most people's well-being. guest: enforcement of the law happens across the board. it happens at the border. it happens at work sites. it happens at audits of companies. it happens by making sure banks are not allowed to give checking accounts to illegal immigrants. it happens across the board.

guest: and not saying do not enforce the law. guest: that will lead to the attrition of the total illegal population, as we have seen over the past couple of years, rather than allowing it to keep growing every year. guest: attrition does not work. we have put billions of dollars into a force in the law, and the number of illegal immigrants has climbed from 3 million in 1990 to over 11 million today. guest: we did not do any enforcement. that is why. guest: i was a prosecutor in the government. we did enforcement. we did not do what you are saying. guest: there was a narrow enforcement at the border. it is the kind of enforcement use all in new york city with regard to crime. they waited until murders and rapes have been.

you start restoring order. that result in fewer big crimes, as well as fewer smaller crimes. host: we do need to wrap this host: we do need to wrap this up. >> more now with a look at social networking and political participation. this is about 20 minutes. learn more adam c-span.org -- learn more at c-span.org. host: we thought we would round up a program, about 40 minutes here on new year's day by talking about social networking and a socially and plugging them into the political process. how have they affected support as a vision and political discourse in this country? for the better or worse? do we have a better citizenry or not? it will do this several ways, first of all, by twitter.

we invite your tweet to be sent in on this topic. that is one way to do all of this. there is also facebook, of course. comments are already coming in on this question as we posted a while back. we will start reading some of those. there is twitter, facebook, and of course, phone calls. its purchase a patient better? or maybe not because of the new forms of media and communication. the phone numbers are on your screen. in the meantime, we will also mix in some stories out there. we found this one from politico from a couple of days ago.

@@ calls beginning to come in. we do have comments posted on our facebook page. when has a social networking

down to the political process? one of your rights, absolutely for the better. it forces people to be diplomatic and empathetic. that is on our facebook page. another comment, i do not think social networking affect the citizenry. that allows citizens to express their opinions but all -- but only serves as proof of the high level of ignorance among the local majority. it is scary, really. i think the new political adage can be added to this. you might think talk radio for setting the tone. george on the republican line. it talk to us about social networking and political media. do you take part? california, george, you are on the republican line. -- is from ocala, florida.

caller: i think the left has now made a larger chasm between the two because they seem not to be objective. they are more subjective when it comes to the obama administration. at one thing i would like to say is that the activists in this country who receive grants has become so large that people forget when they come down on corporations they have to come down also on those corporations, even though they are nonprofit. the last thing i would like to say is that when we try these muslims of the new york, are they going to have the venue change? host: here is a comment on social networking and political media. cambridge, ill., eric, you're on the line cambridge, ill., eric, you're on

i have gotten addicted to sodahead. it leans toward the right. iskander leans toward the right. -- it is called soda head. it kind of lean toward the right. i've heard lots of opinions from the aside. some are respectful, some kind of digging in and do not give an inch -- dig in and do not give an inch. but it is just another facet. since i have been on the other side, i think i have put an inordinate amount of time in it and i have not spent as muchvuñt more enlightened perspectivesm[ and for the moore's -- for the most part, it has been pretty combative. host: what are you there in the

first place? caller: how was just randomly going there on the internet and i answered a poll on obama. through the poll they invited me to engage in this forum. host: has anything you have read, either at that site or elsewhere, and the other venues that have changed your mind on anything? caller: it has gotten me to be a little sharper, a bit more precise with the things that i have come to support my opinions with. the different sites on the internet that i can use to support and validate my points and the different books that i have gotten. quite often i have been a little sloppy and i have made some errors and they have used them against me, but it is a sort of

combative form and it keeps you on your game. host: thanks for sharing your thoughts with us. a message on our facebook page, debating and discussing politics on social networking sites inspires me to further educate myself and be informed and involved. and another tweak this morning, social networking keeps you up to date on breaking news, much better than mainstream media. it all depends on where you go and what you read. back to politico and its top-10 tweets of 2009. terry moran is one of them.

quincy, mass., dan, independent caller. -- social networking and political participation, what is the effect? caller: i think is great. i have washed -- watched "washington journal" for a number of years and it is what everyone needs. it brings the country closer together and everybody realizes they're getting the old shafter here. i think this is working fine. you know, we have got broadband. we are all there. host: do you post on facebook, twitter? do you read? do you take part and how much?

caller: yeah, i have been unemployed and it is a new toy for me. i can use this computer and make statements about how i feel about my country. it is great. host: what is the future of all of this? what is the effect on the political and maybe even legislative process? caller: i think is going to be taken away from us because there is too much freedom over the network. we are we little mouse's, -- we are wee little mice, but we have got to stay together. everybody keeps driving everybody apart. host: another message through facebook, for every positive, negative.

again, that is on our facebook page, facebook.com/c-span. heritage, pa. now, cindy, republican caller. what about social networking, social media? how much do you take part of it all? caller: i used to take more of a part of it, but technically, my opinion is that it is senseless chatter, just like what you are doing now. you are showing twitter, but you are picking and choosing what you are showing.

there really is no say. what you are doing is putting your viewpoints out there. you are venting, but just like you can pick and choose what you want to show on your program, everywhere else, your opinions have been the a -- have been pigeonholed and your venting and your political involvement and getting out there and speaking to the people that need to be spoken to, these people are not hearing what you have to say. you are actually venting and people are picking and choosing as to whether or not to share them. i think it is senseless chatter. and i think this makes people less active. and the citizenry is suffering because of this because we are only getting bits and pieces from people. like 140 characters, come on, that is the 10 pieces. -- bits and pieces. nobody is getting the passion. nobody is getting what is really going on out there. the professor you just had on,

there is no hidden agenda. technically, i think there is. he talked about being political and foreign diplomacy because he is a foreign professor -- or a foreign service professor. but our country better work on diplomacy here with the american people. this administration is not even favorable in the democrat eyes, let alone the republicans who were not pleased with it for the beat -- from the beginning. host: cindy, thank you for calling. we're going to move on to robert in tuscaloosa, democratic line. caller: happy new year. a reminder that this is not a happy new year for the world. i've been listening to c-span sits at this time -- since its inception. i have been in this country --

are was born and raised you're almost 74 years ago and i know that we talk about the evil in this country or the people in the world, we mentioned religion only as muslim or islam. some of the people who have perpetrated some of the most heinous crimes on earth that by being an african-american and being brought here some 300 or 400 years ago, all of those crimes perpetrated on my african-american brothers and sisters were white people with christianity. i am anti religious because that pigeonholes you into a righteous [unintelligible] host: bring this back to our topic, social media and its effect.

anything to say? caller: it is only my opinion and your the only one of people i know that allow people to speak their opinion. you have a great day. host: you, too. we will do this for about 25 more minutes, asking people whether they believe social media and networking have affected the legislative process. regarding facebook, we found a story in the style section of the "washington post" a couple of days ago. they write that inside the headquarters of the nrcc --

some of the advice they're, they're right that conner is facebook's evangelist in washington, and social networking perot. -- social networking professional. interesting piece there in the style section of the post yesterday. yesterday. minneapolis, linda, on

the media has done one thing for the american people. that is to let the american people see for themselves the racism that has been going out towards the president. the signs that have been put up, the things that have been said about barack obama just because he is an african-american. the media has given this racism the platform to furled their hate against president barack obama. the media should do more than they are doing to do a good job instead of giving the white racism -- white racists a platform to spurn their hate like the tea parties. these are white americans that he african-americans. they are only doing this for one reason.

they are trying to bring down the president of the united states of america because there for if barack obama should fail they would not get another african american opera -- an opportunity to ever be the president of the united states of america. host: as we look at social networking, there is this view. this was a message posted on our facebook page. . . also from facebook --

>> and staked their reputation among peers they personally know and respect. >> and look at the rise of al qaeda in yemen. also, the president and ceo of mental health america on a new law that takes effect today. the state of education in the united states with a fellow at the center for education reform. "washington journal" begins at 7:00 a.m. here on c-span.

>> coming up next, a hearing on the real id act with homeland security secretary to janet napolitano, followed by washington these the schools chancellor michelle rhee. >> my possessions are not in a storage bay. what i was able to get out before the house was locked up. >> this week on "q&a", american casino, the award winning documentary on the impact of subprime minorities -- subprime mortgages on minorities.

>> now available, c-span's book, but great -- abraham lincoln, a great read for any history buff. it is a unique, contemporary perspective on lincoln from $56, journalists, and writers, from his early years and is impact today. not in digital audio, to listen to any time, available or digital audio downloads are so. >> earlier this year, the federal government canceled the deadline for imposing stricter security requirements for state issued id's. the rules were first proposed in a 2005 pact passed in part because of the use of fake i.d.'s by the 9/11 hijackers. it includes testimony, lynn security secretary gen

napolitano. >> good morning. welcome to this hearing where we will review the steps that the u.s. government has taken and that state governments have responded to and that we may ultimately take to achieve the aim toward a national goal of keeping fraudulent state identification cards and driver's licenses out of hands of terrorists and criminals. i want to welcome secretary napolitano, governor douglas of vermont, and our other witnesses on the second panel, and thank you for all the work you have done on this very

>> without hearings are any public vetting, we replaced the process that senator collins and i had made part of the intelligence reform and terrorism prevention act of 2004, the so-called 9/11 commission legislation. in our work, we took very seriously the finding of the 9/11 commission that all but one of the 9/11 hijackers acquired some form of u.s. identification documents, some byproduct. acquisition of these forms of identification, where it assisted them with boarding flights, reading cars and other necessary activities. the commission went on to appeal

to the federal government to set standards for the issuance of birth certificates and sources of identification such as driver's licenses. with that in mind, we therefore included in it than 9/11 legislation of 2004 and requiring that the federal government establish a and negotiated rulemaking committee composed of subject matter experts and stakeholders including representatives of the state governments to propose workable identification security standards.

i thought parts of the act were good, but i oppose the idea because ultimately it laid out in prescriptive, unworkable and expensive process. unfortunately, history has borne this out, and that is why we are here today. i really believe that if our original commission legislation had been left intact and are rulemaking process had begun, negotiations with the states and the federal government, and had not been repealed by real id, we would have millions more security id's today instead of being involved in a continuing debate between the states and the federal government. some states including connecticut are working to implement real id. the fact is that the legislatures of 13 states have passed laws prohibiting their

state from complying with reality as it presently stands. several other states are considering similar legislation. at the risk that their state identification documents will not be expected by the federal government, for instance, for boarding a plane. that is the dilemma and the crisis that brings us here today as we try to answer the question of what kinds of changes are necessary to achieve a workable solution here. as always in the congress, we cannot let the perfect be the enemy of the good. we want to insure the work we consider to be good is not diluted so that we compromise our homeland security. i personally think we could achieve both goals. today we will discuss bipartisan legislation sponsored by a number of members of this committee.

it is called the pass id act as the reforms real id and an attempt to make it work as intended what trying to ease the strain on our overburdened an underfunded state governments. the plan retains parts such as the requirement of a digital photograph and signature and machine readable coating on state issued id cards. states will still need to verify a social security number and legal status by checking federal immigration and social security databases. the states would be given more flexibility in issuing the new identification cards of staying within the timetable. if it becomes law this year, states must be fully compliant with it before the current relied the deadline of 2017. that is important to all of us,

it is in the acceptable solution must really work within existing timetables and not to lay increase personal identification security. it eliminates a requirement that motor vehicle departments electronically checked the validity of our certificates with the originating agency. this change has been a major source of concern and i want to discuss it with our witnesses and see if those concerns are justified. pass i.d. strengthens privacy protections to report a public notice in a process for individuals to correct their records. let me thank the senators as well as secretary napolitano for the effort you have made to come up with a plan that can work,

while not losing sight of the very direct statement of the 9/11 commission warning us that for terrorists, travel documents are as important as weapons. i still have some concerns about pass id that i want to explore with our witnesses today. bottom-line, in an age of terrorism, reliable personal identification is an important and urgent matter, critical to our homeland security. i hope that this hearing will enable us to move forward and mark up legislation in this committee on this matter in the very near future. senator collins. >> thank you, mr. chairman. one week from today, we mark the fifth anniversary of the release of the bipartisan 9/11 commission report. in examining how terrorists were

able to attack her country, the commission found that all but one of the 19 terrorists used driver's licenses to board the planes that were then used as weapons in the attacks that killed nearly 3000 people. the commissioners recognize that easily obtained a driver's licenses were security vulnerability. as the chairman said the words that i remember, that for terrorist, travel documents are as important as weapons. to address this vulnerability, the commission recommended that the federal government set standards for the issuance of birth certificates and other sources of identification, particularly driver's licenses, which had proven to be so vital to the hijackers' ability to

carry out their deadly plot. to call the effort to implement this recommendation difficult would be an understatement. as senator lieberman has recounted, he and i offered a very well thought out provision in the intelligence reform act of 2004 that established a collaborative committee comprised of federal and state officials, technology experts, and privacy advocates to develop these secure identification standards. the work of this committee was well under way in 2005 when regrettably, the house of representatives repealed our provisions by slipping the real id act into an urgent were funding bill. i use the word slipping it into

the urgent bill advisedly, because in the senate, there were no hearings, there was no debate, no vote. this was a take-it-or-leave-it vote on the entire supplemental. then, for more than two years, states were left to contemplate the enormity of the task of reassuring new licenses to all drivers by may 2008 while they waited for the department of homeland security to issue the regulations that would tell them how to achieve that requirement. and the states waited. they waited until january 29, 2008, when a final rule was issued, leaving the states just 103 days until the may 11, 2008

compliance deadline,, locating -- complicating the problem. they had little room for the hundreds of millions of dollars that it would cost to implement the new regulation. of course, the faltering economy only worsened the financial strain. another problem was that the key information technology systems necessary to implement the law efficiently were not readily available. although identity theft costs the economy billions of dollars and cost as much distressed to its victims, the department's regulations fail to address critical privacy issues created by the interconnected systems of databases mandated by the law. with these problems unresolved

and numerous states protesting real id or even outright refusing to implement the law, i worked to persuade the department to provide states with an additional 18 months to meet the real id deadline, giving us all time to revisit the issues. the pass id act we are discussing today is one attempt to resolve these problems. it refunds rather than repealed the law and target areas where the law imposed unreasonable and costly burdens, pails to -- fails to protect -- fails to protect citizens and mandate solutions that may not be practical. one example is in the bill's approach to ensuring that each person possesses only one valid license from one state at any one time. to meet this goal, real id would

have mandated an information sharing system that may not be technically feasible or governed >kpinstead of scrapping them altogether, pass id would preserve and find a pilot program to test the necessary technology and to permit a careful examination of privacy concerns. this makes a great deal of sense. nonetheless, i recognize the concerns of those who fear that this bill, in addressing the problems of real id, may have unintended consequences. driver's licenses can be the keys to the kingdom for terrorists bent on death and destruction. states have a responsibility to ensure that licenses are tamperproof and issued only to people whose identity and legal

status can be verified. certain language in the past id act may undermine that goal because it would not allow tsa to prevent a passenger from boarding a plane based solely on the fact that he or she did not have a compliant license. this provision would eliminate an important incentive for states to adopt federal standards and could impose worrisome restrictions on the discretion of security officials who believe a passenger without a compliant license should not be permitted to board a plane. as we examine this legislation today, my primary concerns are whether these provisions are moving us toward the security goals set by the 911 commission

five years ago while accommodating legitimate concerns of states and privacy experts. >> to move up slightly away from normal procedures and by the senators to make an opening statement if they would like. >> i want to thank you for holding these hearings to explore the ramifications of real id on state, on security, and on privacy, as well as the proposal that we have put forward to fix real id. at this point, may add -- may i

add, happy birthday to our friend here, center born a bitch. -- senator voynivich. >> i have been concerned about protecting individuals privacy. relied the calls on the state's to collectively electronically store individual's personal records while issuing licenses and to share that information with the department of motor vehicles nationwide. this effectively would create a national database containing massive amounts of personal information. i chaired to hearings on real id, where it became clear it was simply not workable. some of the data systems do not yet exist because so many

states have balked at the high cost and privacy implications of creating such assessments. if real id is implemented, these databases could provide one-stop shopping for identity thieves and become the backbone for a national identification card. we must act to fix real id. states simply cannot afford the $4 billion it would take to implement real id. over a dozen states have already refused to comply, and several more, like hawaii, have expressed serious concerns with the program. without the participation of all states, there will be only a patchwork system for identification security, which means no real security at all. the bill i am proposing,

providing for additional security and state the dedication act of 2009 represents a pragmatic approach to resolving many of the most troubling aspects of the real id act. i work closely with the stakeholders, many of whom are here today, representing a broad range of views. it sets a strong security stance for the issuance of a delegation cars and drivers licenses. what it does not do is go far beyond that recommendation by requiring the collection of americans' personal information and storing it in a centralized repository, accessible by any state's dmv.

perhaps the most important is the removal of the mandate that states share all of their driver's license data with each of the other states. this provision created a clear threat to the privacy of all americans' personal information, post a great risk for identity theft and fraud, and raised the specter of a national database of all americans' personal information. the bill required states to protect electronic animation, and for the first time, any machine readable data stored on identification cards and driver's licenses, ensuring it is only used for its intended purpose is. another change is the clarification of americans' right to travel on commercial

aircraft and to enter federal buildings. the current law restricts these rights by requiring a real aideed compliant id to aboard commercial aircraft and to enter federal buildings. in this country we cherish the right to travel and to petition the government. americans do not -- should not be denied boarding an aircraft or entry to most federal buildings solely because they have lost or do not have their identification. until the situation should be resolved through additional security screening or other screening is needed. as is current policy and the case with every other type of security risk. what would change with pass id -- what is as important is what

would not change. individuals would still have to prove they are lawfully present in the united states. individuals would only be allowed one compliant identification to be used for official purposes and individuals would need to present the same sources of identifying documents to obtain a compliant license. this is not address all of my concerns with real id. others are disappointed it does not address all of their concerns. the reality we face right now is that in less than a year, states will be required to comply with the law that is overly burdensome and unworkable. we cannot let the perfect the enemy of the good, especially when we are working to address a seriously flawed law already on the books. to date, the homeland security

department, national conference of state legislation, the center for democracy and at several other organizations have endorsed pass id. i hope we will move swiftly to ensure its enactment and provide some clarity to states facing relied the implementation deadline. as always, i will continue to work closely with the department, and security to ensure that individual rights and liberties are fully protected during the implementation of pass id. i thank you again, mr. chairman and ranking member collins for agreeing to hold a hearing. i ask that my full statement from the introduction of pass id be included in this record. >> objection so ordered.

at the birthday, senator. i am prepared to say that you look younger than you are. you do not have to disclose anything here. >> i will make it brief. center akaka, thank you for all the work you have put in. what everyone ought to understand is that real id five years later did not get implemented. why did not get implemented? it is because congress did not sit down with the people that were impacted by the legislation and get their thoughts on how you could go about making this possible. i will never forget when we had the hearings, we decided we

would do it right, and that is exactly what we have done. we have come together to figure out how we can get this done. we are working together in a symbiotic relationship. we want a secure america. the way we do that is by working together. that is exactly what this legislation accomplishes. there may be some things that need to be added to it, but is a good lesson. when you go out and do not spend time with the people that are really involved with it, what happens is, it does not work. then what happens? you have to start all over again. so why not do it right the first time? so we are going to do it right the second time. >> thank you for being here and for your patience while we did the opening statements. i am happy to call on our secretary of, and security,

janet napolitano. >> thank you for the opportunity to testify on pass id. i have a longer statement that i asked be included in the record. pass id is a bill that i support. the department of homeland security worked with governors and other stakeholders to provide technical assistance in its drafting. the approach pass id takes to fix real ideas one that i support. i think it makes sense. this is an important piece of national security legislation that is designed to help fill the 9/11 commission's recommendation that the federal government said security standards for drivers licenses. as has already been commented on, the first attempt to do this, the real id act, was a start that badly needs to be fixed. pass id is a fix for real id.

the states agree that real id is too rigid and needlessly expensive in mandating how states meet their security goals. 13 states, missouri being the most recent last night, have actually enacted legislation barring themselves from implementing real id, and 13 other states have passed resolutions opposing real id. we cannot have national standards for drivers licenses with the states themselves refuse to participate. the practical problem with real id is one of timeliness. that sets the urgency for pass id, because under real id, as of december 31 of this year, states are required to attest that they are implementing relied the for their drivers licenses, so that they can be expected for things

like boarding a plane. by december 31 of this year, no state will have issued a real id compliant identification document. no state will have a real id compliant document. >> if i may interrupt you, that means that assuming nothing else happens in between, that under the law, the driver's licenses issued by the states would not be expected by tsa to gain passage? >> that is correct, not without additional screening by tsa. one can only contemplate the inconvenience in airline travel that could occur if everyone has to undergo additional screening because they do not have a real id compliant driver's license. >> in other words, the secondary screening that goes on now, if for some reason you forget your license, that would have to

happen to everybody. >> that is right, senator. that sets the urgency or real id and why i am so appreciative that the committee scheduled this hearing today and is moving forward. i am pleased to be sitting next to jim douglas, my good friend, the republican governor of vermont. later you will hear from sure of lee baca of los angeles of why law enforcement supports pass id. we get to the fundamental reason for why we have these laws in the first place. we go back to the 9/11 commission report. we need secure identification to thwart potential terrorists. law enforcement needs to have confidence that an idea older is who he or she claims to be -- and id holder is who he or she claims to be.

states vary widely in the standards they employ. national standards are necessary, but national standards -- secure identification will not thwart every plant terrorist attack, but it can present an obstacle and give another tool to law enforcement that we need. as we mentioned, there are lots of similarities between real idea and pass id. the main similarities between the two are the requirements for physical security and driver's license production. a back down check -- background check on employees must be conducted. training must be given to all employees involved in the process. requirement to show pass ids at

the end of p the enderiod, noncompliance identification's would not be automatically accepted to board planes. document validation, both laws would require states to validate the legitimacy of the underlying source documents, such as birth certificates or licenses from other states. further, underpass id, the requirement for electronic verification of social security number it unlawful status remains -- social security number and lawful status remains. pass id eliminates the blanket requirement to use untested technologies for electronic verification of any and all sorts documents. states still have to validate documents, but they can pursue

different ways to reach that standard. second, they are required to electronically verify social security and law will present through the databases come but unlike real id, underpass id, they are exempted from paying the fee for doing those checks. third, there is greater flexibility underpass id in terms of how you read enroll existing driver's license holders. under real id, you have to be enrolled everybody under the age of 50 three years earlier than everybody else. underpass id, we give states flexibility on how to do the real enrollment so long as everything is complete by 2016, which is one year earlier than the final completion date for real id.

lastly, in terms of differences, as has been noted by senator akaka, it contains specific assurances that states and privacy advocates have sought for the protection of the information that is garnered in the process. these differences, which are designed to make the goal of real idea reachable goal and designed to move us toward reaching the goal of the 9/11 commission report, these differences make it a bill that if passed and implemented this year will fix a bill that was flawed from the of that. thank you, mr. chairman.

[no audio] >> that is certainly what we need to do. we need to reevaluate it because it is not working. we have to come up with some solutions that will help us accomplish its goals. the past several years, we have been talking about this, and all the conversation seemed to end the same way, with a great deal of frustration. every governor is a security governor and wants his or her state to issue licenses that are accurate and secure. every governor wants government to worked and is vividly aware of what happened on 9/11 and

wants to do what he or she can to make sure it does not happen again. as you noted in your opening comments, you crafted rules to design -- to bring a altogether -- they renegotiated rulemaking was replaced by real id. as of yesterday, 13 states have enacted laws permitting its implementation and others have adopted joint resolutions opposing the law. real id does not work because a lot of states have just said nope. i am committed to providing secure an actor drivers licenses. while the objections of real id are laudable, the law represents

an unworkable an unfunded mandate that spells to make this more secure. i really believe we need a better mousetrap. i want to thank the senators for introducing asci deep. it solves the weaknesses and delivers more cost-effective solutions that can enhance the security and integrity of all licenses and state identification cards. the sib is consistent with the recommendations that have been cited. -- pass id is consistent. it addresses one of the largest concerns with real id, how to allow states to come into compliance with a workable national standard. the act was written as the original act should have been. that is why nga supports this proposal and i am happy to join

set to predict secretary napolitano and offer my endorsement of the bill. we are working toward compliance with the law. i want to assure the committee that we are one of the states that is not in the system. as enacted, real id poses significant challenges for implementation. pass id would also present some challenges, some changes in the way we issue licenses, but its elimination of unnecessary requirements and cost effectiveness make it a much better alternative. there are significant challenges in developing the electronic systems that rely the requires, as some of you have noted. there is a great deal of doubt about whether they will be ready on time and nationally deployed so we can issue comply licenses by the deadline. in contrast, corestates processes for validating our

certificates ensuring only one license for driver are rigorous and reliable. in vermont, we feel we can achieve the same level of security and do it sooner underpass id. it is more cost-effective, a key consideration in these difficult fiscal times. the cost is $3.9 billion. in vermont, we estimate it will cost at least $20 million, which is a lot for a state our size. vermont has not completed a detailed cost analysis of pass id, but it is clear that it eliminate unnecessary costs. pass id eliminate unnecessary costs like transaction costs for linking to federal systems. authorizes some of the funding necessary to implement the program.

with the assistance of stakeholders, sga estimates it would call states about $2 billion, about half of will id. pass id strengthens privacy protections and requires privacy and security protections for the personal identification that is collected and stored in databases for the program. it creates a process for card holders to access and correct their own information if they find an error. it has explicit recognition of the enhanced drivers licenses. since we are so close to quebec, we value the importance of having an open and secure borders. i have my enhanced drivers license and i have already used it in returning to vermont from across the canadian border. it is convenient and faster, and i appreciate the work of the

homeland security department in facilitating our approval of this document. our businesses retain jobs and grow because of opportunities to sell products and services to our neighbors to the north. the u.s. and canada enjoy the largest bilateral trade relationship in the world. thousands of people in vermont crossed the border with quebec every day. our border station is one of the busiest on the border for commercial truck traffic. in today's climate, a free and open border it is more crucial than ever. the importance of our edl being compliant cannot be understated. our relationship with quebec is of paramount importance.

the ease of border travel the edl allows is critical. since the passage of real id, governors have offer constructive suggestions for implementing it. we have encouraged congress to fix the act by implementing regulatory changes to make it feasible and cost-effective. we have called on the government to fund it. i believe that pass id represents a kind of common sense solution that governors have long sought. pass id represents a workable, cost-effective solution that can increase the security and integrity of all licensed and identification systems. i want to highlight the critical deadline facing us at the end of the year. by december 31, all states must meet requirements to be deemed complaint with real id. with a quarter of states legally

prohibited from meeting these requirements and almost every state unlikely to achieve compliance by year end, we really need to address these challenges if we are going to continue to have the kind of access to our borders and transportation infrastructure that we all seek. i urge your support for passage of this legislation, and i want to thank you for the opportunity to appear on behalf of the nation's governors. i look forward to continuing to work with the committee to address any issues that may remain. >> we will star with a seven- minute round of questions for the senators. for those who do not live in states to have them, how you use them? give us a quick report on how you get across the border and back. >> as you pull up to the border and rolled down the window,

there is a screen that is very close to the driver's side of the vehicle, similar to ordering something at a fast-food restaurant. you hold the card right up to the screen and the information goes to the border agents in the border station so that he or she has that readily available without having to take it off the document manually, which is what happens now. there have been concerns about the security of these documents, and we provide security envelopes that make sure they cannot be read. is that easy and quick. >> i mentioned that i was grateful for the work that has been done by the two of you and a lot of others. but i had some continuing concerns.

i worry that the identity verification procedures may have been weakened. i have heard that from some critics overpass id -- over pass id. none of us want to be back for rework before 9/11, when state authorities could accept an identity document without checking the validity. in other words, the license itself would be valid, but the documents on which it was based were not. a number of the 9/11 terrorist use falsified source documents to get valid state id's that allow them to travel in and out of the u.s.. the the question is, if passed id becomes law, will the next group of terrorists planning an attack on the u.s. be able to evade our laws in that same way?

>> mr. chairman, let me respond at several levels. because the states by and large are not implementing real id, you cannot assume that sets a higher security standard for documents than pass id, because real id is doa. it is not being done by so many states. i want to clarify a statement i made earlier. it is absolutely true that no state by december 31 will have a real id compliant document. the only exception will be if they stay comes to me and certifies that they are willing to comply with real id and are making material progress to comply. >> such as vermont? >> perhaps. but they still would not have a compliant document, they would

just be able to get an extension. you have 12 states, plus missouri, that are actually barred from seeking such an extension. it gives you a sense of the problem. there are a variety of ways that states can do that. we can give you greater detail, but they still must validate the underlying documents under pass id. secondly, they are required to electronically verify the so security and lawful status with the federal databases we have for those. >> that would be with the social security administration and with immigration. >> correct. the difference is that we do not charge the states of feet for requiring that they do that

verification. the third thing is, and this is a difference from the pre-9/11 world. your driver's license can only be issued for a time period that is consistent with your immigration status. in other words, if you have a visa that will permit you to be in the u.s. for four years, a normal driver's license is seven years. your license would only be issued for the time your lawful status is established. that difference would have picked up some of the 9/11 hijackers. >> that is helpful. there is also concerned about eliminating the provision that mandates information sharing among states.

the 9/11 hijackers held multiple drivers licenses and id's from multiple states. it is not just terrorists, but drug runners, counterfeiters, and even bad drivers with multiple offenses can exploit this lack of a information sharing between states. they can have a license in one or more states that may be a problem, and they exploit the failure to share information between the states to help them live from law enforcement. tell us about why this change was made. why not compel information sharing among the states, just to avoid this loophole? >> as some of you said in your opening statement, there is a great deal of concern about protection of personal privacy as we consider these issues.

a lot of concern about this national sharing database among all of the states. with so many states declining and concern about the flow of information from the country, the proposal to have a pilot program makes sense. >> is the privacy concern that the more people who have access to more data, the more possibility there is a violation of privacy rights? >> i think that is exactly right. there are a lot of concerns that come up in various contexts with respect to privacy. i did not believe there was a need for a privacy sleep on our enhanced drivers license, but to satisfy the concerns of those who wonder if information could

be electronically capture, we make them available. there are concerns that may not be well founded, but they are there. we are trying to find the right middle ground between access to information that is necessary and respecting the right of privacy of the american people. >> the concern about having a license in another state -- i assume there is a cause concern here, or is there not? >> there is a significant cost concern. this is where the concept that there would be some big centralized hub that would have to be created, that somehow the states would have to pay for

arose, and the ease of infiltration of a hub if there is one place all the information is gathered. the technical feasibility of some of these things also needs to be explored. from what you watch on tv, you would assume that all these things could happen with the snap of a finger. in fact, technically, some of these things are very difficult. that is why underpass id we continue with what i call the mississippi pilot project, which has several states participating. as we move forward, there may be cost-effective solutions to some of those issues that have been raised by the states. as we stand right now, we really do not have the capacity to say that we are going to have in one place easy electronic verification of every type of

license and document. >> i would like to work with you and my colleagues on the committee to see if there is some way to strengthen this section of pass id without going over the tipping point where we continue to encourage the states not to comply, because we obviously need them to comply. >> thank you, mr. chairman. all of us are concerned about the looming deadline in the current law. and the ability of states to comply with the law. under the previous administration and in the current regulation, there is some material compliance standards that the department of homeland security used to assess whether or not a state is

complying with real id. i remember very distinctly secretary chertoff telling me that vermont was an example of a state that is immaterial compliance with real id. he pointed to your enhanced drivers license as an example of a compliance driver's license. he also cited washington state, new york, and michigan as having -- as being in material compliance. so therefore, i am surprised to see secretary napolitano assert this morning that no state is in compliance with real id. i first want to ask you, do you consider vermont to be in that material compliance with real id? >> i do, at this point. on december 31, there are 18

benchmarks that states have to meet, and even a state like mine that is doing its best to comply is not going to be able to meet all of these 18 benchmarks on that date, because of the requirements for the national data bases that are not yet up and running. we will find it virtually impossible to meet all of these 18 deadlines by the end of the year. that is why the urgency is critical. >> that is an excellent point, and the reason we have gathered here today. i don't want to leave the impression that there has been no progress in this area, that states are completely unable to make improvements in their security, when virtually every state has taken steps, including my state of maine, to make sure we are giving licenses only to people who are lawfully

in this country. my state is one that did not have that requirement. we have examples of people who are here illegally coming to maine, renting post office boxes and being able to get a licence. that obviously is fraught with problems. secretary napolitano, i want ask you about a provision in pass id that you and i have discussed that i find troubling. that is the provision that says that an individual cannot be prohibited from boarding an airplane solely because of the lack of a compliant driver's license. a strong incentive for states to comply with the law has been the fact that they want to avoid problems for their residents in boarding airplanes, yet this bill would appear to undermine that incentive by including

specific language that prohibits federal security officials at airports from denying a passenger access to a plane solely on that basis. i want to make clear that tsa has always had the discretion to exercise judgment if an individual shows up at the airport without sufficient identification. they do that every day now. but that is very different from putting specific language in all that tells states that they are not going to be inconveniencing their residents as much if they do not have a compliant id. i find that troubling. are you concerned that this

provision -- first let me ask you, do you support that provision? >> senator, i think that what would happen under that provision is basically the same as what would happen without that provision. in other words, tsa's operating procedure would be that if someone appeared without a real id compliant document, they would be subjected to additional screening. .

here is the issue. let's say do not have a compliant identification. there is a law that says there cannot be a basis for keeping them off the airplane. the secondary screening is done and they find nothing. the security officials still believes that individual should not board the plane. i think you are creating a situation where that security official is going to feel he or she has no choice but to let the individual board the plane. you have now put that specific language in the bill. >> senator, i think there may be a point that we can explore with

you between now and the mark above the bill. -- the marck up of the bill. with the without the language, the guidance is a few appear without a compliance document that some additional exploration is going to be needed before you are allowed to board a plane. >> mr. chairman, i hope this is an issue that we will look further at. i support many supervisions of the pass id and i commend those who have worked so hard to come up with a system that is less expensive, less burdensome, more protective of privacy concerns, but i do want to make sure that we are not creating unintended consequences that get us back to the terrible situation than we had prior to 9/11. thank you.

>> thank you senator collins. i share your concerns. >> thank you, mr. chairman. secretary of soliton now, as you well -- secretary nepal and china dhs issued an extension for compliance with the real id act. as you testified dhs announced they would grant states another extension but only if they proved the need 18 benchmark set by december 31st, 2009. this was raised by the governor. many state tom to million of people may not meet this deadline -- many states , to

millions of people. we do expect it to begin enforcing travel and facilities restrictions next year or do you issue another extension for compliance? >> you have just described the paradigmatic heart -- rock and a hard place. we are faced with either not enforcing a law that congress has passed so that millions of americans are not prevented from traveling, entering courthouses, and alike before they can do that verses' enforcing it and causing all of those effects. in my view, that is why we needed pass id. more than that, if all i do is an act another universal extension we are not getting to

where we need to be. the goal here is to begin reaching the goal of the 9/11 commission which is to have a secure form of identification. if the law on the books is one that for all the reasons described earlier has to be continually extended, we are not actually getting a system that reaches the security goal we are striving towards. with a better law, we will be better able to enforce and get to the standards we want to reach. >> thank you. i know it is difficult. thank you for your response. gov. douglas, as you know one of the biggest problems with states implementing the act has been inadequate funding.

states simply cannot afford to foot the bill for a $4 billion unfunded mandate in this economic climate. dhs has issued grants to states to offset some of the costs. it allows states to use part of their state homeland security funds which are required for other pressing security needs. mr. baker's written testimony for the next panel states that the federal government should insist that states give the the highest priority to driver's license security rather than state level homeland security priorities. my question to you is would you like to address from your experience as a governor the financial burden of a real idea

in its current form -- of real id in it's current form and whether states are properly and allocating their homeland security funds? >> i know about privatization and in vermont. it you may want to ask other states to respond to that. there is a great deal of accountability when we receive those resources. we believe we have deployed them responsibly. we are audited by the federal government, and i think we have done a good job. you have identified one of the key concerns, senator, that all states have especially in this challenging climate. we are facing tremendous pressure to balance the budgets to meet the needs of the people we serve. i am sure you have heard stories from all over the country about dramatic curtailment that states are facing because of the crisis.

to impose an additional responsibility through real id obviously means something has to get in terms of finances. for most of the last century, when drivers licenses were first issued it was exclusively a state responsibility, a state discretion. states have decided how to do it. now the federal government has imposed requirements. i do not object to them, but i think it is fair that it not be an undefended -- an unfunded mandate. i appreciate the resources that have been proposed. we believe about -- we believe it will be about 50% as costly. especially in this climate that is an important feature. >> thank you very much for your response. secretary napolitano, the act

requires a dhs issues implementation within nine months after the bill has been enacted. some have expressed concerns that dhs could not meet the deadline. since dierdre portions of the regulation could be used to craft pass id regulations. do you believe that dhs will be able to meet this deadline? >> senator, yes, it will be tight and it will be tough, but we believe that we can as it you yourself have noted. we are not starting from scratch. pass id is a real idfix. we have building blocks from which to operate. we believe nine months can be met. indeed, even if there were to be some slippage, we could get

these out prior to the effective date of what real id would have provided. the time line would end with full and plantation one year before real id would have. >> think you for your response. -- thank you. >> i apologize for these questions. it has been said that pass id allows states to rubberstamp source documents like birth certificates and social security cards. and when to point out that p -- pass id requires the online verification database for social security. can you speak to concerns you have such as the requirement that ever certificates be verified using the electronic verification events database?

>> as you noted, senator, some of the requirements of pass id are the same as real id in terms of a verification of a source documents. that should give all of us a sense of relief that was verifications' will be as strong as they were under the current law. the problem is that these national databases such as vital records or passport verification database where the driver's license and information sharing one reference area are not rigid or reference earlier are not up and running. it to have a requirement as we do and levy real id law that is not as there, it does not give anyone a sense of security. pass id is equally strong in these areas of documents verification. the pilot project that the

secretary mentioned in terms of driver's license verification will give us a sense of whether it can be done on a more universal basis. >> madam secretary, can you speak of the status of efforts to develop the databases that we need to verify passports and birth certificates? >> i can, although those questions are more appropriately asked with the department of state and hhs which has the birth certificate registry. it is known as "eve." something like 13 states are now participatory in eve which is the hhs birth certificate database and the remainder are not. i did not know the schedule for the availability of the full implementation of birth certificate validation at hhs beyond what eve provides.

>> i would hope someone in your shop would keep track of where they are in regards to that because it certainly helps to achieve the goal we have which is the best jurors license we can have a from a security point of view. governor, as these databases come on board, i am sure that you and other governors will take advantage of that. >> i am sure we will. i was talking to the people in our vital records office yesterday before coming here. it is quite a process to get all of the data entered in the form that can be accessed in a consistent way. as some of our vital records prior to 1950 are in a different media and those in the years between 1950-1980. we are working on this. we are doing everything we can to comply to real id.

it is so onerous, frankly, that we will not meet the benchmark that have been established. we will take advantage of what is available when it is. >> thank you. senator, welcome. >> i am trying to figure out where to start on this issue for our distinguished panel. i am holding up here in illinois driver's license and in illinois identification card. but they will issue an identification card in addition to your driver's license which i used to go through airport security. i am just wondering if a person does not drive what we did was issue this card for identification purposes. pass id and real id understand

that we are seeking to do this based on driver's licenses. is that correct? >> senator, under both bills when they use the word driver" licenses" the also include within that any identification issued by a department of motor vehicles in lieu of a driver's license. >> it a person does not drive or is 14-15 years old they should have some form of identification in order to board. pass id will also encompass some identification from the state. why then can we go to rather than a state i the -- a state id where the burden would not be on the states. they would not have the burden of processing the costs. have you ever been to o'hare

airport? if they do not have the real id after december, o'hare will shut down. if you do when you're talking about doing where there is extra screening, you'll have to be back at the airport three-four hours of early. i see the biggest mess coming. in a shady like chicago -- in a city like chicago, i am wondering if there is something where you are talking about where there could be a national identification versus a state i.d. card. >> i do not know about the possibility of a national identification card. there are pros and cons of that approach caribbean are not taking that kind of a bite nor are we seeking that right now. what we are seeking is a fix to real id ipsa that come december

31st i do not have to make a choice between enforcing the law that congress has passed and creating what could be, at the minimum, and a lot of confusion at our airports. >> we are hoping we could have this past. pass id is better than real id, but we white went to take this another step. i look at what the gsa is doing now. it to put that burden on a t.s. a worker, what they go through is just unconscionable. -- i do not want to put that burden on a tsa worker. i left town the other day and did not have my id. as a senator, the process i have to go to to get on an airplane and everyone knows me in chicago, i just wonder what would happen to john doe out

there who shows up at the airport, has to get to work, has to get to his meeting with no identification. i am sure there is a process. i had to verify everything in show two or three places where i live and they knew me. tsa staff is doing their job, madam secretary, and i want you to know there. they put me through the wringer. i did not complain. i did not let anyone else getting on that plane that did not get properly aideed -- i.d.'d. what version are we going to put on the screeners, that are looking for a raise by the way, and they have to make that judgment? are we taking those into consideration? >> i would say yes.

. p -- with pass id they would be able to seeing if a driver's license or identification card would be read. we're trying to make it easier while helping his meet our security goal. i recall -- i retreat to the 9/11 commission report. my job as the secretary of homeland security is to take those recommendations and implement them to move us towards implementation which will give us a greater safety and security in our country. as we move forward and reach some of these pragmatic, practical problems it is not a surprise that the first stab at identification like this, real id, it needs to be fixed. the pragmatic problems progress. for a worker at an airport, say a tsa worker, making more

straightforward what kind of id are acceptable should help us overall reached our 9/11 commission goals. >> my grandchildren that issued a social security number. they are in the government database somewhere. i am wondering how we looked at, and shouldn't we look at, a national database that would give the identification of americans and individuals in this country. has anyone done any studies in reference to that? i am sorry i was not here at the time and probably you were not here either. >> i was a governor. >> i think of was enjoying life.

[laughter] -- i think i was enjoying life. do you have any knowledge that looking at that at all in terms of past actions? >> we have not considered a national approach other than the approach we are discussing this morning which is pass id. i think the urgency of getting something done before the end of this calendar year is such that we ought to all work together and find a consensus as this process has done without getting into an area that might be more difficult. >> i am thinking about the long run. the documentation databases are the same database is used for real id. the question is, how secure will that be? i think we ought to look at

that. i hope and pray we will look at and take it to a higher level without the invasion of privacy. we still have a privacy issue here. i do not see how you're going to deal with illinois, ohio, michigan. it is a different issue than how the issue there's. is this what they are planning? would this be the new document pass id? >> that would identify it as compliant. it would be easy for someone to observe like a tsa were . >> so it seems that could be

counterfeited like any other document, so i do not know if that will really be the solution for a special identification. after you get the documentation, the peoples who can create false documents can still get that star on their cars license. >> i think we would be more than happy to brief you and your staff on other protections that are built into the document to inhibit forgery in the kinds of other things that are built now and the drivers' licenses that make them more difficult to manufacture in a fraudulent way. it is never 100%, but it is much more difficult than in years past. >> thank you. request thank you, center. we are glad you are not enjoying life as much as you used to.

it contributes to the work of our committee. i think we should move on to the second panel. i think you, madam secretary greeted this has been a helpful exchange. we understand the urgency of this matter. -- i think you, madam secretary. the next market is two weeks from today. i want to challenge each of us to work together urgently. i know the goal is to get this pass id before july 29th. thank you both very much. i will not call the second panel, stuart baker, -- >> thank you gentlemen for your patience. we appreciate very much that you are here.

we welcome you back and it is great to see you. we will begin with the former assistant secretary for policy at the department of homeland security. secretary baker occupied a role in a new department. in the armed services committee we are always hearing from executives who have the experience and continue the interest based on the experience and have a lot to offer. i think you are doing this as well or better than any of these first-generation of executives, now former executives, of the department of homeland security. i would wonder if these agree or disagree with you. i think you for your continuing interest -- i thank you. welcome your testimony. >> thank you, senator. i feel very strongly about making dhs a success.

anything i can do in my current capacity to contribute to that, i am delighted to do. mr. chairman, ranking member collins, members of the committee, it is a pleasure to be here. i have raised four concerns in my testimony and i will talk about one of them today and that is the source document problem. i think it is easiest to understand that if you have heard the story, as i have heard, from relatives of a carpenter with three kids who took a vacation in the virgin islands around 2002 or so. in the course of that his wallet was stolen. two years later he started hearing that he was wanted for speeding tickets and other abuses of a license in florida. as someone had walked into the

department of motor vehicles in florida, it presented his social security card and a birth certificate from the virgin islands in his name. on the strength of that, florida gave this impostor a driver's license in his man -- his name. he tried to cure the problem from new york. he was unable to do so. he moved to florida and in the course of moving in florida, asking for a driver's license, and the state said that he could not have to get one because he had already had one. he provided more paper. one year later, kevin was wanted by the police and had committed and numerous speeding tickets, unregistered vehicle violations. he was at risk every time he drove his car of being called over and getting sent to jail because of a bad birds to give get that had been accepted by

the florida dmv. that is quite aggravating and dangerous but it was only the beginning of the nightmare for him. on september 13th, 2007, the guy the police in new as sam was stopped, pulled over, got out, and pulled out a semi-automatic weapon he bought in kevin's name and shot down four police officers killing one and fled. the police immediately put an adb out for him. -- an apb. they asked for a photograph. he took the real kevin's photo and spread it over the city. now he does not risk just going to jail. you can imagine what the

reaction of the a police force of jacksonville would be if they called over someone they believe was a one-third -- it wanted police killer. the askin thethey ask him if that's him i don't think his chance of surviving is quite high. they finally found the man they were looking for. the risk to him from that that birth certificate was astonishing. what is difficult to credit is that florida is still accepting birth certificates without doing anything to check the validity of those certificates. that is something that real id would have it fixed and is something that pass i a