with questions about military -- political aspects of the budget. more from defense secretary robert gates and the chairman of the joint chiefs of staff, admiral mike mullen. at that, briefings on the budget from the state department and the department of health and human services. on "washington journal" tomorrow morning, rick maze answers questions about proposals for the defense department and the proposal to end the don't ask don't tell policy. danielle pletka discusses u.s. policy toward iran. we will hear more about the proposed budget from vermont senator bernie sanders, and janet murguia, the president of the national council, will focus on issues affecting latinos.

"washington journal" is lighter day at 7:00 a.m. eastern europe c-span. -- is live every day at 7:00 a.m. eastern here on c-span. . >> press secretary robert gibbs also talked about creating a commission on the national debt. this is about 50 minutes. >> good afternoon. before we get started with your questions, let me make a brief announcement.

the president and the first lady will be traveling to indonesia and australia in the second half of march. this trip is an important part of the president's continued effort to broaden and strengthen the partnerships that are necessary to advance our security and prosperity. indonesia is the world's fourth most populous country, the third largest democracy; is home to the largest muslim population in the world; and an important partner in the g20. during his visit the president will formally launch the u.s.- indonesia comprehensive partnership, an initiative through which the united states will broaden and strengthen relations with indonesia to tackle important regional and global issues. in addition, this year also marks the 70th anniversary of u.s.-australia relations. the president looks forward to commemorating that milestone and

consulting with prime minister rudd on ways that we can build on the strong relationship between our two countries and discuss issues such as global economic recovery, clean energy and climate change, non- proliferation and afghanistan. en route to asia the president will visit guam, where he will speak with u.s. service members on the island. we'll have more specific dates for you shortly after they are advance. >> before or after the ncaa brackets are announced? [laughter] >> i know that is weighing heavily on many traveling members' minds and we will seek to plan accordingly. >> will he visit childhood haunts in indonesia? >> i'd anticipate that that will likely be one of the stops. >> is the whole family coming? >> yes. >> coincides with spring vacation for two little girls? >> likely, yes. >> any plan for india trip? >> not on this trip. >> speaking of numbers, the budget -- it's hard to avoid a headline out of this budget that the deficit is going to hit another record this year. next year, if congress approves and the projections that are in the budget come true, the budget deficit will be back to

basically what it was when the president took office. >> right. >> has he chosen the need to fight the recession to create jobs as a higher priority than fighting the deficit? >> in the short term, absolutely. we have to get our economy moving again because one of the reasons that we've seen the budget deficit grow is that the economy has slowed down. we all know the extraordinary measures that had to be put in place in order to jumpstart the economy and we've seen some of the impacts of that as recently as friday, with increased numbers in economic growth. the president, as you heard in the state of the union and throughout the first year, discuss the need and the necessity to get that economy moving again, and then to transition to address our mid- and long-term fiscal challenges. i think many of the proposals the president outlines in here

we have discussed -- non- security discretionary spending freeze; the president has supported and congress thankfully passed last week a reinstitution of i think very simple commonsense rules that -- for pay as you go, that if we're going to spend money we're going to have to pay for it -- rules that were absent for a decent part of the last decade in which we saw deficits and debts skyrocket. >> his rhetoric, the words he chose today, talking about how we've got to stop spending money like it's monopoly money and deficits matter and all that -- it sounds like he's saying that but saying, but we've got to wait on that part of it. in other words, he's, like, talking at cross purposes to the budget he actually submitted. >> no, no, look, we -- look, we all understand we had to take extraordinary measures, again, to get this economy going. are we spending more money on unemployment insurance than the president would like? yes, on two accounts. one, it's money that we're

having to spend, and having to spend that money means more and more people are unemployed. are we having to spend money on a recovery act that, all things being equal, the president would like to not have to do? absolutely. we have to get our economy moving again, we have to create jobs. that will improve our medium- and long-term deficit picture. understanding, too, that the president has also taken someñi extraordinary steps, mark, in terms of pay as you go, the -- we spent a lot of time in the past year talking about health care -- a proposal that the president laid out a specific path for paying for. we are where we are today partly because of this economic downturn, but partly because for a long time we had two wars that we weren't paying for. we had tax cuts that we weren't paying for. and we had a prescription drug benefit that, although very

worthy, we never paid for. we have to return to some very common-sense principles that everyday americans live by every time they go to the grocery store or want to go to the movies or cash their paycheck, and that is you can't spend more than you have. >> one more question stemming from the briefing that we just had. christina romer was talking about the jobless rate still being at 9.8 percent as we get to the end of the year. with all the additional money that's going to be spent on job creation incentives for a company to hire, is a $3.8 trillion budget getting its money's worth if that's the best we can do? >> well, understand, mark, again -- and i think we've seen this over the last couple of months -- we have to create 100,000 to 150,000 jobs a month just to keep that unemployment rate at -- roughly keep that

unemployment rate steady. as the economy begins to pick up, that will also put increased pressure as we do begin to add jobs because more and more people -- in addition to that, just the sheer population growth -- but more and more people that had stopped looking for work will enter into the process of looking for work. so it is going to takeñi quite some time to bring down the unemployment rate and to -- particularly to add the number of jobs that we've lost. again, i don't think anybody is -- i don't think anybody looks at this in any way other than in a realistic way. we have more than 7 million fewer jobs now than we did when this recession began in december of 2007. so it's going to take quite a long time to fill that hole. yes, sir. >> robert, two questions, first on china and on the budget. what's the white house's

reaction to china's reaction to the decision to sell arms to taiwan? are you concerned about it? are you concerned about how or whether this will hurt the u.s.- )jjr(? >> we discussed many of the things that -- we discussed each and every aspect of our relationship with china when we met in china in november,ñi including arms sales to taiwan. qthe president was asked this ii ñrçó front of the chinese people. we have always said that we wantok the type of relationship çówhereñi we're working togethen important issues of mutual concern -- the global economic recovery, our concerns about proliferation -- but when we have disagreements, we'll do so -- we'll voice those disagreements out in the openñrn public. i think that's the typeñi of iñiñiñir china during this iñiñiñir administration and one that

we'll continei to have. ñi>> well, they certainly voiced their disagreements. they're threatening to impose is that something that the white house is concerned about? >> well, again, i don't -- i think our reaction to that would -- that would not4ì(lc@&c+ warranted. again, this was something that was discussed with them when we met in november. and i'll say this -- again, we want to work on issues of mutual concern. i don't think that either country can afford to simply walk away from the other. that's not what we would do, and i don't think that's what anybody expects them to do either. >> what do you mean by not -- a reaction wouldn't be warranted? >> their reaction, in terms of sanctions. >> was overblown?

>> no, no, i'm saying my reaction to that is i don't think those would be warranted, given what we've know. >> all right. and my quick question on the budget is a political one. what do you think your chances are of getting this budget passed by congress? >> well, look, i think the president had a productive session with house republicans on friday. i think the american people expect both political parties to work together to get things moved forward. so we're obviously optimistic that we can get a budget passed. it's an election year, and we

all understand the games that washington plays in an election year. but i hope that this will be a budget that will be taken up and passed. if people have disagreements about the priorities that the president has laid out, i think this is a perfect time for them to roll out and talk about what their proposals are. i think the times are too important to simply lob a statement or email out a statement about what you think is wrong. get into the arena and propose a series of ideas in which you think are better, in terms of funding the investments that we need to make to move our economy forward, to build that new foundation, and to take care of the future. jake. >> the president's executive order creating a bipartisan commission to look at debt reduction, why is it needed -- considering the fact that democrats control the house, senate, and the white house? >> well, it's needed, because i think if you look at the budget documents, we're going to get somewhere slightly above 3 percent of our gdp taken up in our budget deficit. and i think most people would say 3 percent is about where you need to be. and it's going to take some tough decisions to close those gaps. >> but why are the president and substantial majorities of democrats in the house and senate not capable of those tough decisions? >> because we understand, jake, that unless you get 60 votes in this environment, you can't make those determinations. let's use -- in one particular instance, the debt commission itself. this was a legislative proposal -- and i'm sure many of you have heard me do this --

introduced in december, a bipartisan proposal by senator judd gregg, senator conrad -- one a republican, one a democrat -- that enjoyed pretty broad bipartisan support. normally, 50 votes would carry the day. this proposal got 53 votes when it needed 60. seven cosponsors of the legislation ultimately voted against the legislation. so you need 60 votes in this environment to get something done. >> democrats have 60 votes. >> no. i think very soon we're not going to have 60 votes. >> but when you had that vote on the debt commission, you did have 60 votes. >> we did have 60 votes, but we didn't get the 60 votes we needed. we lost seven republicans that supported the bill. look, some democrats don't support it. i get that. if we would have simply gotten all of the people that either voted for it or said they supported it, we would have gotten far more than 60 votes. mitch mcconnell, who i had the pleasure of sharing a sunday

show with, had supported this two months ago -- except when it came time to vote on it. >> i guess my larger question is, aren't these the tough decisions that the president and members of congress were elected to make? >> absolutely. but, jake, we're -- one party is not going to solve these -- not going to solve all these problems. one party is not going to make -- >> why not? why is one party not capable -- >> because of the -- >> -- when one party controls the house, senate and the white house? >> no, no, no, no, no -- welcome to washington. one party is not going to get -- one party is not going to be able to solve all these. the american people want both parties to work together to solve these. we can make those tough decisions if people are willing to work together to do that. >> was that your message in october? >> which one? >> the one you just said to jake. >> well, it was kind of long. what was -- >> no, but both parties are here -- wouldn't you be making the case that you'd want democrats to get elected? >> i'm going to vote for a democrat in november.

but, chuck, the american people want -- today is an election day, okay? go back to what the president said: if every day is election day, then i can assure you we'll never solve any of the big problems. >> but you're making -- >> well, hold on -- no, no, let me just finish the sentence. chuck interrupted your time. every day is not election day, chuck. we have elections -- sometimes we have specaw elections, but we have elections every two years for congress. if every day is election day, we're never going to solve our problems, because everybody is going to be too busy not trying to save somebody else's job but trying to save theirs. the american people want democrats and republicans in government that represent them to work together to solve their problems. >> you're making my point. the point is that democrats control the house, the senate, and the white house. why are you guys not capable of making these tough -- >> jake, because -- >> are you just saying that -- because it seems to me you're

making the argument that,ñr essentially, underneath it all is, right, democrats -- these are going to require very tough decisions and the democratic party is not going to do it by itself because we're not going to go down and lose our jobs -- >> no, no, no -- >> -- without republicans holding our hands. >> jake, there's not uniform consensus in one party about how to do it. i think that's been pretty clear about health care. lord knows we've talked a lot about internal -- >> -- willing to do health care, but just democrats? >> hold on, let me just -- let me finish the question. we are going to have to make tough decisions, but in order to get this passed we're going to need both parties to work together. if you think one party can do it all, you know, i think there are examples not just from the past year but over the past many years that altogether that's not going to work. jake, just because you're not in the majority doesn't mean you don't have an obligation to help

solve the problems of this country. that's the message that the president had on friday to the house republicans. that's the message that the president ran on. even though the president runs as a democrat, that doesn't mean that we're not going to work with republicans on trying to solve problems. if that were the case, chuck, we'd have elections, and then one party would just go about solving everything; the other party wouldn't even have to show up to work until it was time to have the next election. it may sound like a great idea, but -- >> you're making an argument for legislating -- i mean, you're making the argument for legislating, not for a commission that a lot of people say is a copout. >> well, i don't think the commission is a copout. >> well, it's not legislatively binding. and you don't have boehner and mcconnell signed off on it yet. >> well, it was such a good idea that they supported it a few weeks ago. i don't -- jake, you can ask them what happened. you can ask mitch mcconnell why sitting on the very same show he was on yesterday when he supported the conrad-gregg commission -- when it came for a vote he didn't support it. i don't know the answer to that. it's a fascinatingly good

question. but we are going to have to work together to solve these problems. it's not going to be one person or one party that solves them. ñii don't think it's a copout, because what the president will propose is that democrats and republicans should work together to agree on proposals that he believes should be voted on. understand that the legislation that failed would have required that the recommendations that that commission came up with be voted on by the house and the senate, like a base closure commission. >> right, and this executive order will not do that, because it cannot do that. >> the executive order will ask that based on the number of people that are chosen to serve on the commission -- some by democrats, some by republicans -- that a certain number of people agree in order for the recommendation to be voted on byñi congress. ñiñrñixdñrz2óññibut, jake, the s interesting that -- i thinkñiw3ó

we've heard from some quarters that republicans just may not appoint anybody. well, tell me how you're going ññ)óxd this country if in a very polarized country one political party is not going to join in working on that. it's just -- it's not going to happen. >> i'm not going to -- and it's the last question i have on this, and i'm sorry, but i'm not going to challenge the notion that the other party may be behaving cravenly in this instance and with the vote that you're talking about. but isn't the whole point of being president and controlling the house and senate to man up and make these tough decisions -- >> yes, absolutely. >> -- whether or not it costs you at the ballot box in november? >> we're not -- the commissione1

-- >> you are -- you're saying, we're not going to do it unless we have sign off from the republicans. >> no, no, no. we're not going to make progress unless we have sign off from the republicans. but again, jake, there's not unanimity in one party on either way forward. again, this president has instituted spending costs last year nobody thought we were going to get, including killing an f-22 program at the pentagon. we've outlined a series of cuts this year. we've taken on the cost of health care and how it affects the federal budget. we've got some skin in the game, jake. >> but the president, in his remarks this morning, talked about how some of the cuts were painful. what was the most difficult thing for the economic team and the president to leave out of the budget?

>> i would have to talk to those guys in terms of what -- i was not in every one of the meetings. >> but the president didn't express that there was something that he really would have rather had, but in the end they took it out? >> look, i think there are -- i have not heard him talk in particular. i mean, obviously there are -- budgets have to be a list of your priorities. and in tough economic times you can't afford everything. look, one of the easier things to do, going -- again, let's go back to what had happened for a while, one thing would be to propose a series of new spending and not have to pay for any of it. that's sort of what got us into this mess. >> can you talk a little bit about the process? was there sort of a one team trying to make a case to keep something in the budget? what was going on behind the scenes to settle these cuts and these increases? >> well, look, obviously when the president and peter and the economic team decided on freezing non-security discretionary spending, there's no doubt that there were cabinet officials that wanted to preserve certain things that mathematically just couldn't be preserved, or to take things out that they felt like weren't something that they would have left in. so, obviously, there was some give and take on that, but the larger numbers have been locked for quite some time. and the president obviously was

in meetings on some of this back and forth. >> and as the president goes to new hampshire tomorrow, what's the real goal there? there's still a lot of frustration about the pace of job creation. what does the president hope to accomplish? >> well, the president will have a town hall meeting, but outline a proposal that he talked about in the state of the union to increase small business lending through community banks. ñ%iñ$rñ"iççñçóçóñithat will be i he talks about. iurqp)d from small businesses across the country that want to expand, that needçó a loan to make payroll. we want to ensure that for those that want to add jobs, for those that want to start a small business, that they have the capital to do so.

ñr>> following up on the commission, can you understand, though, the skepticism of people who look at this budget and say there really isn't a lot of specific cutting going on here, we're going to rely on this blue ribbon panel down the road, and don't you think the average american is going to say you're kicking the can down the road here? >> no, no, chip -- chip, i think if you look at what the budget does over the next several years in going back down to a percent of gdp, you'll understand that these are not decisions that are not being made. secondly -- >> but you are relying very heavily on what this panel would do in order to bring deficits back. >> no, i don't think it's

relying very heavily, but i think it's -- is there any doubt that we're going to need consensus to make some important changes? the answer to that quite clearly is yes. >> and following up on jake's question, the idea that -- i mean, you were certainly willing to have democrats alone, or pick off a republican if you needed one, push through on something as important as health care reform. why not use your domination of the elected government to push through -- >> well, chip, again -- i mean, i think i answered this with jake. >> -- deficits, deficit cutting? >> well, again, we took on the cost of health care, which is a big driver in our federal budget deficit over the past year in the health care reform. we've taken on some of those fights. but, chip, there's no doubt that we're not going to get all the way that we need to unless or until we get two parties working together as the american people envision their government working. i don't think it's -- right now there seems to be some blowback on whether or not the other side will even appoint members to a commission.

i think if you're serious about talking about deficit reduction, appointing members, quite frankly, is the least you can do. >> i mean, why would they appoint? if they voted it down in congress, why would you think they even might appoint members to a commission? >> why wouldn't they? >> they already voted against it. >> no, 53 people voted for it. >> you know that the key republicans are not for it. >> well, then i guess they'll get to explain to the american people what they're going to do -- >> well, then you're just playing politics, you're not -- >> no, wait a minute [laughter] >> if you're saying, "we know we're not going to get it" because the republican aren't going to -- >> we're appointing members. >> what good is it if they -- >> let's take a walk a bit for a second on playing politics, okay? there's a proposal, one by -- by republican and democrat, to set up a commission -- let me just do this -- right? it needed 60 votes. it got 53. seven people that said they supported it in december voted against it. now, i'll let your definition of whether or not that's playing politjs&jwí'ofuáu leave president will,ñiñi through executive order. and he'll appoint members on his side on this commission.

now, if you won't appoint members, i'll leave that aside whether you think that's playing politics with the issue. but at some point, chip, you have to get in the game. at some point you have to have a series of ideas on how to do this. this is -- regardless of who wins elections, everybody that's sworn into congress and everybody that serves in the executive branch has an obligation to solve problems and make it work for the american people. not supporting something that you did two months ago, or a month ago; not appointing members simply out of obstinance -- if that's not playing political games, then i don't know what the definition, chip, would look like. >> well, i think you're right. it is. but aren't you doing the same thing by then harping on it

rather than moving on to something that you could actually try to pass legislatively? >> no, the president -- we tried to pass it legislatively. the president lent his support to what democrats and republicans -- >> no, i mean actual cuts, not the commission. if the commission is not going to work, why not just move on? >> we outlined in the budget some specific cuts, and i think if you look at over the course of the next several years -- look, we didn't get into this budget problem and deficits overnight. if you look at the graph of where budget deficits go over the next three or four years, you'll see that on a decidedly downward trajectory, to get the rest of the way the president first asked congress to pass a legislative commission, despite getting 53 votes and having seven people that supported a month ago walk away. the president is going to do this through executive committee and hopes that the republicans will take part in the exercise of governing. >> two quick questions.

have you ruled out abdulmutallab being treated as an enemy combatant? >> look, i want to say -- i'll say this. having been in a series ofñi past many days, decisionsñi that are being reported asñr having been made have not been made. ñrthere's no doubt that axdñ$(ry like new york has serious security and logistical2cmncerns about a trial, and those can, pen into account. the president, chuck, believes that the forum that tigçó attorneyçóçó general decided tht these trials be held in are the best way to deal with khalid sheikhñi mohammed and others. >> my question was aboutñi theñr christmas bomber, though, abdulmutallab. dvoúmçóçóxdñii'm sorry. >> oh, i'm sorry. >> no, it's okay. i mean -- >> have we ruled him out as -- >> as treating him as an enemy combatant. ñibecause it's possible you coud still -- that has been doneñr in previous -- >> that certainly was done with josé padilla and al-marri were indicted -- transferred and]iññr

indicted -- look, i think that very experienced interrogators at the fbi made decisions about interrogation, and the department of justice made determinations to seek an indictment, and the president believes that's thexd appropriae place. >> so that means the administration is satisfied there's no more intelligence to be gained from abdulmutallab? >> the white house is satisfied that the process of gaining that intelligence is working. >> and was the cia -- i mean, there was a report this 4ablpçóçi times -- was the cia e dniçóçó askemóñiçó for their ine decision before he was indicted, or was it just -- >> let me say this, and i want to be clear on this. whey but i can look it up -- when the president held a situation room meeting to go over the failures of the christmas day bombing -- i believe this was on a tuesday, because we then were -- >> this was the 4th or 5th, right? when he came back -- a big

meeting when he came back. >> this was -- right -- i think it must have been the 5th, it was on a tuesday. in that meeting were the president, the vice president, the attorney general, the secretary of defense, the director of the national counterterrorism center, the director of national intelligence, the director of the cia. i don't know who else i've forgotten. whoever that roster was -- the director of the federal bureau of investigation. all those people were present in a meeting where the attorney general said that in the next day mr. abdulmutallab would be indicted for his crimes. >> are you saying there was no debate around that table on this topic -- >> i will say that anybody that wanted or needed to register their concern, the notion that somehow a forum wasn't readily available to register anybody's concern doesn't certainly comport the way i understand events, having been in the room

watching those present have an opportunity to ask questions about those procedures. >> did the president and first lady vote tomorrow? >> they i believe both voted by absentee ballot. >> they've already voted? >> yes. >> just to go back to your initial response to chuck's question when you talked about new york, are you saying that there has been no decision yet, no formal decision to -- >> i am. >> -- to take it out of new york? >> i am. >> now on this new hampshire trip tomorrow, along with the community bank theme, to what extent is this a "take the budget on the road" event? >> well, look, i think obviously there will be certain questions on it and have an opportunity to talk about it. our focus tomorrow is -- the proposal the president will talk specifically about at the town hall is the effort for increased lending through community banks directly to small businesses. >> and going back to the friday event with the republicans, is there any follow up to that? do you think he'll talk to senate republicans at some

point? what other things along those lines -- >> i believe we have been invited to speak to the senate republicans, and we will do so. look, i think the president had -- i think the president enjoyed the give and take on these issues of importance. you guys seemed to think it was a worthwhile endeavor. and i think opportunities like this for both sides are important to talk through our ideas. i honestly believe, and i know the president believes this and said as much on friday, that it may be very rare that everybody in congress -- 535 members -- and the president agree on every single word in a bill. but there ought to be enough that we can agree on in a piece of legislation that can garner strong bipartisan support to solve the problems that the american people have. >> would you insist that the

senate -- if you do it with the republicans in the senate, that it also would be available for live coverage the way this was? >> we were -- we asked that it be open on friday and i wouldn't have any problem with it being open if we spoke to the senate republicans too. but let me say, look, i think the two biggest things that are on people's minds in this country are creating jobs and two parties working together. and i think there's no better opportunity to show the american people that we're serious about their priorities than to work together on getting a jobs bill passed -- one that cuts taxes on small business, one that increases our investment in infrastructure to create jobs. i think we can show the american people that we hear their anger and frustration and

demonstrate it in a way that moves the process forward by workingñr together. >> on the non-security discretionary spending, on one of the calls last night, i think orszag kind of hinted at a veto threat. and i just wanted to get your take on that. when these appropriations bills wend their way through congress and they don't adhere to that freeze, will the president -- >> let me go back and see what peter said on the call. i know that the president spoke broadly about ensuring that we had, through the course of this, a non-security discretionary freeze and the president is serious. >> i think peter was answering a question about whether or not the president would veto the budget. so i think that it got kind of garbled because he -- >> oh, i see -- >> -- well, because it won't go to him, but then it went back and forth until line-item veto and whatnot. >> again, on friday i think congressman ryan presented a proposal for a line-item veto that i think the president would be anxious to look at. >> but, i mean, your chance for you to rule out veto threats on non-security -- >> i wouldn't in any way rule that out, no. yes, sir. >> peter orszag and dr. romer

were very cautious to couch the president's economic assumptions as in the middle of what private economists predict, and yet you're basing about $10 billion a year of your projected savings on passage of a health reform bill that is at least in question right now. on what do you base your optimism? >> we're one vote away from getting health care reform. we think it's good policy. and, wendell, we -- i hazard to guess what your question would be if we didn't take into account any of that in what our budget was. the president has said we should be realistic about what our assumptions are, but also assume -- if we're going to propose

something, i don't think it makes much sense to not assume that it should be in the budget. again, some of that got us into this mess, right? we had troops in iraq. we had troops in afghanistan. but we weren't paying for that on budget. i mean, that's certainly one way to look at how you do a budget -- is to have our brave men and women fighting half a world away, but pretend that we're not paying for it by not putting it in the budget. the president made certain policy assumptions and added those into the budget. >> on another budget matter, republicans have criticized the stimulus bill as containing too much government spending, not enough tax cuts and specifically tax cuts for small businesses, which you seem to be erasing now in this second jobs proposal. were they right all along? >> no, look, there's -- i can get a list of the specific taxes that we cut. understand this, when we cut taxes for 95 percent of working americans in this country, a

whole host of -- >> but they said cutting taxes for small businesses would create more jobs faster, and that's what you're proposing now. >> how about we do this: how about if i agree that cutting taxes on small businesses has the opportunity to create an environment to create jobs? if they agree with me, i got an idea. let's have those two ideas meet in the house and the senate. the president has put forward a plan to cut taxes on small businesses for a tax credit for additional hiring. what better message to send to the american people than both

parties getting that to the president's desk so that small business in this country can start hiring and getting a tax credit? what better way to show them than, as the president will do tomorrow, let's take $30 billion that the big banks have paid back through tarp, and give that money to community banks to lend a small business? that would be another great idea. let's reward small business by increasing our infrastructure spending, laying a new foundation for an economy for the future, building the highways and bridges and railways of tomorrow. that should have bipartisan support. all three of those things, wendell, we ought to be able to do pretty quickly with bipartisan support because we're all on the same page. we just solved half our problems, wendell, and that was great.

>> tomorrow secretary gates and admiral mullen are up on the hill testifying. what does the president hope comes out of the hearing? and will we be hearing from the president on the subject between now and then -- or tomorrow sometime? >> look, if the president gets asked a question, i don't anticipate a statement other than what he said in the state of the union. scott, we'll have more on this later in the day on what we anticipate will be in their testimony. but i think you'll hear a frank discussion about the president's proposal to overturn this, and the support that it has to do so. i don't want to get ahead of where their testimony is and the different aspects of what's involved. jeff. >> may i follow on that? >> i'll come back. hold on. >> okay. >> as you know, on sunday is super bowl. a year ago on sunday the president had a bipartisan super bowl party here, too, sort of a kickoff to the year. it didn't go so well. what did he learn from things that he can do now [laughter] >> i thought it was going to be a super bowl question. [laughter] that seems patently unfair to -- >> what does he think that he can do differently to engage with republicans this year? substantively, after the friday's thing -- >> not invite steelers fans, not invite -- no, i'm kidding. [laughter] look, i think -- look, i think that the president certainly was under no illusion that having members of both parties here to watch a football game was somehow going to wipe away years of rhetoric and mistrust. i think instead of -- and i'm sure there will be republicans

and democrats that will come to the white house this year to watch the super bowl, but i think activities like the president did on friday, exchanging ideas -- you heard him talk about the desire to sit down and work together on these issues. i just mentioned a series of issues around the economy. our problems are big and only by addressing them together are we going to be able to move forward. i think the president wants to hear republican ideas on how to get the economy moving and how to stimulate job creation. i think there's -- i think there has to be a series of give and take, there have to be a series

of meetings, but i also think we have to understand, as i said earlier, if one side, either democrat or republican, is looking for a hundred percent of all of its ideas to carry the day on either side, that's not necessarily ever going to work. if -- again, if you've -- to take wendell's tax example, the recovery plan had about $300 billion in tax relief -- $70 billion for wiping out the alternative minimum tax, which if somebody would have posed two years ago that i can envision in the future republicans opposing doing away with the alternative minimum tax, i think people would have thought you were crazy. but we may not get a hundred percent agreement on every idea, but we certainly ought to

be able to agree on most of what needs to be done and at least look for ideas and legislation that can move the process forward. again, even if you don't get all of what you want, you can get enough of what you want and enough of what your constituents need on something like jobs to make a big difference. >> for this to continue will republicans have to vote for at least some of his proposals? >> well, look, i don't think they're going to be his proposals, they're going to be our proposals. they're going to be -- look, jeff, if people have a concept for a tax credit for creating jobs, we're certainly -- as you heard the president say on friday, he's ready, willing and able to look at it. but i don't think the president is ready, though, jeff, that if you don't agree with everything that he does that you have to agree with everything that they do in order for that to garner some series of bipartisanship. if that's the test i think that's not a healthy standard

toçñq try and meet. >> was there one thing on friday that he was really struck by that he said that he would embrace, or intrigued by? >> well, look, i think specifically when congressman ryan mentioned a line-item -- i haven't met many presidents, but i daresay i doubt there are many that would miss the opportunity to use that. >> robert, just two -- just two questions. >> i like how he always goes like this. >> just two. that's all.

there have been news reports that the president's nominee for eeoc commissioner, chai feldblum, and the aclu support the acceptance of polygamy. does the president believe our armed forces should begin recruiting polygamists? >> say yes. [laughter] >> yes. >> i'm happy to look at the information in the news reports you cite, but i don't have anything on that. >> all right. last june, newsweek's editor, evan thomas, on msnbc, said the president is "sort of god." last week on msnbc, chris matthews said the president is "post-racial. i forgot he was black tonight for an hour." what is the president's reaction to these two msnbc revelations? >> smartly, the president does not occupy his time watching cable television. >> oooh! [laughter] >> robert, do you think it made it more difficult for sheikh mohammed to get a fair trial with the comments you made yesterday and the fact that he would be -- why not? >> no, because i daresay, ann, we wouldn't go to trial and indict him if we didn't feel like we had a case that would

lead to a conviction. and i think -- i don't have any problem saying that i think that conviction would lead to the death sentence. >> and he would be in a civilian trial, with the same kind of protections other defendants would get, including innocent until proven guilty? >> absolutely. >> and do you believe that the president still is insisting on civilian trials, even though a growing number on capitol hill are saying they would stop the money for those civilian trials? >> well, look, i think the president believes, particularly if you look at the southern district of new york, you've got experienced prosecutors at bringing these cases, experienced judges at hearing these cases. we've all seen cases that have gone through that system and ended in the conviction of those that committed terrorism. and i go back to two of the bigger examples over the past many years: richard reid, who

tried to blow up a plane over the atlantic, in an operation masterminded and financed by khalid sheikh mohammed, was brought to justice in a courtroom in boston; zacarias moussaoui, the 20th hijacker, was brought to justice in a courtroom about 10 miles from where i stand and you sit, heralded by the former mayor of new york's reverence for our justice system, after having testified in that trial. i do see now that you have some members of congress rethinking their, what appears to be, more than eight years support of that type of justice in the short term and what i think is a continuation of the type of games that people in this country are tired of.

yes, sir. >> thank you, robert. two brief questions. first, the president was widely praised for the tone that he had with the republicans, of conciliation and conviviality. on the other hand, one of his -- >> bill, look it up for me. [laughter] >> -- major supporters, andy stern, of the seiu, has used some very strong language about republicans, of onáhz opposed health care reform, at one point liking them to terrorists. is that the kind of talk the president associates with or repudiates? >> i have said this many times in this room about different policy debates. nobody should be compared to people that -- to the people that have sought to do the world harm through terrorism. nobody should be compared to nazis. i think in the heat of these debates people tend to get overexcited on both sides of the political spectrum, in both parties, and i think that those types of comments on either side make no sense. let me take a couple more since i know these guys are -- yes,

and then i'll come back here. >> robert, in his speech last week, the president mentioned immigration passing, but didn't go into detail. that obviously disappointed some immigrant rights advocates who were hoping he'd throw his weight behind a comprehensiveñr bill that would include legalization. so my question is, if thisñr is such a priority for him this year, why not go stake outñiñi a specific position and -- ñi>> well, look, i think the president's position on immigration reform and what he supports is enormously clear. ñihe campaigned on it. ñihe worked on legislation thati would come up this year in the house or the senate with people like john mccain and lindsey graham in 2005 and 2006 in the senate. ñ,k÷?rlike climate change, thee bipartisan efforts thatñie1 ongoing to rrngñiñi legislation like this to the fore andñi toññ

create bipartisan majoritiesñiñó ñzie president hosted añrñr meer here not too long ago toñixd kep that process going, and weñi lok forward to taking part in it. >> so i understand you don't want to get ahead of the testimony of secretary gates and admiral mullen, but on "don't ask, don't tell," does the president envision a dual track for repeal where there's someñiñiñiñiñi alteration of the regulations within the pentagon going on at the same time that they're pushing for congressional repeal? >> give me a few hours -- laughter) -- and i think -- >> are you going to get back to me personally? >> i will. i think you'll see efforts on a

number of fronts over theñi coursexdçó of the next many mons that will be outlined by secretary gates, outlined by admiralñi mullen, the chair of e joint chiefs, to address what the president promised -- again, dating back to his senate campaign in 2003 and 2004 -- to seek the overturning of "don't ask, don't tell" a number of different ways. thanks, guys. >> now, a look at the defense department budget with robert gates and mike mullen. this is a little less than an hour. çóñi

we will have about 25çó minutes important strategy documents. ñiafter my opening --ñm/ aftery opening statement, and the germans, and our questions, you will hear from the undersecretary of defense for policy who will discuss theñi qr and the mdr in more depth. then, our controller will provide more detail on the budget request. the three requests are

requestsfy 11 request of $548 billion. in overseas contingency request of $159.3 billion which will fund military operations in iraq and afghanistan next year. the fiscal year this supplemental request of $33 billion which covers the additional estimated costs of the president's new strategy for afghanistan. to make sure we have the resources we need to support our troops and -- who are applying to the theater, i will ask congress to enact these supplements by spring. for the next few minutes, it like to place into context the base budget requests which reflects the institutional party and associated strategy reviews. last year, we began a process of reshaping america's defense establishment and reforming this department of priorities,

procedures, and institutional culture. the objectives were to reconfirm the command to take care of our all volunteer force, rebalance the programs to institutionalize and enhance the ability to fight the wars we are in today,i]çó while providing a hedge against future and present risks and contingencies, and reform will we buy, a fundamental overhaul to our acquisition and contracting. to those ends, the fiscal year 10 budget increased programs were directly support thoseçóñ%r fighting america's wars and their families. it created institutional home for the war fighter by shifting many of these programs into the base budget so they would acquire a bureaucratic constituency and steady long- term funding. the fiscal year 10 budget proposal cut curtailed or ended a number of programs either performing poorly or in excess of real world needs.

these programs, had been pursued to completion, would have cost the american taxpayer approximately $330 billion. conversely, future-oriented programs for the u.s. was relatively under invested or accelerated or received more funding. the fiscal year 11 requests builds on the reforms in last year's budget, changes brought in and deepened by the analysis and conclusions contained in the qdr. these budget and strategy reviews are in use with three things -- first as continued reform. fundamentally changing the way this department does business. the priorities we said, the programs we fund, the weapons we buy, and how we buy them. the budget and reviews are shaped by embracing those of realism. realism with regard to risk, realism with regard to

resources. we have in a sober and clear eyed way, says stress, set priorities, made tradeoffs, and identified plausible, real world threats and scenarios and potential adversaries. for one example, for years, u.s. defense planning and requirements were based on preparing to fight two major conventional wars at the same time. a for sizing constructs that persisted long after it was overtaken by events. the department leadership recognizes we must prepare for a broader range of security challenges on the horizon. they range from use of sophisticated new technologies to deny our forces access to the global common of sea, air, space and cyberspace to the threat posed by non-state groups developing more cunning and destructive means to an attack and terrorize. scenarios that transcend the familiar contingencies that

dominated u.s. planning after the cold war. we have learned through painful experience that the wars we find ourselves in the wars we plan. as a result, the united states need a broad portfolio of military capabilities with maximum versatility of crossbow widest possible spectrum of conflict. this strategic reality has shaped the analysis and subsequent conclusions which directly informed the program decisions contained in the budget. it concluded the u.s. military must balance resources and risks among four major objectives. first is to prevail in today's wars. the first time this objective has appeared in a qdr. achieving our objectives in afghanistan top of the program priorities. we recognize america is the abilities to deal with threats for years to come will depend importantly on our success in the current conflicts. this budget takes additional

steps aimed at persistence shortfalls that plague the recent military efforts, especially in afghanistan. they include enhancing intelligence, surveillance, and intel -- and other capacity. it includes an increase in the number of combat air patrols by the most it -- number of combat air patrols by the most advanced units and procuring more helicopters, around $9 billion worth of all kinds of aircraft and adding to army combat aviation brigades. growing special operations systems and personnel was nearly 2800 people added to the u.s. special operations command in fiscal year 2011. the second major objective is to prevent and deter conflict by better deterrent -- i'd better -- should the sale, by possessing superior military capabilities and means it will

to use them -- should those sales. to prevent the conditions of arising leading to conflicts, we support diplomacy and development provided for in the president's budget request. in a world where arguably the most likely in full frets will emanate from failed or fractured states, building the security and capacity of partners has emerged as a key capability for this department. when there reduces the need for direct u.s. military intervention with all of its attendant political, financial, and human costs. to provide more resources, predictability, and agility to

its mission, the department will seek an increase in the global train and equip authority in the fiscal year 11 budget. authority that has now been extended to coalition activities. that increase will be from three under $50 million to $500 million. furthermore, we will work with allies and partners to stem the materials and maintain a reliable and credible nuclear deterrent which will be laid out in the upcoming nuclear posture review. deterring potential adversaries

requires us to prepare for a wide range of contingencies, including the destructive high- tech capabilities being developed by other nations. to me to potential threats before our military's ability to project power, deter aggression, and come to the aid of allies and partners, the qdr places more focus on an investment in a new air, sea, battle concept, long-range strike capabilities, space and cyberspace. the budget requests include nearly $11 billion for the f-35 strike fighter and a strategy to stabilize costs and schedules and a bite of 43 aircraft and possibly more, depending on contractor performance. more than $25 billion to support a realistic, sustainable shipbuilding program. . .

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not only the importance of continuing our leadership role in cutting edge research but knows that it has a huge ripple effect in communities in terms of jobs and acts as a stimulus to put n.i.h. grants in communities across this country. yes? >> i'm mary with kaiser health. i wonder if if you could expand on the comparative research? i think it is about $261 million. do have specific goals and how that could be spent, and could that research determined coverage decision in medicare,

medicaid, or other federal health programs? >> i know there is a continued commitment reflected by an increase in the patient-centered research, which we feel not only empowers our buyers to make the best possible decision about the technologies in the treatment, but it also does a great deal to empower consumers. to have more health information. dr. clancy, i don't know if you want to respond about any specific areas. there is no specific link in at least either of the house or senate health bills that links with determining factors but i think along the way, it anticipates that having the best information, using not only the most effective strategies to help us dramatically improve

quality and that has been a part of the forfat all along. ok. she says ok. yes, back here. >> hi. julie from national public radio. a lot of information on the health care overall bill now stalled required discretionary funding, and some of the preventative health care measures. is that taken into candidate in this budget and if not, what would you do, given the idea that this was domestic discretionary freeze? >> i don't think that there's any question that both in the recovery act and in some early bills passed already in the obama administration, there is a new platform for health care bills in this country. so absent any thing in the

health reform legislation, we have an historic first time ever investment in prevention and wellness, in those communities and state grants, about to be released. the reauthorization of the children's health insurance program shurs up to another four million american children in those outreach efforts are underway. states have already stepped up and provided, even in very tough budget times. additional help. and recovery in health technology, which will be a multi-year effort and again is transformational to move the health care system from paper files to electronic files. it allows much better collaboration and coordination between providers and reducing medical errors. as a result, there is a huge investment continued on in the indian health services, which is certainly part of this goal.

cobra, and help provided in the recovery act, and medicare services provided to the state, and going for most state fiscal years, which end on june 30 so they will take it through next fiscal year for the states. it laid a platform out. the workforce issues again got major funding in the recovery act. we made additional investments in the budget for more scholarships, more nursing scholarships, mental health professionals, there is an increased investment in community health centers. we're reforming the health system, that work is under way and continues on even though the discussions on health reform itself are continuing. yes, sir?

>> american medical news. the budget has about $370 billion for medicare? is there a patient repeal or delay in the pay cuts? is that your formula? >> that is the 10-year cost for fixing it permanently. the budget assumes allocation for the full 10 years. that's current estimate for a zero percent update for 10 years. >>iest? -- yes, sir? >> i'm with "inside health policy." i had a question about community health care funding what looks like one of the largest line

items and also prevention of wellness -- prevention and wellness. >> i hope that we do not prevent wellness. [laughter] >> prevention and wellness. maybe you could talk about the prevention and wellness part of it. >> actually what i'm going to do so you get to meet a few more, john answered the last question. i'm going to ask dr. wakefield to talk and then give you an update on the prevention and wellness grants. >> thank you very much. of the $2.5 billion that is in the president's budget for community health centers, that reflects a round approximately $290 million increase over the last year's funding. those dollars are allocated over a few key areas. one to continue funding support

for the currently 1,100 help centers across the united states, which include about 7,500 sites ñi associated with them. in addition, those dollars pickup and extend support to the 127 community health centers that were funded through the recovery act and that are being funded through the recovery act.çó in addition, we have $25 million allocated in the total amount to support behavioral health services at community health centers. that $25 million will go to about 125 community health centers, so those are new dollars specifically to outreach and strengthen health services. we also want to see imbedded in

that proposed amount funding for an additional new 25 health centers.ñi that's what sits behind that total dollar amount that you just identified. and then i will let someone else speak to the prevention. >> the investment mentioned inxi the president's budget builds on the stimulus funding which was $650 million over two years for prevention and wellness in several different baskets. the first will be announced in the very near future, $119.5 million to the states divided into a formula grant, añr competitive grant to reduce tobacco use, improve nutrition and increase physical activity. and there are funds for. 40 --

approximately 40 communities, including urban areas and rural areas, programs that will be announced this month. building on the president's budget, it allocates $20 million for large cities, up to 10 large cities to implement programs to reduce tobacco use, physical activity increase, and with good policy change which is a way to save a lot of lives for less money as well as program attic initiatives. >> yes, ma'am. >> a follow-up on the question of the sustainable growth rate. a follow-up on the s.g.r. what impact you think that will have on medicare advantage rates, to be proposed later this month? >> well, i think that we have assumed and i think the

physician community assumes and congress assumes that they will do what they have done the last number of years and not implement a draconian cut in physician rates. i am gathering that medicare advantage plans have also assumed that provider rates based on their current structure -- i cannot imagine that they would factor into their rates for programs going forward that there would be a significant cut in provider rates. yes, ma'am. >> reuters. your agency statement says that your budget helps to build the foundation for health insurance reform. to be clear -- does this assumed -- assume that congress will pass reform legislation this year? >> there really are no specific features in this bill that have that assumption built in.

but i think that the president made it clear in the state of the union that he does not intend to walk away from health reform. i know that conversations continued with the house and senate leadership. so while there are not specific budget allocations based on an implementation strategy, i think the platform is there for health reform to move forward. yes, ma'am. >> "wall street journal." to follow up on the other two questions on health reform budget, just to be clear, you mentioned additional medicare funding and the budget. are there other provisions did you decided to include in this budget, given that the bills are stalled in congress? so you would ensure that they got funding? >> if you recall, actually the increase two quarters for states

was not either in the senate or house bill. it was in the house passed jobs bill passed earlier this year.ñi i think it is the president's way of making it clear to governors that he supports this effort. he's going to find vehicles for it going forward, whether it is a jobs bill that passes the senate, which could mirror what the house has done or whether it is house reform or another vehicle, i think this is a -- the president's statement that two more quarters, he thinks are absolutely essential but the house actually did pass it in the jobs bill. yes? >> i'm interested in the f.d.a.

medical product safety initiative. i'm wondering what sort of tools you are referring to. >> i would love for dr. hamburg to answer that question. >> we are not getting an increase of $1.4 million. this is to spur our core commitment to promote and protect the health of the public in terms of medical product safety. it involves a number of important elements. one is to continue our efforts to ensure safety and quality in terms of the medical products that are developed and made available to the public. an important component of that is recognizing that in the 21st century we need to be active globally. the import of either drugs or other medical products or active

ingredients involved in medical products are coming increasingly from overseas or places overseas. we need to extend our global presence and this funding will give us an opportunity to make forward progress in that domain. also to continue to strengthen our efforts had global marketing surveillance, and the monitoring and understanding of safety issues once the drugs or other medical products have been approved and are actually out in the communities being used by people. we do very careful studies and take very seriously the requirements for approving drugs based on data of safety and efficacy, but we know it is very different when you're studying a medical product in thousands of people, versus being in the marketplace and millions of people using them.

we have a number of important projects underway and others that we will be able to undertake as a result of this increase in funding for patient safety. >> hi. i'm with a.p. just wondering your opinion compared to the goals of the health care legislation in congress. how far would you say this budget goes in achieving the objectives of expanding coverage and controlling costs? those central objectives? >> i would suggest that is not an either/or. i am hopeful that it will be both. a combination of efforts that are contained in this budget which certainly go a long way to strengthening the public health infrastructure and to provide additional coverage with the

children's health outreach and community health centers but in no way reck lickates the effort -- replicates the efforts in health reform legislation to reach out to the 30-some million americans who have no health insurance at all and those who are woefully underinsured based on price. i think it is, as i say, a platform seeking different strategies and goals. but this budget absent, health reform, will still leave a major gap not only of affordable coverage for many americans, but makes very little change in the cost trajectory which right now is crushing families and business budgets and government budgets. i would suggest that we need both. there are major investments in

patients centered research which will help inform doctors. the implementation of health technology is a big step forward but it does not change dramatically the cost trajectory or certainly fill coverage gap or provide security to a lot of americans who have health insurance now but who are really at the mercy of health insurers to make rules day in and day out that kick people out of the market and limit coverage. >> time for two more. >> you mentioned that the budget does not make specific provisions for health reform. i wonder whether there are any provisions for medicare and medicaid cuts.

and if there is health reform, what would be the magnitude of those cuts next year? >> the president's budget does not have any brand new medicare or medicaid cuts. there is allocation for health reform. as you know, both the house and senate bills have proposed changes to medicare and medicaid, but there are no new cuts in the budget.çó >> sir, have you asked a question yet? i need somebody who hasn't asked a question yet. go ahead. >> could you give us an update on major plans to name a new c.m.s. administrator? >> sure. we've had extensive interview processes and have had an opportunity to look at a whole

host of talented leaders and the process is very much underway. the good news is that we have incredibly able leadership at both the centers for medicare services and you heard from jonathan a few times and with cindy, who has joined the team and is running the medicaid side of the shop. as a former governor who worked with this office frequently, it is a night and day difference in terms of the impleme.t&tion and collaborative strategies on medicaid. we are aggressively pursuing a new leader. we hope to have someone named in the not too distant future. but in the meantime, c.m.s. is in great hands. thank you all very much again. i think that we will be available if you have specific questions for them. thanks for being here.

[captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> we're showing you briefings on the president's nearly $4 trillion budget request for 2011. the 2001 and 2003 tax cuts for families making more than $250,000 will expire. there is $a $100 billion jobs measure and spending will be increased on energy and infrastructure. over the next 90 minutes,

several briefings on the presidents' budget proposal for 2011. first, it is veteran's affair secretary eric shinseki and then arnie duncan, education secretary. on "washington journal" this morning, rick maze takes your questions on the president's budget proposal for the military department. danielle pletka discusses u.s. policies toward iran.çó we'll hear more ab> the budget from bernie sanders. "washington journal" is live on c-span every day at 7:00 a.m.

eastern. a couple of live events to tell you about this morning. from the president's fiscal year 2011 budget request. that's on c-span 3 at 9:00 eastern. at 10:00 eastern here on c-span, treasury secretary tim geithner testifies before the senate finance committee. now veterans affairs secretary eric shinseki on the 2011 budget request for his agency. this is about 45 minutes. >> ladies and gentlemen, secretary of veteran affairs, the honorable eric k. shin secretary qui. -- shinseki.ñr

>> good afternoon, everyone. thank you for joining us for today's budget rollout. we will be sharing with you the president's fiscal year 2011 budget and the advanced appropriations request for the department of veterans affairs. this budget request provides the resources necessary for us to continue pursuing the two overarching goals that the president provided to us a year ago. the first is to transform v.a.

into a 21st century organization. and at the same time ensure that veterans have timely access to benefits and quality care from the day they take their oaths of office for the first time until they are laid to rest. to that end, v.a.'s 2011 budget addresses on focusing three critically important concerns for veterans. first, shorten processing time for received and earned benefits and reducing the backlog in disability claims. second, improved access to health care services, and finally, in the downward spiral that results often enough in veterans homelessness. v.a. is fortunate to have public servants that are both talented and skilled who are able to generate the good ideas and then creatively implement them. with this kind of talent and the

continuing support of the congress i'm confident we will achieve our goals of providing accessible, high-quality health care for veterans. i'm privileged to share the podium with the deputy secretary. he has been our leader in watching the process. he came to was with broad experience in both the public and private sector. and he and i both share a commitment to deliver president obama's vision for transforming this department into a 21st century organization. with that, i call on the deputy secretary. >> good afternoon, mr. secretary, and thank you for that kind introduction. we do have an enduring and sacred mission at v.a. today is a watershed moment for our nation's veterans. as secretary shinseki said, this

$125 billion budget request for 2011 and advance appropriation for 2012 are landmark figures that will provide the resources that we at v.a. need to get the job done. one only has to look at the shifting dynamics of health care in the needs of our veteran to understand and appreciate the need for v.a. to have the capacity to serve veterans enhance. the president's fiscal year 2011 budget will give us the tools we need to act quickly, effectively, and compassionately to meet the needs of our veterans. when combined, the president's 2010 and 2011 budget request for discretionary v.a. funds are 20% above the 2009 enacted level.

period. v.a. has in 2011 one of the largest increases of any department in the discretionary budget arena and we are not taking that growth for grants. it is all the more reason that the v.a. must be and will be the best possible stewards of taxpayer dollars. we will continue to transform v.a. by working as advocates for veterans. this budget will improve quality and access and cost of health care services and benefits. we will address the backlog and strengthen our infrastructure and i.t. an acquisition, and by most importantly, investing in our people. as you will see in the advanced appropriations for 2012, we will work to bend the knee in health care cost curve. that is to say, we will work to improve our services and access in a

cost-effective manner. we see this as a contribution to meet the challenge that our nation faces to reduce the growth of health-care costs. the advance appropriation for 2012 represents all activities. as needs arise, it can be changed. our assistant secretary is going to give the details of the budget proposal. what we hope to take away from this briefing is an overview of the financial plan for our department and administration fully committed to meeting the needs of our veterans. with this budget proposal, president obama has sent a signal loud and strong to our citizens soldiers, from the greatest generation to the latest generation, that we will meet their needs and we will keep our commitment to them. now ladies and gentlemen, it is my great pleasure to introduce mr.

john gingrich, a former private c.e.o. and an enormously effective chief of staff. >> mr. secretary, deputy secretary, thank you for your leadership for the budget process. it is my pleasure to introduce the man who took over as deputy assistant secretary for management in late no of last year. -- november of last year. he is currently serving as the acting assistant secretary for management and chief financial officer. he is responsible for the financial management of v.a.'s budget as well as the department performance management, enterprise assets management, and he has stayed very busy doing all of these activities. but he is also very experienced in the federal government.

as the c.i.o. and the c.f.o. of the i.r.s. where he was responsible for the accounting of $2 trillion in tax receipts and the oversights in the operating budget. and here at the v.a., from 1994-2000, he served as the first c.f.o. of the v.f.a. let me also introduce the rest of the panel today to answer your questions regarding the 2011 and 2012 v.a. budgets. we have the acting undersecretary for health. acting undersecretary for benefits. acting undersecretary for affairs. secretary roger baker, the assistant secretary, and the c.i.o.

the executive director of office of acquisitions, logistics, and construction. share tammy duckworth, government affairs. without further ado, let me turn it over to todd. >> good afternoon, everyone. first, let me thank the secretary and deputy secretary and chief of staff for taking time this afternoon to kickoff our rollout of the budget, and thank you for spending this next 45 minutes with us where you can be informed of the president's budget for our nation's veterans. our format today is i've got 17 slides that i will present to you to walk you through the highlights of the numbers in the budget as well as the policies that are included in the budget. i will save some time at the end for questions and answers, and

that is why we have the assistant secretaries and the undersecretaries joining us so that they can answer your questions in this much detail as they need to so that you can get the answers that you expect today. let's go to the first slide in the presentation. as deputy secretary has said, the 2011 budget supports president obama's vision to transform the department of veterans affairs into a 21st century organization. the priorities in the budget are focused in three key areas, and those areas are access, claims processing, and eliminating homelessness. the next slide shows the highlights of the budget request itself. when you look at these numbers, you will see that the budget clearly reflects president obama commitment to our nation's veterans. this is the second year of the large increase in the v.a.

budget. when you measure the increase in the discretionary budget of 2009, the increase is 20.3%. the highlight within that 20.3% includes a discretionary increase of 7.6% in 2011 that is made up of an unprecedented increase in the budget for the veterans' benefits administration, which goes up by 27% between 2010 and 2011. and also an increase in the medical care budget that totals 8.5%. within these totals, our priorities remain the same as they were when we rolled out the 2010 budget last year. those priorities are benefits and claims processing. within benefits in claims processing, let me take a moment to talk about in terms of

entitlement and discretionary spending. for entitlement spending, the president's budget includes $15.8 billion in new money for 2010 and 2011 to pay the claims related to the new agent orange presumptions. out of the $13.4 billion, the vast majority, over $12 billion is for retroactive claims that we had processed and to pay out to veterans and their families. for 2011, the claims estimate is $2.4 billion, and that is also included in the budget request. turning our eyes to the discretionary part of the benefits and claims processing, the 27% increase that you have heard reference several times already today amounts to $460

million, it is going up that amount between 2010 and 2011. that will buy us 4,048 more f.t.e. in 2011. they will be used to process an additional claims related to the agent orange presumptions as well as the increasing trend in non-agent orange claims that we have steeverpb last couple of years in the v.a. our second area of focus is the advanced appropriation that is included for v.h.a., which asumes an uninterrupted stream of expense. included in the 2011 budget,

there is an increase as part of our five-year plan for eliminating homelessness. it brings the total for our effort to $799 million in 2011, or just short of $800 million. this $800 million in 2011 will be used for permanent transitional community-operated and v.a.-operated housing programs that include homeless grants and per diem, the hud program and outruche residential treatment programs and supportive services for low-income veterans. access continues to be an area of focus and priority for the department. let me highlight three components of the access strategy included in the 2011 budget. first, telehealth. it will improve our access to

care and quality of care, especially for veterans and rural areas. also in v.h.a., we will be activating 39 major construction or leases across the country that will provide new services to veterans to meet their healthcare needs. these 39 projects are located in 17 states, and the projects include the opening of a new hospital in las vegas, a new poly trauma center in san antonio and the opening of eight new health care centers. the third component of our access strategy in the 2011 budget is our national cemeteries where we will implement a new policy that will improve access and improve access to our cemeteries by lowering the population threshold that we use in our planning for establishing new national cemeteries. this change in policy will allow us, beginning in the 2011

budget to plan for five new national cemeteries. last but not least in our area of focus is strengthening the management across the department. our budget includes new initiatives that will strengthen management, including a $24 million government-wideñr presidential initiative to improve the acquisitions work force. this is the v.a.'s part of this government initiative but there are various departments and agencies across the federal government as the budget calls out today. this is our component of that government-wide presidential initiative. it also includes $21.6 million to further strengthen the department of level management, including $4 million to help us manage the nationwide implementation by establishing

an office to manage it within the department. it includes over $3 million for benefits in our general counsel's office, which will allow us to handle cases before the court of appeals in a more timely manner and also increase timeliness in the publication and distribution of secretarial regulations. $2.8 million will enhance our alternative dispute resolution, which is good for v.a. and our employees, and it will save our nation's taxpayers money over time. also included under management is a 10-year extension request for enhanced use lease program. for those of you familiar with the enhanced use lease program, it has been a win-win for v.a. and the veterans, and the authority for actually expires.

we're asking the congress to extend that for another decade. the final focus under management is to improve our construction management in the department by working on the major construction budget. that will ensure that all projects, no matter how large or small, will have a proper level of project management devoted to them. that's highlights. an hour let's move to the numbers. -- now let's move to the numbers. the next slide is a pie chart that shows the major components of the budget, focusing on distinguishing between the discretionaries components and the entitlements components. the 2011 budget requests is $125 billion. it includes both mandatory spending for entitlement programs and the discretionary program spending. highlighting the entitlement programs at the bottom half of the chart. they amount to almost 52% of the budget for 2011.

that brings them to a total of $64.7 billion. what do we buy with that $64.7 billion? 3.8 million veterans and survivors will receive compensation. 500,000 will receive pensions. 829,000 veterans and their families will receive readjustment benefits. 6.9 million veterans and family members will be covered by our v.a. life insurance program and 240,000 service members and veterans will receive v.a. guaranteed loans in fiscal year 2011. that is it for the entitlement program highlights. for the discretionary piece of the pie chart, it totals almost 42% of our budget. the major components of that are medical care and medical research make up the vast majority of that amount and i think it is worth noting that what we're getting for this 42%

of our budget here is for the first time in its history, the v.a. medical program will treat over six million veteran patients. our next light moves us into the details that underline the pie chart. this is by our appropriations account structure. it shows what the levels are for 2009, 2010, 2011, and the deltas between 2010 and 2011. look at that table as providing a landscape for the budget. it is here for your quick reference. what i am going to do right now is not focus on each specific appropriations account, because that is what the rest of the slides in the presentation will do. they will walk us through each one of these lines in a little more detail. on the slide, focus at the bottom. in the bottom to boxes and follow those lines across the table, you'll see that the total v.a. funding for 2011 is actually a 10% increase over

2010. the mandatory increase is 12% and the discretionary increase totals to 8%. i would also direct your attention to the last slide on this table, which is 2010 agent orange supplemental. it will be included in the 2011 budget to pay for the cost for additional claims coming in from the new agent orange presumptions. that amounts to $13.4 billion. part of what we do with that money is staff the department of veteran affairs. the next slide is the total f. tembings that this budget will buy. in 2011, we will have an f.t.e. level of 28,003 that is almost a

6000 increase over 2010. the major pieces that make up that 6,000 increase the just over 4,000 f.t.e. to help us address claims processing. as well as adding nearly 1,300 f.t.e. in our medical care programs. let's move from f.t.e. into the actual account level details. the medicare budget authority is presented here in billions of dollars. the slide includes both the 2010 appropriation request as well as advanced appropriation for 2012. the advance appropriation is an increase of $2.8 billion over 2011. more specifics about the funding in 2011, our appropriations request, in total, $51.5 billion. that is made up of two

components, 48.2 billion in direct appropriation and $3.4 billion in collection 3 toll -- total increase, $4 billion, 8% over 2011. $54.3 billion, the $0.6 billion of that in our direct -- 50.6 billion of that we will be asking from congress and another $3.7 billion we will collect through our medical care cost recovery programs and other services. the increase in 2012 his $2.8 billion over 2011. i just want to take a moment here to note that the concept of the advance appropriation relies on 2012 numbers in this budget, being a floor, if you will. as we go through 2010 and through 2011, the administration will have another bite at the apple for 2012. a year from now we will be standing here presenting the

2012 budget, and if we think these 2012 figures need to be adjusted, we will do so at that time. in terms of workload for the medical care appropriation, as i mentioned, 2011 will be the first time we have gone above 6 million veterans being treated. in 2011, outpatient will total almost 83 million or 5% over the 2010 estimate. in 2012, we expect 6.2 million new veterans and the outpatient visits will total total almost 87 billion, off 5% increase in workload from the 20 -- over the 2011 estimate in 2012. selected programs that may be of interest to you is on the next slide. i'll highlight and leave this with you as a reference document that you can use later.

mental health, you will note, that the dollars in the 2011 budget are 9% more than 2010, and that increase continues a rate of 6% in 2012. operation enduring freedom and operation iraqi freedom, that is noted on the second line of this table, which shows that the increase for this veteran cohort to be 30% higher in 2011 been 2010, and another 6% higher in 2012. i also want to highlight the women's veterans budget. an increase of 9% in 2011, and 12% for 2012. it is worth noting that the emphasis including in this will be enhancing primary care for our nation's women veterans. the next slide takes us into unique patient treatment.

the 2011 workload for our veterans, which as i said earlier, six million is a 2.9% increase over 2010 and another 2.5% increase is reflected in the table for 2012. the second line of the table focuses on priorities seven and eight veterans. between 2011 and 20 12, we're looking at an 8% increase in these veterans that we will treat as we continue to expand our health care to priority eight veterans. just looking again at the oefoif veterans cohort at the bottom of the table, included in the numbers above. we are highlighting of 14.8% increase in 2011, and an increase of 12.9% in 2012 oef/oif veteran patients. it is worth noting, we expect

to treat 439,000 of these patients in 2011. let's move from medical care to medical and prosthetic research. the last line in this table below the graph is the operative one for this discussion because it reflects what we're requesting in our appropriations in addition to what v.h.a. may bring in this 2011 through grants from federal and other sources. we're continuing our investments in medical care research by requesting $590 million in 2011. when combined with the increase requested in 2010, this is at 50.7% increase in medical research over two years in the president's budget. we will be able to fund 3, 345

new f.t.e. our research projects include rural health, access to care, and we are also looking to continue to conduct the investigations that demonstrate our ability to enact large-scale changes in clinical practices in acute and chronic disease areas such as mental health, regenerative medicine, and for combat. our next slide takes us into the veterans' benefits administration. the discretionary increase of 1.7%, those funds will primarily increase the number of claim a judicatures and support them as we address claims processing and our backlog. the driver of this increase is the continuing trend of increase in applications for claims into the compensation program as well as the increase the workload that comes with the new agent orange

presumptions. in addition to compensation, it is worth noting that this budget includes other important activities such as the continued implementation of the post-9/11 g.i. bill, the veterans management system that will replace our current paper-centric claims environment and the veterans relationship management program which will provide enhands access to v.a. for veterans. with the money that we're getting in 2011, you can see what we are doing in terms of staffing v.b.a. in the next slide. this is a 24% increase. it is important to note that the the way we're counting the

f.t.e. in that 24% is that there are f.t.e. and v.b.a. in 2010 that are funded out of one-time recovery act money. that doesn't -- that goes away at the end of 2011. those people would otherwise leave our payroll. what we're measuring from the mark are pencht f.t.e. in -- f.t.e. and v.b.a. recovery act funding. this program will go up by 3914 in 2011. that includes 1870 physicians that ñiwill be funded so that recovery atfte currently on board can future, as well as 2049 new doctors. that 1870ened that 2049 in new physician make up the increase

that you see on the table for conference tation. the staffing is important to note here because it is a critical, not the only componen efforts to address the backlog. that plan does include staffing that is funded in this budget as well as investments in information technology that are in the budget. leaving v.b.a. and going to the national cemeteries, the budget authority is in millions of dollars, and sustains an increase that was provided by the congress in 2010, including an $8 million increase over the president's budget this year. when combined with 2010, this request is at a 9.1% increase over 2009 funding levels. a 4.5% increase in that budget

over the past two years. twhan total, it will provide for the following. $3.4 million to address workload increases, $3 million to pursue renewable energy projects through the use of wind, solar, and geothermal efforts, a $39.9 million for efforts to maintain v.a. cemeteries as national shrines, and there's also a component in our minor construction funds that funds national shrines. when combined with this amount, it is $61 million in 2011. going out to the i.t. component of our budget, our funding is frozen in 2011 for information technology. that reflects our strategy in v.a. under the leadership of roger baker, our chief information officer to bring greater discipline and oversight to our program management. we're comfortable with this

freeze while we take the time to make sure that when we commit to deliver a project or program, we are delivering it on budget, on time and it has the functionality that our customers come to expect. the overall i.t. investment represents 2.7 pkt of the total v.a. budget. in terms of the major buckets and what they find, medical programs, $1.3 million, corporate systems, $527 million, inner agency development, $158 million, and staff and administration at $966 million. let's move from i.t. infrastructure to our building and our capital infrastructure and our capital programs, on the next slide. our new budget authority that we are asking for in 2011 is $1.75 billion. it breaks out by line item in

the table that you see below the graph. the largest piece of this, of course, is major construction and we have a couple of slides right after this one that i will talk about. let me talk about the cemetery grants and minor construction. it includes 387 million for v.h.a.. $27 million for staff offices. the state cemetery grant is requesting $46 million and the state extended care grant request is for $85 million. now let's turn to the next slide so we can talk about the details. the total request, $1.51 billion for major construction. let me give you the highlights for v.h.a. and n.c.a. out of this total. the v.h.a. request includes

funding for five major construction projects. three of those are ongoing projects where this budget continues to work to build those facilities and two of the five are actually new projects that we're introducing in the 2011 budget. the three project s that areongoing are a new tertiary care facility in chicago. the two new projects that we will fund or that we are requesting funding for design in 2011 are an outpatient clinic in california and a replacement facility in omaha, nebraska. that's it for the highlights. for the national cemetery construction, the first in pennsylvania and the second in tahoma, washington.

the major construction budget also includes an expansion at our los angeles, california, location. it is also worth noting that in major constructions there are additional line items that are funded that includes advanced planning activities, security, resident engineer staff, land acquisitions for national cemeteries and variety of other functions and activities. so with that, that ends the presentation over the slides. again, you have supplemental slides in your package that you can take away for reference. now we will go into the question and answer portion of our presentation today. i believe our first question is coming from rick maze. >> i would like to ask a goldy

locks question about -- goldilocks about whether the budget is too big or too small. we're already hearing from some democrats in congress. that the budget isn't frozen and nothing is guaranteed and they are going come back and try a cut in. can you give us some ideas. is this the smallest budget that you could do? are there more things needed that you couldn't ask for? >> i think to play off your goldilocks analogy, 27% increase in the v.b. toombings address one of our top priorities which is the claims backlog, almost $300 to hell address the plan to $300 to hell address the plan to eliminate homeless veterans and