-- it violates the constitution for a former vice president to say things about a sitting president that gives fodder to our enemies. host: you have been invited to give political comment. guest: i am not a politician by turning, but i will take a crack at this. when we were in the bush administration, there was plenty of debate, and there should have been. an important element of public debate and scrutiny over what we are doing. i don't think all the criticism is a problem. it should be part of our national culture. that said, i agree with the caller that we should remember who the enemy is. we have a transnational movement that is trying to motivate people around the world, including american citizens, and they continue to attack us, in big ways and small ways.

we have to keep our eye on the ball, and that is something that president obama reasserted yesterday. we have to work together to figure out what that means in terms of the long-term interests and how we deal with problems like yemen not just because of al qaeda, but because of potential instability there. host: how did you get interested in this work? guest: i have been very fortunate and blessed over my career. i was a lawyer by training got into harvard law work for the clintons administration for janet reno, i was in the terrorism and violent crime section. i was given an opportunity to work with some degree prosecutors of our time, pat fitzgerald folks in new york working on the embassy bombings case. i was put on the uss cole case, working with great prosecutors here. i was a young prosecutor learning at the feet of some

great prosecutors who were looking at the problem of al qaeda before 9/11 and trying to address it. the frustration, by the way, in that period -- i was a junior guy, but i was witnessing this firsthand -- was that we knew that al qaeda was at war. they not only declared this and in 1996, but they were taking a progressively greater and greater steps to attack us. the bush administration came in power and i was asked to move over to the treasury department three weeks before 9/1131 9/11 happened, i was part of a leadership team that was going after a terrorist financing. i did that for four years, and then was asked to go to the national security council. host: juan zarate former deputy national security adviser for the bush administration, thank you for being our guest on "washington journal." the whole weekend of activities

going on on c-span and on c- span2. book tv on the weekends. if you want to find out what is on a 48 hours of nonfiction books, go to booktv.org. i will point out that david wessel will be interviewed by alice rivlin talking about the fed. that will be on book tv this week and did you can watch it all live online at a booktv.org. enjoy your weekend. thanks for being with us. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] .

>> just after 10:00 a.m. we plan to bring you a discussion on afghanistan's election. we will record that program at the u.s. institute of peace and show it to you later. negotiations are underway on a health-care bill on capitol hill. if the house and senate proposed a different ways to increase access to health insurance. the alliance for health reform will hold a discussion of the insurance exchanges. we will have live coverage on c- span. hillary clinton will be commemorating the 50th anniversary of the un agreement on global reproductive health policy. 180 nations agreed to reduce infant mortality. see her comments today on c- span2.

>> [unintelligible] it offered an explanation for something that had been baffling westerners in particular for many years. that was stalin's show trials and the success he seemed to have. >> the biography is titled "he literary and political odyssey of a 20th-century skeptic." >> the new c-span video library is a digital archive of c-span is programming. over 157,000 hours of c-span video now available to you. it is fast and free. try it out at c-spanvideo.org. >> secretary state clinton and the jordanian minister will

speak with reporters at 10:50 a.m. eastern. and news on the unemployment rate unchanged in december at 10% even though employers shed 85,000 jobs. the report said that is due to the way the jobless rate is counted. this afternoon president obama will make a statement to the news media about unemployment in america. we will have live coverage scheduled for 2:40 p.m. eastern. reaction to those jobless numbers from npr's business reporter. host: 5000 jobs lost in december. -- 85,000 jobs lost in december. guest: that is a terrible number. i think that takes everybody by surprise. that is a lousy number because we had a 11,000 lost in november. there was real hope that the economy was gaining momentum, and in recent days there has

been a changing in attitude -- a few days ago people would say it may be lost 30,000 jobs in december. in recent days optimism has risen so much people thought it was up to zero or a gain. if we lost 85,000 jobs that is not encouraging at all. host: what affect will that have? what will we see happen today because of that? guest: it is important to remember these things bounce around a little bit. maybe you just had a little bit -- we got ahead of ourselves in november. maybe there was too much hiring done in november and people decided to wait and see how the economy was shaping up. maybe the trend is good but this is a one-month blip, but i am sure if we went to the capital and some democrats office, i am

sure there is hair being yanked from heads because this is not a number you want to come into the state of the union address with. i think it would -- it will be seen politically as a setback and people's lives. host: in december isn't hiring up because of the christmas holidays? guest: you get things a little bit skewed because you get a holiday hiring but it is temporary. the labor department tries to take that noise into account but what you were hoping for there is that we would get some momentum into the new year where if you had said we picked up 10,000 jobs, that would have cost a little bit of euphoria on wall street. -- that would have caused euphoria on wall street. host: as the report comes back from the labor department we were getting the press reports in real time.

a sharp joppa -- a sharp drop it kept the jobless rate at 10%. analyze that for us. guest: when people start coming -- when people start feeling more optimistic they are not coming into the labour market. even though we lost 85,000 jobs we did not get a higher unemployment rate because the job pool did not grow because people are still discouraged. sometimes people just think i will just shovel driveways for the winter. i don't feel like leaving the house. gasoline is so expensive, i don't want to go driving around looking for work. host: those factors actually affect the national economy? guest: it helps hold down the

unemployment rate so we have a better looking number, but when you talk about how many millions of people are unemployed working short hours not getting bonuses, but it all together and it is a grim picture. it is an ongoing problem the administration has to address. nearly two years while it lost 16,000 more than the previously estimated in october. guest: in is back to what i said. these things can bounce around. so we thought that in november, if i'm hearing you right we thought in november we were still losing jobs and in fact we had perked up a little bit in november but see that could contribute why december was not a good month for job creation because to the degree that anybody was going to do any hiring maybe they did it in november and now they're just taking a wait and see attitude so they're not really adding jobs. and then you get to the end of the year and maybe some businesses just decided small

retailers might think, this turned out to be a not great christmas season and we will give it up. people may start close down some businesses and that's why you're seeing some job losses. host: bob independent line, franklin indiana. you are on with marilyn geewax of n.p.r. caller: thank you for c-span. this is a government of the corporate, by the corporate and for the corporate. and also our national news media is owned by corporate. and that's why -- the real problem is nafta unfair trade practices. we shipped out all our manufacturing jobs and government jobs create debt, manufacturing jobs create wealth. guest: you know what, one of the things about nafta though, is that initially a lot of manufacturing did go to mexico. that's the north american free trade agreement that joined together canada, the united states and mexico into a trade zone. initially it did seem that some

manufacturing was going to mexico, but a lot of those jobs in mexico actually ended up going to china and other parts of asia. i don't know. i guess it's argue ble -- argue -- arguable, those would have an impact on manufacturing in any case. and certainly technological change as factories become more automated they just use less workers. there are all sorts of arguments in that. host: minnesota, lynne democrat. caller: my name is duane. host: are you from minnesota? caller: yes. how comes the government don't want people in poverty to get out of poverty? host: what does that mean, dwayne? caller: i'm a disabled veteran

and live with my mother or my mother lives with me. if i make any money over -- basically if i make any money they're going to cut my veteran pension completely. ok. i'm also on social security. ok. if i make over $800 a month they're going to cut my social security. so you can't make any money at all if you're sitting in a place like i am and me and my mother can't make it right now the way it is. guest: well, first of all, i want to thank you for your service if you're a vish. we appreciate what you did for the country. on the issue of government benefits i think that's what needs to play out this year. there are big decisions to be made on deficit spending. on the one hand government doesn't want to spend too much because they have we have this

deficit problem. on the other hand we are frying to take care of vicious take care of people who are disabled. so congress has some tough decisions to make about how much government funding we can afford for social causes like that. and when do we just focus on debt reduction? i think that's going to be a tough issue in the coming main. host: maine joe independent line. we are talking about the economy with marilyn geewax. caller: yes hi. do you hear me all right? caller: hi, can you hear me? host: go ahead. caller: no one seems to bring up the fact that 50 million jobs have been lost to communist countries. they are basically doing all the work that we did here. secondly, all of the jobs we had in green they will be made in china. there are no jobs coming back to

this country. i have been watching them go since 1977, it even earlier than that. the point is our country is being taken over by the stock market. they waved their hands and it is an economic devastation. cities, everything is being wiped out. we have watched it being ripped apart just so that the more they devastate, the bigger beamer they drive. guest: that is another issue congress and the white house will be dealing with, and you're about bonuses we are starting to see for bankers coming back, wall street has been making money but we see these dismal jobs numbers. so there is the argument that if wall street makes money and companies are expanding then there is more money for companies to expand plans -- expand plants, so a good stock

market is good for the country. there is a gap between employment and profits on wall street so jobs are always a lagging indicator. i went back and looked at what happened in the early 1980's when we lost so many jobs in manufacturing. it really took something like four years to get back to a decent labour market. once the stock market started perking up by late 1982, but it was not the job market until 1986. so you always have this lag between good times on wall street and the hard times for workers until the job market catches up. again, that is another political problem. do you pass legislation that cracks down on bonuses on wall street or for bankers, or do you get out of the way and hope the market works quickly to let these successes on wall street

translate into jobs for average people? on job creation? what else can congress do to further job creation? can they do anything? guest: there are political arguments that are sort of -- you can make complick arguments in different direction -- economic arguments in different directions. if you say to bank of america you need to stop these bonuses. i met a lot of americans working in shanghai who were basically investment bankers, venture capitalists. they feel mobile. they can pick up and leave new york and move to shanghai and have a very good life and maybe they do their work over there. there's some fear if you crack too much down on bonuses and wall street that people will pick up and move to elsewhere and we will lose even that. so that's one argument. but other people are making a strong argument that really the problem in this country is the

unfair distribution of wealth. that there's so much wealth concentrated in the stock market, in these bonuses and the highest paid executives have done quite well and you look at the average wage and it's weak. the average person has not gained a whole lot in the last decade or so. what we're seeing on n.p.r. and our facebook page, people are writing in, there's a sense of -- we've had more than 3500 people gone to the facebook page talk about their experiences. as i've read through these things i see people saying, we just downscaled. we just adjusted. we're living in a smaller house. we have less stuff. we have one car now. whatever. they are just adjusting their expectations to lower. and meanwhile on wall street they're not particularly adjusting their expectations. they want those big bonuses. so i don't know. you are at an interesting point in the economy where there's

this big gap in the for funs where a lot of people on -- fortunes where a lot of people on wall street are making money. politically how do you respond to that, hew will people feel about it? these are tough questions coming up in the 2010 elections. host: where there surprises on where the new jobs are? fwoip i think if there's -- guest: i think if there's a surprise in there it's maybe -- i guess -- how can i put this? one of the things we're concerned about is the jobs are growing in places that you would think. health care, education. you know, a lot of those sort of service sector jobs that will start to come back. i guess the thing -- i looked at it, hmm i hope there's stiffle a lot of innovation out -- still a lot of innovation out there because we can't all be nurses and teachers and go for the safe jobs.

we really need people to be the next microsoft. we need somebody to creates a new google that ends up hiring 10's of thousands of people. we need more innovation. one of the sections was the tech sector. will we have new ideas coming out of that sector? i think the thing to worry about is are we going to -- so many people have been so harmed in this recession in terms of their jobs that we hunker down and say go for the safe jobs, i will do what i know will lead to a job. instead of saying i want to be an entrepreneur to go out and start a new business that someday will hire fens or hundreds of people. -- tens or hundreds of people. when we keep going hunker down and take the safe jobs, and i certainly understand that, but we need to spur that entrepreneurial spirit to create the microsofts of the future that will hire tens of thousands of people.

host: do you foresee given that the report, the labor department's reported 80,000 jobs lost in the month of december 2009, do you foresee federal reserve doing anything? do you foresee a statement by the president? do you foresee the stock market dropping today? guest: likely things to happen. maybe if you were someone who was wanting to get a loan it's hard on the people that aren't getting jobs. for you maybe this is good news because it probably makes it less likely that the federal reserve will raise interest rates. the fed has been sort of hanging back, keeping interest rates very, very low. and waiting to see what happens with the economy. if we had had say 85,000 jobs added, the fed might say time to start to inch up interest rates a little bit. so this news tamps down the desire to raise interest rates. and so if you are somebody, a small business someone who wants to, you know, borrow money for whatever reason,

lower interest rates are in your best interest. so that's good. i think probably plit -- politically, yes, the white house will respond to this news. and for the stock market, you know they're crazy. who knows. the likely thing is they anticipate so much. it's always hard to make predictions before the markets open. the futures was waiting. everybody was waiting to see what this report would say. and my sense is i think this is going to be disappointing and that it could harm the stock market. however, having said that, if you talk to economists long enough you know there are two hands. on the other hand, some people might interpret this as good news because there is a little bit of a growing fear about inflation coming back. as i was talking about gasoline prices. if the jobs market takes off too quickly then maybe we drive up inflation. the demand for energy

increases. the demand for you know, gasoline to drive to work starts to increase. so some people who are worried about flaring up inflation and rising interest rates, we had already seen some interest rate hikes in china maybe the market will interpret this as good. we can have lower interest rates and less inflation for a longer time while the economy more slowly builds towards a turning point. host: portland, oregon, gene, republican. you've been very patient. you are on with marilyn geewax of n.p.r. caller: yeah. i just feel like the media there's such a divide in the way that people believe now. you have the democratic belief system, you know, as i can see it is that government is the answer. and then you have the republican belief system that the private sector is the answer. or the entrepreneur spirit is the answer. what i -- i've been in business

for 30 years. and what i see happening now -- i have friends across the u.s. there are so many businesses that are on the verge of closing even just from the fear of new taxes like here in oregon we are going to have a new tax that's going to be what they call like a gross income tax or something that because all the corporations aren't paying. and so the thing is when you have that kind of media that's promoting a certain belief system on most of the networks and then you have the other side which maybe is the glenn beck side which is giving numbers that are saying these things and then these people are saying these things, isn't there a fact that in the government today that there's a socialistic view which means the government is better to run things and there's a capitalistic view -- guest: on this controversial about taxes -- on this

controversy about taxes i hear from both sides there are some people that are very concerned about rising taxes and that could discourage business. that could prevent people from wanting to earn more because they don't want to hire marginal -- higher marginal fax rate or higher property taxes. taxes are obviously a burden on individuals and businesses. but i also hear from businesses who are worried about things like infrastructure. they also want government to keep spending because the roads are too crowded and the bridges are falling down. so some businesses and some people say no, we really do need to keep up those -- increase our tax revenues because otherwise we have this terrible crumbling infrastructure problem. and ultimately a failed transportation infrastructure system is going to hurt the economy more than higher taxes right now. so again that's something that politically people have to work out. right now what do we need more? spending for infrastructure, to improve our roads and to create

jobs or do we need lower taxes? key debate. host: associated press story stock index futures tumbling after the government reported they cut more jobs than expected. the labor department said the unemployment rate stayed at 10%. 85,000 jobs lost last month. more than the 8,000 expected that you talked about. the report signals that many jobless people are giving up on their search for work. dow futures are down 34 or .3% at 10,511. what does that mean? guest: well, the psychology matters. back to what i was saying. even though this number is -- when you look at a job market of 131 million jobs, 85,000, you know, sometimes they revise these numbers they're not -- host: as we saw earlier. guest: statistically if you're one of the sfistics, if you are one of the people that lost your job, it feels pretty painful.

if you stand back and look at the big picture the economy maybe they'll revise it next month and it wonet quite as bad as we thought or whatever, but psychology -- won't be quite as bad as we thought or whatever. do they want to buy appliances this year? time to buy a new washer or drier. people are so discouraged they are not looking for work, if employers are still laying off people that's bad psychology to start the year off with. so i think that's what the stock market is going to respond to, is that there's this real concern that, oh, man, we are not out of this yet psychology and that's not good for investors. host: what other numbers besides the jobs lost or gain, what figures do investors and economists look at? guest: now the big attention will turn to the corporate

earnings season. the year ended december 31 for most companies. not everybody is on that fiscal year. but most corporations will start reporting what happened in the fourth quarter. and again this is that kind of complicated scenario where it may be that all those job layoffs will boost profits. maybe companies made money in the fourth quarter because they're squeezing so hard. we've seen tremendous increases in productivity. corporations are just literally telling people, work harder, work faster. and because of the fear of losing your job people do work harder and work faster. also there's new technologies to help you become more productive. so we may be seeing that even though they're laying off employees they aren't necessarily having less output. so if we continue to have these productivity gains where we're -- we have a lot of output, that may lead to profits for corporations. and that would spur wall street

and they'd be happy and then maybe that would eventually trickle down and all that. it sets up a cycle. you need to look at when the corporate earnings start to come out in coming weeks we'll have a better sense of the overall direction of the economy. host: just a few more minutes left with our guest marilyn geewax, who grew up in youngstown ohio, close to cleveland, ohio, where loretta is on the line. please go ahead, loretta. caller: oh good morning. host: hi. caller: good morning. it seems as if the republicans that are calling in, they want to blame obama and the administration for the problems that we are currently going through, but the problems were based on the eight years of fiscal non-oversight of the wall

street: parachute -- wall street golden parachutes were executive screwed up [unintelligible] we gave away all this tarp money that was supposed to save the little people. guest: again, these are political arguments as to what started this, but certainly in the midwest the trouble began a long time ago. i grew up not far from clear land -- not far from cleveland and steel mills started closing in 1977. that area took huge hits in the early 1980's with that recession. things got a little bit better for the region in the 1990's, but in the recent years there are political arguments as to who is at fault, but the area around cleveland detroit, those areas have taken a lot of manufacturing hits with the job

losses and probably still more to come. so there is a lot of good reason for people to be angry in those areas, whoever you want to blame that is a political argument, but it is true that there are real problems with employment in the industrial midwest. host: car on the independent line, you are last. caller: i am last. host: we are listening. caller: let me say this, i am 75-years old. i have a master's in three business disciplines my i.q. is a genius level. i built businesses and sold businesses and work for multinational corporations so i have a vast amount of experience relative to your comments. host: what is your question? caller: my question is, it is

more a comment. the caller from minnesota stated it was a demand problem which was causing the economy. that is 100% right. all they needed to do was look at mexico. the united states became the number 1 country in the world and income inequality. when that happens the masses of people do not have enough money to buy the products that they make or the services. guest: this inability to purchase things and lack of demand we are talking about it

is one of the key factors to watch, the gasoline prices. everytime gasoline goes up 10 cents they say $14 billion come out of consumers' pockets. that is money you could have spent at a restaurant and instead you are putting it into your gas tank. if we want to boost consumer demand the worst thing we could have is rising fuel prices, and yet that is what we are seeing. i think there will be a lot of worry that maybe there has been this scenario that the economy took a fall and now it will bounce up and go back down. if we had a lousy job market and rising fuel prices, that could increase the likelihood of a double-dip recession. going into the new year estimates word maybe there was a 10 percent chance of that double debt. with this new report may be the

chances have just risen. host: if people want to see your work on mine? guest: we love to have people go to npr.org and have people leave their comments. it is new jobs for a new decade. i would love to keep hearing from folks. also at npr's facebook page you have an opportunity to tell us what happened. host: do you use those on the air? guest: sometimes we do follow up with people and try to follow their stories. i learn a great deal from hearing about people's lives. a gives you a great chance to hear into what is happening around the country. host: is your web site easy to navigate and can you find these sites easily? guest: go to npr.org and look at the jobs things on the front, i

hope. you should be able to -- if nothing else go to facebook and type in npr and click around to find us. host: bank here. >> this afternoon president obama will make a statement -- host: thank you. >> we will have live coverage at 2:40 p.m. eastern. public hearings start by the financial crisis inquiry commission to investigate the collapse of the system. the chairman compares the crisis to an earthquake or the oldest buildings to survive were at the epicenter. -- where the only buildings to survive for at the epicenter. secretary of state clinton has a couple of public events here. she is meeting with the foreign minister of jordan. following that, they will speak with reporters. live coverage starts at 10:50

a.m. eastern. this afternoon secretary clinton commemorates the 15th anniversary of the un agreement on global reproductive health policy. 180 nations agreed to reduce infant mortality rates and increase access to reproductive health care. you can see her, is live at 2:50 p.m. eastern. that will be on c-span2. negotiations are underway on a compromise health care bill on capitol hill. the house and senate proposed several ways to increase access to health insurance. in 15 minutes the alliance for health reform will host a discussion of the insurance exchanges. live coverage right here on c- span. >> president obama as ambassador at large for global women's issues talks about supreme court justice ruth bader ginsburg the changing roles of women in the law and rights of women around the world at 7:00 p.m. eastern.

>> there are two weeks left to enter the student cam contest. $50,000 in prizes for middle and high school students. just create a video on one of our country's greatest ranks or a challenge -- one of our country's greatest strengths. enter before january 20. winning entries will be shown on c-span. go to studentcam.org for infor. >> this is bested -- the suspected christmas day bomber will be arraigned on six charges related to that failed bombing of the point -- failed bombing of the detroit-bound airliner it. a reminder that we will leave this at 10:50 a.m. for live coverage of secretary of state clinton.

host: what is your opinion william on our republican line? caller: good morning, peter. it just does not seem to wash this whole story. for instance, where is the videotape of the nigerian when he was in amsterdam? how come that has not been made public? there are conflicting stories? host: what does that have to do with u.s. intelligence services locating him? caller: it does have a lot to do because we need -- we should be privy to this film and the american public should be able to make a judgment on this also. host: linda in columbus, ohio, what do you think? caller: i think it is of we are demanding that we see this film they are suggesting -- it is odd we are demanding this film. we did not need any thing with

president bush. president obama is not grandstanding. he is admitting to mistakes. it is so honest and refreshingly to see him admit to a mistake and go from there. he could have blamed bush for the way it has been implemented. republicans denied money in new york that they asked for additional money for security. you have to remember that in other countries they may not be checking as well as we are so i am very proud of president obama. i am so tired of listening to callers every day call in, i don't care, he is not saying the word terrorist enough. that is the most republicans can come up with? i am sick of the way they downtrodden this man. president obama was right to take response bfor it.

theb u president. it was clear to see him take responsibility and insist his administration do better. it must. of course we've heard about the problems before in the months and years after 9/11 and while mr. obama did not create the current system he's now gotten an iter lesson in it's weaknesses and it's stubborn resistance to change despite the me a cull pass reform. there were clues about a white house affiliate in yemen to attack the united states about uma farouk abdulmutallab accused of the trying blow a hole in the side of a detroit-bound northwest flight 253. the world is shocked. this is the lead editorial this

morning. the government's report clilingly reports that the united states still doesn't have a single data pace with all terrorism information. incredibly it suggests the intelligence community doesn't know the current visa status beginning the no fly list. president has ordered immediately handling in security. we would feel more secure if the steps were not so basic and evident. they clarify under up great computer technology. train and list and watch procedures and add more people and enhance airport screening. more than 8 years late are the u.s. has another chance to learn from mistakes and so does al qaida and president barack obama has his work cut out for him. west river, marry lynn.

republican. how are you? caller: good morning. i wanted to comment i do not feel safeer in this country at all because i don't feel i'm being protected from terrorist actions. it's refreshing the president said we're at war with terrorists. i may be incorrect but i think this is perhaps it is first time he's ever referred that fact we're at war with terrorists. the point lie i'd like to make how sever, the current administration is so unbelievably income tenth at handling this the newest reports are that the director of the national terrorism bureau was on vacation for 7 days after - host: two things joe. the system was set up after 9/11 during the push administration and michael lighter has been the

national counterterrorism chief for 10-years. he began in the bush administration. caller: so what? host: did you feel safer a year ago? caller: i don't safer that this administration is charge. that makes no difference to me. he should have his head roll if he was visiting his son sky skiing that's fantastic but it's his job to protect the american people. host: steve independent go ahead. caller: good morning. i'm quite angry about the whole scenario and i think all-americans need to voice some anger too. it seems to me that a very fundamental check could have been made by the individual who reviewed and granted the visa. why could they have not made a simple check to the no fly list.

that was the critical failure point and it seems to me that we have a bunch of bureaucrats more concerned where they're going for lunch, than doing their jobs. >> connecting dots on terrorism is what we're asking this first half hour. (202) 737-0002 if you want to comment. (202) 737-0001 for republicans and all others. (202) 628-0205. twitter address c listed if you want to send us an a tweet or e-mail us at - what is that? journalist c-span.org and at c-span.o if you would like to read the and classified report issued yesterday, you can find it right there on our website. here is "usa today" editorial,

review of christmas attack shows complacency. complacency is natural with the passage of time. it is evident in the public as it is in the government. travelers complain about the cumbersome measures put in place to protect them, but it cannot be allowed in defending the nation. these leaders failed to keep their team on their toes. obama seems slow to grasp the importance of the attempted attack. it took him three days to make his first public statement and by then his homeland security secretary went on television to declare absurdly that the system worked. even now some of his fixes sound like only things a bureaucrat could love. it describes a lot of clarifying issuing and clarifying. the system needs more of a jolt. bill a democrat, you are on the

air. what do you think? caller: it seems like nobody connected the dots on 9/11 either and everyone was promoted after that. do you recall that? everybody was promoted after the failure on 9/11. i don't feel safe in this country at all. there was a report out yesterday for every predator droned strike in afghanistan and pakistan, for every al qaeda we kill, we kill 140 civilians. we have murdered 100 million iraq keys and nobody is going to jail. it is a joke. -- we murder 100 million iraq ies. host: charlie on the republican line. caller: could morning. if an elderly woman is boarding a plane and she has needles in her carry-on bag, it is probably

not her intention to hijack the plane. airline security american-style is taking needing needles away from 80-year-old women and ignoring the young muslim males who buy a one-way ticket and boarding the plane with no luggage. no one whose iq is above that of a wall that has any confidence in janet napolitano note to keep this country safe. host: viktor on our independent line. what are your thoughts? caller: my thoughts are i have been listening to everybody is more marks -- everybody's remarks. [unintelligible] i am part of the government. i will not let that happen to all of the people. trust me.

terrorists is just a big joke, and when i say that i mean by saying everyone thinks that somebody out there will protect us. the only people that will be protected is us, the american people. host: that larouche, diana. caller: good morning. -- baton rouge. caller: i knew immediately when this started can yesterday -- when this started yesterday -- i watch c-span all the time. i was trying to think of all the ways the republicans would decide to -- it would not have been right no matter what he said. it felt so good to see my government working again. everybody seems to forget that

they've boarded -- he boarded the plane in another country. we can only have so much control over every country but i think he is doing a great job, i really do. i am sorry so many people get these tidbits of information and for some winners in -- and for some reason [inaudible] have a good day. host: here is a front page from the "wall street journal" as we take this next call. caller: item calling in regard to -- -- i am calling in regard to -- [unintelligible] [unintelligible] what they are doing -- they will

have a whole bunch of people [unintelligible] there is something wrong with [unintelligible] host: are the detroit news channels covering this pretty much nonstop? caller: [unintelligible] host: they you for calling in this morning. we appreciate you watching the "washington journal." "the new york times" is the only paper that did not feature this as the lead. they have a picture of janet napolitano at the white house. under that is where they headlined a story "obama order steps to streamline his the terrorist threat." caller: good morning.

the dots i am connecting is now mr. chertoff the former head of the homeland security is now selling 600 new machines to x- ray everybody and get us more secure. that is a nice connection. i wonder if you have heard about the ehud olmert e-mails -- heard about the e-mails of the conspiracy of wandering all the money that they stole on the mortgages -- conspiracy of laundering the money? check into it, america. caller: the u.s. to push for full body scanners at foreign airports. the u.s. will urge governments to deploy a controversial whole body imaging scanners to detect explosives hidden beneath people's clothing. president obama said the announcement came as top

security aides detailed intelligence failures and responses to aviation security gaps uncovered in the december 25 incident. below this i want to show this full-page. "the washington post" put together a graphic detailing how intelligence is supposed to work where the device region where the dots are supposed to be connected. -- where the dots are supposed to be connected. over here they talk about how the list works. the list is called the terrorist identities datamart environment list. there are 550,000 names on that. from there it goes to the terrorism watch list where there are 400,000 names. every evening terrorist identities environment becomes what it deems the most important into a separate database at the fbi-run

terrorist screening center. this master watch list is used to determine who is not allowed to obtain a u.s. visa or board an airline destined for the u.s. then a goes to the air travel twist. people -- then it goes to the air travel twist. people are supposed to be subjected to more intense scrutiny. then there is the no-fly list. individuals on this are prohibited from entering an aircraft bound for the u.s. the national counter-terrorism center did not fort -- did not forward his name to the list which made it impossible for him to be placed on the no-fly list. texas, phyllis you are on the air. what do you think? caller: i was listening to your

former collar and i hope you give me the same time you gave them. -- listening to your former caller. this one guy slipped through the cracks. every day is getting bigger and bigger. when richard reid got on the plane bush did not come in for six days. i don't remember the democrats getting on bush for allowing that. i don't remember that. this former mayor got on cnn and nobody lied -- and he lied. that was when richard read the hsu bomber, that was pre-9/11. -- that was richard reid the shoe bomber. that was the former mayor of new york. host: thank you for calling in

and connecting the dots. from twitter here is a twitter from somebody. u.s. supports dictatorship and egypt with weapons. egypt arrests and tortures zoellick here -- torturous zawahiri. yemen provided the most comprehensive account on thursday of contacts between al qaeda and the nigerian accused of trying to blow up the u.s. airliner, saying he may have met with a radical cleric who previously had contact with the elected shooter at fort hood. in the weeks before he -- had contact with the shooter at fort hood. yemen's deputy prime minister said the account who oversees

security issues filled in some of the planks of his movements -- fill in some of the blanks. sam, republican connecting the dots on terrorism. caller: i am disappointed in the whole system. the problem is -- less than 50% of them x-rays and inspected, and they all end up on the same airplane. whether you check the people or not better than 50% of your cargo will not get inspected. [unintelligible] host: chicago on our independent line. please go ahead with your comment. caller: good morning. my first time on, i have listened to it often, but i

wanted to speak to the war on terror only because if there is a phrase that can divide a country -- in one phrase that can circumvent a hundred years of law to justify horrific and illegal things done this phrase can do it. how you have a war on a tactic? this is a tactic, it is a police action. it is investigative stuff not this constant keeping everybody on edge. i just think it is very phnoy. sure we have people that don't like us sometimes. they don't like us or some of our tactics but just to perpetuate -- there is no end to this. it will -- there will never be an end to this. the only way there will be an

end is to do the proper police work. it is a police thing, not an army war thing. host: what do you do in chicago? caller: i host web sites, i run servers. caller: democrat from maryland. good morning. caller: there are a lot of companies that benefit from the so-called war on terrorism. one company is the oil companies. they seem to benefit greatly from this war on terrorism, so that the military industrial complex. when this war on terrorism started there were a lot of oil men in the white house bush dick cheney. there were a lot of people that benefit from this so they don't want this to stop. it is the distraction for the health-care issue we have. i want to piggyback on one of

the callers talking about 9/11. if you think president obama did a bad job -- caller: hello? -- host: hello? he is now listing himself on tv. because president bush did not respond appropriately does not justify obama's slow response. we need to stop with these kids games. a terrorism expert at the heritage institute this morning has a long piece about the department of homeland security and its role and responsibility in counter-terrorism and protecting the borders. he says lee of homeland security department. i want to briefly -- he says lay off homeland security department. he says janet napolitano l.

walked into harm's way when she -- her statement that the system worked proved to be the a equivalent of having " a kick me" sign taped to unfortunately, she was referring to the security system designed to keep would-be bombers off of planes to begin with. it was pretty clear that abdulmutallab should have been stopped before it bought his ticket. none of the playerlayers of security or stop by the department of homeland security. this comes from the terrorist watch and no-fly list. these lists are managed and by law, congress insisted the

airlines do the screening. they are managed by the terrorist screening center. congress directed the be run by the national directorate and the fbi, respectively. homeland security is just another customer. the department of homeland security is supposed to set security policies for the affairs office that issued visas. that has never happened because of squabbling. it might make sense if the latest attempt the attack was the department's fall. but it was not. it might make sense if we could guarantee this will not happen again. the best way to stop terrorist attacks is to block them before they can start. that is a better answer. they try to childproof america.

this is from "the washington times" this morning. we will talk more about procedures and how the system works with juan zarate later on in the program. massachusetts. guest: i would like to comment on the september 10 typo mentality. a belief the current -- i believe the current administration lacks the current process so that people in forcing how the rules are supposed to be done are taking a more lax approach. i think it is symptomatic of the process. i do not know what to suggest to make it better. i think that something has to be done before more lives are lost. host: tallahassee, florida.

caller: good morning. i have a couple of questions. the commission set up and took care of the business and made all these appointments. there is a fellow and i forget his name. he is working and is an islamic muslim and he is working with the administration. he was appointed to a vice -- he was appointed to advise about terrorism and he has been connected with this fellow that was on the plant as well as the guy from fort hood. -- that was on the plane. i wonder why nobody questions that. my other question is, why in the world with a point, why did

obama a. the pulte tunnel when she was the worst governor -- why did obama. a. janet napolitano? caller: i think this whole terror think is a scam. every time somebody walks around with a bomb in his underwear, we are supposed to walk on liberties every day. it is just a big joke. thank you for taking my call. host: congress shares blame for the intelligence failures. pour congressional oversight contributed -- for congressional oversight -- poor congressional oversight contributed to this.

hamilton noted congress refused to file a recommendation issued by the commission in 2004 to restructure the oversight of intelligence community. we said our recommendations were the most important we've made. hamilton told reporters at a breakfast. congress did not quite agree with that. hamilton said the problem was the intelligence community screws up now and then. this is from "the help" newspaper -- this is from "the hill" newspapers. caller: one of the eyewitnesses is an attorney from michigan. he has his own law firm. he was within earshot. there was another man with the underwear bomber.

this other man did all the talking. he went up to the ticket agent and said this guy doesn't have a passport to get on the plan. -- on the plane. he is a sudanese refugee. he said, we do this all the time. i would like to talk to one of your superiors. he never saw him again until after this event happened. none of the media wants to cover this. if there is any dispute to have to get the surveillance video out. it should be easy to solve. it looks to me like it is another government operation to me. they are ready to sell all his body scanners. it smells to high heaven. >> we are live at the state department in washington. secretary hillary clinton has

been missing with nasser judeh. we're expecting them to make a statement about the status of the middle east peace process. we're expecting secretary clinton and the foreign minister of jordan shortly. we'll have their comments live when they do get under way. more comments now from a few words from -- from viewers from "washington journal." host: authorities claim he tried to kill his wife after connecticut home on wednesday night by beating her with a flashlight. he was arraigned on thursday in connecticut and held in lieu of a to million dollar bond.

time for a few of your phone calls. caller: good morning. i just wanted to comment. bush and cheney. they seem to be pushing as far as we go with loyal opposition. how far can the democrats allow mr. cheney to go with his comments before they actually speak up and challenge him? this loyal opposition to the government before he becomes -- before it becomes treason. host: indianapolis. good morning. caller: i have heard people talk about the health bill for months. not one time have heard anyone say how much money it is going to cost my wife and i vermont

per year. there has never been any money -- my wife and i per month per year. i am a home owner. these are bad times. i am worried they will do me like the irs, if you do not pay your irs bill. they will make you sell your home. it will be quicker than you can imagine. i had a problem several years ago with the irs. they said i had 15 days to come up with the money or they were going to make me sell my properties. host: taxes on the independent line. -- texas on the independent line. >> we take you live now to the

state department. >> a personal pleasure and an honor to welcome back the foreign minister to the state department. representing a country that is such a valued ally of the united states. over the past 10 years king of dellabdullah has carried on the provision of the jordanian people. jordan has continued to be a key partner in the pursuit of peace and progress in the region and around the world. so today the minister and i discussed a wide range of issues. i want to begin by stating publicly what i had told the minister. i expressed both our condolence for loss of life that's was unfortunately both american and jordanian, and i expressed

appreciation for jordan's combating violent extremism home and abroad. this is a struggle that unites people of faith, people of peace, everywhere. terrorists must be met with unwavering resolved. i remember visiting the hotels in iman that have been bombed in 2005, walking through the wreckage visiting the innocent children men, and women who had been targeted at weddings. i will never forget what i saw there. i will never forget what i've seen elsewhere. the united states jordan, and our partners stand shoulder to shoulder in this fight.

we also share a commitment to seeking a comprehensive peace in the united states. we are working with the israelis, the palestinian authority to take the steps needed to relaunch negotiations as soon as possible and without preconditions, which is in the interest of everybody. the united states policebelieve the parties cannot agree on an hour, that reconciles the goal of an independent state based on the 1967 line with agreed swaps and the israeli goal of a jewish state with secure and recognized borders that reflect subsequent development and meet israeli security requirements. the united states and jordan are concerned about recent activities in jerusalem.

the united states recognizes jerusalem is a deeply important issue. for muslims, for christians, and jews around the world. we believe it is possible for a jerusalem to safeguard its status as a symbol of the three great religions for all people. on this and other pressing challenges, the partnership between our countries provides a solid foundation for the pursuit of peace and progress. i look forward to continuing to work with the foreign minister and with his majesty. we broaden and deepen our partnership and friendship. " thank you very much, madame secretary. the pleasure is all mine. i am extremely happy to be here

again and to have this opportunity to have this overreaching six danishexchange of views. i said the relationship between jordan and the united states can best be described as say french ship. i think this relationship has withstood the test of time. -- can best be described as a friendship. i think the relationship gets stronger by the day. this last year, we celebrated the 60th year of the exchange of diplomatic relationships between jordan and the united states. again, this reflects the salt relationship that both countries enjoy. -- this reflects a very solid

relationship that both countries enjoy. our firm belief in combating the many challenges that we face around the world. i thank you. we saw a tragic loss of life in afghanistan and elsewhere as a result of our joint and collective war on terrorism. thank you for referring to the 2005 hotel bombing in jordan. we must not forget that we too, are still a target and that we will not waver or be deterred in our determination to combat terror, terrorism and terrorists wherever they are. we said very clearly we will not wait for the terrorists to peppertreeperpetrate these crimes.

our presence in afghanistan today is to fall. number one to combat terrorism and the root causes of terrorism and to help out in the humanitarian effort that is needed there. i would like to say that our presence in afghanistan will be increased in the coming days. this is something that is ongoing. jordan was one of the first countries that was there. we're part of a network of countries that will assist afghanistan and also trying to combat terrorism. we are also there to defend jordan's national interest and to defend jordanians and to safeguard them against this growing threat.

we continue to look forward to working with you and with other governments in combating terror and terrorism. i had good discussions with the secretary and this morning spoke with senator mitchell, as well, and their respective teams. we agreed to relaunch serious negotiations between palestinians and israelis. there is a clear plan to establish an independent palestinian state along the lines in the west bank including east jerusalem and gossip living side-by-side with a safe and secure israel. -- including easter islam and gaza. it will ensure a secure and

collaborative region and border. we are in agreement there are serious difficulties, but we hope that 2010 will see the continued and much-needed leadership growth the united states can play in this regard. once again i would like to remind the important issues that need to be tackled. they include refugees and jerusalem. everything should be subject to negotiations. jerusalem is potentially a flashpoint. it is so sensitive to all religions. actions on the ground in jerusalem can turn into provocative and antagonizing actions to the followers of the

three great religions. it is important to try and avoid unilateral action in jerusalem. everybody is in agreement that jerusalem is to be discussed in final stages negotiations as occupied arab territory. there is a sense of urgency to move forward and to achieve tangible progress that will allow us to address and more adequately other global challenges before us today. we will witness further result instability. i refer to what i said earlier about the global war on terror. as i said, jordan is fully committed to working hand in hand with our partners and ready to assist the united states to

achieve peace which is not only in the interest of the palestinians and the arabs, but also the united states of america. we will do all we can to ensure the success of this endeavor. thank you so much, madame secretary. i look forward to continuing our could work together. -- i look forward to continuing our good work together. >> a question of the terror report the president got yesterday. it singles out the piece that issue. the fact that the suspect did not have a visa -- it singles out the visa issue. then there was the issue of the misspelling of the name. how serious are these issues?

what do you plan to do about them? have you poor or are you willing to give guarantees to the arab countries and to the palestinians about the obama administration's views on negotiations? >> as to the reports the president made it very clear in his remarks both before and again yesterday that we all are looking hard at what did happen in order to improve our procedures to avoid human errors mistakes, oversights of any kind. we are in the state department fully committed to excepting our responsibility for the mistakes that were made and we are going to be working hard with the rest of the administration to

improve every aspect of our effort. i think it is very clear from the president's's stated resolve that this is the highest priority for him and for all of loss. the safety and security of the american people, of airline travel will remain at the top of our minds and our efforts. we will be working with all of our other apartment inside the government to do all that we humanly can to make sure that we prevent incidents like this and protect people. with respect to the middle east we're absolutely committed and have been from the very first day of the obama administration to working with all of our partners. this negotiation is clearly about issues that most directly affect the israelis and

palestinians. but it is of great matter not just to the people of the region, and just to the arab nations, but to the entire world. there is a hunger for a resolution of this matter, a two-state solution that would reducbuke the naysayers that would give them a legitimate state for their own -- it would give the israelis to the security they want. we will be consulting very broadly not only in the region but in europe and elsewhere. we are in constant close consultation with friends like our partners in jordan. but this is a year of renewed commitment and increased effort towards what we say as an

imperative bowl for the regent and the world. >> good morning. let me start with you. senator mitchell talked about a two-year time frame. we hear about the first nine months and focus on borders. is this the thinking of the administration? the palestinians are saying they're not going to come to the negotiation. the in a fairly -- the israeli ambassador does not believe in the timeframe. >> i think what senator mitchell release said is that he wants to move as quickly as possible, that there is an urgency that we certainly feel. perhaps to be a negotiation on all of the final status issues.

and as mr. judeh discussed earlier, resolvent borders results solomons. so i think -- result settlements. so i think we need to lift our sites. instead of looking down, we need to look at the forest. where are we headed together? we know what a final resolution will have to include -- borders security a jerusalem refugees, water. we know what the elements of the two-state solution must include. so i think senator mitchell was being prudent in saying these are hard issues. the require a lot of back and forth between the parties guarantees and assistance from the rest of us who are trying to move this forward. so it might take as much as the

time he mentioned. we hope to be moving much more expeditiously. but first we have to get negotiations relaunched. we can stand here and talk about what we would like to see happen. at the end of the day, the two parties that have to make it happen. >> you lost a member of the intelligence service. their controversial issues. can you shed some light on whether he was a double agent and will affect the intelligence? >> may as start by picking up on the positive statement that the secretary made on the pursuit of peace in the middle east and just say that in the final analysis time is of the

essence. the president of the united states and the secretary of state expressed a sense of urgency and said peace in the middle east is critical. you asked about time frames. i think the secretary of state has said it before. you cannot does have another open ended process. some deadlines have to be put on the process -- on the table. they can prevent obstacles. they help the parties put things in the right time frame and the right perspective. we have to much process and not enough peace. we do not need another open- ended process. it is important. final decisions are known to

everybody. if you saw our borders you automatically resolve settlement in jerusalem but you identify the nature on the ground of the two-state solution and what it looks like. then all other things fit. i hope that with the difficulties we saw in 2009, we will have difficulties and more difficulties that are resolved and be affected by this. we will have more difficulties. may 2010 be the year of negotiations that lead to security for israel. on afghanistan, neither the secretary nor i are intelligence officers. and i cannot presume to speak on behalf of the secretary.

i am not at liberty to discuss intelligence operations or ongoing shared intelligence between like-minded countries. i have said very clearly that in the global war on terror and terrorism, and jordan is at the forefront. we were there as part of the global network and we are also there to protect our national interests. we were a target of terror and terrorism many decades ago, not just recently. we have had to be creative and extremely effective in our pursuit of those who want to do harm to our country and our citizens. most recently, we have the hotel bombings. let me not count the attempts that were thwarted. we have a commitment whether it

is military personnel or whatever or humanitarian work. we're saving humanitariany. we're not just talking about counterterrorism. we're not waiting for terrorists to carry out their plan. we're talking about prevention and finding the root causes, finding the root of work terrorists plant and plot and trying to stop them before they attacked our citizens -- finding the root of where terrorists planned and plot. logistical presence and intelligence operations to protect our own citizens. and information is power. sharing information is also power. sharing information is just as

effective in combating terror. >> thank you very much. >> i hope that wasn't too long of an answer. >> and we will hear later from secretary clinton this afternoon. shall be commemorating the anniversary of the u.n. agreement on global reproductive health policy. infant child mortality was agreed to be reduced. secretary clinton's comments this afternoon at 2:40 this afternoon on c-span2. the unemployment rate was unchanged in december at 10% even though employers shed 10,000 jobs.

president obama will speak on the economy this afternoon. they plan to create tens of thousands of green jobs. the white house said he will announce projects. the funding is part of the economic stimulus package that congress approved early last year. 'president obamas comments -- president obama's comments will be at 2:40 live here on c-span. japanese prince hatoyama minister told reporters his top priorities for japan include preventing another recession and balancing the budget. it is about 25 minutes. >> the prime minister will begin with remarks. >> i would like to wish all the people of japan and happy new year and offer my heartfelt wishes that this will be a wonderful year for all of you.

thanks to you we were able to realize a once in a century change in the administration. but the reality is at this point, we're now just standing on the starting line. we saw to create a politics where the citizens played the leading role. with your support our new administration is ready to achieve reforms on a great scale. our efforts have just begun. it is now just been over 100 days the new administration started. in many ways, we're not come up your expectation. we are in a difficult process of trial and error. i believe the people now feel

the politics in japan have begun to change. i sincerely believe this. my determination is to maintain my original focus as prime minister and to work together with all of the citizens to create new kinds of politics, politics that will serve your needs. this year will be the crucial year in deciding the success of our efforts. on new year's day, i visited the temporary shelter that was set up at the olympic center in tokyo for part-time and unemployed people. there are many people there in difficult straits. everyone who lives in japan should be able to enjoy the minimum standard of living guaranteed by the constitution. the government should be supporting people who want to work but cannot find jobs.

during the course of the next year i hope to create the kind of politics that safeguard people's lives. many people are concerned about the economic -- about the economic and unemployment. i know many people feel these concerns. we cannot permit this to become a double dippi recession. we will not allow this to happen. we put together an emergency economic policy response that included 24 trillion yen to promote future security and growth. based on this, we developed a second supplementary budget for fiscal year 2009. we hope to pass this budget as quickly as possible so that the citizens of japan can regain

even to a small degree a sense of prosperity. we promised many things during the election campaign in our manifesto. these include a child desperate allowance, free public high school education, as well as individual household income support for commercial agriculture. we have created a budget proposal for fiscal 2010 to reflect a solid commitment to the kinds of paul those are your tech bytes. protect people in their lives whether this big employment including small businesses, child rearing or health care long-term care, education, and the environment. when this budget is passed, i am confident that people will appreciate how epic making it

truly is. we will make every effort to ensure the earliest possible passage of this budget. this is our determination. at the end of last year, deputy prime minister led efforts to develop a growth strategy purpose of which is also to empower people with hope and enthusiasm toward their work so that thicken manifest their full capabilities -- so that they can manifest their full capabilities. it is easy for issues such as the informant for the aging of society to be viewed in a negative light as a problem to be dealt with we have to see these challenges in a positive- looking white. there is a great opportunity for

japan to create world-class green industries. a chance to develop creative policies that help people maintain their health and to make japan the best place in the world for seniors to live. we believe our growth strategy reflects the kind of fork- looking kind of perspective. we to shift emphasis to the demand side of the economy. -- that reflects the kind of forward-looking kind of perspective. many people feel this is backwards. the economy should meet people's needs. this is the change of thinking we want to implement. this is what is crucial to empower local communities to meet your own needs and challenges. the idea the central government should do everything is out of date. whatever can be resolved should be.

the answers should come from within the community. this is how we hope to change japanese society. this a winning -- this is what we mean by taking the lead. one of the party objectives is to create regular venues for deliberations between the central and local governments. we also want to affect the change from conditional subsidies to lump sum grants given to local communities. we will budget funds specifically for use by localities. over the course of the next year we want to change the relationship between the central and local governments. we want people to be able to feel of this change. this has to be done under the

leadership of elected officials and it has to be done speedily. we are laying the groundwork so elected officials can work effectively. we feel that revamping the system is extremely important. this is what we have abolished the conference of vice ministers. people in the political posts ministers, parliamentary secretaries, have worked hard. we have been able to initiate politics driven by elected officials. we want to keep moving forward step by step. our efforts to review government programs has been very well received. what to include regulatory and systemic reform. -- we want to include regulatory and systemic reform. we want to include

organizations and public interest corporations in this process. we would like to hear people's ideas about independent administration organizations that are no longer necessary or that could be reformed. we want to be more strict in prohibiting the hiring of bureaucrats in the public sector. diplomacy and security are among the most important responsibilities of the central government. in my first 100 days, i traveled outside of japan on eight different occasions. it was important and met with several top leaders in asia. i was able to convince them that japan has started to change. i felt this very clearly from their reaction. whether the issue is climate change or nuclear disarmament

japan has something meaningful to offer. i think people have started to feel this. i would also like to make next year in the year in which while maintaining the strong foundation of the security alliance we emphasize the importance of asia and further develop the vision of a community. this is one of the reason it is important to resolve the issue of moving the airbase. we need to respect the feelings of the citizens of okinawa. there is an existing agreement between japan and the u.s. these are my honest feelings. i do not believe i have been delaying on this issue. we need to set a deadline and come up with a solution that will work for both the people of okinawa and the american people. we have created a city with

members of the three governing parties which will debate this issue and produce an outcome. this is critical to the very important u.s.-japan security relationship. i hope in the future people will look back and say, they might have taken some time, but it produced a good resolution of this problem. the coming year is not just a critical year for the democratic party of japan or the coalition government. it will be a crucial year in terms of whether politics is returned to the people, whether or not people can feel truly competent in that regard i want to make it a year in which our seniors can say the world has become a safer and more secure place to live, where young people who happened looking unsuccessfully for work and say i have found a job.

i want this to be a year in which young children can feel strongly that they're moving toward a hopeful future. over the course of the next year, the cabinet members will work to the up most of our ability. our cabinet exists for the sake of the people. we will continue to work and seeking your support and cooperation, i would like to close my new year's message. thank you very much. we will now have questions from the press. i will indicate the people who'll be asking questions. please state your name and affiliation. please raise your hand. >> i am from a newspaper.

please allow me to wish you a happy new year. it is clear the biggest political battle coming up in the new year will be the councilors election. i would like to ask what your stance in looking towards this election will be. you intend to keep the same cabinet membership or is there any possibility that you would reshuffle the cabinet in preparation for the election? and is there any possibility that there would be a simultaneous lower house election concurrent with the house of councilors election? and finally, i would like to ask how many seats you think you have to win in the house of councilors election in order to be able to declare that you have been victorious in that

election? >> as i mentioned earlier our first priority is to pass the budget and to safeguard the welfare of the people of japan. i want to acrylic exhort the efforts of our administration in this area -- i want to greatly accelerate the efforts of our administration. i am focused on getting the budget passed and creating the kind of politics that will safeguard the well-being of people. everything comes down to this. this is therefore not the time for me to be making statements about the coming election. in other words i'm not giving

any thought to the idea of reorganizing the cabinet ahead of the election, nor do i have any thought about calling it doubled election for both houses. i am not thinking about that sort of thing at all. our goal is to do our best to the people of japan right up to the time of the election. through such efforts, we will be able to say how best to compete in the house of councilors election. i am not in a position at the start of the year to tell you what number of seats would constitute a victory or defeat. next question, please. >> i am from television. the regular session will be convened this month. there are a number of bills being tabled. windy think this might pass? at the regular session your

political responsibility involves the falsification of records and it will become a focus of inquiry. the opposition parties will seek further explanations of how the money will be used. how did you intend to respond to their inquiries? >> first regarding the session, various legislation will of course require coordination within the democratic party of japan and the other governing parties. this is something that still needs to be worked out. in order to have -- to further promote that, and to revise the law governing the way they function, these are some of the things that we will be debating.

there will also be debate regarding whether foreigners will be granted the right to vote in local elections. but the first most important thing is to court made our views within the governing parties. once positions have been coordinated, we will put forward proposals for new legislation. the process of coordination is the most important things about weekend pass the budget that will safeguard people's livelihoods. this is the same as the case of the regular budget. it has to take priority. then we will start thinking about proposing and working to passed various laws. regarding the question of my political contribution that i have received, the situation surrounding this incident is just as i have informed you at

the end of last year when i held a press conference. i believe i have explained everything as well as i can within the extent of my knowledge of the event. things happened in the past that i did not understand. so i can appreciate why this might not be very convincing to the people of japan as a matter of accountability. i will continue to exert my best efforts to exploit blamed these matters. as for the prosecutors -- i will continue to assert my best efforts to explain these matters. i think the matter has been settled. if this comes up, i plan to respond as fully and carefully as possible. this is my intention. in terms of how the money is

used and how much of a grasp of the matter i have, and will do my best to explain the matter. next question. >> my name is fugita. you spoke a moment ago about the u.s.-japan relationship. this is the 50th anniversary of the u.s.-japan security treaty. could you share with us in some concrete the tilt your image of the ideal u.s.-japan relationship. >> i think that this year, marking the 50th anniversary of the revision of the u.s.-japan security treatment is a very important year. i hope that we can avail ourselves of the positive

opportunities it presents. in other words security matters are of course at the heart of the u.s.-japan alliance. but there are many other levels at which japan and the u.s. are indispensable to each other. i think it is important that we recognize these aspects of the relationship. there are a number of global issues. i hope we will have a relationship where we can assert their respective -- our respective positions where we consider what needs to be said even as we continue to enhance mutual trust. even if you have your own view. you can follow what the other party wants. this is not the ideal relationship. it should be a kind of relationship in which we -- in

which one can say what one wants to. clearly, this would improve trust within the relationship. this is the kind of u.s.-japan relationship i would like to build. this will play an important year on a number of different planes. >> my question is regarding the revision of the constitution. you have written a proposal for a new constitution and i would like to ask your thoughts on this. and watch way should this be pursued -- in which way should this be pursued? do you have any intention to invoke the constitutional review committee? >> as a politician and a member i have my views about the constitution. this is a debate that should be

held among the members so in this sense i like to offer my idea for what the constitution should be. but more than security issues, my ideas are focused on my concern for increasing regional sovereignty. it is based on fundamental change in the relationship between the central government localities. i am prime minister and am obliged to follow and uphold the constitution as it presently stands. this means by worked must be conducted from the position of upholding the constitution. we think along these lines, we need to bring together the views of the three coalition parties. we further will debate issues of the constitution.

this is critically important. i think that as a valiant members, we cannot avoid the debate on the constitution. but at the same time, there are commercial real-life issues such as the economy is used of pressing importance the need to be resolved for the sake of the citizens of japan. this is the most important challenge facing the government. upholding the constitution and we need to have debate among the governing parties ideally among all the parties, and this debate to be fully pursued. any question of invoking the constitution review committee should be decided through discussions of the opposition parties. this is the proper way to pursue this matter. this'll be the last question. >> i believe this is a question

that should have been asked when your administration was first launched. i would like to know if you intended to maintain the same cabinet lineup all the way through to the next general election. was that your intention when you put this cabinet together, or is there any possibility that you would reshuffle your cabinets as this would be required? >> this is a very important question. i believe that if the members of the cabinet are always changing it undermines confidence not only domestically but even more importantly, internationally. the cabinet is the face the country present to the world and it becomes obscure. this makes japan less of a presence in the world. therefore, it is my hope that each of the cabinet appointments that i have made it will be able

to continue in their post for as long as possible. i would like to work in those positions as long as possible. i do not think it serves the national interest to continually and casually reshuffle the cabinet. we will like to close at the press conference. thank you very much. >> president obama plans to announce more government spending to create tens of thousands of green jobs. we will have live coverage. the labor department reported the unemployment rate virtually

unchanged last month at 10%. jobs lost mainly for people who stopped looking for work. the president's will announce projects and the funding is part of the economic stimulus package approved by congress last year. the president's comments at 2:40 eastern. hillary clinton commemorates the anniversary of the u.n. agreement on global reproductive health policy. nations agreed to reduce mortality and increased access to reproductive health. the comment will be live at 2:40 eastern on c-span2. a compromise health care bill. there are different ways to increase access to health insurance. the alliance for health reform is hoping a discussion of the proposed health insurance exchanges.

that conversation coming up at 12:50 eastern. in the meantime, a look at this morning's "washington journal." host: juan zarate could you give us your analysis of the president's speech yesterday? guest: good morning. thank you for having me. this speech was important. it laid out quite clearly what the u.s. government knew before december 25. we have learned since about a potential attack was laid out clearly and honestly. i think the president did a good job of laying out the facts and also taking responsibility. you have to give him credit. there seems to date no shirking

responsibility here. what struck me about the speech and the report is that this was more of a failure of collapsing a strategic problem, al qaeda trying to attack the homeland, which has evolved over the months. there was technical information available. that struck me because that was not apparent in some of the information we had seen before. . z$

sure that people are targeted? guest: i think absolutely. one of the things we need to be careful of is sloppy analogies between what happened here and what happened before 9/11. but the president, as well as john brennan, did a very good job of explaining that yesterday. this was not a 9/11-type failure, where you had as stovepiped, capped by different agencies not allowed to be shared by law as well as by culture. we actually do have a very good system, given all the reforms of the past eight years, that actually not only collects vast amounts of information globally but has it available and is sharing. the problem here is that there was not a prioritization of the nature of these threats, and it was not a connecting of the data that was available. that is what the analysts are supposed to do, frankly, and that is where the failure lies. host: it was in one of the

editorials this morning, it could be "the new york times," but in "the new york times" lead editorial, it says, "80 years after 9/11, the government still does not and -- eight years after 9/11, the government still does not have a single terrorism data base." guest: i think there is a reason you did not have the database. there is information about foreign citizens, communications, that cannot be blended with information about suspected american citizens. host: why not? guest: there are civil rights, civil liberties, constitutional issues, with non-u.s. citizens of versus u.s. citizens. that was not the issue in this particular case, but to suggest one huge database with all the information about potential

terrorism suspects -- we have got to be careful, because when you are looking at investigations you may be looking it innocent individuals and to put them aside as potential suspects. the other thing i need to mention -- we need to remember that we have short memories and get our country and that there have been incredible successes -- we need to remember -- we have short memories in our country -- that there have been incredible successes. remember the december 2006 plot where al qaeda was planning out of pakistan through london to bring down 10 airliners over the atlantic. that was a very serious threat, perhaps the biggest threat since 9/11. the intelligence system we put in place the sharing we had with the brits and the pakistanis actually support to that well in advance. we tend to forget those in -- that actually thwarted that well

in advance. we tend to forget those instances. host: "the washington post" this morning has a large chart that outlines the different lists and all the different communications that are supposed to happen, and it begins with this tide list. could you describe to us what the tide list is? guest: there are gradations of the databases and lists. the tide list -- i would just call it the tide list -- is the master list of all potential suspect individuals. that number is over 550,000 individuals of potential suspects. host: that is the master list. guest: that is the master general list.

but you have to be careful, because not every name in that list means that the individual is a terrorist threat. from there you have additional screening of those individuals with information available where they are able to identify people who prevesent more of a direct threat. that goes to a more refined listed from that, there are lists created for those who pose more of a danger to aviation. the no-fly list, which means you don't let somebody on the plane because you think they might blow it up or taken hostage or do something nefarious with it, and the other list is a selectee list, where you take a person inside and you give them extra scrutiny. the problem here was that the suspect in the case, abdulmutallab, was on the big list, and it was not the information to put him on the more refined list that would give him extra scrutiny. that was part of the problem. host: when you come to the no-

fly this, there is only about 4000 names there. is that comprehensive? guest: no list is comprehensive or perfect. host: but that is the official no-fly list for the united states. guest: that is. people need to recall that the u.s. government has tried to be strenuous about who goes on that list. those are individuals who are reasonably known to be threats to aviation, who may be operatives who may decide to use the plane as a weapon. these are not just people who are potentially suspects who had an extremist conversation monday somewhere around the world. these are actors who are known to us or suspected to us to be very dangerous folks. a real good question here is sure that this be brought in? i would remind people again since our memories are short that when i was in the white house, there was a great deal of pressure from congress and

advocacy groups to which will downed the list -- to whittle down the list. there were susan cries about the number of names of the list, mistaken identity -- were cries about the number of names on the list mistaken identities. host: is the list smaller today than it was when you are in the white house? guest: the master tide this is bigger now. when i left, we were closer to 500. that is now higher. there was always an attempt to refine the list and make sure you did not have wrong names on there, bad names. part of it is the commercial interests. part of it is you do not want to unnecessarily burdened travel for the american public. it is important for u.s. commerce. host: how often did you look at

that list? when you are in the white house your position was similar to john brennan's, except to get the position. guest: he took the position i had, but he is also the homeland security adviser. in theory, somewhat similar. host: would you look at the daily, because supposedly gets fed into a computer every night. guest: i would start and end every day reviewing the threats that had emerged either over night or during the day. i thought my responsibility was to make sure that we were giving you attention to those threats that appeared based on the information available information coming through the system. again, i was at a fairly high level. it works slightly differently than somebody on the line. i saw my responsibility as to make sure that we were looking

at the priority threats and doing everything to ask the hard questions, not only of our intelligence community and law enforcement community but our partners abroad. that is how we started and ended every day and we have instituted this as part of the reforms in 9/11 and accretion of the counter-terrorism center. three times a day the community, the counter terrorism threat community did get together, continues to get together to review literally a matrix of threats that are being laid out against the united states. sometimes those numbers come in terms of seriousness, in the dozens sometimes they are a few, but the lists are in the hundreds of threats that are posted to the united states literally every day. host: does the dni system work, in your viewpoint? guest: one of the things that people need to recall was that the system was built to deal with the failures in the iraq experience.

dien n -- dni was not necessarily an expert or model to fix the 9/11 problem. -- experiment or model to fix the 9/11 problem. it is not just counter- terrorism, but it is things related to north korea, iran the big ticket items that the intelligence community has to be focused on. i think dni is still a work in progress. there had been hiccups' over the last year, some conflicts with the cia as to who is to represent the u.s. and the intelligence community abroad. but i think in general, the process in place for the counterterrorism community has actually worked quite well. i think folks need to just recall the successes that we had in light of, unfortunately, this failure. host: our guest is juan zarate

former deputy national security adviser in counter-terrorism for the bush administration. cspanwj is our twitter address. margaret, a democrat, you are first up. caller: good morning. i hope you can clarify a couple of questions that this lonely layperson has regarding the computer system, and the right people get notified. am i to assume -- i have had these questions since the christmas bomb incident -- and i to assume that the computer systems that we have in place and all the intelligence agencies don't take the information as it is gathered pertaining to one person, and sort of cholesterol -- sort of

coalesce it all and some kind of alarm goes off when it hits a certain level of danger? guest: that is a very good question a good question not only for the layperson but for the expert. there are multiple databases that has that information about suspect individuals. what you have are systems that actually tried to track and manage information and to tie information with the various databases. but the important thing is that there is a human factor that requires analysts to actually do the prioritizing, and in some cases, pulling from various databases to actually look at potential threats. there would not be eight matching database or process by which anything related to some guy named abdulmutallab would get compiled automatically. he would have to have analysts -- you would have to have

analysts as we found out yesterday, looking at threats from al qaeda in yemen, saying that al qaeda in yemen is trying to find operatives that can get past the u.s. homeland, and then look for individuals or pipelines of individuals who may fit that category. that was the failure here. analysts were not taking that strategic problem and then pulling from the data that was available. it was available, and was noble. that is the -- and it was knowable. that is the unfortunate thing about this case. host: what is it your viewpoint on abdulmutallab's father going to the embassy, a well-known figure worldwide in many circles, and reporting on his son, and that information not going further? guest: that information provided to our embassy in nigeria in november it was a critical event. the analysts, the people at the embassy and the state

department, did not describe enough importance to it, frankly. i think it was his judgment, in essence, as to the importance of it. -- i think there was a misjudgment, in a sense, as to the importance of it. we get hundreds of thousands of locked-in threa -- walk-in threat information all the time did most the time, -- all the time. most the time, it is not any good. that said, this was a little bit different. this was a prominent individual in nigerian society, not going to his own government officials but coming to the u.s. embassy telling officials that his son had gone to yemen. that should have triggered some -- the whole context of that should have triggered more concerned, especially as we learned yesterday given that we were learning the past few months that al qaeda in and was trying to find out if to send to the u.s. -- find operatives to

send to the u.s. host: you are on with juan zarate. caller: this, first of all, is a very interesting conversation. there were two things in the news that were quite chilling recently. first is an interview with osama bin laden several years ago that he was interested in bleeding america white. unfortunately, concentrating on large wars rather than intelligence -- wise intelligence gathering. host: could you explain what you mean? caller: i am of the opinion that the entire invasion of iraq was costly in american lives treasurer, and basically misguided. whereas we should have been hunting down bin laden.

guest: very good points. in terms of hunting down bin laden, that has not stopped. that is something that is of great importance the prior administration and this administration is important in terms of the ultimate dismantling of al qaeda. but you're broader point is a good one, that he has talked about his ultimate goal of bleeding america of blood and treasure. he equates the current battle with the united states to the battle against the soviets in the 1980's in afghanistan he ascribes to the mujahedin in his efforts the collapse of the soviet empire, and they want to see the collapse of the u.s. we need to be cognizant of that, in terms of how we react ensuring that we do not overreact. that is one of the challenges for this administration, not giving the terrorists to much of voice in this particular incident.

>> we are going to leave this record a program and take you live to a discussion on health insurance exchanges. both house and senate health care bills are offering types of insurance you can purchase for those who do not get it through their employer. live coverage getting under way on c-span. >> we welcome you to this program to examine the parts of the senate and house reform bills, health reform bills that would set up a health picture -- a health insurance exchange, or a set of exchanges to improve the way individual and small group insurance markets function. a lot of different models for exchanges and they can defer pretty widely from each other everything from simply a farmers

market style website that allows better grasp of the available options to an exclusive highly regulatory animal that exerts substantial control over who can buy what and-what price. -- and at what price. fortunately for our purposes in looking at this issue exchanges do exist in nature. both government and privately run. and we will hear today from folks who have been running some of those successful exchanges and we will hear about some exchanges that have not been quite so successful. and we will look at the exchange provisions of both the house and these animals, a lot of which look pretty similar but there are some noteworthy differences and we will look at those as well. my colleague and moderator, sara collins, will be helping to for

in that discussion about what issues need to be addressed in reconciling the two versions, which is a nice segue to the fact that our partner and co- sponsor in this briefing is the commonwealth fund, which has both commission and done some very excellent analysis of this issue. the exchange proposals in the bills and the idea of an exchange itself. now let me turn to the aforementioned sarah palin said, vice-president for the help -- sara collins the vice-president for the health insurance program. she is an economist and also the main author of the papers that you have analyzing the provisions of the respective per -- respective reform bills that were available as handouts. sarah? >> thank you ed, and good

afternoon. i will briefly laid out the broad provisions in the senate and house reform bills and where people are estimated to gain coverage under the bills, in particular, the number of people covered through the exchanges and then discuss why we need an expert -- and insurance exchange and the type of reform bills that are before congress, and what the key issues are in terms of structure and implementation as we move forward. everyone knows by now the broad outlines of the bills. they both came for near universal health insurance coverage by focusing on the strongest aspects of the employer based health system, medicaid, and the children's health insurance program and by regulating the individual and small group insurance markets which are arguably the weakest part of the system. each bill would be set -- bring sweeping change to those markets, which would fall under the purview of the state's by

establishing new federal rules to require insurance carriers to accept everyone who applies prohibit rating based on health status and age vans. that would create an exchange that would operator of the state or national level. it would allow individuals to purchase health insurance coverage. sliding scales would improve affordability and reduced under insurance and a substantial benefit package with different levels instead of floor for plans offered through the exchange. large employers are required to offer coverage or contribute to the cost. and nearly everyone would be required to have health insurance coverage. in terms of where people would gain our estimated gain coverage under the bills, these are our estimates for the congressional budget office. employer's coverage would remain the predominant system.

the exchange would provide a new source of coverage to 30 million people either individuals or employees of small companies. small to mid-sized companies purchasing coverage through the exchange would bring about 5 million to nine million people under coverage. coverage through the medicaid program is expected to rise from 35 million to 55 million. and 23 million under the senate bill. what is the purpose of an insurance exchange in the context of broad based health reform post in the bills on existing health insurance system? the individual and small- business markets are poorly art -- poorly organized for now. there are substantial barriers

to obtain coverage. the market's rules vary widely from state to state. plans are often difficult to understand. large amounts of premium dollars go to insurance like. and lack of competition is based on avoiding risk rather than enhancing value. the exchanges can be designed to provide structure and oversight to ensure its markets with goals of improving consumer protections, enhancing transparency of the benefit packages on lowering premium growth changing the competition dynamic from risk to value. the key provisions of the exchanges in terms of their viability over time and their viability to provide comprehensive in -- coverage include broad risk pooling and individual requirement to health coverage benefits standards to ensure comprehensive coverage and informed choice, sliding

scale premium and subsidies that should only be available through the health insurance exchanges the authority to negotiate premiums a choice of high value plans. tim jost is going to provide much more detail on the similarities and differences between the senate and house bills on the exchanges on his excellent paper included in your packet today. i will skip the slide and leave that discussion for tim. and get to what i view as some of the issues as we move forward. those include federal versus state operation or control of the exchange, exclusivity of the exchange -- and by that i mean, whether the exchange becomes the whole market or if the individual and/or the small group markets are allowed to exist outside of the exchange.

the extent to which the exchange has the authority to set rules and plan participation and whether the rules for participation are aimed at encouraging planned innovation and the value and health care design. and finally, whether the exchange will have the ability long term to focus on by you and not on risk. -- to focus on value and not on risk. >> in the packet to you will find a lot of good background material including speaker biography information, much more extensively than we will have time to give them orally. and you will find the power point presentation that you may find hard to read on the screen in your pockets as well. if you are watching on c-span and have access to computer, you can find copies of everything the folks here have in their case at our web site which is

www.allhealth.org. and for the record, we did not get a letter from c-span asking us to open this briefing to the cameras. we volunteered it. there is a webcast and a podcast available probably monday at kff.org stands for kaiser family foundation. thanks to the folks who make that possible. he will find material there as well as at our website. and in a few days, you will find on our site a transcript of today's session which a lot of people find it useful in reviewing things very quickly.

you have question cards in your materials, green cards that you can use to write a question and have answered by our panelists. there are also some microphones that you can use at the appropriate time. following the program, i would appreciate it if you would feel out and leave with us the blue evaluation forms that are -- fill out and leave with as the blue evaluation forms that are in your pocket. we have a very knowledgeable group today. we will hear some great presentations and have lots of time for discussion and your questions. let's start. leading off today is timothy joseph from the washington and lee -- tim jost, from the washington and lee university school faculty. his paper provides the jumping off point for our discussion today. he has written several books on health policy topics, not to mention his co authorship -- co-

authorship of the leading book on case law called "health law" nowlin its sixth edition. whether you agree with him and not -- now in its sixth edition. whether you withagree with him or not, i think he will find him very intelligent. >> thank you very much. i must say as an aging law professor, power point is still something i'm not very comfortable with. i will do my best to move my slides along, but you might also listen to what i have to say. if there is anything that we can predict with almost certainty about the health legislation that will emerge in the next month, is that legislation will include the health insurance exchange. a health insurance exchanges quite simply unorganized market for the purchase of health

insurance. the exchange's most familiar to us are the -- are those represented here by mr. kingsdale and the employees' program. the medicare advantage program the medicare part "d" program and those in the netherlands and switzerland and arguably in germany also exchanged -- contain elements of health insurance exchange. the connecticut business and industry association represented here by mr. vogel today represents a successful private purchasing cooperative. while each of these models can be called an exchange, they are in fact, quite different. indeed the models represented by the house and senate bills are different in very significant ways. the focus of my paper and my brief presentation this morning

is how the house and senate bills differ and which model is most likely to result in the exchange that serves the best the goals that an exchange is intended to fulfill. first, let me ask you the question why do we need an exchange? what do we expect an exchange to accomplish for us that? it is intended to play a number of roles in health care reform. sarah briefly went over this, but let me do it again. first, it is expected to be the lowest of managed competition among health insurance plans. it is hoped that the exchange will focus on price and quality rather than risk avoidance and will thus, make health insurance more affordable and accessible. second the exchange is expected to create a sizable risk pool that will, together with the insurance reforms found elsewhere in the bill, allowing insurance risk to be more efficiently managed reducing

the incidence of adverse selection by insurance and the route -- the practice of risk selection by insurance. third, it is hope that it will reduce administrative costs by simplifying marketing and premium collecting and by eliminating risk-based underwriting and some bovine the packages that insurance companies put together for insurance as well. at fourth, the exchange offers the possibility of making health insurance market more transparent and facilitating consumer choice among health insurance plans by standardizing plan offerings and providing more and better information about health insurance options. fifth, the exchange may play regulatory role helping to make insurers more accountable. in particular, it could serve as a form for reallocating risk among insurers and guaranteeing that those who sell comprehensive insurance company

-- that those insurers to sell comprehensive coverage with manageable cost sharing and respond properly to consumer claims and complaints as well. sixth, the exchange will likely play a role in facilitating other key features of the health care reform legislation, such as the premium -- payment of premium credits or perhaps even the positioning of the individual employer mandates. in many respects, the house and senate bills perversions and exchanges are quite similar. both the house and senate bills -- provisions and exchanges are quite similar. both the house and senate bills allow employers to purchase health insurance through the exchange. both require that health plans offered through the exchange offer standardized, essential to benefit packages that are arranged by teariers based on

cost, by you and consumer choice. both have transparency and disclosure requirements to insure accountability. both provide premium subsidies which will cover over half of uninsured individuals in the non-group market and are only available through the exchange. both give the exchange some discretion over whether or not to offer health plans, and thus, some bargaining power with insurers. both bills generally outlawed risk underwriting by insuring some pre-existing condition exclusions and both contain provisions for griot -- reallocating risk for insurers. both finally allow grandfathered plans to exist outside the exchange which will undermine its ability to cool risk. the bills however, differ in key respects. which approach is in the end

taken will have a profound influence on implementation and effectiveness. at first, the house bill has put responsibility for creating exchanges on the national government. the house bill creates a national exchange that allows states to create effective alternative exchanges like in massachusetts, to opt out. the senate bill, on the other hand, places the responsibility for reforming exchanges on the states. it depends on each of the states to enact legislation that will mirror the federal legislation in terms of insurance reforms and creating exchanges, and then to proceed to create each state its own exchange or sub-state exchanges. if a state declined the invitation to do so, or of the department of health and human services determines that a failed -- that a state has failed to do so, hnns can set up

an exchange to do so. this will depend on the federal government effectively determining that a state has failed to comply with the law and stepping in after the fact. the state exchanges are also an unfunded mandate. there is no federal monday -- federal funding in the states to do this. they will have to pay for them themselves presumably by taxes imposed on insurers. -- insuranceeds. state-based exchanges have advantages including perhaps not a better knowledge of local insurance markets and restore the ituri environment. but national markets offer larger risk pools and greater efficiency. you do not have to set up 50 exchanges, each with its own programs each with its own capacity to do all of the functions that each exchange will do.

the federal government already has extensive experience with running exchange-like programs like the medicare advantage program, the medicare part "d" prescriptions drug program and the latter two include risk adjustment programs, which will probably be part of the exchange or at least the insurance regulation system. most importantly, in national program promises uniform implementation of the exchange. if some states want to go beyond the federal program, the house bill allows them to do that. but it does mean that no state will be allowed to lag behind, that no state will be allowed to simply refuse to set up an exchange and then have the federal government stepped in belatedly and try to clean up the mess. the second biggest difference between the house and senate bill is the exclusivity of the exchange.

the house bill requires all non- group health insurance coverage to be sold through the exchange. the senate bill allows a non- group market to exist outside the exchange and does not require policies sold outside the exchange to meet all of the requirements of the qualified plan sold through the exchange. this belief -- this leaves the door wide open to risk selection by insurers against the exchange. both bills also allowed a small group market to exist outside the exchange, which i think to some extent threatens the same difficulty. the senate bill partially compensates for its open market by requiring insurers to include all insurance in and out of the same exchange and the same risk pool. and requires issuers of qualified health plans to charge the same premiums in and out of the exchange for the same plan

by requiring insurance outside of the exchange to cover the same level of coverage and actuarial value and finally the senate provides the same program inside and outside of the exchange. but the senate has plans that are configured to attract the best risks away from the exchange for those existing outside the exchange, and leave that for the more high risk groups. the senate bill will also require a greater amount of regulatory oversight because it go require -- it will require the states, not the exchange but the states, to collect enough plants on data -- in the date on plans outside the exchange to do a risk assessment of plants both in and out. it seems to me to be a better

requirement for them all to be sold within the exchange. does the exchange merely offer whatever plans insurers made available, or does it have read the ituri authority as well? both -- regulatory authority as well? both the house and senate bills have some regulatory authority making sure -- making insurers for dissipate -- participate in certain programs. the house bill does go further however, in negotiating the terms of the insurance plans with the insurers. while the terms for these negotiations are not specified the legislative language leaves room open, for example for the exchange to negotiate with respect to issues like premiums medical loss ratios, administrative costs etc.. the manager's amendment to the senate bill on the other hand

also allows the exchange to take excessive premium increases into account in certified plans and in fact, requires generally is some general language of being in the best interest of the insureds. i believe there is some language with respect to issues like premiums. there are other differences between the bills that we can address in questions. the house bill still includes a public plan, may be for another few hours. [laughter] to be offered through the exchange. the senate bill, of course, include these multistate plans that are offered through ltm so the senate lawyers one exchange on top of another exchange, which can lead to some interesting dynamics. the house bill only borrows them -- bars them from premium

subsidies. the senate bill has drawn bertrand's parity and disclosure requirements. i believe the transparency and -- the senate bill has a stronger transparency and disclosure requirements. i believe the trans. -- transparency and disclosure requirements are exceptionally good. the senate bill requires a qualified health plans to provide insurance programs, which the house bill does not. neither bill -- and i do not know how much opportunity there is too slick in the anything at the last minute, but neither bill addresses the issue of privacy of health data. under current harrahhipaa requirements, i do not see that is covered. a key point however is that although the exchange holds great promise as a health policy tool we also have a history of some pretty disappointing experience with exchanges. we will hear today about some

good experience with the exchanges, but a number of states have tried exchanges that have failed. we have a chance to get it right with this legislation. to come up with a powerful tool for improving access, controlling costs, and perhaps even controlling the quality of health insurance and health care. it is very important that congress gets it right. and i thank the commonwealth fund and the alliance for sponsoring this meeting today to allow us to talk about this. thank you. >> thank you tim by the way, in his paper there is an executive summary of front and text in the back and wedged between them is one of the conesus charts that you will at -- one of the neatest charts you ever see that summarizes this information. the next is jon kingsdale. he is the executive director of the biggest real world pilot of

a real world insurance exchange this side of the federal employee plan, that would be the commonwealth health insurance connector authority set up by the massachusetts landmark reform law from 2006. jon has worked for more than 20 years in the private insurance world. it would be tough -- and he has even done reporting for "forbes" magazine. i know many of you called him during the debate as you try to shape this language, not just on the exchange, but on related topics. jon, welcome back. >> that was a very helpful introduction from sara and tim on the basics. i do not know how much further i go, and if i lose you -- and i have been added since the civil war and occasionally i lose myself. [laughter]

there's more that we do not know that we do know about how this -- the house and senate versions would actually play out. i am so pleased that philip vogel is here. he runs and exchange extort in connecticut. -- he runs and exchange next door in connecticut. and they could not be more different. when you see a house version or a senate version, you have seen one out of a thousand permutations that may play out. that said, let me try to shed a little bit of light. i start from the promised that this is, perhaps, the most challenging domestic implementation of a domestic policy initiative at least in this century. that is easy, only 10 years but i would go back maybe another century. it is personal, complicated partisan to say the least. and then of course, cost

control, which is far more ambitious than we were in massachusetts. we just did access expansion. we are on phase two of cost control, which means taking money away. that is even harder. the administration will be congratulated for taking on the two toughest issues in american politics, i think, at once. and has been -- and as has been noted, most exchanges have failed. i feel like the fall -- 14th century or 15th century european mapmakers trying to describe in, the death. -- to describe incognita. i believe it lives or dies based on implementation. a lot of humility. i would start with the saying that the way to improve the odds that an exchange of any sort will work is to define very realistically the very limited

set of objectives. and i will not go into the details, but when i hear objectives set forth in policy papers that run to the half- dozen or doesn't objectives for exchanges, i shudder. -- or a dozen objectives for exchanges, i shudder. and then try to resource them for whatever exchange we come up with adequate before implementation. most of what an exchange operator will have to encounter has not even thought of. it will depend on the circumstances as they evolve during a whole new set of realities. i think there are maybe three objectives that our party doable. and one is, to reduce administrative costs of buying insurance. there is tremendous waste, if you will, or cost in insurance particularly in the small group

end of insurance. that is clearly a target. secondly to improve consumers' shopping and buying experience. particularly, in the non-group and a small group and of the market. i actually, to this day four years after we got up and running get a stop and help -- and thanked on the street for buying insurance for their kid because instead of spending half the money -- half the morning on the telephone trying to compare different carriers and coming away with it much of scribbled notes, they can go on our website and in 20 or 30 minutes compared fairly reasonable products and push a button. i would not underestimate the importance of sick -- for its success and of the mentation of health reform just been able to -- for success and

implementation of health reform just being able to help your customers. most of the cost they are trying to place for, they do not control they generate by doctors, hospitals pharmacies and etc. through competition and choice, we may be able to add a little price resistance and a bit more fortitude on the part of the negotiators and take down through administrative deficiencies some of what they retain in premiums as well. -- through administrative efficiencies some of what they retain in premiums as well. i would say there are some weaknesses in both bills. first of all, industry resistance. to be very basic, and exchanges and automated store for insurance. you do not run a store if you do not have products. and there is typically no way to compel a producer to sell through you, even if you require

it unless you close off all of their stores. they're pretty good about finding the store they want to sell through. one thing would be their resistance to an exchange. you can deal with it through making an exclusive channel that is one way. certainly, that is practical for non-group. i think that is impractical for group insurance, small or large. make additional segments evolutionary see if the exchange is working and build on its track record, in fact invite participation -- both customers and producers -- and then provide for some flexibility, particularly when you get beyond the non-group market. small group is a local market and is different in connecticut than it is in massachusetts not to speak of mississippi or alaska. there are some provisions in the house bill that i think will have absolutely zero small employers use the national exchange. we can talk about that if you

want. secondly, adverse selection is a major issue. this is a complexity option new rules, all of these encourage adverse selection. it is the easiest way to make your bottom line as a carrier to be positive. one way to counter that is to exclusive channel for non-group and another way of selling claims based risk adjustment, but has to be across the entire market segment. if you are doing it for a small group you cannot just do it for the exchange, but the entire market. forgoing the large group market, if that is an option for large groups and they can do choice themselves, the only large employers who are likely to get into the exchange are the ones that somebody else wants to dump their. and thirdly, cost control tools. thank you for plan selection that is critical. the house is clear on that.

the senate is a little money year but it is pretty clear. -- a little muddier but it is pretty clear. in massachusetts for example over three years, the connector has come to standardized benefits. but in 2007 when we started, we did not know which products would step -- would sell and which would be preferred. we had to evolve over time and then automate, automate, automate. there are a tremendous amount of administrative inefficiencies to begin with. turning to house legislation for a minute, i think one of the problems -- and tim referred to it -- is what i call market insensitivity. that is only one of several reasons of why there is likely to be zero small group participation in the national exchanges currently envisioned. another regionreason is all of the

premiums are supposed to flow directly from carriers to employers and an employer has to get billed and paid for five employees in order to get started, it is pretty much a nonstarter. an exchange is far less complex and less nuanced. most small businesses do not change states. delegate and decentralize where possible. it is clearly hampered by the focus on a washington-based mowry national management structure. and finally emphasize -- or a national management structure. and finally emphasize balance. this is where the backlash will be very real and tangible for the god awful big monster created in washington and it does not actually get me insurance when i go on line. secondly, there is an issue about regulation verses retailing. clearly, the house version is

foreign exchange to be more of a regulator than this and as a just, i think. maybe that can be done, but there has got to be a limited set of goals, a considerable amount of independence from the agency that administers this, the health tauruses administration, to figure out what will work to try different things -- the health choices administration to figure out what will work, to try different things. i would suggest minimizing the policing role if you want to actually sell insurance, which is basically the mission of an exchange. nobody buys if you have not done anything. you will have to be somewhat less of a policeman, and that may mean regulating carriers more through state insurance read than a national exchange, which is trying to regulate the producer of the product while it sells the product. and finally, i think customer experience is a potential weakness in the house version

and their flexibility phasing in and not prescribing every element of transparency. at encouraging pilots would be very helpful. turning to the senate, i think there are a number of problems and and will add a fourth one. scale of the economy is clearly one. as a web based electronics store, the fixed costs are pretty substantial and scale is critical to the administrative efficiency, and national is by definition bigger than state by state. but you can make that the exclusive channel for non-group and i think -- well in massachusetts that would be 300,000 people. at that point, even a modest sized state exchange has got 90% of the scale economies you can get out of volume. 300,000 is a pretty good -- at that point, you are not much

incremental savings from growth. developing a national web based tool that the exchanges could use. secondly geographic portability. people move, split their time between states, etc. but the key is to have national plans, not a national store. as long as you can buy national plans, that is the key. and if you can be supplemented by a reciprocal plant in regional terms -- a reciprocal plan in regional terms and there are conventional wisdom things noted on the power point but finally state resources and energy is somewhat of an achilles' heel here. given the controversy alateen that has come to characterize this entire reform effort -- given the controversiality that

has come to characterize this entire reform effort, that could be problematic. finally, i would turn to the last point about greece forcing an evolving -- about resources in an evolving -- resourcing and devolving exchanges legislating and trying to figure this out. some degree of independence to these exchanges to figure out what works. i like the senate version much better which has funding tied to sales premiums and transactions actually happening with the exchange. i think that focuses the exchange on its most core mission, to get a bunch of people injured. secondly clear objectives, but flexible means. we just do not know. there is a much more that we do not know then what we do know about how these things are going to work.

there is a huge wash of billions of dollars annually envisioned in these exchanges and a very murky set of auditing instructions. and finally, rigorous evaluation over time. i hope that is helpful. >> thank you, jon. our final speaker is philip vogel, senior vice president at cbia service corp. he is in his third decade at cbia and the services corp. offers health insurance among other things, to the thousands of members of cbia. he has also spent a dozen years in the private insurance business directly. he has been a certified life underwriter for more than 30 years and his division has led the way in setting up a

statewide health insurance purchasing alliance that allows workers and small business members of cbia to choose among several different policies. we are anxious to hear the experience that you have had and the successful you have had. thank you for joining us. >> thank you, and i think you have heard a lot of good ideas from the panelists and i will probably repeat some of it, but i will take you into the private sector a little bit at one point it was called a hipaa because we really designed it under the clinton era under the competition model thinking that you would set out an exchange and people would make decisions based on price network satisfaction and quality data. that is what we were trying to do when we introduced our program. i will repeat some things that were set up here because i think there were a lot of good things said, but what i'm going to try to do is give you a view into

the private sector and the exchange that has been running for over 15 years. as i said, cbia is a not-for- profit. and we run it out of the cbi service corps subsidiary. we pay taxes for any that we provide. and basically, coming from a state that is very highly injured -- we only have an uninsured rate of around 10% or so. we have very high mandates. but we have a lot of practices in place, and yet, we are able to compete in the private sector. nobody has to come and buy from us. this is totally voluntary. we look at a very competitive marketplace and how we work. and what i would like to do is try to take you through that, little bit of what we are, why we are successful. i need to give you