florida, i believe, is correct. but until you get rid of the entire ira's, that means your job to, it is not going -- get rid of the entire irs, that means your job, too, is not going to be fair to anybody. by the way, there is no tax man that i have ever talked to that will give you the same -- and will tell you exactly what he believes. there will always give you eight different one. host: we are out of time, charles. guest: as far as sales tax, not designated to speak about tax policy. but we did a study of value- added taxes, which is a sales tax, which the fair tax is a version of a value-added tax. we looked at how these things were a minister or around the world and for people who are saying that there would be no

irs, that is just a misconception. there is someone there, some entity that is collecting this tax. i'm very much a pragmatist and one of the things we learned in studying all of the sales taxes, including state sales taxes is that there are all sorts of exemptions in these taxes. the complexity -- what i call the complexity creep happens very early in these taxes. they may start out simple, but then some entity comes in and says, do not tax me. my service or my good should be excluded from this. and pretty soon you have a very complicated tax. i just have to say -- and this is coming from me as an administrator, not as a policymaker -- human nature being what it is, people are going to come in the matter what tax we have for special rules, and special rules make for complexity. host: nice to see you again.

we appreciate you coming in from time to time to answer our viewers' questions. the nelson is the national taxpayer advocate, representing u.s. the irs. we appreciate you being with us as we close here. we started on haiti and we will close on that. the president is scheduled to speak right now on 80. we're learning that he will be w. bush and former president bill clinton to assist in the efforts for haiti after its devastating earthquake on tuesday. we will be back tomorrow morning at 7:00 a.m. eastern. see you then. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] . .

>> day two of the financial crisis. witnesses today include attorney general eric holder, financial industry regulators in two states attorneys general, the congressionally appointed commission made up of six democrats and four republicans is scheduled to deliver a final report by december 15 of this year. the hearings are underway. follow it live now on c-span2. later this afternoon, we'll hear

more from president obama as he speaks at a job summit hilled by the house democratic caucus. congress is out of session so members can attend that meeting being held at the capitol visitor center. it will begin live at 4:45 here on c-span. this weekend, tuft university history professor on the 1965 voting rights act, the role itq played in black radical politics, and how it paved the way for future african-american leadership. he'll discuss his book with "washington post" national editor on "afterwards" part of this weekend's book tv on c-span2. a couple minutes we are expected to hear from president obama on relief efforts in haiti. news reports indicate that the president will appoint former presidents bill clinton and george w. bush to represent the u.s. in recovery efforts in hatey. we'll hear more about that momentarily with the president at the white house. in the your comments and calls

and news items from thisw3 morning's "washington journal." washington, president and ceo of interaction. thanks for being with us this morning. we would like to get to your telephone calls about pat robertson topos a contribution to this debateç >> we had a bit of technical difficulty. there again we are waiting for the president momentarily at the white house. this morning on the topics from washington journal.i]xdçç

caller: good morning, mr. robertson's comments are just tunningly ignorant. it's one thing to hold such opinions, it's another thing to be so stupid as to voice them. what i did want to find out is where isç the vatican in regar to helping this nation of haiti, which is overwhelmingly catholic, where is france in helping haiti? but especially the vatican. not just now but in general. thank you very much. host: thank you very much. can't answer the question. did hear in one news report last night that the archbishop was among those killed by the quake. some of the reaction on the internet, one of the interesting ones is from the huffington

post, their religion editor. can you see the headline on the page, go to hell pat robertson, haiti needs help not stupidity. haiti is suffering and the only response from christians and other decrept human beings is compassion, love, and all the concrete support we can supply. tonight i'm going to be with students from haiti and students who have family will offer prayers and support to one the disaster has to come front and center in the hearts and minds[ç of americans. we should be thinking about how to help. instead pat robterson opined on his tv show this happened because in order to gainç libey from the french haiti, read black people, made a pack with the devil. go to hell, pat robertson, the sooner the better. don't speak for hatey, don't speak for god. haiti is suffering a catastrophe and you offer silliness at best and racism atçworst. haiti was the first island in the western hemisphere to overthrow slavery and white oppression. if this is what you call a pact

with the devil, god's heart is breaking with this tragedy and ours should be, too. we'd like to hear what you think about this sidebar catastrophe. relief efforts pouring from around the globe. call from washington, d.c. ce&er: good morning.t( pat robertson,ç imperialism, ts is the position -- reason haiti has such hardship is because it broke with the french. just like they caused simbabway to go to hardship. -- zimbabwe to go to the hardship. activated during the haiti earthquake, a heart machine, it can create earthquakes. i would like to know if the machine was active during the

haiti-ç-another thing i want t know is the united states -- united nations isçó a criminal organization. it's responsible for the spread+ of the swine flu. it was pattening -- peatenting it as well.ko this is an effort to -- host: tony, you believe the united states has patented swine flu and responsible for spreading it? >> i don't know if the united states. i think the world health organization. host: why would they do that? caller: because they practice in genocide. they want to reduce the populationç by 80%. this is all part ofñ)ççw3;3 agenda.t( agenda 21.ç >> we'll leaveç this segmentçm the "washingtonç journal" and take you live to the white house. president obama will speak about haiti relief efforts. >> good morning, everybody. i have directed myç administration to launch a swift, coordinated, and aggressive effort to save lives

and support the recovery inç haiti. the losses that have been suffered in haiti are nothing less than devastating. in responding to disaster of this magnitude will require every elementçç of our nation capacity.ç our diplomacy and development assistance, the power of our military, and most importantly the compassion of our country. this morning i'm joined by several members of my national security teamç who are leading this coordinated response. i have made it clear to each of these leadersç that haiti muste a top priority for their departments and agenciesç righ now. this is one of those moments that calls out for american leadership. for the sake of our citizens who are in haiti, for the sake of the haitian people who have suffered so much. and for the sake of our common humanity, we stand in solidarity with our neighbors to the south knowing that but for the grace of god there we go. this morning i can report that the first waves of our rescue

and relief workers are on the ground and at work. the survey team worked overnight to identify primary areas for assistance and shared the results of that review throughout the united states government and international partners who are also sending support. search and rescue teams areç actively working to save lives. our military has secured the airport and prepared it to receive the heavy equipment and resources that are on the way. and to receive them around the clock 24 hours a day. an airlift has been set up to deliver high priority items like water and medicine. and we are coordinating closely with the haitian government, the united nations, and other countries who are also on the ground. we have no higher priority than the safety of american citizens. we have airlifted injured americans out of haiti. we are running additional evacuations and will continue to do so in the days ahead. i know that many americans, especially haitian americans, are desperate for information about their family and friends. and the state department has set

up a phone number and email address that you can find at www.state.gov. to inquire about your loved ones. you should know that we will not rest until we account for our fellow americans in harm's way. even as we move as quickly as possible, it will take hours and in many cases days to get all of our people and resources on the ground. right now in haiti roads arew3 impassable. the main port is[çç badly d communications are just beginning to come on line. and aftershocks continue. none of this will seem quick enough if you have a loved one who is trapped, if you are sleeping on the streets, if you can't feed your children. but it's important that everybody in haiti understand at this very moment one o#hthe largest relief efforts in our recent history is moving towards haiti. more american search and rescue

teams are coming, more food, more water, doctors, nurses, paramedics, more of the people, equipment, and capability that can make the difference between life and death. the united states armed forces are also on their way to support this effort. several coast guard cutters are already there providing everything from basic services like water to vital technical support for this massive logistical operation. elements of the army's 82nd airborne division will arrive today. we are also deploying a marine expeditionary unit. theç aircraft airary u.s.s. ca vincentç and the navy's hospit ship,xd the comfort. today i am'announcing immediate investment of $100ç million. this will mean more of the lifesaving equipment, food, water, medicine that will be needed. this will come over the year as we embark on the long-term recovery from this tragedy. the united states of america will also force the partnerships

that this undertaking demands. we'll partner with the haitian people, that includes the government of haiti, which needs our support, as they recover from the devastation of this earthquake. it also includes the manyç haitian americans who are determined to help their friends and family. and i have asked vice president biden to meet in south florida this weekend with members of the haitian american community and will responders who are mobilizing to help the haitian people. we will partnerçç with the un nations and its dedicated personnel and peacekeepers, especiallyç those from brazil o are already on the ground due to their outstanding peacekeeping efforts there. i want to say that our hearts go out to the united nations which has experienced one of the greatest losses in its history. we have no doubt that we can carry on the work that was done by so many of the u.n. effort that had been lost, and we see that theirç legacy is haiti's hope for the future. we will partner with other nations and organizations and that's why i have been reaching out to leaders from across the

americas and beyond we are sending resources to support this effort. and we will join with the strong network of nongovernmental organizations across the country who understand the daily struggles of the haitian people. yet even as we bring our resources to bear on this emergency, we need to summon the tremendous generosity and compassion the american people. i want to thank the many americans who have already contributed to this effort. i want to encourage all americans who want to help to go to white house.gov to learn more. in the days ahead we'll continue to work with those individuals and organizations who want to assist this effort so that you can do so. finally, i want to speak directly to the people of haiti. few in the world have endured the hardships that you have known. long before this tragedy, daily life itself was often a bitter struggle. and after suffering so much for so long, to face this new horror must cause some to look up and ask, why we somehow been

forsaken. to the people of haiti, we say clearly and with conviction, you will not be forsaken, you will not be forgotten.ç in this your hour of greatest need america stands with you, the world stands with you, we know that you are a strongç an resilient people. you have endured a history of slavery and struggle of natural he disaster and recovery, and through it all your spirit has been unbroken and your faith has been unwavering. today you must know that help is arriving. much more help is onç the way. thank you very much, everybody. >> a number of other briefings throughout the day, too. you can watch those briefings live atç c-span.org and more a scheduled later today. we'll keep you posted later this afternoon. we'll hear more from the president as he speaks this time at a job summit held by the

democratic caucus of the house. congress is out of session so members can attend that meeting. which is being held at the capitol visitor center. we'll have the president's comments have 1/2on at 4:45 p.m. eastern. now remarks from the state department's counterterrorism coordinator on theç obama administration's efforts. he was joined by former c.i.a. and f.b.i. dornte terrorism officials, an event hosted by the cato institute. this is almost two hours.çç >> good morning. good morning, class. i want to welcome you to the cato institute's auditorium. i'm jim harper, director of information policy studies here at cato. with my colleague,i] benç free and chris preble, a co-chair of cato's strategic counterterrorism initiative which is made possible by the generosity of the atlantic philanthropies.ç we are very pleased this morning to have an excellent group of experts with us, andç later th

morning a top counterterrorism official in the obama administration to address help us see president obama's first year in counterterrorism. a year ago today many of us were here starting the second day of a two-day conference in which we explored terrorism and counterterrorism and worked to shape and predict the obama administration's counterterrorism strategy. you can review that conference. i urge you to do so, at cato.org/counter-terrorism. we had over 30 experts in terrorism, security, risk management, and communication, and like today we had many, many people. thank you, those of you, who have come back. thank you for bearing with us as we test the capability of our conference abilities and our staff. when we met before i took the liberty of framing counterterrorism in a way that i think probably simplifies or oversimplifies the work of many

terrorism experts. i said that overreaction is the key goal of terrorism. overreaction delivers gifts to terrorists when it, one, drains the blood and treasure of victim states, when it drives neutral or undecided parties to the side of terrorists, and whenot it confirms terrorist narratives aboutç ideology and good and evil. overreaction can be legitimatize the -- delegitimatize the victim states in the eyes of important audiences. this framing has helped me as i continue to think about terrorism and counterterrorism. i hope it's been helpful to others. and i hope perhaps it might be helpful toq you as you think wih us about the past year in obama's counterterrorism policies and the coming yearses. putting my own views aside, last year i said what matters is the incoming administration should have a counterterrorism strategy.

how in the view of the incoming administration does terrorism advance the goals of terrorists and what are those goals? how will the new administration seek to ensure that terrorists do not achieve their goals? how will the new administration defang terrorism as a strategy? and what are the new administration's communications plans for terrorism generally and in the event,t( heaven forb, of a terrorist attack? we didn't get direct answers in the form of a published strategy. but we got more than we wanted in terms of terrorism events. the silver lining, of course, is that our society can learn and grow more familiar withç the problem of terrorism and we here today can develop some good, indirect evidence at least of what the administration's approach to counterterrorism isç our panel of experts represents a variety of perspectives that will help us review year one of the obama administration in counterterrorism. from left, your left to right, we have clark ervin, director of the aspen institute homeland

security program. michael german, former f.b.i. agent now serving at policy council on national security immigration and privacy of american civil liberties union. priscilla lewis, co-director of the u.s. and world initiative. jacob shapiro, assistant professor of politics and public affairs at princeton university's woodrow wilson school of international affairs. soon-to-be joining us, still in the middle of his commute, is paul pillar, former c.i.a. official official, now professor and director of the security studies program. he will be here within the next five to 10 minutes i do believe. it will take a lot of the morning to lay out all the credentials of this fine group. instead of doing that we have put together a biosheet many of you picked up. if you didn't manage to pick it up i'm sure a neighbor did and you can took at it. as i said after our session this morning, daniel benjamin will give us direct evidence of the administration's thinking and plans, especially in light of the christmas bombing attempt. we are very appreciative he could join us.

no between our session and mr. benjamin's talk, we'll have a brief recess in order to reset the stage. you canç u& that to stretch yr legs or fressen up a bit. don't go far because we'll begin in short order with dan benjamin. when we started planning this event, i conceived of a relatively simple structure for our conversation that we would look back on the year just past. look forward with our prescriptions for the next year and the rest of president obama's service. and go to q and a. obviously, well, christmas brought us an unwanted gift, if you l we'll start with a discussion of our top lines, what our takeç aways are from e christmas bombing attempt. then look back at the first year of the obama administration. look ahead and go to q and a with you. if i hurry up and stop talking we'll have about 25 minutest( f each. so let's turnç toç that first question and we'll just go down the row. i'll join you there seated panel.

what for each of you is the take away from the christmas attempt? please. >> thank you very much, jim. i would begin this way. i think that largely the administration's response to the christmas day incident is commendable. i would have preferred for the president to could come out sooner. it was three days before the president made a statement. i think in times like this the american people want to see the commander in chief, particularly one as articulate andç analytil as president obama. once he did come out, i think there were four appearances subsequently, both the tone and content it seems to me of everything the president said and announced was exactly right. i'll talk about that specifically. i'm reminded of what william f. buckley once said, he would rather be governed by the first 100 people in the boston phone book than the faculty of harvard. by that he meant there is a loì+ of wisdom that resides in ordinaryç americans. everything the presidentç announced, assigning a person in

the intelligence community to be responsible fori] following up all priority leads. more wide sharing of information within the intelligence and security community. checking the visa status of known or suspected terrorists. ofç course revoking visas when there are activçe visas in pla. tightening watch listxd proceedures to make it easier when there are reasonable grounds to believe that someone is a terrorist or may be a terrorist to put that person at least on the selectee list which would subject him or hero7f to enhanced screening and perhaps even under certain circumstances, i would argue those circumstances existed in the abdul case on not-fly case. and enhanced screening calls. and technology, whole body imaging, other things. all of that made perfect sense. which leads to the second point that is since they are so

obvious and common sensical, why are they just now being instituted nine years, almost, after 9/11? eight years after the creation of t.s.a., seven years after the creation of the department of homeland security, and what became the national counterterrorism center, it was initially the terrorist threat immigration center, and six years after the creation of the direct rat of national intelligence? if there are -- if there is anything good, it seems to me, that comes out of the christmas day incident, aside from of course the obvious, the fact that the plot was foiled, not of course through our own government, but through the heroism of the passengers and the ineptitude of the terrorist, it's that, the incident, has served again to concentrate the national mind on the urgency of the terrorist threat. and i would close with two additional quick thoughts. one of the other good things that the administration did, and there is no indication they will change their mind about this as

these investigations continue and as these reviews continue, is the administration did not announce there are going to be any further organizational changes. that is a typical response of government when there are huge crises like this. it seems to me that we have the organizational structures that we need. what is lacking and the administration's been vage about this, is accountability. the president commendably took responsibility and of course ultimately the president is responsible for everything that goes right and wrong in his government. it's the right thing to do morally. it's politically smart as well. president kennedy famously took responsibility for the pay of pigs fiasco and it proved to be popular for him politically. as a practical matter the president does not run his own government. it is the people in the intelligence and security bureaucracy in this instanceswho do and it's they who should be accountable. theç final thing i should say , i acknowledge the potential danger of overreaction. i think there are times during the course of the year since

9/11 when our government has overreacted. a good example of that isç the program when muslim men, arab men between 16 and 45 were rounded up and incarcerated for a long period of time. gtmo is another example of that. but i am more concerned about the other reaction. which is underreaction. i think largely since 9/11 we have tended to think that the threat has gone away. and again this incident serves to concentrate the mind. i hope and expect that the obama administration will have new urgency to counterterrorism as a result of it. >> thanks very much to jim and cato for inviting me. i appreciate the opportunity to come. i think one of the things that christmas shows is our intelligence community is still dysfunctional in ways that were far too similar to the dysfunction that provided the opportunity for 9/11 to occur.

and i think that's something that we should really focus on. this is still a problem of the correct management of information. after 9/11 the issue was originally that we weren't selecting the right information. you have to -- collecting the right information. you have to remember after 9/11 it took a couple of years before what the government actually knew came out. in the first couple years what we did is unleash the collection capability of the government. and allowedç suspicious list collection. i think what this instance showed is that when you gather a lot of unfiltered hey and make the haystack bigger, it doesn't help find -- hay and make the haystack bigger, it doesn't help find those needles that need to be found. that is somethingçñr that we sd take a real serious review of rather than sort of trying to create knee-jerk reactions.ç pretty much for the last almost

year, i guess, the obama administration has embraced this concept of suspicion with collection. there was an opportunity to reform the patriot act. the administration pretty much stood behind having it put back in pretty much the way it is. pretty much any of the surveillance powers have not really been recalculated. one of the most disappointing thing that comes out of this is the statement that the terrorists watch list system worked. well, if there's any better evidence that the terrorist watch list system doesn't work, the christmas incident should be it. you don't even have to look there. in may the department of justice inspector general issued a report indicating there were huge problems with the terrorist screening center watch listing process that created error rates as high as 35%. there were 1.1 million separate

identities put on it. it's obviously a broken system. and that needs to be completely repaired. to get to why that is a broken system, i think, is very important. i think part of the problem is, i think what al qaeda has learned or what other terrorist groups have learned, is they don't even have to succeed in the terrorist event anymore. they can claim credit for a failed terrorist attempt and it gets the same reaction. i think one of the things i think president obama did well was very quickly get the facts out, which was different from the 9/11. as far as what were the actual breakdowns that allowed this to occur. so that we can hopefully have an adult conversation about what needs to be done to repair those problems. rather than sort of knee-jerk problems or solutions to problems that don't exist. but unfortunately the statements

that have come out of the intelligence community and sort of the options that were given don't reflect those problems. things like body scanning, things like adding more names to the terrorist watch list. well, if you look at what actually happened, those are not necessarily the best solutions. therefore even adequate solutions for what the problem is. i hope that we have an opportunity to completely review what is still wrong with the intelligence community so we can actually get the solutions that help us and don't have our enemies. whether it's overreaction or underreaction, i think what we want to make sure is the reaction is correct to address the threat as it exists rather than as different either political or commercial entrants would methol guise -- methologize it.

>> i add my thanks and sayç al i'm very honored to be included in this panel. i come at this set of issues from a rather different perspective. the work that the organization i co-direct pursues focuses among other things on the impact of sear onq public thinking about terrorism and public thinking about appropriate responses to terrorism. and on the opportunities available to political and other leaders to communicate about terrorism with the american public in ways that help create a climate of public opinion in which it's possible to build public support for constructive, farsighted, balanced reasonable approaches to terrorism. so i do come at this from a different perspective. i hope that the kinds of observations i make will add to our conversation. and i think that they will because in a very real sense terrorism, acts of terrorism

themselves are strategic communications. and our responses to those acts need to be thought of in terms of communications as well. so there is a connectionç ther i think as i look back on the christmas attempt, for us it's certainly a reminder of what a perfectlyq engineered manipulation of the body politic, acts of terrorism are. they lead to a kind of emotional hijacking brain which takes place at a neurological level where a primitive sirktry in the brain is activate -- circuitry in the brain is activated which suppresses the action the front of the brain, the part of our ability to attain abstract concepts, and very central to our ability to feel empathy to other people. those things that might lend the

public to be able to support farsighted andç responsible oo proaches toç -- approaches to terrorism are suppressed. terrorism also activates some very basic schemes that make us think that extreme measures are necessary. we feel that we are in an emergency in which it's ok to and necessary to give up some of our principles orw3 rights in order toçç achieve some great degreeu! of safety. it also gives us the feeling of being in a state of war, which has its own implications. among them the stereotyping and collectivization of the enemy. we are in a where the enemy is a group and not individuals. so that's another scheme that gets activated. in addition it exploits our tendency to circle the wagons. and to look to authoritarian leaders for guidance.

those are the sound effects of terrorism on public thinking that has to do with fear, the activation of a sense of being at war. for us as we look at the president and the administration's response to the christmas attack, one set of questions has to do with whether when leaders embrace or otherwise acquiesce to fear inducing frameworks within which to understand them, like a war, is it going to be possible for those same leaders simultaneously to build public support for farsighted, sensible, responsible approaches to terrorism? and a point that follows from that being the notion that acquiescence to the notion of a war also make it impossible for the public to understand some of those measures like increased security screenings at airports for visitors from majority

countries, is it possible for the public to understand that in any terms other than a war on islam, which is a notion that the president has worked very hard and appropriately to reject and to put outside of the picture. to summarize i think for us the question would be has the president and his administration managed to create a continuity between some of his earlier statements of principle and some of his earlierç poststatements like the cairo speech and some of the responses that are being developed and taken in the wake of the christmas event. we see this creation of some continuity in a larger picture among all of the elements of the president's counterterrorism strategy as a really important challenge for him at this point. >> jim, i'll just reiterate. since i feel aç littlet( underqualified compared to some

my co-panelist, i'll try to be very brief. i think there are two things i want to high light. one plays off your poping statement which is that the danger is overreaction. there's never been a time in history when there is a shortage of idealistic young men and women willing to sacrifice themselves for a cause. so each of them can goad us into new and more costly security measures, we have a very serious problem. just to put some perspective on that, i think the other thing i want to highlight is it's very easy to look at the christmas bombing and say there was a failure here, right? he was allowed to get on the plane. there's also a deep success here in the following respect. the security systems in terms of intelligence and screening that our government has put in place since 9/11 meant that the group conducting this ended up with a relatively incompetent, not that highly skilled or well trained operative. there wasn't the space where he could be developed certainly in the way 9/11 hijackers were.

and the screening systems that were in place forced them into using a very cumbersome and ultimately ineffective device. that's what gave the passengers time to disrupt the plot. we can look at this and say this was a terrible failure or say compared to what was possible five, 10 years ago,q we have coe a long way. >> paul, welcome. i want to point out to you and our audience we have a policy analysis by our colleague randell o'toole why we are sitting in gridlock. yourç thoughts. >> i apologize to everyone for arriving late. my colleagues have made some excellent points. i will make two observations relative to the christmas bombing, or attempted bombing very briefly. one is that no matter how assiduously we try to reform bureaucracies and organizations and no matter how many heads we

plan to roll, such incidents will happen. and when we look backwards at something like this with all of the blinding light of hindsight in which certain things seem to be inexcusable and other things seem to be crystal clear, they were cots that should have been put together. we collectively forget in the real time in which government agencies and bureaucracy and officials have to deal with these fragments ofç informatio it looks very, very different. we have been through this all before. and this latest ground of the hindsight filledç precriminatis to some extent got even silly, i would say. references to things like a communications intercept, makes a mentioned of an unnamed nigerian as something people should have jumped all over. the population of nigeria is 150 million. that doesn't narrow the search

for terrorists very much, does it? my second observation is that despite that reality, there is this extremely strong resistence to accept it. we do indulge in hindsight. it's partly driven by the psychological sort of factors that priscilla mentioned and quite clearly it's also driven by the politics. we saw in spades over these last couple weeks with regard toç trying to make political hay out of the latest incident. >> do any of you have comments on what others have said? i'm interested in having a conversation among you. >> i do. a number of quick things. one, i completely agree with paul for whom i have the enormous respect that we have to acknowledge and we have to continue to underscore that our government can do everything right and we could still have a terror attack. the odds are always against us, the odds are always in terrorists' favor, no question about that. that said, it seems to me that

does not and shouldn't be used to excuse preventable failures here. one of the additional things it seems to me that's commandable about the president's response is, what you didn't say at the beginning, unlike the typical government response, maybe i did say it, it's worth underscoring, here the president in contrast to the initial statement on secretary napolitano's part which he says was misconstrued, she said the system worked, the president was consistent in saying the system failed. it was a catastrophic failure, potentially catastrophic failure. and that there were dots that could have been connected and should have been connected that were not just clearç in hindsight, but were clear at the time. just a couple of quick examples of that and to mention one in particular that paul mentioned. the n.s.a. intercepts that a nigerian was being prepared for  here on the homeland. my understanding is at least one of those intercepts, there were several,ç specifically mention the first two names of the terrorist. if you put that together with

the fact that this suspect's only father, not just any guy off the street as it'sç been sd by some in the intelligence qe1ñ butç a respected nigerian banker went physically to the embassy, talked to not one agency but two, the state department and central intelligence agency. he said i'm concerned about my son increasing radicalization. he's in yemen, again theç n.s. intercept. followed those meetings up with written communications and telephone calls. we know that yemen is a hotbed of terrorism. apparently the intelligence communityç didn't conceive of e possibility that al qaeda might attack the homeland, whichç ses to me is anotherç failure and failure of imagination. we also know that al qaeda's fixation on aviation systems, all of that it seems to meç no just in retrospect but before the fact ought to have been enough to put us on high alert. that's the president's view as he has said. another thing i would say is

john brendan, is famous, when he was white house terrorism advisors has acknowledged he was briefed by by the saudi terrorism official who was nearly cincinnatied by an assassin who used p.t.n. one of the explosives used in this device hidden on the body. this information was not shared, he says, with the f.a.a. and with t.s.a. because this wasn't an assassination attempt in a building. it seems to me we have much of the failure of imagination that predated the 9/11 plot. just again to sum this up. this was a preventable failure. if we don't take it to be a preventable failure and learn from it, it seems to me we'll have a failure in the future that's not potentially catastrophic but catastrophic in fact. >> i think it's a close call. is it 20/20 hindsight? >> i also agree with you, but the problem i think is is that

wasn't the promise that was made. the promise that was made after 9/11 is you give up your rights to your electronic records through the patriot act. your right to privacy, and we will protect you. through the foreign intelligence surveillance amendment, you give up privacy rights to your international communications that's the way we'll protect you. you give us billions of dollars, you give us unfettered authority, you take away the burden of oversight and that way we'll protect you. now we find that that was all a wasted effort. surprise, surprise, us giving up our privacy doesn't help the government actually find real terrorists. it just creates a lot of information that the government has to then filter through in which the veryç important piec of information get lost. >> the issue is not whether we are going to pin the label failure again in hindsight, hindsight is the only thing

we've got looking backwards, on a particular incident. i don't differ with the details that clark mentioned at all. the issue is our failures, even if we say yes, it's a failure, are they going to happen anyway despite all the reforms and everything else? i agree 100% with mike. we heard all this before. we had this hugeç fix five yea ago with the creation of a couple new bureaucracy, the office of the director of national intelligence, the national counterterrorism center, and that's what was supposed to prevent this sort of thing from happening. so it's basically the same thing of bureaucratic players. that strongly suggests to me that the answer to the question of are we going to have failures, even if we want to definitely pin the label of failure on what happened a couple weeks ago, are we going to have such failures despite all the efforts of reform? and the answer to that is, yes. >> i just wanted to make maybe

an observation that while i agree with theç assessments th i'm hearing here, i fear that the narrative that the public will take away from this is not that we gave up so much and it turns out it was a waste, but that recently things were allowed to get lax and that's why this happened. and what has in fact happened in the administration is that there's been a revelation and a wake-up call, that's another set of reasons why i said in my earlier remarks that we think, my colleagues and i think it's critically important for the president to be able to draw a through line from his earlier statements of principle and from the kinds of comments he made in the cairo speech, through to the

current policy decisions, if that's possible. otherwiseok the narrative then going to be reinforced is unfortunately, at least there is a good probability, that theq narrative will be one of kind of a revelation and a wake-up call. >> let me raise a question that we didn't really touch on here in the early going. that's the question of the status of al qaeda, if you will. this morning in the "new york times." scott shane does a news analysis the term al qaeda, used as a catch all, has an important distinction. none of the 2009 cases appears to be directly tied to al qaeda central, the pakistan-based group led by bin laden. to the extent we haveç comment maybe jacob, what did we learn fromi] al qaeda? what's the current thinking? >> my senseñr is that there are two things going onçó. aç coherent organization, the

fact that -- that conducted the 9/11 attack. and they are still operating although how much ability they have to do more than kind of encourage people is not clear. but then you have groups kind of in many areas adopting the name because it now has a certain cachet within the islamist, extremist community, it's useful for fundraising purposes and getting recruits. it's also useful for governments. if youç label the group and events in your country as al qaeda related, the united states government is strongly incentivize to come to your side with aid, intelligence assistance, military, things like that. there are theseç factors which play in to magnify the sense there is one organization out there. there is not. one of the interesting streams of kind of reporting that's come

out about the attaaki who killed the c.i.a. agents in afghanistan recently is that that may have been more related to one of the pakistan taliban organizations than al qaeda. but there's a great deal of complexity there that's just incredibly hard to communicate anywhere outside specialist circles. >> i would add to thati] by sayg theçq following. it seems to me we now reallyç have the worstç of all possibl words. -- worlds. after 9/11 commendably the government put al qaeda central, bin laden, the top leadership of al qaeda, the people who conceived of and carried out the 9/11 attack on the run. but our focus on iraq for a number of years, there's no question but that took us -- took our eye off the ball and allowed al qaeda central to

regroup. we all know now there's somewhere along the afghan, pakistan border. they are still in business, we still haven't found them. and they provide at least inspirational support to terrorists around the world. everything i have read, both unclassified and classified suggests they have again regained their ability toç pos }in addition to that we now see increasingly franchises operating around the world with al qaeda, the arabian peninsula most lethal examples. - there are also examples in somalia, north africa, al qaeda, and there is there is concern about al qaeda in west africa. there have been examples of activity in ghana. that's why afrocom was set up to focus on the threat from sub-saharan ay%9ñ in addition to that we have these homegrown plots. i don't think we should necessarily infer from the fact

that there seems to have been an increasing number of them. this past year, since september 11, that necessarily homegrown terrorism is a rising threat. it may wellxd be that the numbe just happens to beç aç coincidence. the point is it is axd threat. i have never believed áe conventional wisdom that we in the united states have less of a potential homegrown threat in the muslim community than the case in europe because our muslim community is better integrated, they areç educated. that is certainly true, but i think one of the things to takeway from bin laden, from a with at( hery, is thatç terror -- a with a herea is that terrorists come in all sizes. it's not the case that if that person is educated it's not led to terrorism. we have a metastasizing problem of terrorism and one about which we should be increasingly concerned.

>> i take exception with one thing. the term metastasize carries with it the connotationt( of a threat that is something that can kill you. we think of it as the stage before you die. this is not a threat that can seriously damage our society. i wouldok agree spreading perha maybe although the kind of quantitative evidence is unclear, andçó certainly can of overall terrorism has not gone up substantially once you drop iraq and afghanistanw3 from analysis, which is a very different thing because of the way we count terrorist attack there is capture lots of civil war stuff. once you drop that out, there's no quantitative evidence that overall rates of terrorism are increasing. the amount of damage these types of events are doing is not going up dramatically. in any meaningful way. describing, yes, metastasizing

carries a connotation that as mike described and jim said, plays into the hands in some sense of the political goals. >> just respond to that quickly. i promise i'llç be quick. with all due respect to jake, it seems to me that that thinking is very, very dangerous. that is a pre--9/11 mindset in a post-9/11 world. and i'm really surprised there is anybody who can make that argument with a straight face in light of the christmas day incident. metastasizing is the right word to use precisely because it suggests it can kill. terrorists are at work outside this country and inside this country today to exceed the number of people killed on 9/11. their ultimate goal is the acquisition of a w.m.d. which would be a game changer for this country which would pose a threat to this country. if we don't recognize that, it seems to me we are laying ourselves open for the ultimate

catastrophe. >> i'll just depend -- as he said in his original words, there has never been a shortage of misguided idealizedç world changers out there who, for whatever their purpose is, have used violence as a methodology for moving their vision of the world forward. whether that's -- that is never going to go away. in fact, there have been w.m.d. -- weapons of mass destruction found right here in the united states. all the those opposed, noents of a dirty bomb together with the instructions to put that together in maine and a chemical weapon was found in texas. the one in maine was found last year. anybody know çabout it? this is a pretty learned audience. the one in texas was found inç 2003, i think, 2004.

why wouldn't you have heard about these? well, because it was a white supremacist in maine and a right-wing anti-government militia person in texas. so we can't talk -- we have to have inv adult conversation abot what this threat really is. the only place i disagree with jacob isç the idea that becaus terrorism is a complex problem and al qaeda is a complex and concept and entity that only experts can really get down to the bottom of it. i think -- i have a lot of confidence in the american public when they are given reliable information.t( and i think the conflation of what theç threat is is a huge part of the problem of our reaction. and unless we can start to have that conversation where we don't callç al qaeda and iraq the sa thing as bin laden's al qaeda and even bin laden's al qaeda the same thing post-9/11 that it

was pre-9/11 much less every other group out there who is like a rolex you buy on the corner not very much like a rolex. part of where i'll criticize johnok brennan's remarks in the press conference, he was given the opportunity to present that. one of the reporters asked, what's the why here? why would this 23-year-old young man be willing to sacrifice himself? why? his response was, al qaeda is an organization that is dedicated to murder and wanton slaughter of innocent. i'm not sure that's really a response. he went on, al qaeda has the agenda of destruction and death. al al qaeda is determined to carry out attacks here in the homeland. i don't think that's helpful. because one of the things the government should realize about the christmas attack, this kid was, 14 years old on 9/11? raised in a country that wasn't

really part of the conflict that created al qaeda, why in the world -- we should be concerned about why this 23-year-old kid over the last eight years has decided he personally is an enemy of the united states of america. we should have an adult conversation about how terrorism actually works. terrorism is a methodology. i have a book about this that i talk about their methodology. part of their methodology is to do exactly what they are doing. it requires us reacting in exactly the way we are react the. -- reacting. if we read their methodology it will give as you road map to not only what we should do is what we should do. a lot what we are doing now is didn't do. >> i told our panel we would be doing a good job if i break up fist fights. i want to bring our attention back to the bam -- obama

administration. we have the arrest of afort hood shooting, ongoing event in iraq, afghanistan, guantanamo, and i'm sure i have missed a few things. let's continue focusing on the actions of the administration in response to all the year's events. paul? >> maybe can i segue into that from what i was going to say in response to some of the most recent comments. the labels, metaphors, whether it's ma it's at that sism, they do more harm than good. al qaeda is a name. does more harm than good in making us understand that because there is this tendency to think of one unified organization. that's not the case. the shane piece this morning in the times is a corrective to that. on the domestic infans that

occurred, i agree -- instance that occurred, i agree with clark, what we are seeing are individuals basically self-radicalized individuals who are the ones taking the initiative to seek out groups, to seek out training, to seek out help. that was true of the northern virginia five. it was true of hasan. so that puts the lie in my view to the concept that the main thing we are wore roying about here is a group that is the center of instigation and action that > seeking out, and drawing these people in. be they domestic actors here in the united states orç those overseas. the threat and even putting it in the singular, the threat is misleading. i'll do it anyway.

is very multisided. it is not just one group. the experts get bogged down into these debates about just what is the status of al qaeda central? it's somewhat of a diversion even if you agree yes there is still an organization there. it is only part of the threat. and the manifestations we have seen all these incidents that you enumerated, jim, are basically not part of that. they are individuals seeking out other groups. and including individuals here in the united states. >> putting you on the spot. labels. labels, communications about this. how does that affectq public perception and publicq policy? >> certainly, as i hinted earlier the label war is an incredibly powerful one. not just because of the label but because it describes a state of mind and a way of thinking, right, that chastesçó the way

people think not only about themselves but ourç collective responses to challenges like this. .ç

it's in the terrorism in some huge sense. we can put together individuals. but the other possibility is to look outward. one of the messages and and

approaches we commissioned and try to test into narratives that might promote public thinking, constructive public thinking about terrorism in the statement here, and we've done this in a variety of different contexts in danchte projects, but one of the promising narratives had to do with helping people understand that while there is a small and very dangerous group of organizations and individuals who do indeed mean us serious harm, the vast majority of people arn the world either hate us or love us.

it puts a larger circle around . >> by way of the importance to evoke a bigger picture, to put that very dire threatçó in a context that enables people to see it as not the onlyñi way of understanding or describing the world out there. and the administration.çó

i think it's fairly clear the early part of this year that the administration is going to eshoo the -- to eschew the war notion. i've seen the administration assuring the public it does believe we're in a state of war. do you see that same thing happen and what do you think of it? >> you're quite right and in his last statement, last thursday, president obama went out of his way to say that we are at war. partly because, of course, he's been under political attack from republicans and conservatives and former vice president chay lee -- cheney's words that we're not at war. the administration is beginning to emphasize this. what i'd say generally, it gets back to your question about how the administration has done on counterterrorism, i think the bush administration

overemphasized the war aspect of counterterrorism and i think the obama administration until now has underemphasized it. i think the proper strategy is to recognize that there are a number of elements to a successful terrorism strategy. we do have to kill and capture terrorists, there is a war aspect. and the obama administration, to the degree they continued that, is understated. people don't realize that president obama has intensified the effort to go after al qaeda in afghanistan and pakistan. he's increasing the number of troops placed in afghanistan and the number one objective for doing so is to prevent afghanistan for again becoming a base for terrorism against the united states. there's another aspect to this. it seems the obama administration has continued

the bush administration strategy of moving law enforcement agencies in general and al qaeda from making cases that can stand up in court and putting emphasis -- he can't make an effective criminal case. the dallas case, the springfield, illinois, case were examples of that, where the bush administration didn't focus is where the obama administration has focused commendably. this is what paracilla is talking about, is theñi struggl for the hearts and minds of the muslim community here in the united states and around the world. we've got to figure out why it is that young people for some reason are perverting the name of islam and using it as an excuse to carry out terrorism. the cairo speech was a

commendable effort to talk in a new way to the muslim world and disabuse some of this notion that because the vast majority of americans are not muslim and do not adhere to the form of islam that the terrorists want us to, we are necessarily, inso facto, enemies of -- ipso facto enemies of islam. i think we do ourselveses a peril if we overemphasize any one of those aspects. >> paul pillar, your a co-author of a chapter in our forthcoming book here at cato that uses military and the war theme. what do you have to add? >> war is another one of those words or concepts that does more to confuse, blur, and con flate. i agree with clark in terms of the main driving mechanism here, it's a matter of responding to political criticism.

that's quite obvious and what the president was saying last week. but neither the obama administration nor its critics have been specific about and i'd either or both of them to be specific, when we say we're not going to call it a war, what does that mean? are we referring to military force? are we referring to how we should handle detainees? there's another example where we put it in this context. those and other issues are ones that ought to be debated specifically on their merits. there are pros and cons to being discussed about what sort of judicial procedures should be used. with captured terrorists. simply batting the label back and forth, are we at war or not at war, doesn't clarify those

issues at all. clark also correctly points out the change in emphasis with regard to use of military force with regard to the drone. let's be blunt about this, too, this is partly a political reaction, this is under the president who was opposed to the iraq war from the very beginning and as a democrat, fairly or unfairly, has to be concerned about not being vulnerable to the charge of being a wimp on national security matters generally so part of what we're seeing is a response to that as well. i hasten to add, that does not mean, here i also agree with clark, that does not mean this particular military instrument does not have a utility as one of the large number of these instruments or some of the others that must also beñi used. so yes, there's a discussion to be had here about the role of

military force, military force does have a role but simply batting labels like war, war on terror, back and forth does nothing to clarify. >> i'd like to kind of, actually, take paul's very good advice and try an lay out two cons of the war metaphor and someone else may be able to speak to the pros. it seems to me the war metaphor for what we're engaged in here -- it plays into the narrative they're trying to construct to the populations they're appealing to of this ragged band of brave individuals fighting the mighty power that's oppressing their society. it plays into that metaphor. it ealso helps their efforts in some sense to create fear and anxiety in our population as a way of kind of pushing us into political changes.

it magnifies the sense of the threat and danger they represent. so it seems to me there's a couple of very clear cons. i'm not clear on what the advantages of this are. >> and getting to the communications strategy, this is another thing during the press conference where secretary napolitano was asking rhetorical questions, we need to look at the whole issue of what is called counterradicalization, how do we communicate better american values in this country and around the globe. if the american value we want to communicate around the world is that if we don't like you, whatever country you're in, we're going to send a predator drone out and blow up you and your family, then we should probably be expecting some hostility as a result of that policy. it's ironic that secretary napolitano is saying this as she's implementing a t.s.a. program that discriminates

against people who, from 14 nations, by the way, 13 of which are prominently muslim nations and you know saying we don't care if you're the most reliable, trustworthy person in the world, because you come from that nation, you're going to get extra screening, period. basically, you know, put forth this discriminatory policy and wonder why they're not accepting that american values are tolerance and acceptance and these different ideas. as a communication strategy, i think we're missing the boat there, in addition to this idea of the war. what is it we're accomplishing by this and if we're creating more terrorists than we're kill, it's not anesquive way of approaching this. >> a lot of what i'm hearing from many of you may boil down to provocative reasons. al qaeda has a plan. it's mapped to their success against the soviet union in

afghanistan. while we sit around arguing about how many angels can dance on the head of a pin, they're trying to break the united states. what you're saying is provocative weakness? people join these groups because they see us being weak, see us thinking twice. shouldn't we be more focused on stomping this problem out? >> i think if you want to stomp out the problem that amounts to small groups of young men and womenñr doing things for abstra causes, that's a key hotic quest.çó -- that's a quixotic quest. they're going to latch onto this cause for a whole range of reasons. if we set for ourselveses the standard that we need to stamp

all of that out, that's not going to happen. >> i think it also, the statement, misunderstands what the terrorist methodology is. they're not looking for a military victory. what they're trying to do is delegitimize the government they're attacking. whatever you say your values are, that's a critical statement and i can prove that by provoking you intoñi making taking actions that violate the values you say you appreciate, that violate the rule of law because once i -- you know, it's very hard as a tift to convince people the law dun matter. right? i have to convince my followers, you can now become fugitives of justice and throw away the rest of your lives because law doesn't matter. until i can prove it. i can go out and commit a terrorist actxd and the

government violates the laws, it creates now law. if the government can create new law we can create new law. that's a powerful message, we're developing a new generation of terrorists and i'm afraid that's what we're in now, whereas this new generation, we're still addressing a problem that existed pre-9/11 rather than looking at this as a comprehensive methodology to try to goad us into action. >> just a quick reaction to that, if i could, jim. it seems to me that jake, in my judgment, overgeneralizes the issue and sets up a straw man. no one says the goal is to stop small numbers of men and women from following quixotic causes. that's not what we're talking about. this is a small number of men and women who have a goal of carrying out an attack against the united states. that's the goal.

it seems our objective should be, agreeing with paul we can't prevent every terror incident, we should do everything we can to reduce the chances of a catastrophic attacks. that's why i think we need to redibble our efforts on preventing terrorist attacks. the other thing i'd say is that, i want to emphasize i'm not a jack booted thug when it comes to this issue. let me underscore again. there is a war aspect of this, a law enforcement aspect, bp we have really failed in the bush administration, and commendably, the obama administration is focusing on the hearts and minds program. because we can't kill and capture every terrorist as rumsfeld of all people famously acknowledged in a memo, we have to get smarter about how it is that we can counter the narrative and we certainly can engage in security measures that perversely create more

terrorists. so it seems to me we've got to come up with a balance. the terrific cold war strategist was so right at the end of that famous long cable in saying, the only way the united states and the west can be defeated would be to pursue the communists in a way that's contrary to our own values, to the same is true for us here. i think it's possible for us to balance security and liberty. quickly, i have in my own mind a calculus i go through when i try to evaluate a given security measure. my calculus is, does the gain in security outweigh the diminution of liberty? i'll give you two examples. thanks to richard green we take off our shoes at airports. none of us likes it but it's a small price to pay in terms of inconvenience if it prevents the next shoe bomber in the absence of any good technology that prevents us strog do that.

there was a, i think it's "usa today" story, that the n.s.a. was trying to get a record of telephone calls not just between someone here and someone abroad, but further, n.s.a. wanted a record of every single call in the united states. that is obviously counterproductive. that puts more hay on the stack when what we need is to have less hay on the stack to find the needle in it. we need to strike the right balance, it seems to me. we can do that but we can't have perfect security and we can't have perfect liberty.

>> we can say how much security do we want to buy at the price of, it might be privacy, it might be personal liberty, might be the convenience of the traveling public, might be monetary kansases. it often is monetary costs. it might be cost in blood and treasure for military operations overseas as in afghanistan. the question that ought to be asked in each one of these endeavors, if it is being conducted in the name of counterterrorism, is how much additional security are we buying at the price of all those things, not just personal liberty. the other point i want to make, it relates to what clark said, this is like a lot of things hashed over last week, names going on a watchi list an all that, this is not a trade craft

or administrative matter, it's a policy issue. it's a policy issue in terms of what criteria we want to use to move some of those half millions of names from the database to the database that can make a difference with regard to secondary screening or being denied a seat on the airplane altogether. that's a subset of how much security do we wan to buy at the price of someone's ability to fly or to fly without getting hassled? one of the most encouraging things i heard or read in the president's directive last week was the part about, i can't remember the exact language, but it was clarifying the criteria for moving names from one list to another. good i think if for -- good thing for the president to focus on. that's not just something nctc can do, or the d.n.i. can do,xd

that's a policy issue to reflect the policymaker's sense of how much freedom the american people want to buy. >> as we continue i want to start to focus on the future. what should the obama administration be doing for the rest of the term and however far president obama's service gos? >> i want to jump in here and just, again, kind of in a cautionary way suggest that there are not very many prices the public will not pay, unfortunately, for safety. and again, i'm not in any way disagreeing with the content of the arguments that i'm hearing. i'm just reflecting on the research that we looked at in terms of how to talk about this. >> i've been intrigued by the -- my sense that there's

resistance to the whole body scanners, which are in one sense obviously an improvement in security, though marginal. >> there's no public resistance. the public is 80% or 85% in favor of full body scans. >> i'm hearing from -- >> it's a matter of changing moods. on the business of what names should go on no-fly lists, there were complains before, too many names are being put on it. if the last scary incident happened three weeks ago, we're in favor of loading all kinds of names on the list, if it's been a few years that have begun by, we start gum bling about how many names go on the list. >> and also i think it'sçó abou the information the public gets. every sales pitch from every standard company has been on the news saying, this is the answer. a british study said it is not. said it would not identify

these specificñi things, powder liquids, and plastics. if the public got the information that this body scanner machine would not be any addition in security, and will show you naked, do you still want it? >> and that's what i was going to say too. >> it's a matter of getting the right information. >> having debate on the basis of effectiveness, a more powerful foundation, and the other foundation is the -- is where these measures are counterproductive. that's where i think you both are getting at the notion of what do you lose by taking some of these measures? and i guess i would emphasize the importance of spelling that out because as long as it's left as a tradeoff between something and safety, rights and safety, liberty and safety, privacy and safety, the majority will conclude that it's preposterous to ask

someone to put those other things before safety. so i believe there is that argument to be made, it's important to connect the dots and help people understand how it is that the costs of some of these measures do not actually -- may outweigh the benefits. i would make an argument for connecting the dots. >> let me ask about an issue that hasn't arisen, the narrative is now carries worldwide on the internet through videos. this event will be watched around the world by people who are keenly interested. we have a different problem than we did 10 years ago or 15 years ago, much less 40 or 50 years ago in speaking to the world. how do we address this?

knowing that everything we say, literally here, but especially the administration and is perceived around the world, what's the right thing to do? how should we change our behavior since we're talking not just to domestic audiences but international audiences. >> can i defer to my colleagues and at some point, not necessarily now, try to answer the other question you pose, that is, what should the administration be doing going forward and i'd -- >> let's do that. maybe we'll go down the line and get two minutes each of you on which what the administration should be doing. to the communications question and then our prescription. >> i think i'll just add one piece of evidence here to get started for the discussions. i did a large national survey in pakistan. one of the things we did is

studied support for four specific military organizations, al qaeda, the sectarian militias and the afghan stall ban -- taliban. what we found is when you take it down to people's socioeconomic circumstances, what they think about the u.s. impact on the world has zero impact on their support for any of those organizations. for al qaeda, this is a little bit odd, they're articulating that they're doing something to deal with the u.s. for the other organizations, this makes perfect sense. all of them, when they go to their public, are articulating goals about specific things that are very local. what we're doing on the world stage is not important. i think it's easy for us to think that how we're perceived and what people think about our actions on the world stage and the massive impact of terrorism, there's not a lot of evidence for that.

i think the main thing we need to bear in mind in response to realities that you summarize is be careful and be aware how much is getting out there. most of that is outside the control of government leaders. so we have reactions to things that say american teleadvantagists which have had tremendous negative resonance in the muslim world. it's not the fault of the bush administration or the oba maw administration, you can be a little more careful and when general voith was speaking in uniform saying, my god is better than your god, that doesn't help. a little more discipline when it comes to those sorts of things are appropriate. i believe as far as what the governmental leaders themselves

can do, it got to most of the messages that need to be heard. once per year, every january, i ask for a counterterrorism atji from the administration, clearly my pull with the administration isn't what it should be. put what should the administration be doing to set the stage for better in the future? >> that's a terrific question. it merits a lengthy answer. we don't have a lot of time. just two or three quick points. before that, i wanted to agree with paul on another point. that is, he's quite right that part of our problem is, and it's the peril of being a democracy, it's much better -- easier in an autocracy than a dictatorship. if the threat of terrorism seems to be real and imminent

because flfs a recent attack last week or a couple of weeks ago, then we go to one extreme. if years pass and we get terms like overreaction, we have to use this term we used again anp again and have an adult conversation about terrorism. we have to be adults about it and recognize that even when it's not an issue staring us in the face in the headline, it ought to be a concern of the average mesh and a top priority concern for the government. i also wanted to defend the whole body imaging machines we've talked about a couple of times here. they are not perfect. and there are certain things they cannot detect. if an explosive is hidden in a body cavity, it can't detect that, but it is the closest there is now to a silver bullet. they can spt concealedñi guns a knives hidden on passenger's clothing on their bodies. they can't detect thatçó what i

hidden is an explosive, but they can detect no, ma'am anomaly on the body. they would note that there was something odd on the man's person, one would think there would be a further physical inspection which would have found the explosive. we need to couple this technology withxd other technology. that's in part why you've got this, in addition to the hysteria, of course, why you have this huge public support for it in the polls. to answer quickly your question, what should the obama administration do going forward? let me focus my comments on the department of homeland security. we need to put homelandñi security back in the department of homeland security. what do i mean by that? part of the reason why d.h.s. is still getting its sea legs seven years after its creation is so much of what the department of homeland security does doesn't have anything to

do with homeland security, counterterrorism. secretary napolitano spent a lot of time last year, no fall of hers, but spent so much time in her early months with the threat of the h1n1 virus, that should have been handled by the h.h.s. i'm not a political analyst but they'll take up immigration reform this year. if they do, i would argue that the department of homeland security should not be the point agency for that. it's been announced that d.h.s. and the secretary would be the point people for that. of course there's more of a security connection to immigration than the case of the swine flu. the department of homeland security processes immigration benefits and enforces immigration laws, they'll have been to be involved and consulted but the security component of immigration is really very small. it is overwhelmingly an

economic issue, a sose yo cultural issue. the point is, d.h.s. was conceived in the wake of a terror attack to try to prevent the next terror attack. counterterrorism should be its focus. the second point is, i worry -- and i was part of the transition, i was appoint as inspect job general for the department of homeland security at its inception by president bush and i was the can co-chair of the transition team to the obama administration, i bring a nonpartisan perspective to an issue i think ought to be nonpartisan, homeland security. one thing i worried about was the obama administration's decision to collapse the department of homeland security council into the national security council. i understood and applaud the rationale for doing it. the reason was the bush administration's tendency, wrongly, to think that the homeland security and national

security essentially had nothing to do with each other and they must be, as the obama administration realized, part and parcel of the same thing. that said, unless there's a parallel structure competing with the n.s.c., the president is not going to hear as much about our latest vulnerabilities in aviation as about the latest machinations in iran or north korea. the president, i don't know that he explicitly said this, but implied that he's more focused on aviation security and other homeland security issues going before than was the case beforehand. if there's any organization changes that need to happen, i would close by saying, before you got here, paula, i agreed that the last thing we need is another major organization. we created these organizations after 9/11 and they failed, but if there's to be any

organizational change at all -- >> clark and i disagree on far more than just the body scanners. i'll focus on what we do agree on. i have tremendous respect for the work he did at the homeland security department as inspector general. that's one aspect completely missing from all our terrorism effort, flst no accountability. that is the big problem. that is what is causing this failure in communication is that the american public doesn't have the facts on the table so it's impossible for them to engage in any meaningful debate about these policies and all these porn issues. i think that's something that this administration needs to address immediately and they're already a year behind. a top to bottom review of every intelligence agency, every intelligence authority, every intelligence practice and procedure, to gauge its

effectiveness and whether it's being abused to gauge whether it's a complete misuse of resources. if we don't understand that and can't communicate that, all these other debates about what works and what doesn't are meaningless without facts. and the second thing we need to do is make sure that our policies and procedures actually do express the american values. tolerance, transparency, you know, respect for the rule of law and due process. those things ultimately will keep us stronger and protect us better than any sort of effort to stomp out who we perceive is the bad guys. and you know, this christmas incident gives us that opportunity to say, hay, wait a minute. we receive a lot of promises from the intelligence community but what is actually happening? what are the actual breakdowns and let's do a review of this.

there's a bill in the house that was proposed by representative barbara lee that would create a congressional body that could do exactly this type of review. i think that's what is really necessary so we can have the facts on the table and engage in a conversation about the areas that we actually disagree once we're all working from the same facts, rather than arguing from our -- from different sets of facts. >> i will take as a given that we need at the level of government a strategy. a counterterrorism strategy. so my points will go to what we need by way of a communication to and with the american public about our counterterrorism strategy. i would start by saying that i think a lesson from the last year is that, don't overreact while true, is not enough. it is about not doing things

rather than what we do need to do, think, and feel about this challenge. that's the big challenge. to develop a positive agenda that represents a real alternative to the war on terror with all ofñi its potential for abuse and overreaction. and it needs to be a communication or narrative to be shared with the american public that is as compelling, as easy to sync, as a war on terrorism if at all possible. i know that's a very, very high bar to imagination from a communications standpoint. it needs to be a narrative that includes all of the profoundly important assertions made in the cairo speech, all of the principles that mike refers to but that also tells us how a different approach will keep us

safe. it needs to promote clear thinking. it needs to enable people to take in facts because as long as the kind of framework for thinking is the war on terrorism, there are facts that will simply not be heard or that will be rejected because they don't fit that frame. and it needs to be a narrative that is in the hands of everyone who is capable of influencing public thinking at a significant level before the next crisis happens. state leaders, educators, community leaders, members of congress. the fact that there could have been any sense of not being prepared for what to say after something like the christmas attempt and after evidence emerged of potentially dangerous homeland sources or domestic sources of terrorism, that could have been

unanticipated or unprepared for in some way is unimaginable. those things were so inevitable. the need to prepare for those things from a communications standpoint is critical and clear to me. and i would just add two more points, one of them being that i think -- at this point, as opposed to a year or two ago, there really is a challenge of trying to present a narrative that includes and takes account of what's being called the homegrown terrorism threat. rather that's -- how real that is, whether it's growing or diminishing, it is out there and it is beginning to shape public thinking system of this new narrative has to take account of that. i would just -- and i don't have a recommendation here. i would simply observe that ironically, the very narrative that helps to promote constructive thinking about how to address international

terrorism, the narrative of counterradicalization, which leads people to think bigger and to think upstream and think longer term, that very narrative may have some potential to backfire when it comes to thinking about the domestic terrorism threat. because it could promote increased public fearfulness about the possibility of violence from muslim and arab communities. if the thought becomes widespread that any unhappy, disgruntled young american muslim or arab is potentially a violent extremist, that could be problematic. radicalization other there is different than radicalization here, essentially. the last point i would make, as i look back on, we're talking about a communications strategy for terrorism, those are all very kind of top down things. i wonder whether there's an opportunity in the coming year for the administration to engage the public in thinking

about how it is that we would like to respond to the terrorist threat and the next crisis. the obama campaign broke such new ground in terms of engaging people create ily and actively in this process. what they are opportunities to reach out to the incredibly diverse american public and draw on the strength and insights of citizens to try to solve this problem and in so doing to unify in some ways our society and build resilience and -- as we confront this threat. i see some opportunities and real challenges for the administration. >> if each of you take two minutes as defined in scientific terms, we'll have about 10 minuters in audience. >> i think my -- the obama administration, the continued aggression in terms of counterterrorism is great.

there's a striking line in the white house report which is that there was a failure to, and i'm quoting, assign responsibility and accountability for followup of high priority threat streams. that's an appalling managerial failure, if someone failed to organize their team, that needs to be held to account. >> the last thing we need is more commissions of inquiry which have their own motive tooff their existence by uncovering problems and proposing fixes even if they were problems and fixes uncovered many times before. i think looking at the president's directive last week, you get an idea of how this is a struggle, in this case by the administration to come up with any new ideas. those weren't ideas. they were exhortations to sort of do what we've been doing all the time but try to do it well. improve analysis. make sure somebody isçó

responsible. >> we'll leave this recorded event to take you live to the white house and a statement by the president. >> our country has endured the deepest recession we've faced in generations. much of the turmoil was caused by the irresponsibility on the part of banks and financial institutions. firms took reckless risks in pursuit of short-term profits and short-term bonuses, triggering a financial crisis that nearly pulled the economy into a second great depression. a little more than a year ago we stood on that precipice. several of the world's largest financial institutions already failed, credit markets froze and banks refused to lend. trillions in household savings evaporated as stocks, pensions and home values plummeted. we were losing hundreds of thousands of jobs each month. it was at this time that many large financial firms, those left standing, teetered on the brink of collapse, overwhelmed by the consequences of their

irresponsible decisions. even though these firms were largely facing a crisis of their own making, their failure could have led to an even greater problem for the country. the federal reserve and other agencies took emergency measures to prevent that outcome and the previous administration started a program, the troubled asset relief program or tarp, to provide them with funds to survive the turmoil they unleashed. it was a distasteful but necessary thing to do. we've worked over the last year to manage this program effectively to hold firms accountable and to recruit as much tax money as possible. many originally feared that most of the $700 billion in tarp money would be lost. because of the management of this program by secretary geithner and my economic team, we've now recovered the majority of the funds provided to banks. as far as i'm concerned, however, that's not good

enough. my commitment is to the taxpayer. my commitment is to recover every single dime the american people are owed. my determination to achieve this goal is only heightened when i see reports of massive profits and obscene bonuses to some of the firms who owe their continued existence to the american people. folks who have not been made whole and who continue to face real hardship in this recession. we want our money back and we're going to get it. and that's why i'm proposing a financial crisis responsibility fee to be imposed on major financial firms until the american people are fully compensated for the extraordinary assistance they provided to wall street. if these companies are in good enough shape to afford matsive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers. now, our estimate is that the tarp program will end up costing taxpayers around $117

billion. obviously, a lot less than the $700 billion that people had feared, but still a lot of money. the fee will be in place for 10 years or as long as it takes to raise the full amount necessary to cover all taxpayer losses. this will not be a cost borne by community banks or small financial firms, only the largest firms with more than $50 billion in assets will be affected. and the size of the fee each bank owes will be based on its size and exposure to debt so we are recovering tax dollars will promoting reform of the banking practices that contributed to this crisis. now, the fact is, these financial institutions are essential to our economy. they provide capital and credit to families purchasing homes, students attending college, businesses seeking to start up or expand. that's why the rescue program was as necessary as it was unfortunate.

and that is why, through this fee and broader reforms we seek, our goal is not to punish wall street firms but rather to prevent the abuse and excess that nearly caused the collapse of many of these firms in the financial system -- and the financial system itself. we cannot go back to business as usual and when we see reports of firms once again engaging in risky bets to reap quick rewards, when we see a return to compensation practices that seem not to reflect what the country has been through, all that looks like business as usual to me. the financial industry has even launched a massive lobbying campaign, locking arms with the opposition party to stand in the way of reforms to prevent another crisis. that, too, unfortunately is business as usual. we're already hearing a hue and cry from wall street suggesting that this proposed fee is not only unwelcome but unfair. that by some twisted logic,

it's more appropriate for the american people to bear the cost of the bailout rather than the industry that benefited from it, even though these executives are out there giving themselves huge bonuses. what i say to these executives is this, instead of sending a phalanx of lobbyists to fight this proposal or ememployeing an army of lawyers and accountants to help evade the fee, i suggest you might want to consider simply meeting your responsibilities. i urge you to cover the cost of your rescue, not by sticking it to your shareholders or customers or fellow citizens with the bill but by rolling back bonuses for top earners and executives. more broadly, i'm continuing to call on these firms to put greater effort into helping families stay in their home, provide small businesses with needed loans and to embrace rather than fight serious financial reform. ultimately, it is by taking responsibility on wall street,

here in washington, all the way to main street that we're going to move past this period of turmoil. that's how we're going to avoid the cycles of boom and bust that have caused so much havoc. that's how we're going to promote vibrant markets that will promote innovation and entrepreneurship and hard work. that's how we create growth. that's not only in the best interest of the economy as a whole but in the interest of these large banks. i'm going to be working with congress closely on this proposal and on maff of the american people, i look forward to signing it into law. thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> we'll back back at the white house in about 40 minutes, 12:30 eastern time for today's white house briefing with secretary robert gibbs.

we'll have live coverage. late they are afternoon, more from president obama as he speaks at a jobs summit held by the house democratic caucus. congress is out of session so members can attend that meeting, which is being held at the capitol visitors' center. that event begins live at 4:45 p.m. eastern here on c-span. through the day today here on c-span2, day two of public hearings by the financial crisis inquiries commission. witnesses include financial regulators and two state attorneys general. the commission is scheduled to december of this year. that's on c-span2. here on c-span we expect a state department briefg to begin shortly on haiti relief and rescue efforts. we plan to carry that live for

you if it takes place before the white house briefing. until then, a portion of today's "washington journal." host: here is the front page of "the wall street journal." host: we would like to get to your calls. we will begin with chantilly, host: we go to chantilly, virginia.

caller: google was bought last year by the c.i.a. we owe a lot of money to china. the c.i.a., the government controls everything. when you put a video on youtube, and it's talking about government, it's being removed and it's being removed because they don't want people to know the truth about the things that we do around the world. is being removed. it is being removed because they don't want people to know the truth about the things we do around the world. i do not know where this is going to go. but we need to wake up. host: before you go, you asserted that the cia has a majority shareholder interest in google? where did you find that information? caller: besides c-span, i don't

listen to the media because i cannot listen to the media. i get my information through a website network that is growing so fast. they only started last april. he was only in one state and now he is in 11 states. host: you heard about this alleged cia investment in google from there? caller: it is a lot of information about health, government -- i encourage everybody to go to the network. host: "the washington post" today. this is more about other companies that concerned about their security.

host: back to your calls. federal way, washington. sure when on the democrats' line. audicaller: i say, where's the

beef? article points out where we are vulnerable through google and our government agencies and things, but at the same time we are doing the same thing to china. google, that is the nature of the beast. it goes with the territory. google can pull out of china if they want to, but that is not going to stop a cyber war. host: north dakota from the democrats' line calling us from illinois -- eddie from the democrats' line. he is gone. a headline in "the wall street journal" -- what is new front among cold war foes. the next call is from austin,

texas. caller: good morning to you. i was just reading the business section oft ofthe oregonian -- business section of "the orgonian." that other companies would follow their lead. but i thought it was kind of interesting, just a couple of days ago, several chinese authors over there accused google of digitizing some of their books on google books without compensating for getting permission from of these offers. now we are hearing that google will fended -- offended the chinese government', that the hackers are trying to hack their information.

i think googled has been known to steal works and not compensate a lot of authors right here in this country and it has gotten people were right. and i think they tried to do this over in china and china basically said, no way. can i also just real briefly comment -- i heard a guy called earlier about? host: very briefly. caller: you asked,ç why would't the government -- would the government starts swine flu? was in our government behind infecting the blood of the tuskegees with syphilis? host: usec in 2010 you are concerned about the government doing this? caller: i don't put anything past them. in fact, a couple of years ago john hopkins university went to the poor neighborhoods in baltimore, maryland, and east st. louis and deliberately and

without informing the poor people in those areas, the black people, that they were deliberately putting lead in the soil, and that was reported and "the baltimore sun." host: let us move on to ogden, kansas, norman on the republican line. caller: i think any company should be allowed to move out of any country that they want to. yes, there probably is a lot of spying going on. but we people here in the united states should be able to do what we want to. as long as it is legal, that is what the constitution says. host: the off a lead and "the new york times." it quotes --

this was not the first time the company had considered withdrawing from china. let's take a phone call from oglesby, illinois. good morning. . let's take a phone call from ogilvy, illinois. caller: thank you for taking my call. host: what did you have to say? caller: we are talking about google pulling out of china and the comment i have to make, we still have to remember that china is communists, they want to put on a capitalist face but they are communists. we have gotten pet food from them that has been tainted. we have gotten toys from china that have been tarnished.

it is just a little ridiculous that -- you can walk into wal- mart and everything is made in china. we need to stop this. the trainees are communists. they don't treat their people right. and -- the chinese are, as did everybody talk about all of this step, racial, i don't know where you are going but that is my comment. host: "the wall street journal" has an interesting inside look at google itself. you can see the headline. these are the founders of google -- and their ceo, eric schmidt. it suggests the three engaged in a heated discussion. sayre de -- sergei is originally from russia and it talks about his philosophy toward china coming from that.

the next call is from travers' city, michigan. john on independent line. caller: thank you for c-span and caller:çó i'd like the education and understanding of the free society. it is my understanding that google went into china understanding that they were --

i guess the word is compliant with the censorship and restrictive regime said as a condition for doing business in china. therefore, to me, minnow, when you go -- you know, when you go swimming with sharks reminded didn't. host: here is an editorial about the same thing.

anymore reaction? caller: that sounds to me -- i mean, that's good. it is a good thing that everybody, and myself, got to hear it. but once again, this seeking of the undoing of things like google and it being the access point for people to do hacking and destructive activity, or at least potentially so, given the general nature of the communist threat -- it comes as no great surprise.

if google decides to get out, so much of the better. but given the lack of putting together and connecting the dots with respect to the christmas attempt, i only got to thinking, my goodness, if there is a company that could come up whiff a computer algorithm that would be successful at connecting the dots, something as successful as the search engine of google, the people responsible for that could well be in a position so as to act in terms of a subcontractor in order to address the not connecting of the dots phenomenon we have with respect to intelligence. it seems to me them pulling out and at least appearing angry

with the chinese or whenever would stand them and better stead so as to perhaps some land government contracts with that sort of security in mind. host: john, appreciate your comments. the next phone call is from belts bill, maryland. on the democrat line. caller: from the time that google said they were going to go into china in 2006, i felt then that they had their heads in the sand. china is what it is, in it -- and oppressive country, and they show a good face to the public to get what they want. i feel that once they got the software it into china, they did exactly what they meant to do in the beginning, and that is to use it to hack into other countries and also to limit people in their country from the

more knowledgeable by blocking certain things. i think google was there mainly out of greed. they got as big contract and was like, wow. and now look at it, all of the worms are coming out of the can. it and i think the world at large is at risk because of china's oppressive methods. but i don't feel sorry for google but i hope they get out of there because the things that the chinese are doing to the people as far as limiting what they can here on the google, what good is it except a tool to have other nations? thank you. host: google's is not china posture majority internet. the majority of the market is a chinese search company. we will tell you more about it if i define it quickly. people talk about censorship. "the new york times" has this story.

çó host: it says also that outside the company's offices in beijing, a trickle of young people laid floral bouquets and notes at the multicolor sign bearing google's logo. as daylight faded, two law students approached with rice liquor and lighted candles. she wanted to make a public gesture of support to google who steadily lost market share to baidu, the chinese company.

it is the major search engines in china. jim on the independent-minded you are the last voice on this. caller: basically i work for a company in massachusetts, and medical company. there was a chinese national who was working there and they were talking blueprints, stuff like this -- so there is domestic spying going on here. but on top of that we have our companies over there. i'm just wondering what is the extent of the spying going on with those companies and the technological documentation that they are getting from those companies that operate in there. now, on top of that, during of the clinton administration, you've got to remember that it was aircraft that petitions clinton -- hughes aircraft

guidance system for the missiles -- not the missiles, but the rockets soq they can launch american's satellite into orbit. the bottom line is, after they got the >> at the state department in washington, d.c., that briefing on hayify that we were expecting to take -- haiti that we were expecting to take plays now has been delayed. now scheduled for about 1:30 eastern time. we'll be recording that. maybe able to bring itñi to you live if gelts underway after today's white house briefing. and speaking of which, that's scheduled to start at 12:30, about 20 minutes from now we'll take you to the white house for today's briefing with press secretary robert gibbs. live here on c-span. and until then, more from today's "washington journal" with a discussion on health

insurance exchanges. host: yesterday, the white house that with a defect of conference committee with house leaders and the president over the health care bill. one of the headlines here in the "new york times" -- this is about the different versions in the house and senate versions over insurance exchanges. here to talk about that is linda blumberg from the urban institute. she is a senior health policy fellow. she has her ph.d. in health care. what is the basic concept of in exchange, and what is the difference between a state-run and federally-run? guest: the health insurance exchange is a government entity that creates an organized help enter the marketplace.

it is focused largely in pieces of legislation involving purchasers and those who would be purchasing through small groups. it does not bear risk itself, it contracts with insurers to provide the coverage. its intention is to ensure that they are complying with consumer protections, that it is fostering cost-efficient, good competition among health insurers, and is helping people and all and expand health- insurance coverage to those who do not have it today. host: most states have health insurance commissioners whose job it is to oversee the insurance providers. what is the difference? guest: insurance regulators do not play a role in helping people get coverage. they do not provide as much oversight, frankly, for the

consumer protections, as we would like to see. right now we are creating a system where we will facilitate health insurance competition, which is lacking in the best majority of markets today. the exchange is a way to organize the market, held it function better, and assist people to get coverage, which injured commissioners do not do today. host: no. any states that are currently running successful the changes? guest: yes, massachusetts has done a good job. the uninsured rate in the state is below 3%, analyst in the country. host: how did they do it? just go through a variety of tools. they have this thing called a connector, basically, an organization to help with coverage. it provides subsidies for health

insurance coverage to those up to 300% of the poverty level. all low-income adults and children have subsidized health insurance coverage there. and they provided different insurance regulations to help make sure risk was being spread broadly, that the sec -- sick were not being discriminated against. host: we would love to hear from you, particularly you in massachusetts. it looks like the debate will be if legislation should be at the state or federal level. is that correct? guest: senate is the state, house is federal. host: they were the ones most interested in the public option.

this is one way to help those people who wanted that. guest: you could still have a public option if it was state- based. massachusetts does not have that right now. host: the phone numbers are on the screen. massachusetts, let us talk specifically at what has happened to health care costs. guest: their health-care costs are growing basically at the same rate that they had been prior to reforms. so what they are doing is spending more government dollars as they move from federal interstate dollars to provide coverage for people who did not have it before, but in terms of the cost-containment concern, that is the biggest issue. while they have done the expansion and it has not created

a worst cost situation, they are struggling with to do now in the second phase in terms of slowing the rate of health care spending, which is an issue we face all over the country, not just massachusetts. host: what should be the issue as congress looks at this cost side? guest: we want to be able to put in place as many strategies as we can in order to slow down the rate of growth in a way that will not affect medical care. in these proposals, congress is putting in a number of different strategies to do that, but frankly, we are in a situation where some of the science has not caught up with our desires, and we are trying to figure out what will be the most effective. what we do know that has been helpful -- although it is

controversial -- is the public option plan. host: how long will states have to set up these exchanges? yes, as it stands now, they would need to be set up by -- guest: as it stands now, they would be set up -- need to be set up by 2014. there are requirements to obtain coverage. host: could you explain the difference in how they federal plan would be structured, compared to a state plan? guest: it is a manner of who will be overseeing these exchanges. either it will be the federal government or individual states. under the senate version, which is state-oriented, they could opt out, or if they demonstrate they are not able, the government could step in.

on house side, the opposite could happen. in individual state such as massachusetts who had it up and running code apply to run it on their own and get approval. so there are some outlets on both sides for the opposite to occur but the key is how much uniformity there will be across states in the types of plants people are for dissipating in, which plans are in, which are out, how the information is collected and dispersed to consumers. host: the house has a suite of plans to choose from. guest: the federal employee health benefit plan has a flavor of the help change to it.

it is still employer-based, so it operates differently. the only people who can obtain coverage through the federal plan a party their people working actively for the government, or are retirees. it is different because they do not have to worry about enrolling uninsured people. the notion that you have a suite of plans, and someone is giving you information, which is great, compared to what other employers to, it does help consumers compare their options and figure out what is best for them. so there are some similarities, but the connector would go quite a bit further. host: does the urban institute have a position? guest: we did not take issues.

we are a nonprofit organization. we are about information, not advocacy. host: chris in michigan. on the republican line. caller: i have a couple of questions. i have family in massachusetts. i have sold health insurance and private markets before, so i am familiar with what is happening there. i am in michigan and i am unemployed, so i understand a range of these issues. my question with exchanges has to do with two things. it assumes people are not capable of making choices and understanding health insurance on their own. i have a variety ofr

it puts the government in control of private health insurance companies.ñi massachusetts, i know, is twice as expensive as any policy i can buy in michigan with equal kind of coverage. so i don't see how the government controls or the health exchange actually either others will costs or makes it easier for me to have insurance. maybe you could comment on that. guest: sure. you raise a number of different points and i'll try to touch on them. the issue of information is a very big one in health insurance right now. particularly in the private nongroup insurance market, those people who have to buy health insurance coverage on their own. there are a number of different options out there, you're right, about that. but there's also an enormous variety and a real lack of information. very typical in nongroup health insurance markets for insurers

not to provide documentation of their details of a policy until it's actually sold and someone is enrolled so people don't have full information about what they're buying, they may get summaries but they don't get details. they don't have a lot of information about what their cautionary is going to be on typical types of services often. so people can get, you know, very little information ahead of time in terms of what drugs are in the formlaries, what their doctors -- which doctors are going to participate, etc. and so the health insurance exchange could provide very uniform information, require it of participating insurers to make sure someone buying something they understand and that they know. it doesn't mean that there is going to be fewer options available to people, especially since it's going to be very costly today for people to buy for health insurance coverage on their own. they often have to pay a fee just to go through the enrolls application process. so there would be a lot of changes here in terms of the

uniformity and completeness of the types of information. in terms of cost, individual health insurance today is the most expensive way to buy coverage. it really is for most people, the coverage of last resort. when they don't have an option through a public program or through their employer. the administrative costs in as a share of what the benefits are that are paid out in individual coverage can be 30% to 40%. so we're talking about a very expensive way to buy coverage and so expanding the group's centralizing marketsing, facilitating enrollment so that the individuals have an easier time getting in, could hold down those costs considerably and has in massachusetts. also the more information you give people and allow them to compare plans easily, the more you're giving incentives for insurers to be cost efficient. because if you can compare that's what creates competition. if you have a lack of information it's very different -- difficult to foster a

competitive environment. host: shreveport is next. caller: yes. i just was -- i had a couple of questions and thanks for c-span and thanks for taking my call. the so-called reduction in medicare that the republicans more or less talk about on a regular basis is really -- is it information or misinformation about the program, either the senate or the house of representatives bill, are they going to really reduce the amount of money into medicare to pay for this plan? and also the public option, why is it that they are not wanting to really fight for the public option? it seems to me that that would be a good way to go and if people are purchasing

insurance, you know, they're responsible for reading the policy and knowing what coverage they have and, you know, it's just like taking out a loan. if you don't read the fine print and you sign on the dotted line, you're responsible. because it's a contract. andity think the republicans are just fear mongering and trying to kill the bill simply because of the input of the lobbyists from the insurance, you know, the big corporations. host: thanks for your call. guest: a comment on the medicare question briefly. the pieces in the health legislation that would reduce costs under medicare, are really comprised of a number of components that have been discussed by legislative advisory commissions in the past, pretty extensively, such as the medical payment advisory council which advises congress

on issues of payment in medicare and have also been ratesed by the congressional budget office and these are pieces of the medicare payment puzzle that have been pretty resoundly discussed as playses where there are overpayments in the current system. and that regardless of health care reform, these have been savings that many people, many experts in the field, feel like should be put in plays anyway. and so what's been going on here is the notion of, well, we've got a big, you know, a large expansion of health insurance coverage here, there are costs associated with that, let's put these in place that we know are good business practice anyway for the medicare program and use those savings directly to help finance health care reform. my expectation would be in the current budget deficit environment that if we didn't have health care reform, these medicare savings components would be put in place anyway

but used for a deficit reduction. reduction. here we are using it for financing health care reform. they are not things that will -- medicare beneficiaries will feel just as adversely affected. this has been one of the most controversial components of the legislation. with regard to what we believe would be the impact of having a public option -- a strong public option available in the health insurance exchange, is one that would basically catalog their competition. it would be there as a lower administrative costs and a somewhat lower payment rate-type of plan available. because of its presence, it would force other insurers to negotiate with providers in a more aggressive way. right now we have a lot of concentration in health insurance market, but we also

have a concentration in the hospital markets. this has created a situation where there is not a lot of incentive for in jurors to lower the rates -- insurers to lower the rate the our pain thethey are paying. host: next phone call. caller: i have a couple of questions. i am on medicare and medicaid. under the current bill, would i be required to purchase insurance? my second question is, what are people not looking harder into why the's health care system? even rush limbaugh has praised it as the best health-care system in the world. -- hawaii's health care system?

i understand it is a social system and he seems to praise it as the best in the world. i am sure he is angering the gop world. guest: those individuals that are dual eligible would feel little difference, if any, under the reforms. as far as individual mandates to have health insurance coverage, it would apply to those non- elderly individuals who are over the poverty threshold. in terms of medicare and medicaid coverage, that would certainly qualify as acceptable coverage. so the world should stay pretty much the same. hawaii is an interesting state. it is a state that does not have a government system, although

that is a misunderstanding. what they have is different from other states. they have some requirements@@3bh that's why they have coverage in other states. they do not, however, have any extensive system in terms of providing financial support to the low income population beyond the medicaid program and so they really could use a lot of help and would get a lot of assistance from this reform in terms of expanding their coverage and providing support. host: this is the question that house and senate negotiators are facing in their meetings with the president, democrats worked for many hours yesterday . there's one paragraph here.

guest: that would create a lot of complexities and problems, frankly. what we don't want is people eligible for more than one exchange because, number one, what it does is create more administrative costs. it also sets up a situation where you could have competition between insurers in 1 exchange and insurers in the state exchanges for the healthiest individuals but then it creates a problem where we haveñi to worry about whether or not people who are higher costs have higher medical needs are going to have as affordable of coverage as as affordable of coverage as people who are healthy

caller: for state medicaid, this is a strain during these times on the states to find funds for the state medicaid. medicaid medical providers seem to dwindleñi and more people of

course will beñi in need financially on state medicaid. some people unfortunately there's a stigma in state medicaid and as some people know also, if you have medicare it is getting ever hardered with a dwindling pool of primary care providers to find a provider for medicare. medicare. it would seem that had the specter of the stigma is growing taller, whether they are eligible due to circumstances, seemed to becoming second-class citizens, and this is slipping away from the debate. i could go on for quite some time about this, but i wonder if

anyone will address these issues of the dwindling pool of primary care providers and the stigma that some of these existing plants are getting, not to mention the stigma of the public plan. where are these providers going to come from with the ever- increasing cost? i will be happy to take my comments off the air. guest: with regard to state medicaid and cost, all those would be made newly eligible for the program through the reform. they would be enrolled in the states, but states would receive very high matching rates. so the government would be internalizing the vast majority of the cost associated with

those newly-eligible individuals coming into the medicaid program. . @@@@@ @ @ @ @ @ @ @ @ @ @ @ @ @ and i think what we're able to discern is that the more individuals are made eligible for medicaid and other programs like it, the less the stigma is there. for example, the participation in the program that supports the most income population in massachusetts has been very, very high. once the culture of the community changes in terms of the notion that there's an expectation that people are going to have health insurance coverage and that there is some community responsibility involvement in ensuring that that's happening, that that still ma eases and i would think under this with a great

deal of outreach and facilitation making it easier for these people to get enrolled in states today that that will improve quite a bit. provider supply and payment rates is a significant issue. it will be a continuing one. the issue of -- the house legislation does include some additional funds increasing some payment rate in the medicaid program, whether or not that survived the compromise from the senate, we still don't know. i think it's important for that to occur for some of the reasons that you are alluding to and i think these issues with regard to differentials between payments to physicians under medicaid and under medicare because medicaid generally pace quite a bit less than medicare to providers, think will be one that continues and i would imagine that over time we might see those payment rates coming closer to medicare levels. host: assuming that a deal is reached between theñi negotiato

floor, a question of how it gets to a vote, cnn news.com is asking white house spokesperson robert gibbs about posting this legislation for 72 hours before a final vote. here's what they say. white house spokesman declined to say whether or not president obama would advocate posting a bill for 72 hours before a final vote by the house and senate. quote, i don't know theçó exact answer toçó 72. i know that there have been, i think health care has been the most covered story by the news media in 2009. cnn news.com asked whether there would be a chance to view it online and his response, i think we all have had plenty of discussion on health care. what has gone through the process at this point is no surprise to anyone. this is not something that's going to happen in 20 minutes. i'm sure people will have an opportunity to see what's in the legislation.

guest: the process is very complicated and that's not my specialty. it's, you know, it is a situation that is unfortunate that we have such a patchwork in terms of our current health insurance system. lots of different pieces that work very differently for different populations, that if you are trying to improve the situation for many people while at the same time preserving the pieces that people like, which is what they're trying to do here, that it ends up creating very complicated legislation. and that's why we have these very large bills that are difficult to get through. host: biloxi, mississippi. caller: good morning. watching -- i watch the whole health care debate from gavel to gavel on -- in the house. it always became -- very hopeful about what the outcome was and then i watched my spirits sink as i watched what happened to it in the senate.

and then right away that sounded exactly to me like that massachusetts bill which was -- which i have heard about a long time ago which i knew was m.i.t. rahmny's deal -- mitt rahmny's deal. it came to mind what was said, in this country you have two conservative parties and one is just basically less conservative than the other one. because the thing that bothered me about the rahmny plan was that like any state that has, for instance, auto insurance, you had to require auto insurance, we just had that happen to us three or four years ago and within a year's time, the auto insurance premiums went up 30%. this is not an exaggeration. it went up 30%. it went exactly the opposite of what they claimed would happen. now, i like the way this woman talks about all the health care

and everything because she seems so thorough. what i don't get is, once you have an insurance exchange but tgs still a mandate, what would -- you're still going to have the mandate. what would then, even the insurance companies in the exchange, what would inspire them to lower their costs? i don't get it at all. and it still has me worried that it's like a two-party system but with one less conservative. you know, that it looks like they were spoon feeding customers to the insurance company. thank you. guest: well, what i'll try to respond to are the issues of your concern about cost containment and what the incentives are and the situation with the exchanges -- let's take a step back and talk about today for a moment. right now there is not a lot of incentive for cost containment

in the private health insurance system nor in the provider system. the way that things are structured now, there's really a lack of ability at some level for the insurers to bargain in many cases with the providers in order to hold down their fees and then in order to pass those savings on to consumers. the idea of the exchange is not one to have the government set rate which is what maybe you are alluding to with the more government-oriented system where could cost containment is a little more straight forward where the government would the city their rates and decide what providers would be paid and hold down the rate of growth and spending in that way. what's going on here is trying to create an environment that is less politically controversial than that kind of approach where you set up a market plays that would function -- place that would function better than the market we have now where the incentives are not for the

insurers to save money by avoiding those who have high medical needs, that are sick and trying it attract the best groups and individuals but where the health insurance risk of these populations isñr sprea very broadly. and so in order to do that you have to bring everybody in. you have to have these requirements of coverage so that individuals who are healthy can't opt out of the system and not share in the costs associated with people who are sick. because we all know, everybody ages, and everybody has episodes where they have bad health and so to have everybody in, whether they're sick or healthy, but everybody is then protected later down the road, whether they're sick or healthy. so these are all pieces of bringing a structured market place together and then putting information in plays, putting rules in plays to encourage the health insurers to compete on providing cost efficient care instead of avoiding high cost

individuals. so that's the idea. host: michaelen in his political wrapup this morning looks at the news about yesterday's meeting at the white house in his new story. written by john. democratic congressional leaders are considering a new strategy to help finance their new ambitious health care plan, applying the new tax to wages and capital gains, dividends and other forms of unearned income. the idea discussed wednesday at a meet at the white house would play cate leaders to bitterly oppose president obama's plan to tax high-end insurance policy that could cover many union members. next call is from springfield, massachusetts. we have a massachusetts person on the phone. what's your experience with your state exchange? caller: yes, ma'am. i'm a diabetic, all right? and i'm on social security,ñr a right? i fortunately get my insurance

through my wife, health new england. and i notice with our insurance up here, all right, our rates and everything keep on going up and so does our co-pay. i went to see my kidney specialist yesterday and i asked him what his opinion was on the health care bill coming up and he told me that he had about two hours he could tell me. so apparently he's not a big -- in favor of that. but up here i know, you know, we used to get our tests -- ok, we didn't have to pay a co-pay on our tests. my wife has m.s., all right, and like i said, she's still working. and when she has to go in for a catscan because she has legions on her brain, all right, those tests were usually covered. now this year all of a sudden out in new england put a $150 co-pay. all right? and it seems to be -- we have a

lot of prescriptions and a lot of shots and everything else. up here in massachusetts we pay quite a bit. you know, i don't really think, if you don't have a tax -- if you don't have a number for me -- from your insurance company, when you buy all your income tax, you get penalized. and i feel bad for people who can't afford insurance at all and then on top of it they have to pay a penalize on your taxes. you know? host: thanks. we wanted to hear experience from massachusetts. you provided some. goipt issue of cost continuing to increase in massachusetts is one that i think i mentioned before is really the same problem that we have across the country. we need to think very long and carefully about what the best strategies are for containing costs and slowing the rate of growth. we have some strategies in these pieces of legislation but i think we're going to need more and part of that is going to have to be based on research and analysis that is in

progress and will follow what's being put in place by these bills to see what is the most effective in that. but it's, you know, very difficult politically to do cost containment in a very feblingtive way because cost containment means taking money out of someone's pocket, very much so out of hospitals, physicians, and potentially be the insurers. and so what we have is a situation where you've got really a lot of political force working against cost containment but then a lot of real perception and understanding of the need for it in terms of helping the system move forward and keeping coverage affordable. one of the things that would be included in the legislation here for those that would be eligible for coverage through the health insurance exchanges, there would also, in addition to subsidies to help people buy premiums and make sure that coverage is affordable in that respect, there would also be some out of pocket financial assistance for the low income

population and in addition there would be very strict limits, all inclusive limits, on how much out of pocket costs could be applied to individuals when they get sick. and right now we've got a lot of variation out there in terms of the out of pocket liability on people in their plans when they get ill and it is a problem and there would be some assistance in this legislation. host: missouri, the republican line. caller: hello. i'd like you to respond to some questions i have here. from all indications and everything i've heard, this government takeover is still only going to cover 935% to 96% of people. so we're still going to have many who are not going to be covered. and the insurance is going to be offered, it is going to have such huge deductibles in co-payments that people are going to have to think twice about going to the hospital or the doctor and they're still going to declare bankruptcy

because when they can't pay them. and if you pay a penaltyçó or a tax because you choose not to buy insurance, when you go to the emergency room or if you had a catastrophic illness, it's still not going to be covered so the situation's going to remain the same. and you talk about administrative costs, when you enter the government into the administration -- administrative costs, we're talking billions of dollars. the president said that he would reduce cost. let's throw out this health care bill and get some of this worked out before it's crammed down our throat. how are they going to reduce costs? that's what we need to know. and the insurance companies only have a 3% profit margin. the media has the biggest profit margin as well as the fed and wall street. these things need to be written in stone so we can see them

before this is crammed down our throats. how are we going to keep people from going bankrupt because of huge deductibles and co-pay? what are you going to do with the tax money that you penalize people for for not purchasing insurance and they still get sick and how much is the administrative cost of the government going to be added on to our bills? host: thanks. guest: well, there's a lot of issues that you raised there. i'll try to touch on what i can. in terms of there not being complete health insurance coverage under these bills, that's correct, that there would be roughly 5% of the population that would -- is expected to remain unsured under them. a significant part of that remaining uninsured population would be individuals who are here from other countries and do not have legal status to be here. and that was a veryçó significa political issue and i think

members of congress felt very strongly that there was not public support for providing financial assistance to individuals that were not here legally. so as a consequence that is a population that's going to remain uninsured and it's going to be a significant issue as it is today for particular states where there's a high immigrant population such as new york, florida, texas, california. so that will be an ongoing issue and some financial systems -- assistance to those states for providing care to that population will be necessary. a number of other individuals who will not pick up coverage voluntarily will be eligible for public coverage through the medicaid program. so if they become ill or injured and they go to a hospital, they can get enrolled at that point. but there will be others who remain outside. as far as the out of pocket costs go, there are relatively high deductible plans that would be offered within the health insurance exchange and

would be the minimum amount of coverage that everybody would be required to have. however that doesn't stop people from getting more comprehensive coverage as many ofñr them do today. that would also be provided within the ex change. for those who are modest income and were eligible for financial assistance in the health insurance exchanges, they would get not only premium assistance as i mentioned before but also would be required to pay lower out of pocket costs. they would have cost sharing subsidies as well. there's a good deal of assistance there. but in terms of making sure that everybody has very low out of pocket liability across the board, while that's a very nice idea and a lot of people support it, it also costs more in government dollars and there was a limit to what i think congress felt was politically acceptable in terms of the overall government courses -- costs. so they're trying to moderate between those concerns. host:çó springfield, missouri.

you're our last topic -- discussion on this topic. caller: good morning, ya'll. on insurance that changes, on insurance ex changes, my opinion is that a -- exchanges, my opinion is that a national change would be much more cost effective than efficient. otherwise -- but with respect to automobile insurance, a state assigned risk pools, you know, have been quite effective. but they are in the insurance company license and the states required -- and the state's required to participate. a few comments on things that we hear, if i could buy insurance across state lines. every insurance company, you know, writes in particular states they choose. all they would have to do is admit themselves to do business. on the -- there's -- if there's anything about insurance i

don't know, nobody's ever been able to point it out to me. with respect to this current health care plan that's been destroyed as it's gone through congress, i personally think it's a mistake to enact the current plan. there is nothing in there to control cost, the only thing that's going to control cost is competition and there is no competition. the cost of current health care is created by people and it's also created by providers. an example on providers, i wanted to change my primary physician to a closer location and the only medication i'm on is five mill grams of something a day. i made an appointment with a doctor and then a couple days

later got a call from his nurse saying they wanted to see me in a month and i said, well, why does he want to see me in a month? you take blood pressure medication so he wants to check your blood pressure. so as it turned out, unless i agreed to go down to his office every month to have my blood pressure taken, which there's no way in heck i'm going to do, you know, he wouldn't accept me as a patient. host: so that's an example of cost containment. guest: well, you know, it's -- the personal situation you have a complicated for one for someone who is not a physician to comment on. they have some liability if they're not monitoring you appropriately while they have you on medication. so, that i can't really comment on the appropriateness of that. but that physician may feel that that's medically appropriate care. in terms of the state versus federal exchanges, my concern

about having the state exchanges are a couple. the first is, one of uniformity in terms of access to coverage that's comparable across the states. we do vom concerns that the more variation you allow, the more flexibility that states have, you may end up having people very similar people in two different states having very different access to the types of insurance coverage that would be best for them and so that's the concern. the second concern is one of federal dollars. what we're talking about under this reform is largely spending federal dollars. not state dollars. and so when you have the federal government not administering the health insurance exchanges, not doing the oversight of how the markets are working and how the money is being spent on insurance plans, then you have a situation where somebody who

is doing the oversight is not really the one who's handing out the money in order to finance it who is doing oversight is not really the one hand the on money and there is a bit of disconnect in terms of incentives for the states and being aggressive host: thank you very much for being here as the house and senate democratic leaders continue to work out the differences between their two pieces of legislation. we're going to continue to talk about health care until this whole process worksñi its way through washington. thank for being here today as our guest. [captions copyright national cable satellite corp. 2010] any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.] >> we're waiting for mr. gibbs to begin his briefing with reporters. later this afternoon a programming note, president obama will be speaking as a jobs summit held by the house democratic caucus.

congress is out of session so members can attend that meeting. it's being held at the capitol visitors center. the event beginning life at 5:05 eastern time right here on see spanl. again, waiting for press secretary robert gibbs and the daily white house briefing. live here on c-span.

>> again we're live at the white house waiting for today's fi