we will hear more about the proposed budget from bernie sanders and the president of the national council of la raza focuses on issues affecting latinos. every day at 7:00 a.m. eastern. president obama proposed a budget of nearly $4 trillion for fiscal year 2011. over the next several hours, you'll hear the president's comments and a briefing with white house budget director peter orr said. in less than an hour, defense secretary robert gates and the chairman of the joint chiefs of staff take reporters' questions on proposed defense spending. after that, the budget briefing at the state department. . .

>> good morning, everybody. this morning, i sent a budget to congress for the coming year. it is a budget that faces the challenges of the country. we are at war.

our economy has lost 7 million jobs over the last two years, and our country is deeply in debt after of what can only be described as a decade of profligacy. over the past 10 years, the previous administration created an expensive new drug program, created tax breaks for the wealthy, and started sioux wars. when i first walked through -- started two wars. when i first walked through the door, there was a projected deficit of eight trillion dollars for the next decade. if we had taken office in ordinary times, we would have started bringing it down immediately, but our country is

in crisis. the economy was in free fall, and the financial system was near collapse. many feared another great depression, so we initiated a process that added to the deficit as well. one year later, because the steps were taken, we are in a different place, but we cannot simply move beyond this crisis. we have to address the irresponsibility that led to this, and that occludes -- includes reining in spending as well as reliance on borrowing to fuel our growth. that is what we have to change. we have to do what families across america are doing -- saves where we can so we can afford what we need. i think it is important to understand -- we will not be able to bring down this deficit overnight, given that the recovery is still taking hold, and families across the country

still need help. we will continue to do what it takes to create jobs. that is reflected in my budget. it is essential. the budget includes new tax cuts for people who invest in small businesses, tax credits for companies that hire workers, and tax breaks for retrofitting homes to save energy. we also continue to lay a new foundation for lapsing growth. just as it would be a terrible mistake to borrow against our children's future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that would determine our economic success. that is why we built on the largest investment in clean energy as well as increase investment in research, so we are fostering the industries and jobs of the future right here in america. that is why i propose a more than 6% increase in funding for

the education department, and this is tied the -- tied to reforms that inspire students to excel in math and science and turnaround failing schools. in the 21st century, there is no better anti-poverty program than a world-class education, and that is why we eliminate the wasteful subsidies to banks that lend to college students and use that money to make college more affordable. this will help us reach the goal i have set for americans. by 2020, we will once again have the highest proportion of college graduates in the world. these are the investments we must make to create jobs and opportunity now and in the future, and in a departure from the way business has been done in washington, we show how we pay for these investments while putting our country on a more fiscally sustainable path. i propose a freeze in government

spending for three years. this will not apply for the benefits folks get from social security or medicare, and it will not apply to social security, but it will apply to all other discretionary government programs. we are not simply its photocopying last year's budget. freezing spending means we simply want -- does not mean we will cut to pay for what does work. we have gone through every item, looking for efficiency and programs that have outlived their usefulness. that is how we freeze discretionary spending. last year we found $17 billion in cuts. this year we found $20 billion. some of those are common sense. we cut $115 billion from the program that pays states to clean up mines that have already been cleaned up. we have also cut and economic development program that has

funded a music festival, and we are saving $20 million by stopping refurbishments of the department of energy foundation they do not want to refer in this. others are more painful because the goals are worthy. we eliminate one program of a grant that does environmental cleanup of abandoned buildings. that is an initiative i support, but there are other means to achieve it. we also eliminated a program that allows people to get their earned income tax credit in advance. i am a big supporter of the earned income tax credit. the problem is 80% of people who got this and vance did not comply with -- got this and advanced in not comply with one or more programs. ñri am willing to let go of oner

more initiatives i care about. i am asking others to do the same. i am asking them to take a look at what is working and what is not and trim back accordingly. like any business, we are looking for ways to get more bang for our buck by cutting red tape. we consolidated 38 separate education programs into 11, and last fall, we solicited ideas from federal employees about how to make government more efficient and effective. i am proud to say a number of these ideas, like allowing social security appointments to be made online, made it onto our budget. even though the department of defense is exempt from budget, it is not exempt from common sense. it is not exempt from finding savings.

one example is the $2.5 billion in spending for c87 transport aircraft. the government decided townk ce production. every year since, congress has provided unrequested money for more c-17's the pentagon does not want or need. it is waste, plain and simple. i proposed a fee on big banks to pay back taxpayers for the bailout. we're reforming, and while we extend middle-class tax cuts, we will not extend tax cuts for oil companies, investment fund companies, and those making over $250,000 a year. we cannot afford it. finally, changing spending as usual in falls changing policy

as -- involves changing policy as usual. that is why they're hammering out concrete proposals over the medium and long term, but they would come up with answers over a certain deadline. i should point out that as an idea that has strong bipartisan support. it was originally introduced by senator gregg on the republican side and conrad on the democratic side. it had a lot of republican co- sponsors. i hope that despite the fact that it got voted down in the senate that both the republican leader mitch mcconnell and the republican leader in the house will go ahead and fully embrace what has been a bipartisan idea to get our arms around this budget. that is also why we are restoring pay as you go. congress cannot spend a dime without cutting a dime

elsewhere. this will help lead to the budget surplus of the 1990's, and it is one of the most important steps we can take to restore fiscal discipline in washington. you can read more about the budget at budget.gov, but the bottom line is, we simply cannot continue to spend as if deficits do not have consequence, as if wason does not matter, as if the hard-earned tax dollars of the american -- as if waste does not matter, as if the hard-earned tax dollars of americans can be treated as monopoly money. i welcome any ideas from democrats and republicans. what i will not welcome is the same old grandstanding when the cameras are on and the same irresponsible budget policy when the cameras are off. it is time to hold washington to the same standards family and businesses hold themselves. it is time to save what we can,

spend what we must, and live within our means. thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> white house budget director peter orszag briefed reporters on the 2011 budget request. he spoke for about 45 minutes. >> i will give a brief overview and turn it over to my colleague.

that focuses on three things -- fiscal sustainability it. before turning to the details, let me give some context and background. at the end of 2008, gdp was declining by more than 5% on an annual basis. at the end of 2009, it was increasing by more than 5% on an annual basis. although g.d.p. and the economy is now expanding, the employment market remains too weak. unemployment rate is 10%, and there are 7 million fewer jobs than in december, 2007.

that is why this includes key drivers of long-term economic growth like moving towards a clean energy future. let's also do a bit of background and contacts on the budget. in january, 2009, the situation involves two key features that are also the case. one was a significant increase in spending from 2008 through 2009, and the second was a significant deficit. both were already apparent before the administration took office, and in the first case, several weeks before the administration took office, the congressional budget office issued a budget of look. that showed an increase in spending from 20.9% in 2008 to

24.9% in 2009. the reality came in slightly lower at 24.7%, but the result was more discretionary spending. that's in them -- significant increase in spending was already apparent at the end of 2008 and early 2009. second, we also face not only a 2009 deficit that was in excess of 1.3 trillion dollars, but the medium-term deficit in excess of eight trillion dollars, and that came from two primary sources. the first was a set of policies, the 2003 and 2001 tax cut andñiñr the drug plan that s not paid for. thatçó results in interest costs because the policies were not offset. ñisecond, the economic downturn amounted to about 2.5 trillion dollars because when the economy

weakened, tax revenue declines, and certain kinds of spending increase. ñithose stabilizers' added about 2.5ñr trillion dollars to the projected deficit. that is an explanation of the situation in which we found ourselves and in which we continue to find ourselves, but iáuátjm:5]h forward. çówhat in particular are we doig to bring the deficit down from roughly 10%ñi of the economy end 2009? the first pepys to make sure you do not dig the hole deeper. -- the first is to make sure you do not dig goalkeeper -- so- called pay-as-you-go principles. that is to embed in law the principle the new tax cuts need to be offset so they do not cause a deterioration in the budget deficit. if we have lived by this simple principle over the last several years, we would beñi facing housing deficits that would be

roughly 2% of the economy, and debt would be declining rather than rising. second, the economic recovery, which will ultimately take hold, will help reduce the deficit fromòj??ñ 10% of the economy tot 5% of the economy by 2015, because tax revenue will recover, andñi those the -- goes automatic stabilizers on the spending side will also decline. -- because the automatic stabilizers on the spending side will also decline. to get from 5% 3%, we have a series of proposal. the first is specific steps to reduce the deficit by 1.2 trillion dollars, which would move us from 5% of the economy in 2015 to 4%. these include measures like the financial services fee, which raises $90 billion over a decade, helps repay taxpayers for tarp, and also by imposing

the tax on our largest financial institution, helped discourage the leverage that is partly the cause of the financial meltdown we experience. second, we allow the tax cuts to expire for those four in -- with incomes above $250,000, as scheduled under the legislation. that reduces the deficit by almost $700 billion over the next decade. third, as part of our effort to ñrmove to a clean energy future, we eliminate possible fuel subsidies, which reduces the deficit by about $40 billion over the next decade, and in addition to that, we have non- discretionary spending, which will reduce the deficit. let me be clear about this freeze. first, it is not across the board. some agencies and programs are

going up, and others are going down. we are investing $3 billion in education, because that is one of the keys to economic prosperity. even while we are reforming those programs, consolidating them into 11, and putting more emphasis on resorts rather than just funding. second, we are investing in research and development, including more than $61 billion in fiscal year 2011, which is up 6%, because innovation is key driver of economic activity, and there, we're investing in a clean energy to move towards the future, working in concert so we can become the leader of green energy. all things together move into roughly 4% of the economy, which

is above where we would like to be. to get the rest of the money there will require a bipartisan process, which is why we are calling for a commission test not only with our long-term fiscal imbalance, but also producing plants that will balance the budget by 2015 -- producing plans that will balance the budget by 2015. that has to do with making key investments in job creation today, reducing the deficit by one trillion dollars over the next decade, while investing in innovation and clean energy. in an addition, we also face a long-term fiscal gap driven primarily by health care costs, and one reason the a administration has been so focused on comprehensive health care legislation is that it would not only reduce the deficit over the next decade but put in place the infrastructure and policies that would help constrain costs and improve

quality in decades thereafter, and unless we do that, we will continue to face a substantial long-term fiscal gap. grassley, -- thank you, and with that, i will turn it over to christine. >> thank you. i will take a few minutes to summarize some of the key assumptions of the budget. the council takes the lead to produce the forecast. our council is based on data from the middle of november. i should say right up front as the forecasters in each of our budget frequently say, we are economists and not to the

ferries, and all forecasts have to be understood to be subject to substantial margins of error, and i would say it specifically in the wakeñi of the downturn le we have been through. çóñrwe haveñi certainly attemptt face budget projections on our best estimate -- attended to face but the projections of our best estimate of what lies ahead. i am going to focus onñi fourth quarter changes, because i find these the most straightforward to interpret and compare. the and ministration forecasts growth of 3% in may 2010 followed by growth of 4.3% in 2011 and 2012. our estimated growth in 2010 is virtually identical to private forecasters and is in the middle

of the tendency of the federal reserve and federal open market context. our forecast is also in the range of other forecasts. it is through the substantial variation in that forecast. that is shown in chart 2.5. our annual average projection is 3.8%, similar to the 4.2% historical average. the forecastçó the congressional budget office released last week was considerably more pessimistic about 2010 and 2011 than either forecasts, and as noted in its release, they are required to make forecasts under

the assumption the none of the provisions are extended, there is no new jobs bill enacted, and all of the tax cuts expire at the end of the year. the report was careful to explain that under the assumption some of these policies will be extended, its forecast would look much more similar to other forecast. for the unemployment rate, the demonstration projects the ministers and will and 2010 at approximately 9.8%. at the fourth quarter of 2012, 7.9%. these are in the range of other forecast for the short and medium run. our projections of the unemployment rate reflects the severe hold this recession has

taken on the labour market and american workers. to counteract the rate of unemployment, the president has called for a number of targeted actions to jump-start a private- sector job creation, and among these is the small business jobs and wages tax credit announced last week. let me say a word about the inflation rate. we project inflation will be 1% over 2010, up 1.4% over 2011, and 1.7% over 2012. i would say these are lower than some forecasters and higher than others. bill level reflects the effects of continuing high levels of slackened the economy. under these conditions we see little risk of noticeably

increased inflation. at the same time, expectations appear to be well-anchored, so we do not predict rapid declines in inflation. they anticipate the inflation rate will level off of 1.8%, squarely in the range of the long term protection range of 1.7% to 2%. there is no question the past year has been an incredibly difficult one for the american economy and for the american people. because of the actions of the past year, the projection is greatly improved. real gdp expanded strongly in the first quarter of 2009 and shows every sign of continuing to grow steadily. however, the pass back to full employment will take time and vigilance. the president is committed to

taking every responsible action to accelerate a job creation and speed recovery. >> i think we will now open it up to questions. there are wireless microphones for folks asking questions, and i see lots of hands up here, so why don't we start right here. >> that did not include the 5.7 number we got on friday? >> absolutely not. >> is that when you decided you had 100 million -- $100 billion driving the four gust? rigid driving the forecast? what is the place holder there? i>> we certainly locked down

before we get the fourth quarter gdp number, so i think that is the question. >> on the placeholder, we had $100 billion, and that includes $37 billion for the new jobs and wages tax credit the president talked about and increases in wages, and there'll be other components forthcoming. >> it did influence the modeling? >> we anticipate some additional job activity y. >> it would not vary that much? >> the house had $155 billion. it is not completely opposed to a offals, so be careful about jumping to relatives

conclusions. >> the assumption you have does include additional jobs money in the range of $100 billion? >> yes. >> since you got this done, do they assume some version of health-care reform would be funded? >> we took the average of the two, and you will see the net impact, so i would note that is slightly north of $100 billion in deficit reduction, so it is a small share of the deficit reduction contained in the budget, and i would further noted does not include the impact of winding down the wars in iraq and afghanistan.

if you count that, you're more than two trillion dollars in deficit reduction. >> thank you. my question is, can you explain what is driving optimism? in line with unemployment. >> i think the first thing is to said it is equal to the consensus for 2010. for 2011, we are in the range of the november forecast. we are a little higher than the consensus. i do want to come by to historical consensus, because one thing i mention was coming out of past recessions has been

4.2%. our work has 3.8%, so we are being true to history, if anything, airing slightly below the historical average so we think based on what we see happening it is a reasonable, honest forecast. >> i remember last year you gave a forecast that was more optimistic than others are saying. you indicated you had-the others were not looking at. the you have data driving the forecast the others are not looking at? >> let me talk about last year. certainly one thing i was talking about is we had better assumptions of the policies. i think the first thing would be

to acknowledge our forecast was lower than it turned out to be, and that reflected how severe this has been on the labour market in particular. the beginning of the unemployment has been unusual given the performance. the last thing is, when we got the fourth quarter number for g.d.p., we now know what the change was from the end of 2008 until 2009. it was 0.1 of 1%. last year, the goal was to grow 3/10 of a percent. it was remarkably accurate. >> that is an economist version

of told you so. >> the budget identifies performance goals that agencies submitted, but it does not say whether those will lead to an increase in funding. can you talk about whether you're proposing additional funding in the areas agencies identified as important? >> the high performance goals were set into the budget process and will continue to play a key role. we are implementing those with funding streams and holding agencies accountable for progress on the goal, so yes, the goals will be reflected over time in funding for each agency. >> i am curious about what you

read into the fact that you're raising taxes to the tune of nearly one trillion dollars on upper income families. you have a lot of increases on multinational corporations, yet you do not get the budget down to below 4% of gdp. does that tell you -- what does that tell you mathematically about the ability of president obama to keep his pledge not to raise taxes on families under to leger thousand dollars? what is the commission instruction -- under $200,000? also, you have a debt of 77% of gdp. do you think the united states can handle about -- hamel that

without financial crisis? >> -- handle that without financial crisis? >> i think that reflects the medium-term deficit, which reflected the environment we face at the beginning of last year. you have toçó remember, 5.8 trillion dollars because the benefits were not subjects to pay go. 2.5 trillion dollars because of economic downturn. we are taking steps to mitigate economic downturn. we face a substantial medium- term deficit problem, and we put forward proposals to get as part of the way there. the commission will have to get us the rest of the way there. we have been very clear on our stance on taxes and other spending proposals. the commission has not been named. let's do its work and see what

it canñrñi come up with. >> [inaudible] >> we have been clear on our position on taxes, but it has not been formed yet. let's let it do its work. >> can you clarify the pledge to cut the deficit in half. my memory is it was nominal, that it would be half of 1.3 trillion dollars. the no. you said it was the deficit when the president took office, so does that mean $650 billion by 2013? you have not had that in this you are over that. >> that was 9.2%. we hit 4.2%, so we are cutting the deficit more than half.

>> the second one is on the three-year freeze for non- security spending. i do not see that figure. can you reconcile that? >> if you look at the bottom on page 152, it says memorandum's funding for non-security, and you see the four injured 47 and 2010, and we are below that. çó--çóñi 447 in 2010, and we arw that. let me pause because there has been misconceptions. what is clear is in 2009 there is a bump up in spending because of the recovery act, which was necessary to keep it from moving. as you can see, our freeze is

not off the hire data. instead, it excludes the recovery act with the argument we raise taxes and excluding that bump up. way in the back. >> what would you say to federal employees slated to get an increase but significantly lower than previous years. in what areas or agencies do you think they will be hired in? >> federal employees will get an increase in their salaries, which i think sounds pretty good. it reflects a formula used to compute wage and salary increases, and it does lower

than it has been in the past because inflation is lower than the past. with regard to expansions in federal personnel, they have been disproportionately in the department of defense and veterans affairs. some areas where we are expanding include that work force. we have $500 billion in federal contracts over the past -- and over the past eight or nine years, those have doubled. the acquisition work force has stayed constant. it is not hard to figure out the oversight has not kept pace with what it should be. we are trying to improve oversight in what the federal deficit by as rigid federal government buys, trying to bulk up on goods and services and

also expanding acquisition work force so we have better oversight of those contracts. right here. >> both speaker below sea it and john brynner are -- speaker policy and john brynner are saying the pentagon should be impacted. -- john joehner are saying the pentagon should not be impacted. why is that off the table? >> we should admit -- adequately fund the troops while they're at war. there are significant constraints imposed under secretary dick -- secretary gates's leadership. last year we proposed canceling fighter jets. i say most people in the room at the time thought that was

completely unrealistic and would never happen. this year secretary gates had made it clear he does not take -- think programs like that are militarily necessary and we could do a better job by canceling those programs. we are going to be pursuing those while making sure our troops in the field are adequately funded. >> this -- does the decision we are not going to the moon not send the message we are giving up? >> not at all. the consolation program, which is over budget and behind schedule, was intended to do what we have already done, which is to return a man or woman to the moon. we believe in the future of space flight.

if we believe nasa can inspire americans, so we have a small increase, but we're saying let's redirects that to advance robotics research and development and find technologies that will allow us to go further in space and not just repeat what we have already done, especially on a program that is behind schedule and over budget. when the back. >> i have a question on bipartisan spending. some of this is addressed in the health-care bill, but looking forward, is something as sacred as that on the table? >> we put forward the proposals we favor. the commission is not formed,

and we have to respect the commission and let it do its work. >>ñi some advocates of the fiscl commission, while pleased you're going this direction, would like to see more in terms of trying to talk about tough choices that are going necessary. was there any consideration when you put the budget together for paying for the policies? >> we have 1.2 trillion dollars of deficit reduction. a lot of painful choices that have already been put on the discussed some of them. is more necessary? sure, but weçó sank to get the median deficit to where it needs

to be requires a bipartisan process. >> about the mortgage deduction, last year, when that was proposed for this year, it seems as though even amongst democrats there was considerable resistance to that idea, as closely and the slow housing market. are youñi confident you can get enough support in congress for that? >> we are trying to limit deductions from taxpayers back to the rate that applied when ronald reagan was president, so i think it is important to put in context. there are going to be a lot of questions about political economy, and i would again returned to the point that last

year many people were skeptical thatñr we3(uááu((qq" as getting we are going to fight for the things we put forward because we need job creation and debt reduction, and i think that reflects the priority not only the president has put forward, but that makes the most sense. >> [inaudible] ñi>> the conversation is on lots of topics, not surprisingly. let's go over here. >> an hour ago, and the president spoke about the nation being at war. can you give us an idea about t(ñiwhat the president spoke ab? >> even more spending is subjected to the same scrutiny the base defense budget and

other spending is. for fiscal year 2011, we have put forward a proposal for $160 billion to fund the war in afghanistan, and that is level with the cost of 2010. way in the back. >> you talked yesterday about a glide path. can you discuss the challenge of trying to do it in a gradual way? >> as i mentioned, we face two substantial challenges -- a job deficit, and a fiscal deficit with 5.6% of the economy after the economy has recovered. we need to get the deficits down so it does not show goff job creation, but we want to make sure we do not do that too

quickly or we will repeat the mistakes of 2007. remember what happened then? they economy was beginning to recover, and you threw the economy back into recession. we do not want to do that, so we are seeking a fairly smooth pass from roughly 10% today to the levels of 4% in may 2015, putting us and should double range of the fiscal is sustainable path. more would be necessary, but we do not want to eric to rapidly because that would exacerbate the jobs deficit, so we are trying to find this approach in which we have of us move glidepath suit a more sustainable level, and i think that is displayed here. >> the president on friday said

the red the budget proposal. -- said he read the budget proposal. i want to know the biggest difference between your plan and his, and could you answer jonathan's question about sustainability of deatbt? >> one reason we are creating a fiscal commission is to get the deficit over the medium term down to a level with stable debt to gdp ratio. that would be reflected in a balanced budget, excluding interest on the debt. i would note that for right now in 2010, private borrowing has collapsed. long-term interest rates on federal securities remain below 4%, and the reason that does happen is in a sense the u.s. treasury is basically the last bar or of left standing. in the severe economic -- the

last borrower left standing. in the severe economic economy, that is exactly what should happen. if you go out over time and private borrowing picks up, you want to make sure you're getting ahead of the fiscal deficit problem so you are not crowding out activity. with regard to rep ryan, i have a lot of respect to mr. ryan in the plan he put forward. it is worthy to delve into that for a moment because it provides a contrast. his plan succeeds in addressing our long term fiscal problem, which is a significant accomplishment, but let's examine how he does that. he takes the medicare problem, and for those 55 and below turns it into a voucher program so individuals are on their own in the health-care market, and the voucher does not keep pace with health care over time. it is not surprisingly if you

shift dramatically in terms of risk and expected costs, obligations from the federal government onto individuals, as you can reduce projected costs. he introduces individual accounts, privatization, into social security. he has significant changes for the tax code that would provide large tax benefits for upper income households while shifting the burden on to middle and lower income households. he eliminates the loopholes that currently exists. he has put forward an interesting plan. they're in it -- many aspects were the of further debate, but it is a dramatically different approach in which much more risk is loaded onto individuals and in which the medicare program is dramatically change from current structure. >> the president was supposed to receive tax reform

recommendations in december, and that was delayed indefinitely. is there a possibility that could be folded into the fiscal review, or is that of the back burner? >> i would imagine it would be folded in. i would imagine the commission with a variety of things, including tax reform. >> i was wondering if you could give a dollar value for the improvement in the economy and how that will affect the deficit. the you have a dollar figure for that? >> sure, there are various ways of calibrating that, but economic recovery moves it from 10% to 5% of the economy. the economy is roughly 15

trillion dollars, so a 5% improvement would be $7 billion. >> can you follow up. can you give us any sense of scale with the number of jobs at stake? >> i do not have a set of projections. we could perhaps get back to you with underlying assumptions. it has been the department of defense, homeland security, veterans' affairs, for example. in the back. i think we will have time for one more question, so why don't we make this the last one. >> i am wondering if this budget is reflecting any efforts to improve performance management within the federal government,

and if not, when would you expect to see the results of his efforts in performance management? >> it absolutely does reflect the work of the nation's first chief performance officer and a deputy of management in a variety of ways. the federal government is going to spend nearly $80 billion on information technology. there are a huge number of improvements already been made, including a simple measure were you can go online, click on individual projects, see whether they are behind schedule or not. it is already leading to a canceling i.t. programs that were being manned -- manon's. -- managed. the already mentioned contacted. that is another thing the performance team has been

working on. that team is working to do to simplify and streamline the hiring policies and also provide easier checkpoints so those applying for federal jobs can check on line and see if what is happening. in area after area, you're seeing the work that is already being done in improving government performance seating into that. i want to thank everyone. if you have further questions, it is available on our web site. thank you very much.

>> throughout our overnight schedule, we're showing briefings from the four trillion dollar budget request for fiscal year 2011. it includes a three-year spending freeze on several programs excluding military and homeland security spending. the tax cuts for families making more than to under $50,000 will expire. there is a $100 billion jobs measure, -- more than $250,000 will expire. there is a $100 billion jobs measure and. we continue in a few moments with defense secretary robert gates and admiral mike mullins. in a little less than an hour, the state department budget

briefing, and after that, more about the budget with kathleen civilians and the head of veterans affairs. -- kathleen sebelius and the head of veterans affairs. tomorrow morning, rick maze takes your questions about the president's plan and the don't ask don't tell policy. danielle pletka talks about iran. we will hear more about the budget from senator bernie sanders, and that we focus on issues facing latinos. "washington journal" is everyday lives of 7:00 a.m. eastern. >> this weekend, nobel prize-

winning economist joseph stieglitglitz on the economic collapse. >> now look at the fence with robert gates and admiral mike mullins. this is a little less than an hour. -- now look at defense with robert gates and i'm wrong mike mullins. this is a little less than an hour -- admiral mike mullins. this is a little less than an hour. >> first, let me say this statement will be available a little less than an hour after the briefing. the statements are kind of long, so to put your mind at ease, we will have about 25 minutes for questions after the statements,

and i would ask you confine your statements to the budget, and as we get to the end of the 25 minutes, i would be happy to take one or two questions on other subjects. today this department is submitting a defense budget request along with two important documents. after my opening statement and the chairman's and the questions, you will hear from the under secretary of defense for policy, who will discuss this in more depth and then robert hale will provide more detail on the budget request. the three things our budget request for $548 billion. this overseas contingency it requests which will fund military operations in iraq and

afghanistan next year. the fy10 supplemental request of $33 billion, which covers the new strategy for afghanistan. to make sure we have the resources we need to support our troops, i will be asking congress to enact the supplemental plans kerrigan for the next few minutes, i would like to place into a wider -- supplemental plans. for the next few minutes, i would like to discuss strategy reviews. last year, we began the process that reshaped america's defense establishment and reformed priorities, procedures, an institutional culture. we will reaffirm our commitment to take care of the force, to rebalance our programs to enhance our ability to fight wars today, while at the same time taking a hedge against

further future contingencies and a fundamental overhaul of our approach to prevent -- to procurement and contracts. to those ends, the budget increase funding for programs that directly supports those fighting america's wars and their families. i have created an institutional by shifting many of these programs into the base budget so they would require constituency and steady long-term funding. .

>> we have in a sober and clear-eyed wade set priorities and made tradeoffs and made decisions based on real world scenarios and potential adversaries. for years planning requirements were based on fighting to major

conventional wars at the same time. and a foresight in construct that persisted long after it was overtaken by events. the department's leadership now recognize that is we must prepare for a much broader range of security challenges on the horizon. and they range from the use of sophisticated new technologies to deny our forces access to the global commons of sea, air, space and cyberspace, to the threat posed by nonstate groups developing more cunning and destructive means to attack and terrorizes. scenarios that tran send the contingencies that dominate u.s. manning after the cold war. and we have learned through painful experience that the wars we fight are seldom the wars we planned. as a result united states needs a broad portfolio with maximum versatility across the widest possible spectrum. and this strategic reality shaped the q.d.r.'s analysis and

subsequent conclusions which directly inform the program decisions contained in the budget. the q.d.r. concluded that the u.s. military must balance resources and risks among four major objectives. and the first is to prevail in today's wars. the first time this objective has appeared in a q.d.r. and achieving our objectives in afghanistan and iraq has moved to the top of the institutional military's budgeting and policy and program priorities. and we now recognize that america's ability to deal with threats for years to come will depend importantly on our success in the current conflicts. and the fy 11 budget takes a number of additional steps aimed at filling persistent short fouls that curtail recent efforts especially in afghanistan. they include intelligence and keck sans capacity including a 75% increase over the next couple of years in the number of

combat air patrols by the most advanced uav's and increasing the availability of horpts by procuring more aircraft. around $9 billion worth of all kinds and adding to army combat aviation brigades and growing special operations systems and personnel, with nearly 2800 people added to the u.s. special operations command in fy 2011. the second major objective is to prevent and deter conindicate, by implementing all international power and cooperation. should those fail by possessing superior military capabilities and the means and will to use them. to help prevent the condition from arising that lead to crises or conflicts, we strongly support the increased funding for diplomacy and development provided for in the president's international affairs budget request. and in a world where arguably, the most like lei lethal threats

will emanate from failed states and building the security capacity as partners has emerged as a key capability for the department. one that reduces the need for direct u.s. military intervention, with all of its attendant and mill and financial and human costs. and to provide more resources, predictability and agility to this important mission, the department will seek an increase in the fy 11 budget. and authority that has now been extended to coalition activities. that increase will be from 3w50 million to 500 million dollars. and furthermore, the department will continue to work with allies and partners to stem the proliferation of dangerous weapons and materials and might not tain a reliable and credible nuth nuclear deterrent which will be laid out in the posture review. defending against adversaries requires preparing for tingancies, including the

disruptive high-tech cablets developed by other nations. to meet the threats by the military to project power and deter aggression and come to the aid of allies and partners, the q.d.r. focuses on and investment in, battle concept and long-range strike capabilities and space and cyberspace. the fy 11 budget request include nearly 11 billion dollars for the f 35 joint strike fighter, along with a strategy to stabilize the coss and schedule and abide a 43 aircraft and possibly more depending on contractor performance. more than 25 billion to provide a sustainable ship building program. more than $3 billion to modernize ground forces by applying mature technologies to forces quickly. including the development of a new ground km bat vehicle. and nearly 10 billion dollars to support the development of a

flexible, scalable and adaptive missile defenses that work. -- are cost effective and address the real and growing threats to the united states and our allies. and some $4 billion over the next five fiscal years if a number of long-range strike programs, to include the development of a conventional global strike capability and the upgrade and modernization of the bomber fleet. and our fourth major objective is to preserve and enhance the all volunteer force. america's single greatest strategic asset. for programs like these that directly support the war fighters and their families on the battlefield and at the hospital or at home, we have continued to shift funding from war appropriations to the base budget. this will help insure the critical programs receive an institutional home and long-term support. and recognizing the strain that post 9/11 wars put so many troops and their families, the department will spend more than $2 billion with wounded warrior

initiative, with a focus on senate ailments of current conflicts. and we will sustain health benefits and enlarge the pool of medical professionals. we'll broaden electronic information sharing between the departments of defense and veterans affairs for wounded warriors, making the transition out of military service. and we'll increase the time spent between deployments for our ground forces, with a goal of achieving a dwell to deployed ratio of 2-1 for the active component and 5-1 for the guard and reserve. policies and pursue more innovative and flexible ways to retain quality personnel. fine al we will expand assistance and counseling and childcare and education to support military families. some $8.8 billion total in the base budget and -- and overseas contingency operations requests. and to achieve these objectives, the department must continue to

reform the way it does business, from developing and buying major weapons programs, to managing our work force. and building on the reforms and the fy 10 budget when a number of excess or poor my performing programs were canceled, the q.d.r. proposed additional steps reflected in the budget submission. they include terminating the navy intelligence aircraft and ending the infrared surveillance program and can selling the next generation c.g.x. cruiser and terminating the net enabled command and control program. and ending the defense integrated military human resources system, dimers, due to cost overruns and performanceçó concerns. completing the c-17 program and closing the production line as multiple studies show the air force already has more than it needs and ending the alternate

engine joint strike fighter, as whatever benefits that play accrue are more than offset by cost and complexity and associated risk. i'm aware of the political pressure to continue to build the c-17 and proceed with an alternate engine. let me be clear, i will strongly recommend that the president veto any legislation that sustains the unnecessary continuation of these two programs. reforming how and what we buy continues to be an you are jent priority as the q.d.r. says, the state -- the department and the nation can no longer afford the pursuit of high-tech perfection that incurs unacceptable costs and risks. nor can the department afford to chase requirement that is shift or contain -- continue to increase throughout a program's life cycle. and fundamentally changing these practices requires enough full-time professionals with the right skiths skills and training. the department's budget plan

includes an increase of more than 20,000 such positions to supervise or replace contractors by 2015. and fundamentally reforming acquisitions above all calls on us, to fostary culture and practice of accountability. and accountability with regard to industry, and within the walls of this building as well. this is especially important when dealing with our most costly and millie important programs. programs such as the f-35 joint strike fighter. and as i mentioned earlier, we have restructured the f-35 program and believe it is on track to be the backbone for air supreme court for the next generation. none the -- spore yeart, nonetheless, the progress over the last two years has not been what it should as a number of key goals and bench marks were not met. as a result, i will withhold $615 million dollars of performance fees from the lead

contractor, since the taxpayer should in the bear the burden of getting the program back on track. and this step is being taken with the agreement of the contractor and i appreciate their responsiveness and commitment to finding the best solution. accountability is just not about holding contractors responsible. the department of defense bears responsibility for the j.f.s.'s troubling performance record. according my, i directed a change in the leadership of the joint strike fighter program office. and in addition give, given the importance of this program to the future of military aviation, i'm elevating the level of the j.f.s. program manager to that of a throw-star officer. and in summary, the cumulative effect of this and last year ears budget along with the recommendation of the q.d.r., to make sure that this department is doing everything it can -- we can and more, to prevail in the wars we're in, while preparing our military to confront the most likely and lethal threats

of the future. and in closing, as i said last year, we must remember that every defense dollar spent on a program access to real world military needs is a dollar not available to take care of our people, reset the force, and win the wars we're in, and improve capabilities in areas where we're underinvested and potentially vulnerable. >> that's a risk that the president and i are not prepared to make. making the tough decisions in tradeoff is especially important in the constrained budget environment that we face today and almost certainly will face in the future. and like to thank the members of the department, both military and civilian, along with our interagency and international partners for their hard work over the pennsylvania year on these important documents. admiral? >> thank you. good afternoon, let me state up front that the chief & fully support the president's 2011 budget submission and the recommendations of the 2010

defense review and the blissistic defense missile review. we support and appreciate the process through which the secretary derived these documents. as with last creer's budget request he had a collaborative process, and integrated across various disciplines. every service chief and every combatant commander had a hand in the result you see before you. and every one of them share my enthusiasm for the way ahead. the secretary already walked you through the context and the details of the budget and the q.d.r. i would like to reiterate these submissions represent in my view the right balance of capabilities to deal with the threats to our national security across a broad spectrum of potential military operations. i have i have said it before but we must be ready foral cheapings big and small and near and far. and for the wars we play need to fight in the future, even as we win the fights we're in right now. and i applaud the secretary's

desire to fund the current operations through the base budget and we're getting there. and because this year and next we're still looking at some measure of tingancy funding, i would like to direct my attention to those specific allocations. i'm confident that 2011 oversees contingency operation requests to provide our troop what is they need to have a responsible drawdown in iraq and execute the president's strategy in afghanistan and pakistan. by the end of the year, the remaining 10 bringing depades will be left to six advisory and assist brigades and all troops will be withdrawn by december 2011. and the key element of this transition is to maintain enough resources to outfit and train and sustain iraqi security forces. and while the government of iraq is funding a significant part of the effort, and falling prices and budget constraints make a

security fund a priority. $2 billion in fiscal year 2011 will provide the resources that he has requested to assist the iraqis in establishing a security structure that supports responsible draw down and allows to us transition, both to our civilian side, as well as the iraqi security forces. in affling afghanistan, like ways, a key focus is the development of competent afghan national security forces. our request also makes that a reality. and accelerating police growth and infrastructure and training and equipment. as for our own infrastructure and equipment, i'm delighted to see we kept face, to provide a premium on protection by procuring and fielding more am rack vehicles. the fiscal year 2010 provides for $10 million to complete the program and fiscal year 11 request include $3.4 billion to

sustain. as we have seen first hard through eight years of war, intelligence and surveillance and reconnaissance assets, are absolutely critical enablers for the war fighters. for -- we this funding we will reman them from 37 to 65. and while enhancing our ability to disseminate knowledge. and the emergency response fund known as surround also have proven to be game changers inasmuch as they give our troops more flexibility to truly make things happen to the local populace wherever we are. as one junior officer noted in a counterinsurgency fight, the dollars are fass faster and more precise and more impactible than bullets. our request for this year and next will devote a billion dollars to the cert program, the majority of which is to be spent in afghanistan. frankly i like to see more flexibility in the rules

governing the use of these funds. proper accountability remains a must of course, but i have seen with my own eyes, the huge difference serp can make when it is applied with speed. and our coalition funding empowers our partners d their capacitgivilt them the to and these funds account for $2 billion of the fiscal year 11 requests and could possibly be some of the most important expenditures we will make. and let me close by conveying my continued thoughts and condolences for the people of haiti. at the request of the haitian government and in partnership with the united nations and the international community, we'll continue to do all that is required to aalleviate suffering there. as usaid and reconstruction and projects evolve, i think we could expect there will be over time less need for the united states military. indeed u.s. southern command is continuously assessing and redeploying their assets

accordingly. as you know this morning, general frazier released karl vincent and other units. that said, we remain in haiti just as long as we're needed. i couldn't be more proud of the way in which our soldiers and sailors and airmen and marine and coast guardsmen have stepped up to perform this important mission of mercy. they and their colleagues prove every day the great strength of our nation and the great flexibility of her armed foirses. thank you. >> i don't know how you can possibly have any unanswered questions but -- are you deep sixing the work construct or de-emphasizing it in favor of a broader outlook on the world. i have a follow up on the bombshell you just striked on the joint strike fighter. >> i think that what we have -- if i gave one -- one, one of the spears i gave to the folks

working on the q.d.r., was that i felt that for some time, the -- the two major theater of operations construct was out of date. and that -- we are already in two major operations. what if we should have a homeland disaster or another encounter. what if we have a haiti? the world is very much more complex than when the two m.c.o. concept came together in the early 1990's. and what i wanted to convey, was a much more complex environment in which you play have to do, not just two major conflicts but a -- a prod range of other things as well. or perhaps in the future, one of those conflicts and then a number of other tingancies, so i felt that that -- that cannot struct was too confining and -- did not represent the real world

that our country and our military forces are going to face if the future. >> august 30th, you were down in fort worth and gave a relatively sang win assessment of the fighter program based on what you knew at the time. fast forward, what has happened today, i'll force you to take a drastic move of removing the program manager and slapping lock heed and the pentagon management around. >> first of all, during the interval, of the last several months, the undersecretary for -- for atnl, dr. carter has immersed himself in the program. we have had a couple of joint estimates teams look at the program. it was clear that -- that there were more problems, and than -- than we were aware of when i visited fort worth. and i think that the restructuring program that dr. carter has put in place will work it is it is realistic.

the cost estimates are in accord with the predicting rather than what the program is predicting. i would say there's no insurmountable problems with the f-35. and the measures that -- that dr. carter is taking i think will mitigate significantly some of the more pessimistic conclusions of the jets. and the joint estimating teams, so i believe that we are we are in a position to now move forward with this program in a realistic way. but by the same token -- one cannot absorb the additional costs that -- that we have in the program and the -- and the delays. without people being held accountable. i think if -- if -- if i have set one tone here at the department of defense, it is

that -- that when things go wrong, people will be held accountable. >> mr. secretary. >> mr. secretary. >> in a q.d.r. you talk about countering weapons of mass destruction with focus on failed states and positioning to monitor and track lethal agents and rather than defeating thes at themselves. walk us through what you think the force will look like in the future. are you talking about command mando teams, similar to the emergency support teams? >> i think in a lot of areas, and in many ways what we're talking about is support for -- for the president's program, proposals in terms of a global lockdown of nuke here material and whatever we could do to support that program. a lot of it is technological. and that's in terms of markers and being able to track things. some is better intelligence. i would say, it is a broad array of policy and intelligence and

-- and technologies, regard than necessarily new capabilities. >> i don't know if you have anything to add? >> mr. secretary. >> the q.d.r. says that china's rise and that india is going to continue to reshape the international system. and china said this weekend that it is -- reducing contacts, military to military with the united states and certain strategic dialogues over the taiwan arms sales. and -- does this affect your plans to go to china this year? and more generally, how do you respond to -- to china's complaint over the armed sales. >> well, first of all, i don't know -- i don't know whether i'll go or not. and i -- i have not heard anything. and so, my current plan is -- is to continue to man on that trip. the united states as you're well aware, the taiwan relation pact

commits the united states to providing a certain level of support to taiwan so it is able to defend itself. we wept through this kind of a downturn in the last year of the bush administration, when there was an armed sell to taiwan and we saw a reduction in military-to-military relationships. and they have thoroughly announced that they intend to -- to reduce those contacts now, again. i will say that one of the -- of the points that i made to -- to general shue when he was here, the vice-chairman of the military commission, was that i hoped that in the future we could shield the military to military relationship from the political ups and downs in the relationship. and i think that -- we have a lett to learn from each other. i think that stability is -- is

enhanced by contact between our military and a greater understanding of each other's strategies. soy hope that if there is a downturn that it will be a -- a temporary one and that we can get back to strengthening this relationship. >> what is your response to the -- to the chinese threat to sanction u.s. companies involved in taiwan arms sales? >> we'll have to wait and see. >> mr. secretary. the follow-up on tom's question about w.m.d., in the q.d.r., it calls for the establishment of a joint task force headquarters, to -- to train and man for and execute operations to -- to eliminate w.m.d. and what does that refer to and why now is there a need to -- to establish this kind of headquarters? >> i think that's a recommendation, obviously, of the -- of the q.d.r., it is a recommendation. i think we'll take it under

advisement and see whether we follow through on that or not. >> completing the program, are you planning on buying more m.a.t.'s and if so how many? >> yes, we now have a little over 15,000 regular m.r.a.t.'s, in afghanistan and the a.o.r. afterthe -- the additional requirementñr that has been levd by sin km is for about 10,600 more m raps. 6600 would be a.t.v.'s, the all terrain vehicle. and that's a version of the m rat's and they asked for 4,000 of the original ones in various forms. we have the funding for that and we will try to be responsive to that requirement. >> mr. secretary, two years ago when you issued the national defense strategy, you asked the

service chief to accept risks, to deal with threats. how far does this q.d.r. go toward moving them in the direction it wanted and how close are the services now to being in balance? a year ago you said you wanted to. >> let me apps that and turn to the chairman. first of all, i think that again, it is important to keep -- this rebalancing in perspective. and as was the case last year, of our -- of our research and development and procurement budget, roughly half of it goes for conventional modernization. and unrelated to the current wars. so 50%. and this year, roughly speaking,

the current war, fight, funding, if you will of transferring programs or funding programs representing somewhere between 7% and 10% of the budget. then duo -- dual capabilities, such as c-17 and various other kinds of equipment account for 40%. so it is important to keep in perspective when we're talking about rebalancing, as i said at the beginnings of the process -- process, my problem when i arrived here was that those fighting the current war had no seat at the budget table at all. and -- and for example, most of -- of special operations command funding has been in supplements and now these okos. my goal is to move those capabilities which we need long term into the bey base budget. same thing for caring for families and wounded and helicopters and all of those

other things, but relative to the entire defense budget, half of it is still going for the modernization. i would say in terms of risks, a year and a half ago or two years ago, our level of highest risk was actually in the current fight. and that's not in terms of our future capabilities. and i believe that we have now, by taking a little risk, on the high-end capabilities, have significantly reduced the risk in the current fight. and -- >> all right. >> this budget is -- isñrñrçóñr real growth and i can -- i can tell you, and if you have been through the details, you could see in particular, the service the each of the services budget has grown. and i'll just pick one -- area of great focus for us, for the last several years, that's helicopters and i think the number in this budget is on the order of 117 helicopters which certainly have what i would call dual use across that, what the

secretary just described. as iver said, it is about rebalancing and the ability to swing the peng welcome hard in the other direction, it just -- it just, almost doesn't exist. and so, we continue to move it to seek that balance and in fact funding these wars, as the secretary has described as a priority, has become -- the top priority in my view as it should be, and i also think that that is a significantly important investment for the future as well. and it does both things, because these kind of capabilities, let's say the special forces, the i.s.r. piece, they're going to be with us in the future no matter what our fights are. or what our engagements are. and so i think that the balance -- we're moving in that direction and at the risk shift is minimal with respect to what the services are. >> and i -- and a question on japan for you in the c.d.r. >> and this -- japan will

continue to implement the bilateral agreement and slightly different from previous language, it says we'll continue working with japan to implement the agreement. why is it different? and does that mean that this is the only -- this is the only way forward with japan? >> i think you have to be a creme f criminologist to find significant difference in those two. we are still -- we're still committed to the agreement that is we have -- we reached with the japanese. we -- we napped they are reviewing it. i am comfortable with that. we have a now government in japan. and they have some very high priorities they're trying to deal with. and -- and so i would say that right now, i think the watch word for us is patience. >> you will continue to working with japan. >> sure.

let's not misunderstand. we just celebrated the 50th anniversary of our alliance with the japanese. and that alliance is very important to both japan and to the united states. >> and -- okay. >> i wonder if you could talk more about the -- about the i.s.r. and the predators and you mentioned the number of combat patrols going up. and what -- what -- what is the -- talk more about the purpose of the shift to -- to the reporter -- reapers and how quickly you expect to see gains or advantages in afghanistan. >> i think again, we could both answer this but i think we have seen what the gain is. and -- and the reaper clearly has some capabilities that the -- that the -- the predator does not. they both are useful. and we are -- we are buying both. but, we are buying as many

reapers as we possibly can. and -- and to the chairman's point a minute ago, we have to a considerable extent stripped the other combatant commands of much of their i.s.r. capability. and to put it into the fight in iraq and afghanistan. the reality is, there is huge demand, all over the world for these capabilities. in the drug fight, here in this hemisphere, and -- and a variety of places around the world. they're useful in natural disasters. and obviously in a combat situation like we face, they also carry armaments. so this -- this is a capability where i think that we will continue to see, continue to see significant growth if some years into the turet, even as the wars

in iraq and afghanistan eventually wind down. and just because the more we have used them, in a way -- the more we have identified their potential in a broader and broader set of circumstances. so i think everybody who has had anything to do with this see this is as -- as a -- a terrific capability. >> starting the early 2000 and 2001 and 25002, many of us talked about having the characteristic of persistence in an area. there's no platform in the world that gives us better persistence and longer staying time than these platforms and to speak to the needs and the desires of -- of the -- of using them speffing in haiti, to look at -- at the population migration and to do it realtime. so we -- and back to 2000 and 2001, while we new what

constituted i.s.r., we didn't understand it well. we have this these fights learned a lot about what the requirement is and how many of the platforms we need and sensors and what to do with it. that speaks volumes about our ability to succeed in these wars but also how we will use them in the future. the 37 to 65 is a -- is a -- is a best estimate right now but i would suspect it'll continue to grow. >> and i would just add, when i was director of central intelligence in 1992, i tried to interest this building in u.a.v.'s and was unsuccessful. >> secretary. as you mentioned this budget -- will include war funding for fiscal year 11. and if i'm not mistaken, that's the first time that the budget will institutionalize the war funding in that regard. one of the criticisms. >> the war funding itself will be in the 11 overseas

contingency operation fund so the -- it is submitted together with the budget. >> and i would use the word for that. one of the concerns in the past about war funding, this building has not been rigorous enough in set ago side what truly is war funding, directly related to the fight and what maybe is on the margins. what is your direction going forward in the next few years? for making sure that the war funding is indeed directly related to the cost of fighting a war and the building doesn't have an opportunity to throw other things in this perhaps. they wouldn't before. >> i would say that one of the -- the chains that came about with -- with the advent of the obama administration was a much more rigorous approach by o.m.b. as to what was allowable in these o.k.o.'s so in fact both

in the -- in the 10 budget and in this budget, there have been several billion dollars -- of things that -- that we submitted as part of the o.k.o.'s that -- that -- that we have ended up absorbing into the base budget. the guidelines have become much more rigorous. and in this administration to get at just the problem you described. >> mr. secretary, you mentioned months back you wanted to find a way to implement the don't ask, don't tell policy. have you found a way to do that. does this budget address that policy or a way forward, an alternative of some sort. >> the budget doesn't address it. stay tuned until tomorrow. >> and back. >> and the fighter. and did you have concerns that it -- that the cost overruns would potentially might trigger mcoccurredy and do you think they're too premature to not continue on with the production of the hedge for future

potential j.s.s. overrun? >> i don't think there's a ned to go on with the f-22 and i think that -- i think -- and i'm not sure about -- about mcoccurredy. >> and mr. secretary, you're asking for 50.7 billion dollars, funding a military health system. and -- that's, well above rate of inflation. could you discuss -- that amount of money and growing fund of money on your defense budget, on the -- are you asking congress in this budget to increase the copays. if not how do you expect to contain the costs in the future. >> i'm glad you asked me that question. there has not been an increase in the pream qum for tricare since the program was founded in 1995. and i asked anybody to point me to a health insurance program that has not had a premium increase in 15 years.

and the benefits are generous, as they should be for our men and women in uniform. but the reality is for a family of three, the out of pocket costs per year in tricare are about $1200. the out of pocket costs for a family of three that are under the federal employees health care program is about $3300. we see a lot of people coming back into tricare, because the benefits -- are so good and the -- the costs are so low. and for -- for -- for two or three, at least two or three fiscal years running, we -- we proposed a very modest increase in the premium. and each of those years, the -- the -- that was voted down in the -- in the congress.

and both for fy 10 and this year, we have fully funded health care, rather than leaving, making the assumption about the premium increase. but we certainly -- would like to work with the congress in figuring out a way to try and bring some modest control to this program. and this program -- the military health care program in 2001, was $19 billion. in 2010, it is 50.7 billion dollars. it is going to go -- it is only going to go up. and -- and it is a -- a it is absorbing an increasing percentage of our budget. we absolutely want to take care of our men and women in uniform and our retirees. but at some point, there has to be a reasonable tradeoff between

reasonable cost increases or premium increases or copays or something. and the costs of the program. >> mr. secretary, in your opening statement, you made reference to building security capacity of partners. i wonder how much of that relates to the iran threat and we have heard a hot of talk in recent days about what the u.s. is doing to help allies in the region on iran. i'm wond erring if that is a change in strategy at all. >> it is -- part of it is in that region but a good example of building partner capacity is yemen. and that's where we worked with them on counter terrorism capabilities and on building their border security capabilities and so on and obviously, i mean, obviously -- 0 obvious to us at least, helping them build their own capabilities in lieu of eventually perhaps having to have u.s. forces present on the ground in substantial numbers or -- or doing this ourselves.

it is clearly -- it is clearly much cheaper and much better for us. and we see a lot of opportunity here. around the world. and it is an opportunity for a whole government effort because when you improve the security, the indigenous security capabilities you're dealing with the state department and governance and so on and i think both we and state see this as an area of real opportunity to try and prevent wars from happening, rather than having to deal with them once they already started. you want to add anything? >> and i just echo strongly what the secretary said. is this kind of investment and partnership with state, u.s. and others absolutely critical. and the example he used is -- se is one so that we have a relationship that is long standing and long before we get to a point where any conflict breaks out and enabling capacity, given capacity to other countries to take care of

their own problems is -- is absolutely critical. and some of the -- some of the -- of the programs that have been ongoing in the middle east and the persian golf have been going on for several years. this is not smgs -- something that came up the other day. we invested that over a period of time. >> a and i was curious about the size of spaces to chur review. you talked about the q.d.r. and the information on the missile defense and the n.f.c. was not pleased with the first coming to the pentagon. what is the status >> i'm not certain, but michelle will be here in a couple of minutes and she could tell you straight out. >> who is the new p.m.? >> i don't think we have announced it yet. so, but -- it should be out within a day or two. >> and can you say, with the

departure -- is this marking the beginning of the end of the involvement in haiti? and to what extent is iraq and afghanistan help define what you're able to do still in haiti if the long-term? >> again, this is one we'll both take a crack at. i think the answer to your first question is no. it does not mean the beginning of the end of our engagement. and one of the principal assets that the vincent brought was -- was helicopters. nearly all of those helicopters are remaining in haiti. and i think as -- as the chairman indicated in his opening statement, we anticipate being in -- in hate foy so long as we're needed. and as long as the president wants us to be there and the haitians want us to be there. and what we're getting into now is what balance of assets makes the most sense for that period? i would say, i would say that at

this point the operation the in haiti have had really virtually no impact. on the force flow to afghanistan or our forces in afghanistan or iraq. >> and as i look after the future, i don't see -- that becoming as -- a significant problem. i think vincent really is a reflection of reality on the ground, that we just -- she's done administrate work and had a big impact early and the capability is still there and -- and this operation goes into favor. and she and one or two other ships are no longer required and we want to release them, as i look to the future for the other units that are there. i don't see it having a big impact on afghanistan or iraq. >> and both engines, you sound like you came up with a very hard recommendation for a swreet toe. there seemed to be a caveat in you did not want the program to be disrupted.

if it were, you would recommend the veto. is there a difference this year? will you again have that caveat on disruption on the ultimate end? >> i -- i i was very concerned about the program last year. and -- that was the reason that -- that the veto threat was -- was focused on disruption of the program. we think that the level of costs is such now that -- that -- and -- and the fact that this is unnecessary, that it is important to take a final stand. thank you all very much. [captions copyright national cable satellite corp. 2010] nng [captions performed by the national captioning institute] >> our coverage on the armed services committee is at 9:00 eastern.

>> good afternoon. welcome to the department of state. this morning the -- the president has sent the 2001 -- 2011 budget to the -- to the hill, which -- provides significant funding for a balanced national security strategy and provides resources so that together the department of state and the department of defense and the department of homeland security and usaid and other agencies can serve and

protect the national interests of the united states around the world. to start off, we'll have deputy secretary of state jack lou go through the high points of the budget and answer questions you play have. and will be available afterward to answer additional questions. >> thank you. good afternoon. -- i'm pleased to be here with you today to present the budget to the department of state and u.s. a.i.d. and the department of state and usaid budgets are critical to securing national security interests around the world. and as the president's budget industries, they're part of the national security budget along with department of defense and homeland security. we appreciate the confidence and support that the president has shown in his budget and what the budget represents. and the obama administration is committed to advancing our national interests using all of the tools of american power,

civilian as well as military. our diplomatic and development tools enhance here and strengthen our alie ens and build partnerships to confront pressing global challenges. we're projecting leadership through the diplomatic presence and personnel as we engage with allies and emerging powers u and crisis and conindicate areas and multi-lateral organizations. secretary clinton recently pointed out this is a strategic and moral imperative to advance american interests and solving problems. and this assistance helps to take insurgents off the battlefield and helps confront rise to extremism. it helps our security and economic interests. the fy 11 budget is 48 billion dollars. it is a 4 billion increase above 2010. of the increase, 3.6 billion is for programs in afghanistan and

pakistan and iraq. and war represented spending represents a 7.5% increase in overall spending and spending not war related grows to $3.4 billion, which is 20% above 2010 spending. we're also submitting a fy 2010 supplement request that includes efforts in afghanistan pakistan and iraq and the balance of the supplemental requests will support u.s. and military forces. i like to spend a few minutes walking through the major element of our budget submission and after we would be happy to respond to any questions that you have. and -- over my shoulder, you see, some grasks which i think you have in front of you as well. and i'll follow the structure of that grask and walk through the highlights of the budge pept and so securing frontline states, which -- make sure i get the color right is blue on the chart. it is behind me. and -- this represents 20% of

the state and budget. and it supports civilian contributions to efforts in afghanistan pakistan and iraq. it includes $10.7 billion to support the strategy in afghanistan and pakistan. it also supports the civilian effort as we shift from -- military to civilian programs in iraq. and as i mentioned, the supplemental for $4.5 billion for 2010 is also included. that covers afghanistan and pakistan costs but the transition costs that i mentioned, which are very much timely expenditures. our afghanistan strategy as you know, is a fully coordinated civilian military plan. civilians are working side by side with -- with the military in each of the districts that are targeted for action. and our goal is to build the capacity of afghan institutions to diminish the threat opposed

by extremists to draw insurgents off the battlefield and provide meaningful alternatives. combination of supplemental and fy 2011 funding will allow the program to be built up and maintained for 18 months. in 2011, the funding is $5 billion. and pakistan is another key country in the war against extremism and our budget focuses on imprfing basic infrastructure which will enable government to provide services to people of pakistan this is key to providing stability and provide the tools to wage a effective campaign. and for fiscal 2011, funding for pakistan is $3.2 billion. and with the scheduled draw-down of forces funding in the budget will assure smooth transition of police training and the operational support for our civilian presence. and -- as the t.o.d. begins to draw down, there's savings in the defense budget of roughly

$15 billion and the state expenditures are ramping up and we're seeking an increase of $2 billion. the trend will be more dramatic as the military drawdown continues and military spending continues to decline in iraq. and for successful transition, investments in civilian capacity must be in place prior to the military withdrawal and the supplemental funding if iraq is necessary to assure the time sensitive investments proceed on schedule. and the 2011 funding for iraq is $.5 billion. and the programs in iraq will include police training rule of law programs and -- and a transition from the current military footprints to a more -- more normal diplomatic and development program. and there are presently 22 provincal reconstruction teams housed on military bases. that will be reduced to 16 by august 2010 and down to five by october 2011. and at that point, the enduring diplomatic posts will not be connected to military paces.

they'll be free standing diplomatic posts. and overall the state department budget funds over two thirds of the 3,000 civilian personnel in the three frontline states. and these critical civilian deployments are essential to the success of our strategy and to the reduction with u.s. troop levels. and second category is meeting global challenges, it is red -- part of the pie chart behind me. and this 28% of the budget and supports our efforts to meet you are jent challenges such as natural and manmade disasters and poverty disease and malnutrition and threats of further instability of climate change and rapid population growth. in many cases these efforts involve several agencies in a coordinated whole of government effort. they improve people's lives and make them vulnerable to the ravage of poverty and threat that it brings. and improving the most basic human conditions reflects our values and enhances or security. and the conditions lead, and

often to conflict and instability. and the global health initiative builds on the progress we made. and we will invest $63 billion to help partner countries achieve significant imprfments in health outcomes and coordinating or disease treatment programs to build stronger and more sustainable health systems. the particular focus on improving the health of women and new borns a children. and the g.h.i. request is $8.5 billion which including funding for t.b. and other disease specific programs. the president's commitment of $3.5 billion to establish the global hunger and food security initiative attacks the root causes of hunger, poverty and malnutrition by raising cultural pro-- productivity and improving household nutrition. the total funding of $1.8 billion includes $1.2 for staid

state usaid and the treasury department will split multi-lateral programs, within the global health initiative, there's an additional $200 million that splits the programs that are a essential part of the food security initiative. we view this as interconnected. and the funding to address global chimet change sperts our copenhagen commitment to provide $1 million between 2010 and 12 for forest programs and take meaningful action to fight climate change, within the state and usaid budgets we're requesting 46 million for sustainable landscape. for example we'll expand renewable energy programs in the philippines and improve electric systems in south africa and southern africa and support climate change with china and indonesia. and counting all of the funding

if climate change is $1.4 billion. we're requesting $4.2 million for humanitarian assistence programs. as we have seen in the past three weeks, it is crucial that the usaid maintain here. these programs provide assistance to displaced persons and refugees and victims of armed conindicates and natural disasters, such as the devastation in haiti. the budget includes 100 million dollars coming out of the president's speech in cairo last spring. these create economic opportunitys with the muslim world and foster partnerships and science a technology and address challenges facing women and youth. this is on top ofñi $700 millio we invested in the areas asñi pt of our regular programming. and third area strengthening security partnerships, which is the green section of the chart behind me. there's 28% of the budget and it includes funds to strengthen the security partnership and meet critical challenges which in turn help secure our own

interests. and these funds provide security assistance to our friends and allies in the middle east, including israel and egypt and jordan and support sector programs in other parts of the world. because we have broken out of afghanistan and pakistan, the number i give you won't tie to the number that is in your charts. in addition to afghanistan and pakistan and iraq, it is $6.6 billion. and we maintain our commitment to pay you on peacekeeping mission asestments in full and on time mitigating demands on forces to restore peace and strengthen regional stability. this is a $2.2 billion. and we continue to support the government of columbia in its battle against drug trafficking and violence and the stability which has a direct impact on regional stability and our own security. and that's $465 million. and we fund the critical -- critical initiative in mexico to help the government against drug cartels which has a direct impact on the united states. the budge p budget includes

funds for those in the caribbean to control crime. and funding for the initiative in mexico is $410 million. and finally, as these funds provide economic and development assistence to help our partners around the world spur economic growth and provide basic services to their people and support civil society in other groups. . .

>> secretary of defense robert gates said one of the most important lessons from iraq and afghanistan is reconstruction is necessary for long-term success. rebuilding civilian capacity is critical to this missions. the budget includes $100 million of complex crises funds that will enable the secretary of state to meet key emerging crises. this represents a transition funding for this purpose of the department of defense and to place the authority directly in the state and usaid. and for police training in iraq.

both were previously funded by the department of defense but the final category, investing in personnel and infrastructure, is of the chart behind it. 24 percent of the budget goes here and it supports and the structure and personnel needs for national security efforts for diplomacy. the department of state and usa id of the backbone of our capacity with a talented and all trade core of staff that are critical and engaging with our partners around the world, tackling diplomatic and development challenges, and mitigating rest. our civilians help bring stability to volatile regions of and to stabilize global economies to assist minish -- to diminish the trans-national criminal networks and to strive for a world without nuclear weapons.

these are serious challenges and this represents a fraction of what it costs for military engagement if conditions deteriorate to where military action is needed. military operations will end of the work of the state department will continue on a long-term basis. the goal and afghanistan is to manage a similar transition security conditions said rigid permit in july of 2010. -- 2011. the proposed budget will enhance the strategic course is available to address future challenges. the increase of 410. service personnel will help meet these needs and that sustained at this rate will result in a 20% increase by 2014. an increase of 200 foreign

service offers will keep the agency on a path of doubling the foreign service by 2012. fiscal constraints remain but will remain on track to fix these core capabilities. technology, health care, housing, and other support for the all volunteer force. the operations but it is necessary to lay a strong foundation to implement effective programs with both national leaders in the public. the state department has interests in tires around the world. the robust and continuous global presence, especially in key countries, allows the u.s. to provide critical leadership and to strengthen our partnerships and to forge new ones and to advance opportunity and prosperity for more of the world's peoples. in doing so, protect our own security, promote our interests and laid the foundations for a more peaceful and prosperous future. with that, and i'm happy to take

your questions for the courts can you explain the figures put up by the white house in the budget authority for 2011 state about $63.80 billion, which is a 2.3% decrease from 2010, and your figure here is 52.8. what else is included? >> without looking at the piece of paper, it probably includes other agencies that are in function one ticket. it may have some applied -- some adjustments from year to year funding because of the way supplemental funds are being accounted for putting the numbers i did you are the funds being requested for fiscal 2011 in the state department of the courts right but this total for everything. i am trying to figure out. the numbers you have here, it

does not add up. the entire administration budget does not add up in the course the numbers i gave you are what are and the budget. it is hard to react to a chart and the courts the budget book has 56.7 at the bottom line number. is that because of the supplemental. " i suspect that it is one or two things. foreign funding or just to cut this is just stay. >> the way it accounts for advance funding from prior years. i am describing the new funding request for 2011. i am happy afterwards to cross check numbers afterwards. there are presented slightly differently. >> their request for fiscal 2011. can you give us the comparisons

for fiscal year 2010 including your proposed supplemental request so that we can seem how much funding is going up and how much funding for iraq and pakistan is going up. two other countries i would be particularly interested in with the same comparisons are yemen and haiti. >> i can either walk through them now or get them back to you afterwards. rather than read off the numbers, it might be easier to do after. for afghanistan, the total funding in 2011 enacted was to

$0.60 billion but our supplemental request is one point made dollar billion to enter the 2011 -- we're ramping up the civilian effort. we're giving to a fully funded program level. you could see our buildup of civilians and hour and a buildup of programming. it is really an 18 month period that matches the president's new strategy. >> i did not follow that. it is 5 billion for fiscal year 2011. he said 2010 enacted was $2.60 billion. w2çheç saidçóo"3 the supplet will beççt(okhtçç1.80 bill. íroçççç]çoknbko>> right. fghanñr membersçççóçççççç

$3.30 billion in the regular ç?ndççççp(propriationsçi]ç for( aok $4 billionmxçñrçó requm çççyow3ççççów3t(ç?;?l. w3fá>>ç the increase, if oneq o w3çxdincreasemy would pay to 5+ there would be eight to 0.0 that you are requesting for the remainder of fiscal year 2010.

court>> i rounded up. we should be saying that it is 7 in total? >> no. çw3çokt(that is the request. ççx(oksupplemental is too. xdççç>> on both the program e operations side, we are building up to the program level. if you look at it as an 18 month period, it is not going to be totally screwed. there are certain things -- will be totally true. >> there will be $5.30 billion

and you are asking for $4.90 billion which is a production. >> i would be reluctant to look at the changes and these numbers and call them dramatic shifts because we are talking about a program or the timing of the expenditures for month-to- month cannot match fiscal year perfectly. there are searches that come in the middle of the year and we're looking on the program side. we decide the operations for the moment. we are building up to and assistance program of roughly $400 million per month. it will not be that much each month. when transfers happen, they might not happen the next month because of the way programs are funded. you can look at the month-to- month or the 12 months to 12 months because the timing is

coming in the middle of the year and causes the program to have an 18 month character. >> could you give us the numbers for pakistan and iraq? >> i will give you the program level. on the program level, the funding was 1.45 and a separate request made the total 1.8. the request for 2011 is 3.0. that represents full funding of a program that is civilian assistance for pakistan. that also reflects funding for the pakistan counterinsurgency fund.

>> on the operations side, 26 is the supplemental request. >> the similar numbers in iraq to go is that the total for operations 2010? >> could you give us the combined? >> we will put a table together that combines the forint assistance for an easy comparison rather than trying to do this verbally. there are two different tables and we should have anticipated that you wanted the numbers all and. it is not a difficult thing for

us to do. let me take a minute on iraq. it is important to go to the policy on the iraq members. -- on the iraq numbers. the amount appropriated was $466 million. the separate request is for $517 million. that is a big increase. the reason for this request in 2010 is that an order for us to have the transition and police training from the military to the civilian side, we have to acquire the equipment which includes aircraft, helicopters, it means recruiting and training in procuring the staff and facilities for them to work in. because the timing is key to the

military withdrawal, we have asked for the supplementals to make sure that we can get all of the groundwork correct well in advance. the other thing that we need to do is prepare for the ultimate military withdrawal. we are going to need to construct civilian facilities that are not a part of u.s. military bases. that requires advanced work. the cost of these programs is high because of the security requirements are quite high in terms of the fiscal structures and the transportation and security requirements. the resources, particularly for the police training program, to get off the ground quickly. that the $730 million carry that forward. the overall funding level is

higher that. >> the conflict crises fund of $100 million. is that a straight transfer of funds that fell under what you described as the budget or does it reflect any increase in funds available for those kinds of activities? it is not correct to call it a transfer because it is not a thing -- because it this. the secretary of state has session to intervene in a crisis situation using department of state funding.

there is a great deal of consultation and collaboration before and going forward. properly led civilian leadership, this is an important change. >> this that fall under the trooper few ridges that fall under the secretary? >> it goes with the secretary. >> another one about afghanistan, pakistan and iraq. how will this budget increases transfer into personnel changes at embassies? what numbers can be look for in the coming year? >> we have approximately 900 civilians in the embassy and throughout the country in afghanistan but more and more of

the people being deployed are outside of kabul. as we look ahead, we are looking at an increase. when i briefed on this previously, i described it on the order of the 200 or 300 more people. it may be a little bit larger than that. we have room and this budget for a little bit more than that. what is important is that rather than take an arbitrary number is that the civilian resources have to be defined by the mission. as the district plans military world as they need civilians to go and side-by-side with the military, which are getting those requirements six months in advance and we are filling those requirements. i suspect that the numbers will be several hundred more in 2010

and they will increase in 2011. >> in pakistan and baghdad, as well? >> in baghdad, there will be an increase in civilians and there is already a large number of civilians. there will be an increase. we have 22 reconstruction teams. as removed ahead, people will be moved ahead in positions will be moved ahead there is not and that number of additional positions but it will remain a very significant post. for a brock, rather than pick about the increase, while the military is decreasing, civilian presence is unlikely to drop sharply because we have new responsibilities. the place where you see the biggest increase right away on the civilian side is in police training.

the deployment of people toward the end of 200011 so that is still a way off. >> islamabad, an increase? >> there are additional civilians that have been slated. it is not on the same order is the increase in afghanistan. the civilian increase is partially to implement the civilian programs. we also have the requirements for the military systems to have people do the proper oversight. >> about 10 days ago, the afghanistan-pakistan regional stability pact had been revealed. this that mean there are funds there for reintegrating raw militants into afghan society

and also these programs to counter the extremist voices that were mentioned and that plan? >> secretary clinton said in london that the u.s. supports the reintegration program. the principal funding for integration will be a commitment of defense department resources that will be used as the campaign moves forward. but not have any plans to have additional efforts for civilian funding for reintegration in now. çóçspecifically, reintegration plans are being programmed in the defense department. >> what about the media --

>> we have been building up in the 2010 budget and that will be carried forward in 2011. there are costs like cell towers and broadcast towers. the number will not be a quite the same level as it was in 2010 but a very significant program with strategy for helping afghan develop their own media, not just seven u.s. communications. that program is funded in the 2011 budget. >> if you could talk about the kidee request in the supplemental budget which i imagine is more straightforward. >> the immediate expenditures in haiti were not budgeted and a formal sense because it is an emergency to the extent that

there were resources set aside for haiti that can be used for this purpose, we are reducing them right away. we have been in a disaster response mode where the question has been what needs to be done and how to report. as we move forward and get to the end of the relief and into recovery, we will clearly have additional funding requirements. our budget documents indicate that we cannot put a number to paper before these documents were prepared. we are working through those issues now. we aret( working on with the office of budget management and there will have more to say shortly. it is our expectation that there will be additional requirements to pay for the immediate emergency response and to carry forward the recovery and early reconstruction process. the assessment of damage has not been completed yet.

we are at a point in time where we are just about to make that transition of immediate relief to the longer term. >> will we be getting the supplemental figures? >> you should have the supplement the figures on the documents that were released right before this briefing. the supplementals for afghanistan, pakistan and iraq to the we do not have a supplementary that for haiti. >> there is a number in the appendix that says funds appropriated under title 3 and for not less than $295 million to be made available for assistance to haiti. >> that was the regular assistance. there was actually a little bit more than that budgeted in. it is more like $375 million that was provided for haiti. one of the things that we are doing right now is that we are using funds that were to meet urgent needs wherever

have the flexibility to do so. given the natureç of the disasr response, you quickly drive down your emergency response fund and the challenge is to figure out what other spending sources are available. terms of the quality and speed of the u.s. government response. çit has caused quite a lot of money and it has required us to drop down fundst( that were okças we getq later intoç the, we need to mak ] sure we have areç other naturalzv disasters later in thew"3çqw3?;ñç year,ç w3ççkoçów3áqát. çi]çi]weç are puttingç toger analysis ofçç this. qit is notçç a first orderw3w3 analysisñr. that is what is required to okçóççw3respondççóok in somes when we are saving lives. what can you do to get a search

andçó rescue team to get a çççquestionçt(ç -- ?ç çxd]iw3ççççi]w3t(ç< çe is provided. e point where one can step back and take a longer view. that is what we're doing controversy over who is paying for whatçñr and the military flights toq florida for patients and hospitals? who is going to pay for this? >> those are not principal çissues thatçç we have direct responsibility for. myñr understandingfá is that the issues have been worked throughó and there is a plan forç dealig with that. ççi would point out that there separate issuesç regarding çhaitian americans who are u.. citizens. ?;i]t(i]we have beenççççt(e

returnçó of haitian americans wo choose to come back to the united states with the they have been injured or not. those arew3w3ç not principal af our responsibility. >> i think the white house. >> on multilateral development packages and the budget book that was released this morning, it is showing from 2000 tend to 2011, an increase of the single biggest, and almost $900 million to multilevel development banks. on the fact sheet put out, it's as $1.90 billion to multilateral development banks.

could you clarify? >> i would be happy afterwards to cross reference documents, let me explain what i understand to be going on in the international financial institution funding. there is additional funding for the food security initiative, the multi lateral component of that, there is something for climate change, it is a joint bilateral effort, and there is also some funding needed to recapitalize some of the regional banks. as you know, those are department of treasury programs. we pay a great deal of attention to them because we coordinate our programming together and obviously it comes under the function 150 account. that is why there is an

increase. i would have to look at the way the document is prepared. >> it is still a big increase. it does that have to do with some sort of multilateral agreement that came out of g-20 or some other conference with the agreement was made where a group would increase funding for food security? >> i think driving those numbers is our commitment to the initiatives described. for the two security initiative, we reviewed the commitment as a whole. i use the $400 million number that was the multilateral peace which was part of our overall commitment. we envisioned a program where we will provide on a bilateral basis one set of services while the multilateral programs will provide a different set of services. roughly seeking -- roughly speaking, the multilateral will

be infrastructure and the bilateral the country partnerships and support. if we did not have that cooperation between the bilateral and multilateral programs, we could not have the initiative that we are describing. it is very important. it also creates leverage for the u.s. contribution. we think we have the right balance between bilateral and multi lateral. one of the challenges is coming into countries with a coordinated approach so that we cannot have five different ideas about what we are trying to do. i think the budget reflects that commitment to that effort of coordinating across institutions and most importantly, working with host countries. it is their program so they need to have ownership of it. that is how you end up with sustainability. >> could you talk about 410 positions and 200 usaid.

the president's early plans were to increase the number by 1600 over two years. >> were stretched out a little bit but it was never over two years. >> how to the cuts he is trying to make effective the positions added? >> as i indicated in my opening statement, we have had to extend the period but we have not changed the goal. it is a remarkable statement of how important this rebuilding the core capacity of the state department and usaid. it is a difficult budget year but difficult trade-offs for domestic programs, we are maintaining the commitment to building up our capacity to have properly trained civilians available for this critical assignment. the fact that there are 3000

civilians and pakistan, ñafghanistan, and iraq makes a case is clear as anything as to why we need more people. without ruling, it means pulling survive -- civilians out of other posts. we need to grow and this budget gives us that ability. okthe case ofç hiringqw3 willxy slow down slightly. it will not be a dramatic change. >>]i w3sw6how willw3 that compo 2010? >> what is the new timeline? >> there is a big number from department to department. ç>>u! he said the time linew3 a long datef çç?tççw3ç2014.

25%. >> can you give us figures on yemen? >> are there areas where you are losing something question park were less money is to win? >> as you go through, there are certainlyçw3okç areasççr>e reductions. we have held the line and a lot of areas. we targeted the increases and there have been some areas of production. xdqthe reality is that international spending has been underfunded for so long that holding the line is in and of itself it difficult thing to do and a lot of these accounts. i could produce a list. i think the real story from our

perspective with targeted investment increases and very strategic areas. we targeted the increases for the conflict space, the initiatives to which we think are key to getting and restoring the u.s. role in the world and to play the kind of constructive leadership role that the president ambitions and rebuilding our core capacities. we have tried to look at countries where there has been progress and you can startç to tamp down the numbers in a constructive way. it is not always a positive signal to take a number down. it is actually a positive thing and the number is coming down because things are better. there are some examples of that. there are examples of programs like down in columbia with a graduate from the first day of the program from the second qstage or the heavy equipment purchases are behind you and you

are programming it in a different way. there are a number of areas with the numbers go down. i do not have a list of cuts in front of me to read them off. >> probably. i would have to go back and break it out. the fact that we just completed the purchase of helicopters in mexico, all of the helicopters have been paid for. they are being delivered. we are moving to a different stage of the program. another program is designed to get and what people do as opposed to what they used to do the job. a similar point in colombia. those are positive regions to see the number down. we have been careful in this budget, not just the whole number levels for reasons but to

use as carefully as we can the scarcer resources for diplomacy and development. >> and talked about numbers going down and a number of sub- saharan countries. >> overall, numbers have gone up. we have increased what was the highest level of funding after and we also increased the global fund. we have taken the increase in help dollars and used part of the increase to fundççy the gll health initiativew3 which is designed toç connect all of our different health programs. what we have doneç historically very successfully iss7ç)a/=eçç these treatment programsqd(uów3a chevy, malaria, tuberculosis,ç sq%ei+ kind of self-conscious buildin| su. ççt(what we are doing iszv fon ç

if aç÷ woman comes into açz]qy because of funding, we can also provideçok maternal care and ce to a newborn child. additional focus on systems ñrinvestment and the health care for women and children, that we will be able to prevent 3 million currency related deaths and -- pregnancy-related deaths. there is an awful lot of benefit to be gained by taking this coordinated approach. we see this as being important and countries were perhaps a significant investment and also important where we have a smaller investment. where we do not see the global health initiative is being limited to the 10 or 20 top

funded countries. this is a whole different way of doing business or part of part of this to coordinate what we do and work with the host government because they are focusing their efforts. we see it as both an opportunity to extend the disease production capacity of our federal assistance but to leave behind a much more stable system and the courts the idea of bringing it back to the numbers is to change your focus to the local structures. that would not require larger numbers. is that the reason some are cooling down? >> overall, the number goes up. i would have to look at the country by country funding levels. overall, the number goes up. >> is this 10 million for only mexico or central america? >> you have 35 between central america.

>> 310 to could thank you. 310 for mexico and 100 for central america. >> to you have eight separate for the other initiatives? -- do you have a separate for the other initiatives? >> [inaudible] been tested but to call for any

additional funds reflect any greater focus on these approvals? there is some suggestion that the says should be once and for all taken away from the state department. >> we have funding for our counselor of their programs -- counselor affair programs that is up. >> the ability to retain more vifunding [inaudible] . >> that is a long time. >> how much money is that? >> there is an additional $728 million.

correct the 2011 budget includes improvements to the expanded capabilities for passport and visa w3capabilitie. çfe address the concernsç rai. we'reç planningçrjz improving facial recognition technology and new biometric techniques. we are fundingç or than $50 million in 2011 for systems to collectw3çxd information. w3çi cannot have aw3çt( numbee biometrics. w3>>ççó this set includes sharg data with the airlines and other federal agencies? b.>> what would share withç d3

çqçand what we share with airs we share with airlines. hot >> did you said that was $50 million? 8i]çi]xd>> 50 millionçów3xd foa enhancement and sharing. ççóççyç>> that is the incre. i did not haveççiyé3qçw3;ht ofçç me. >> toç see dollars million i]additional? + >> correct. -/tççaçóñr

the coast guard and special operations. >> to live. >> -- thank you. >> we can go through the line item details if you would like after the briefing in more detail. [inaudible] çwhat of the conditions for the

mexican government and cools? >> we have been working with the government of mexico very closely in developing a plan. i was just down meeting with the cabinet in november. the idea is to work on the programs that will improve the law enforcement activities that will enhance human-rights. there is a great deal of focus on taking the capabilities that have been built up with our assistance and caring goes forward effectively to deal with ]

shoreq up the institutional capacities. ççççççthank you. çççóççc-span3 c-çspan2xw3y national captioning institute] [captions copyright national cable satellite corp. 2010] ççç>> we are sure we give brs monday president's budget request. it includes a three-çyear spending freeze onç several programs excludingok military ad homeland securityxd spending. çxdthe 2001 and 2003 tax cuts r families making more than two andxd a $50,000 will expire. there is a $100 billion jobs measure andç spending would be increased on energy and infrastructure.

çour coverage of the proposed budgett(ç for the fiscal year 1 continues over the next several hours withç briefingsç by vars administration members. on "washington journal" tomorrow morning, rick maze takes questions on the proposed military budget. danielle pletka discusses u.s. policy towardç iran. çthe president of the national çcouncil will focus on issues that affect latinos. çit is live on c-span every day

w3at 7:00 a.m. eastern. w3açót( couple of live eventsçól you about tomorrow. defense secretary robert gates and joint chiefs chairman admiral mikeñrç mullenxdçt(ç+ thexdç proposedt( pentagon speg before the armed services committee. that is at 9 eastern. at 10:00çt( eastern, timothy geithner justifies before -- testifies before the senate finance committee. çqhealth and human services secretary kathleen sebelius on the fiscal year 2011 budget request for her agency. the obama administration released the full budget request this morning. this is 40 minutes. ç>> good afternoon, everybody. thank you for being with us

today. eleased a 2011 budget. the budget builds on the themes that the president laid out in his state of the union, strengthening security and opportunity for america pause working families, investing to build a new foundation for future growth, and bringingçóçón new level of accountability and transparency to government. we try to abide by the president pledged to root out programs that are redundant, obsolete, under this budget,ç we plan to serviceqç thatççç americaç s upon moreççxdçweoçç/7]çqw3g program on the results. anyççt(ç of theçw3çç neceç care fra strengtheningçokjgc r

getting serious about t(ç preve. i]çj℠bs( 9c] job as secretaryççç is givino workç with so many incredible doctors, scientists, nurses, and public policy experts. they are the ones thatw3ç drivr department's decisions. i like toç introduceomç the leq ofqççç our tei w3çthere will be/+ available r çquestions asçpartçó;ç of ol program today. qççi]çthe leaders will beçte çimmediately followingççd8 tf ççi want to startç with the t row.

ççñrñrw3?m(qçqçoárwei]çó hay xdxdçadministratori]çççw3çf t(dhe agency for health researh and quality. qwlsecretary. joining me ont( stage from the left to the ridet(çokçóçw3 arç çblumenthal,çç the coorújator t(çoçw3çthe assistant secretr çhealthç. theçç neqalájájápáor of the buáháq)vices

services. i p'd families. çóadministrator ofç theçççh resources administration. çw3the directorççóçóçko of t÷ ñrçççw3ç5ánñçqxddirector or disease control. ç/othe commissioner ofçw3q th] drug the devastation. ájt(r" and state operations. çfáthe director for medicare management. çççççacting assistant secrr financial resources. i want to start by saying thank çyou for all of the workç#"uz o w3çeach and evepy@e9ñ we needqçñiq+nçóç to2ptásci. --ç from day one,xd0d presidea says we need to putççi1ñ sign.

3çwith aç protectr transformingokçñr the health-ce records. çthe investments wekoçç havee have been guidedmy by some of te finest scientific and medical experts in the world. w3xdokwe are also guided by a ct vigilance about using taxpayer dollars wisely. we are in a time when so many families are scraping together everyw3 last dollar to pay their medical bills. fraud, waste, and abuse inç the health-care system is [ilply unacceptable. ça historic investmentw3 in cracking downççñrfá on healthe fraud. ççççóthe peopleçst&ñq stilld medicare and medicaid. çokw3myçthis investment allowo build on ourbçó investments that began last may when president obama asked the attorney general and beef to create a new health- care fraud prevention and action tax force.

it is really an unprecedented partnership. q%qk3qçççççççwe can st trends, courtney strapt)qáhp'd çdevelop newç fraud preventiod prosecution tools. for example, we have a new system that allows us to identify fraud byç analyzing sq%ei+ okqçthis budget sends açów3 clr çómessage to thjtrz commit fraud,ç stop stealingqç from seniors and taxpayers or we will put you behind bars. bçlast year, almost one year a, we expanded access to health careçç to millions of americ's q'çi]çxdç wp reauthorization act. zvçw3w3çñr=mçq%thanksq te have funds toi]i]xdñrççç proh care to millions of kids who are not yet enrolled so that they

can start hittingxd the health care they need. çwe are investing in new funds and what i consider to be the backbone of america's health care system. these neighborhood centers will provide high quality primary care for over 20 million people per year. 3 million more than ever served in 2008. on top of that, we have almost $1 billion in funding to strengthen and support our country health care work force. we're going to use this money to increase the capacity of nursing schools, help more low-income and minority students realize their dreams of becoming health care providers, and ensure that america's seniors are going to get care when they need the most. the budget contains a significant increase in funds for the indian health service. as we continue to work to eliminate health disparities, this will be front and center. off the principle we are trying to establish in our health-care system is that regardless of

race, gender or geography, every american deserves high quality and affordable care. we are investing in next generation technologies to help provide better care for all americans. the adoption by her doctors and hospitals of electronic health records of produces medical errors, helps coordinate care and cuts costs and paperwork. we're going to fund research projects that put the best and most up-to-date information in the hands of doctors and empower patients to make important health care decisions. our budget is based on our growing understanding that help -- health is influenced by many things outside a doctor'si]ó73ç to help moreu!yç aóericansç ìk çççxdvtççhealthypç lifestylt çyóç;çs3i>g?ç3jju)áutjo7kc

health infrastructure. wfçount?7[çwhatu! we haveçç tk care system%ç[ç where ww wai( l dething goes wrong to intervene. ççwe arew3 on(t[e roadka(ç#ga ççwe ahat3 on(t[e roadka(ç#ga çñq/qçymçboaççbromisesç be time. çtow;çtzççççokççç that progra]sdq!qáqp'cers for q%=9ì(lc@&c+ that puts thew3 work to reduce çrates of disability and çómorbidity in 10 of our biggest u.s. cities. similar4])ogramsi%ç communitpc) across thec)u'try. çççççóomççt(çóççw5+wçik obesity, a problem the cost of billion each year. :1çç the 21st century food market. ççw3w3çóo7knearly halfwc%yñd

quickly toç endw3 and ultimatey çótainted salaam it that was recently recalled. we will also be able to expand the efforts of the food safety working groupiñ that i cochair. t(the adevional fundingw3wg!w3çs ççvy standards/b'sny(d2kfnó7ewwt(0e andçi] response and hire 350 additional food inspectors. çxdu!if you want to see how wee +itájy çççççççóafter smoking ratr years, the number of americans whoç smoke now hovers right around 20%. i]nbit is unfortunately holding steady. yea signed the familyçç smokingyea prevention and tobaccoç control

act which for the first timeç3 giveçç the food andp drugçç% demonstration new power to regulate tobacco. çw3brçxdvçthis budget buildst progress by providing çççoksignificant fundsç forg our children aboutqç the dangers help us develop better waysw3ço w3f ççççççt(basis,ç strengthc w3çw3çw3, we mustqd8g#w3ç ae prepared for public health9tj÷ çççw3emergencies. causes mother natureçç or our fellowman. thp xonççççççw3this cluesçi] w 3 fápandemic, we got a wake-upl about the readiness of our countermeasures. even as our scientist and the

ectorççç partners scrambe 7lmwvçvaccine and sixççqçóç e w3q]ñwfá;z;ç/oçtakes,ççoka temporary(v@ccineç shortage çççççw3r>ñçót(miççççande n theqp u.s. for the last 50nde years. $500,000 --xdçxgnçwy3q5ççk3 o 'termeasures.e these c focus these investments,ç i hae of our entireokççt(çó counter. w3çç?;