force creates skills shortage for u.s. manufacturers." guest: this is one issue where democrats, republicans, they all agreed. i testified a couple of weeks ago along with my counterparts in business about the importance of revamping the school system so that we of workers that are better able to@@@@@@ you must know how to develop and utilize your analytical skills. when our leaders look for the long-term future, the thing we're most concerned about is the shortage of high-skilled

workers, both the aging population, the retired and the fact that we're not producing as many science and technology and mathematicians from our colleges is something that concerns us and concerns everybody. we really need to work on that. host: baltimore is next up on the independent line. caller: thank-you for cspan. guest: -- host: you are, go- ahead. caller: thank you for c-span. what are americans going to do as far as manufacturing? many of those jobs that are gone, textiles and automobiles, what should we be concentrating

on? guest: that goes to what we were just talking about. what we should be concentrating on are those businesses and activities that create value. those are the ones that create the highest-paid jobs in the future. manufacturing will be a part of it. we can manufacture in the united states. go to texas instruments plant and look at the technology being developed right here in the united states. go to a caterpillar plant or a dealer plant. we continue to manufacture high- technology in the united states. technology in the united states. one of the keys for the future áb

both services and manufacturing will be#úqd of ourñi future, but it is making sure we have the high end of the value-added chain. host: rockford, ill., good morning. doug, go ahead with your comment. caller: i have a question about the extension for unemployed benefits. will it happen? or should begin sign up for other assistance? guesthost: the unemployment rant yesterday. what is your organization's view on unemployment firstly? guest: yes, the extension did runout yesterday. that is the fault of congress. when need to provide that kind of safety net to our americans

have not been able to find jobs. hopefully, congress will get to that quickly. i hope the caller will have some good news later in the week. the jobs bills and focusing on that has to be divided into what the public sector can do. and with the private sector should do. the private sector jobs have shown us through history are the longest-lasting, the highest paid. we need the kinds of rules, policies that allow the private sector to be able to invest.

we need to modernize our tax code to put us on a level playing field with foreigners. we need a tax bill to allow for capital generation. we need financial regulatory reform, for the system to be modernized. if we take those steps and others, -- host: begun next to texas, and a democratic color. caller: thank you. i want to make a comment on health care. -- we go next to8os]xdxd texas. ñrcaller: concerning social

security paid for with income, this health care has ruined things down here. çóçóçóxdhost: max, where do your health care? caller: i am on medicare. i'm 76 years old. host: do you have a pension? ♪ callercaller: yes. but i have people down the street you do not have one. they are barely getting by. ñii don't know where these polls are coming from. to say that people do not want don't see how people keep on

living like this. guest: healthcare is very important, an economic tragedy, and a personal tragedy. keep in mind with the business roundtable companies do -- we provide health care for every one of our employees. it is the biggest single cost pressure our ceos say every year that they face and over which they have no control. three years ago the head of several entities -- and i stood up to create something called "divided we fail." it was designed to move the political system to address health care and get meaningful reform. we still believe that reform is necessary. we spend too much for too little. at the highest in we have the best health-care system in the

world, but it does not reach everyone. we need to reform the delivery system to pay for outcomes, a value quality, value consumer- directed healthcare systems. we pay as much for prevention and wellness as for treatment. so that we can have, we can avoid some high costs. we need a system that brings everyone in. our members pay for anyone who goes in the hospital without insurance. we the politics have diverted us away from what the country needs. modernizing, improving the health care delivery system. host: let me put you on the spot. can you give us an average of

what your company's pay? >> live it to the state department. it is david johnson, assistant secretary of state for international narcotics and law enforcement. >> this report covers calendar year 2009, and its conclusions reflect the department's analysis of the international drug control and money laundering environment they're in the last calendar year. the briefings are available in the press office and we will also bring them in here to hand out. there will be posted on the state department website at the conclusion of this briefing. without further ado we will

let the secretary takeover. >> good afternoon. today is the 27th addition of the report to the congress. this report is a review of foreign government's efforts to do with their own domestic narcotics problems and to meet their international responsibilities as set forth in un treating is. the drug and chemical section covers 130 countries and jurisdictions. the second section describes the effort to amend strong anti- money laundering and counter- terrorist efforts. this provides an assessment of the worldwide illegal drug and money-laundering situation. this report has been prepared in accordance with section 489 of the foreign assistance act from 1961 that requires us to identify major illicit drug-

producing and transit countries. section 481 defines a major money-laundering country as one whose financial institutions engaged in currency transactions involving significant amounts of proceeds from international narcotics trafficking. that means both of the states having challenges and those with large and financials institutions. this report's conclusions reflect the analysis of the international environment during the past year. based on the analysis we identified challenges we face with partners. more importantly, it points to lessons learned which will help us all. the u.s. provides significant

assistance and resources to partner states to help develop effective law enforcement, judicial institutions, and anti- money laundering regimes. our cooperative efforts are essential to deter crime from reaching our shores. additionally, weak and partners are working to reduce our own demand for illicit drugs within our own borders in concert with other consumer nations. we view this as a shared challenge and responsibility as of you by the secretary visiting mexico. if you will allow me one thing off the subject. last week in afghanistan when the bombing took place, one of our own dedicated afghan employees was seriously injured. on behalf of all his colleagues here we want to wish him a speedy and full recovery.

his condition is stable. he is making progress following surgery. with it that i will attempt to answer any questions you might have. if not, i will get out of your way. >> what is your chief take away on the narcotics imports? which countries are courting the most, which the least? where does the greatest ever need to be made? >> i think what i will do is stick to the script. we divide efforts here between the september report for we do what you say exactly. we identify the countries which we say have failed demonstrably to cooperate. we will do that again in september. the chief takeaway is that this

is a very challenging situation. it requires the cooperative efforts of all countries involved. those that produce, who are ultimately consumers themselves. and it requires efforts on behalf of all government. it is also -- illustrates the consumption of drugs is an international phenomenon. the country regrettably with the highest usage is iran has substantial efforts under way to help deter this. among the fastest growing cocaine markets are those in europe. it is a global problem. it is one we work on with partners.

yes, sir? >> could you describe the situation in afghanistan? >> i would say it continues to be a very big challenge. if you look over the recent times, production of puppies has declined by about 30% over the past two years. that is beginning at a very high plateau. it remains a significant challenge. i would also emphasize that the measure i cited is poppy production. it gets to only one aspect of the problem. that is production of the raw material. trafficking throughout afghanistan continues to be a big problem. we with partners through the

largess of the american taxpayer and others have been developed. we believe we're having more of an impact on the trafficking issue. it remains a large problem. where we have reshaped our assistance programs is to move away from a focus on eradication. to move more to one focused on interdiction and institution- building. we're also trying to build an alternative livelihood's. there is a strong focus on agriculture. that will only have an impact over time.

the battleship has turned over the past year. we expect it to have more impact going forward. also, some strong efforts have been taken by the afghans themselves. in particular program we and others have supported in hellmand in a very concentrated area. it brought combination of alternative livelihoods, economic support, provision of government services, and also the threat of law-enforcement action. it had an impact on low level of production in that area. it goes to, emphasizes a point everyone understands that this is part of an insecure situation. where there is greater insecurity regionally there is a

greater incidence of production and trafficking. >> when you say that it turned over the past year, the mean the broader situation in afghanistan, or are you referring only to pop the production? >> our policy has reformed, moving away from an eradication focus to focus on interdiction. there is also a much stronger focus on alternative livelihoods. in terms of the results of an area under cultivation, the change took place between 2007 and 2009, a drop of about 30%. due to the measurement. we're talking about here, by the end of calendar year 2009 our programs are just coming on

stream. yes? >> according to dhs, the mexican drug cartels have a presence in thousands of u.s. communities. also, there is reporting on the cultivation of marijuana by drug cartels even in national parks. how does the international strategy address things domestically connected to international concerns like this? >> of the strategy not so much, although -- the report, rather, the strategy not so much. the assistance program we have with mexico is aimed at helping mexican partners develop a greater capacity to deal with then mexico with the use of drug cartels. i will leave it to domestic law

enforcement agencies to describe the level of engagement here. an example was the take down under operation coronado by the department of justice a few months ago. the arrest took place in more than 300 locations. yes, there's a broad impact in the u.s. of cartel operations based or emanating from mexico. that illustrates another point that bears emphasizing. when people think about "spillover," you think of the border. it is not tending to be that way. it is more broadly into the u.s. some of the border committees can be not nearly as effective as more inland areas. >> i have read the reports

regarding specifically mexico. money-laundering continues to be a challenge. can we expect something to be done between both countries soon? >> money-laundering is one of the areas we're seeking to address, both in terms of domestic operations in both countries. my colleagues and i are responsible for providing equipment and training for mexican border authorities and mexican law enforcement authorities so they can better detect bulk smuggling. the motivation for sequestering this is very strong. you see it in things as bizarre

as the axles of non-industrial becoming. these are the devices you need to deal with that. we still have work we can and must do. we are dealing with millions in a problem better expressed in terms of billions. we need better progress in the finances. >> i have two questions. on the money-laundering, obviously iran and the uae, and i know that you're dealing with terrorist financing relatedxd to that, do you believe one of the reasons -- what are the

terrorist concerns, concerns about financing we should take away from this report? specifically in those countries. then on venezuela, last week the ambassador from this level was forceful in defending his country's efforts to combat the drug problem. he maintained that he gave specifics that were impressive. he said your charges in this report are political. >> the report on money laundering deals with not a specific use of laundered money. it is based, it emanates from the legislation that requires us to look at money-laundering as generated by illicit narcotics trafficking.

ineffective regime deals with all criminal and terrorist activities that might be financed for those causes. isñi there and the money-makingr the use of moneys for nefarious purposes. >> you do not delve into the use of the money? >> no, we deal with frameworks ñrin place to combat it. on the issue associated with venezuela, i don't contradict -- the statistics in this report are based on the self-report of countries involved. the statistics you see for 2009 should not differ from what was cited by an official from venezuela.

if you look at the evidence on the ground of where narcotics are emanating from, transiting into the kariba -- into the caribbean or africa, then into europe, you see an extraordinary path of aviation exports from venezuela, near columbia. his welcome to his point of view, but that is not political statement. it is based on evidence of the radar tracking. >> i am aware of the good cooperation of the u.s. with russia in fighting narcotics in afghanistan. russian officials are saying

that potentially, helped to increase the supply to the russian federation, sometimes. the think the u.s. can reverse its policy about stopping eradication of pop be in afghanistan and find some other solution? >> i'm familiar with the issue. it has been articulated by russian government officials. the level of production has continued to decline even in the face of our altered policies. it has declined more than any eradication policy we ever had. we found the eradication program was not a cost-effective

way to deal with this. it was not having a material impact on the problem. we have refashioned our program. i don't think the program we had under way with eradication as a significant was really changing a threat to russia faced. russia does face a significant threat of opium products exported from afghanistan, as do all of the neighbors of afghanistan even into western europe and asia. 8ñi don't think an eradication program will be an effective way to address it. not the one we had under way. >> on the northern hemisphere, have you seen any changes in the last year compared to previous

years? >>ñiñr of the threexd major coce producing states in theñix"7d colombia continues to have a significant declines even though it is still by far the largest producer. peru had a modest increase. bolivia has a continuing trend of a step up the year by about 10% or 15% over the past several years. additionally, the method of production now being usedht by cocaine producers in bolivia have adopted more effective production methods. it has nearly doubled the output of coca.

there is at a significant increase in the potential of output because of that. >> [unintelligible] >> i don't attribute the letter to government efforts. i attribute that to the efforts of the producers. but on the former, the continuing growth in the area under cultivation, it is a disappointment that it continues to increase. and that they're not effective policies to limit the production over time. >> has a miss will increase or has it been the same? >> and not a significant change over the past year. >> [unintelligible]

>> it is from each country. yes, sir? >> a certain country is not included at this year. north korea was included last year. is north korea and volume i? is there any new finding there? >> no, there is no new funding with respect to north korea. we have not seen sufficient evidence to say with certainty that state-sponsored trafficking has stopped. the last high-profile incidents was in 2003. kimmitt did impact of repeated incidents and other publicly acknowledged criminal behavior by north korea points to the likelihood of state-directed trafficking in addition to tracking by individuals.

>> the reason north korea is not included in volume ii? >> i believe because the absence of a significant financial industry. let me check. i'm getting a not from one of my colleagues. >> i just want to go back to venezuela. [unintelligible] why is your report so different from others ? >> because the facts as we observe them in terms of product emanating particularly by air from venezuela remains saddam to get. >> [inaudible]

you lot at the efforts of certain countries, but they're still major money-laundering efforts. >> we have seen some efforts in the seaborne in cooperation with some law enforcement agencies. >> you si no efforts by venezuela? >> not in the particular border area i'm talking about with aviation exports of cocaine. i have not seen any efforts or any significant efforts at least, of stopping that traffic. >> have you been in contact with venezuela? >> yes. >> and what did they say? >> we have some cooperation with them. particularly with the seaborne, but we have not found a willing partner on the aviation issue,

particularly in the border region. >> what can you say about the middle eastern states? >> your colleagues earlier asked about that issue. i explained that our concentration on listing individual states of special concern was something we dealt with under a program that comes to fruition in september. on the question of particular states in the middle east, i would refer you to the report. yes? >> there is a press report in beirut saying that the u.s. embassy is asking the lebanese

to provide them a list with foreign companies of all other data to the embassy. [unintelligible] are you aware of this? " not aware of the report. i would be glad to take a look at the report, but i am unfamiliar and do not want to speculate. >> a couple more questions? >> i'm just trying to understand. you mentioned it terrorist financing a lot. but then the earlier you said that you do not look at the source. >> i'm suggesting the programs we have under way for cooperation deal with money laundering across the border. an effective anti-

money-laundering regime which deals with proceeds of crime as well as terrorism is the same type of program. we're looking at the anti-money laundering program. that is our mechanism to gauge. we recognize that moneys that are laundered could be used for any number of nefarious purposes. our focus has to do with both counter-narcotics crime and terrorism. >> let's go back to money laundering. given the state of the world's financial crisis, are you seeing any substantive changes? >> cannot cite anything specific for you. no.

obviously, the pressures to use that could have an impact, crime level. >> if i just follow that up with haiti, there is a lot of talk of its being a major transit point. most of the money that goes to haiti seems to come through the form of remittances. it has been a huge source bought for control of money laundering. they are such small amounts coming and going in the cash. can you address that? is there elevated concern or actions being taken? >> it is always to be encouraged that remittances or any other form of money transferred goes to recognized financial institutions so it is both safe for the sender and recipient, as well as avoiding the taint of the situation that could mask nefarious transfers.

with respect to haiti, we had a program on the ground before the earthquake assisting with building capacity and their policing of financial crimes. we intend to restart that as soon as we can. the source of much of the drug money coming into haiti goes back to the question concerning venezuela. a spaniel is one of the destinations, in fact the largest one for flights emanating from the border region in an as leverage espaniola. >> even if you look at the report, decriminalize money laundering for narcotics?

yes. it seems that this country -- venezuela, is taking more efforts then many other countries you are setting. if this report is about cooperation, maybe you do seem to make a distinction between brazil, whereas with venezuela you have some of the mouth as not having results. -- you have singled them out as not having results. >> this is not a political report. >> it seems -- >> with respect if you look at the radar traps i don't think you can make that argument. >> that is just one specific area. >> it is one specific area which

is a very destabilizing activity both in the caribbean and in west africa. it is a great concern. >> regarding mexico, you have it during the past months been very supportive of mexican efforts and the corporation with the u.s. the mexican public [unintelligible] the level of violence continues to increase. president calderon is down in polls. are you worried that the historic at strategy could be in peril? >> we see a broad commitment to building the institutions of an effective policing system in

mexico and reform of its judicial institutions. it has very broad support. thank you. >> coming up at 1:00 p.m. eastern we will go live to the brookings institution for marks from house majority leader steny hoyer will talk about fiscal responsibility. the house and senate will gavel and for business this week. the house back at 2:00 p.m. eastern tomorrow. you can see the house live here on c-span.

the senate will enter today at 2:00 p.m. eastern and work on expiring tax cuts as well as health insurance for the unemployed. you can see the senate live on2 on. steny hoyer will arrive at the top of the hour. we will have live coverage. update this morning. guest: thanks for having me. host: we go to your calls on the issue of u.s. nuclear weapons strategy. every board and " the new york times." the white house is rethinking nuclear policy. paul on our republican line. caller: good morning. good morning. i would like to comment on this nuclear. i go back a long way -- also on the economy. i was a combat medic in korea and item 75. i have run a business most of my life. even reducing this by 10%, we still have enough weapons left over if we reduce it by 10% to

destroy any one of these third world countries and one afternoon, we have so many weapons. as far as the economy, jobs, this is the main thing. i followed the army and weapons of my life. my son just retired with 25 years in the service as a colonel. when i shipped out to go to korea from colorado, that land between denver and colorado was a wasteland. when i go out there now to visit my son, everybody is in there in uniform. what would happen today in if we -- the whole thing is filled

in with service people. " scott part of the article in " the new york times" read to thatxd -- we will read more of that article in just a moment from çinside the " the new york tims ." caller: thank you so much for taking my call. i appreciate c-span very much. my comment is on the long term, i think it is a terrific strategy to reduce the nuclear capability because we've got so much of anç arsenalçççç ale çable to deal with threats arod

the world. ç;ççççxdçççand i thinkt of the world and then following our lead is the ideal way. this was mentioned in a great book called "blood on their hands. " i do not know if you read it or not. it is an alstom to read about -- çof some book to read about. host: who is the author? çççcaller: forest redd. çhost: ocean city, maryland. their role on the republican line. -- darrell on the republican line. i want to fight daveç wisconsin and his son for their service. i want to talk about obama's nuclear-weapons strategy. it can be good if they take the money allocated, instead of new ones, make defensive weapons to stop the threats that we have pared -- that we have.

and also, if they can take the president's delegation and go to countries like russia and iran and kind of stop them from making so many weapons. russia has allies. whether or not we believe that are together or not, it does not matter because they are because russia buildings in iran four nuclear weapons. that being said, defense of weapons are good. guest: how are you doing? host: find things. guest: i would want obama to reduce the nuclear weapons, but i also want to say that america has to open their eyes and not lead us going to war with iran because they're putting stuff nuclear weapons. they are just tried to push

obama to war. we should not listen to those people. they are trying to set this up for another war. obama has to wakeup to find out how the rich people are trying to set him up. host: the paper is reporting that the president will be briefed on some options for nuclear strategy. here is the article described by officials. the new strategy commits the u.s. to developing no new nuclear weapons.

host: of riverside, ohio. good morning, sarah. caller: over the last five years i spent a lot of time at the international atomic energy agency's website, iaea website. i encourage people to go to the website and read the non- proliferation treaty and some of the letters other countries in the middle east have sent to the head of the iaea and other directors over the years in regards to, for instance, israel's nuclear-weapons and the threat to the middle east and how they would all like to see that area of a nuclear-free zone. with regards to us, yes, with obama, that would set the example to the rest of the world of, let us really examine this and let us reduce, for instance, israel, i know the last

president unchallenged is a realm with regard to opening up inspections was president kennedy, so at the i e a website you can access the letter president kennedy wrote to the leaders in israel with regards to opening up inspections. i think that would help settle iran down. they obviously feel threatened about what we have done in their neighborhood and the threats is room makes to them constantly. we should definitely look at this and obama would be setting the tone and example by looking at our own nuclear arsenals. host: can you share with us where we will find that? what is the website? caller: you could just google iaea or international atomic energy agency. and also at the u.n. site there are a lot of documents and letters with regard to the

nuclear standing of different countries in the world. both are excellent. mordecai vanunu, and he was an israeli scientist who exposed what was there. i know is wrong has released them from prison. host: here it is "los angeles times." iran relations with iaea turns contentious. phoenix, good morning to tiffany on our independent line.

caller: i'm pretty young. i have been watching c-span since high school at 4:00 a.m. host: what to dedication. thank you for doing that. probably a couple of weeks ago a gentleman said it gives a regular people a window into congress to see what is going on. i think it is pretty interesting myself. really what i want to say about the administration about this nuclear deal going on -- it is kind of needs. at this time, do we really want to have talked about eliminating nuclear-weapons around the world? i'm not sure. it but i think it is going to give someone else the power to provide the people -- there are

going to be bad people all over the world. host: i have to let you go. thank you for the comment. a reminder to listeners and viewers, make sure you meet your television or radio. the article is the issue about u.s. nuclear weapons strategy, it comes from " the new york times, reporting on president obama getting an update from secretary gates and others about nuclear policy. they write other officials not officially allowed to speak on the issue say in back channel discussions with allies, the administration has been quietly broaching the question about whether to withdraw tactical nuclear weapons from europe. at the same time, the new document would steer the united states toward a more non-nuclear defenses that would rely more on missile defense, most within striking distance of the persian gulf. from " the new york times" this morning. connie, democrat caller.

caller: i keep wondering -- is the purpose of the question to seek information or is it to undermine the administration? i can't figure it out. we have two wars going on and on -- i cannot figure out why. is it really to gain information from of yours or is it to undermine the administration because quite often on c-span i listened to these questions -- it seems like everything is about, is obama doing the right thing. you read into it, is obama doing the right thing. i cannot figure it out. i know when bush was in office, i did not vote for him, but i supported him because he was the leader of the free world and i did not say all this undermining of him. two years left in his term -- people stood behind him. every time i looked around, obama is being undermined. i am not saying it is you personally. i just wish you all would be fair to this president and stop

misleading questions because your questions the way it is framed -- as if it is true, so you are giving people opinion, do you think or should he not do it. i would say let us try to stand behind the president and stop undermining him. holes cut connie, we appreciate your input -- host: connie, we appreciate your input. our sole reason for its request is to give you a chance to weigh in with your opinion on the issues of the day, whenever that you may be. we really appreciate you calling what your view this morning. michigan, john on the independent line. go ahead. caller: top of the morning, how are you? my opinion is, i think obama is doing the right thing. i think he is a very knowledgeable man. i think he has a cool hand -- like the call he might get at 3:00 in the morning, what is going to do?

armageddon could be -- you know. we don't need any more nuclear weapons. we have enough silos, submarines all over the globe. it only takes a few. bonds today are much more powerful than hiroshima and nagasaki. we don't need any more nuclear weapons. we have more than enough to destroy the whole globe. idefensively, that is what we've got to watch. some tyrants, however it may be. i don't think china is even a threat to us. who is going to want to blow up the bread basket of the global? we could have the ability to produce more food than any nation in the earth. who wants to blow up? it does not make sense. but if you get some not less the capability, that is what we have to prevent. host: back to the article in "the new york times."

new york.

melissa on the democrats' line. caller: the question in regards to the president of the nine states rethinking the agenda for nuclear weapons. i think it is a good idea. i think definitely -- right now he is the president of peace. it seems are around the world the united states has so much respect now than in the past. and i think that's all of the information we are receiving as far as iran has nuclear weapons or this person may have nuclear- weapons, we did not have to go have the same issues we had when the bush administration when there was no weapons of mass destruction. they were never found. i think this is a smart president. he is going to take his time, he

is going to weigh his options and he is going to find -- where he does not put all of our children in a dangerous position that i want to give a response to the other caller -- as far as the undermining of his administration. i think she is kind of wrong on c-span. c-span is very fair. i watch c-span in the morning. but she does make a point and other media, always questioning and throwing light some sort of -- where the american public has doubt. all of this doubt out here in the media. i think with the american public, and it just makes fear. host: used the word undermining. the media may be undermining the

present but they are creating this fear? caller: i really feel that. i'm young. i have to tell you, i voted for mr. obama. never really been a major politics, never really been into politics but the best president has really started a lot of young people into really motivating a lot of young people into politics. is he doing to much? all of these lies. trans. administration -- everything is on line. you could see everything. he constantly tells us that. live is and lies, all of this

doubt. host: we appreciate your view this morning. larry from oak grove, illinois with a republican view. caller: the more i listen to c- span lately the market disappointed i am in the callers calling in. this reduction of nuclear weapons is almost irrelevant. we already have been built. obama it is supposedly a brilliant legal mind, he should use those as a bargaining chip before you are going to announce you are going to reduce them. if they are redundant and we will reduce them anyway, don't tell the enemies upfront. use them as a negotiating chip with nations like iran and career and surrounding nations that already have nuclear weapons, that we are willing to do this if you do this for usçç and help control nuclear proliferation and the middle east. this is supposed to be a

brilliant legal mind. where is it? thank you. host: highland park, illinois. caller: i listened to c-span every morning and i want to thank c-span for its programming. kg2vyou know, when it comes to zínx;:dñp%ó?u,3ççi]ço çare anti-israel call up and me comments against israel but you çnever hear them sayççç inxg ;p!outçççç how the arabs or bustles and israel or sit -- sheep rockets into the heart of israel. i think they should look at both sides of the story before they lambast israel all the time. it seems like there are a whole group of them and they cannot wait to put is rubdown every chance they get. i thank you. host: about 50 minutes of your calls on the u.s. nuclear strategy -- about 15 minutes of your calls on the u.s. nuclear

strategy. from "the washington times" on the economy. kansas city star, kansascity.com. comments from senator john kyl. host: they will keep certain types of unemployment benefits.

this was the number 2 republican. the senate will not act until tuesday which means that as of this morning, -- sunday morning, benefits will not be available for unemployment either will some highway or transit funds, small business loans, or help for newly laid- off worker's insurance premiums. u.s. nuclear-weapons strategy, go ahead caller. caller: the united states is doing the right thing. when two guys are in a basement and one guy says he has eight matches and the other one says he has nine but they are full of gasoline and a half did keep the guy from opening the door and striking his match and destroying the whole thing. what it all amounts to is that i have 100% faith in the decision made by this country.

people are safe and that is what is most important. there are many things i could say but i am proud to be part of the country. thank you. host: manhattan, democrats line, go ahead. pcaller: i think president barak obama is making the proper evaluation when it comes to protecting the united states of america. as far as being the most powerful nation on the base of the earth, we don't need to go military crazy. keep everybody safe but there is one newspaper you quote consistently and that is the racist rag in new york post. that is considered the rag of new york city.

i wonder if you guys are aware of the "new york post" reputation?" is not a strong reference point. host: what newspaper do you agree? caller: i read "the new york times," the new yojk dail2 ne, cal" and" news de." host: i have in my stack somewhere. it. you for your and screen input. we are reading an article from "the new york times" about nuclear strategy. they write that mr. obama has complained in recent months that he has failed to break through

the bush era national policy security policy in some fundamental way. west hills, randy, independent. caller: a couple of points. the strategy about nuclear weapons in the middle east and the second is about the media in general. first i want to say, regardless of what obama does or decides to do, he would be a lot more effective if people in this country were more unified behind him as they were behind bush after 9/11. the danger has not passed. we still face great danger from terrorists around the world. and for the republicans to say they want to see obama failed --

failed, i cannot fathom any more leverage for terrorists to see our in fighting like this and to see half of our country basically calling for obama's neck and went to see him fail and rush limbaugh going on radio saying he wants to see the president fail and all of the republicans' so-called leaders not disputing that, that gives the terrorists a lot more leverage because they see us divided. in a big way, osama bin laden has already succeeded in this plan. he spent only a million dollars bringing down two huge buildings and he ended up breaking our economy eventually and dividing this country in half and while we fight each other they are laughing their butts off at us house the but we are that we are fighting over political differences and not unify. host: randy, your comments on nuclear weapons policy -- anything additional?

caller: what i was saying about nuclear-weapons, regardless of what he will do about nuclear- weapons, we are not unified behind our president. the second point i wanted to make about the media in general is that i know that people, if they have political leaning one way or the other, they see the media being against them but the media in general usually point to the microphone at whatever voice is the loudest. i remember the town hall meetings, people were shouting, and about 15-second clips of people shouting at the top of their lungs and a loop over and over again. host: here is the latest " foreign affairs klaus " magazine. there lead article.

inside, in this extensive article, the authors write -- alexandria, virginia, kennedy -- kenny, democratic collaller. caller: the increase we have

spentx, according to the brookings institution, since 1998, we have spent >> we will believe "washington journal" as house majority leader steny hoyer is talking about fiscal responsibility. he is expected to talk about the new bipartisan fiscal commission. live coverage now on c-span. >> since 2006, he has been the majority leader of the house of representatives. he seeks bipartisan solutions, an approach that is being discarded in these unfortunate times. he will soon get the opportunity to test his skills as he never has before. our program has been engaging

in an outrageous acts of fiscal pleading and cutting spending and increasing taxes for seven years now, steny hoyer's the second most politician -- second most important politician in washington. he is a voice for saturday. he has broken with many of his colleagues in publicly showing his willingness to put everything on the table and entertain strong measures to move the federal government to balance. i believe he was the first leader to publicly declare his support for a bipartisan budget commission. he said," i would like to believe that the congress could address these issues through the regular bread legislative process. this suggests this is an extremely gift -- difficult in the current political environment." anybody want to disagree with that? he got his wish. we now have two prestigious

commissions and i have no doubt that at least one of them, by this fall, will release a report that includes proposals that will gore everyone's box. ox. at that moment, steny hoyer will be one of the most important congressional leaders in the nation's history and will undoubtedly be the most steadfast voice in congress for fiscal responsibility and tough decisions. i pray every night that republicans will join him. the topic today is building momentum for fiscal responsibility. [applause] >> mr. haskins is in charge of hyperbole at brookings. thank you so much. i am pleased to be here.

brookings' does such extraordinary work. i want to thank my good friend alice rivlin for being here. i m on opposite sides of the political aisle but not on opposite sides of this issue. t,m mann, thank you for being here and helping people understand the body of congress that sometimes is difficult to understand even from the inside, much less the outside. thank you all for giving me some of your time this afternoon. never in my decades in congress have seen a public so outraged by deficits and debt. at this moment, this is a moment of historic opportunity. we can waste it on opportunism

and slogans and symbolic solutions or we can dedicate ourselves to the painful, un glamorous decisions of fiscal discipline. we can choose to hang together or we can hang separately. i believe and hope and expect that we will hang together. the consequences of failure are dramatic enough to concentrate the mind of even the most dedicated senate. it is enough to say that by the time my grandchildren and great- granddaughter's are in college, our debt will exceed our gdp we will owe more money than the value of our entire country. it is enough to realize that by then our government will exist to do only two things -- pay for entitlements and pay interest on our debts. there was nothing left over for our nation's defense, our children's education, in a bit of scientific research, or any

other critical investments that keep america the home of freedom and opportunity to is he not to look across the atlantic at the extreme crisis in greece to understand that it can happen here. if we do not change our course, it will happen here. when you look it eight centuries of a financial crisis, an economist from the center of intellectual knowledge at the university of maryland -- i am into hyperbole myself -- america is no exception to the lot of debt. they point out that economic contractions are followed by budget crises that devin prosperity and a stalled recovery. "if there is one common theme to

the vast range of crises, is that excess of debt accumulation often poses greater systemic risk that it seemed during a boom. government debt is the unifying problem." m, the common symptom of decline." the economists add that public debt of 90% to gdp a tipping point. senator, -- senator tom coburn made that same point earlier this week. they go on to say that this is how empire's decline. historian neall ferguson said that. this is our turning point and choice, the point where we join the debt ridden hours that saw their own fiscal ruin or the point in which we as a nation

refuse that and write a new chapter. it is a waste of time for us to hand out blame. there's only one constructive reason to look back at what is -- at what got us here and that is to identify the kind of things we need to avoid that is why there is harm and the mindset. this draws exactly the wrong lessons that do much to repeat the cynics -- same mistakes. asserting that the deficit is the result of policies enacced since president barack obama took office is orwellian. the recovery act has saved 2 million jobs according to the cbo, but it has only contributed fractionally to the deficit.

ithe tax cuts enacted under president bush, the wars in afghanistan and iraq, and the economic downturn explain the entire deficit over the next 10 years. the most important lesson we can drop in the years of recklessness is this, when it comes to budgeting, what is politically easy is often fiscally deadly. it is easier to pay for tax cuts with borrowed money than with lower spending. it is easier to hide the true cost of war then delayed those costs before the people. it is easier to promised special cost-of-living adjustments that explain why an increase is not justified. it is easier to promise 95% of americans that we will not consider raising their taxes and then ask all americans to contribute for the common good. those kinds of easy choices are

so often selfish choices that they leave the chore of cleaning up to someone else easy choices may be popular but the popularity is bought on credit. the behavior in washington will only change with the incentive to change. when voters remain -- demand more responsibility. i am hopeful that is just what is happening today. the public has a responsibility to educate itself about the sources of the deficit and the brains of realistic solutions. they should not demand that government escalate entitlement payments and increase the deficit at the same time. the public must be ready to confront tough choices and leaders in both parties are -- need to be ready to be honest about those tough choices. when deficit solutions meet

resistance, which they will, and when they are painful, which they will be, it is our job to explain why they are also correct and absolutely essential. i believe we have a president and a congress that can and will take that responsibility seriously. president barack obama and congress have taken four major steps to return our country to fiscal health. president barack obama proposed a budget that would cut our deficit in half by 2013. it is perhaps more conceptual than real at this point but it will be released show courage in congress. it also contains a freeze on non-discretionary spending that will force congress to identify priorities. less discretionary spending will barely put a dent in the deficit, however. that focuses on approximately 14% of the budget that confronts us.

alan simpson explained," to say that all we have to do is take care of waste, fraud, and abuse and foreign aid is like a sparrow flying in the middle of a typhoon." colorful and correct. her willingness to curtail the growth of programs we value is powerful evidence that washington will tighten its belt before asking the public to do the same. defense spending is exempted from the freeze because we should insure that our men and women in uniform have the resources necessary to do their job while they're in harm's way. that does not mean that defense spending should be exempt from cuts where they do not undermine the mission. we have a set for our military. we must apply the same oversight to defense spending as we do to other discussion -- discretionary spending. that is why president barack

obama signed a bill to reform weapons acquisition, bringing the process more competition and your conflicts of interest. the gao report recently said that the 96 largest weapons systems that we have are responsible for $296 billion in cost overruns. that kind of defense waste only makes america weaker, not stronger in the long run. third, we continue to work to pass a health insurance reform bill that is debt -- not only deficit neutral but drives down the insurance cost of the single greatest driver of our deficit. it will be a big step but not the final step for only one. by insuring the fiscal sustainability of our entitlements for decades to come. the health care reform bill that passed the house and senate last

year would be fully paid for in the first decade and reduce the deficit by approximately $1 trillion in the second decade. we have brought back to pay as you go law. president clinton used paygo to create a surplus. that policy was adopted in a bipartisan way in 1990 and reaffirmed -- in a bipartisan way in 1997. as all of you know, it was waived and in 2003, it was reauthorize pretty decision by president bush and republican congress to do away with paygo through his back into the bread for a wet weather comes to cutting taxes or increasing medicare benefits, paygo value because it removes from the table the easy and usually

unspoken solution that we would rather our children pay for it. i was brought to sponsor the paygo law. this may not get us out of the whole but it will stop us from digging deeper. i think the attention given to the exemptions secure the importance of real discipline to new policies, the principle of paying what we buy for applies to health insurance reform and restraining spending. the requirement that we include tough choices to expand access to health insurance has made the task of passing the legislation harder but it will prevent congress from creating a large liability. the medicare prescription drug program that was enacted after statuary paygo left, created in

unfunded liability of more than $7 trillion. congress will use the emergency designation to provide for the extension of unemployment benefits and other safety net programs which have been traditionally designated as emergency spending during recessions. it seems to me that is for a program. we must work to -- it seems to me that is appropriate. cutting the deficit cannot struggle job creation. i have told my friends in the press that you cannot stimulate and depressed at the same time. we need to stimulate but we stimulate now without a thought to tomorrow's discipline that is essential, we will not serve either now or the future will. all of these steps are essential but they are not enough to return our budget to balance. president barack obama is

creating a bipartisan fiscal commission. along with speaker pelosi and majority leader read, i pledge that we will get an up or down vote in congress. we want a statutory provision that was unable to be passed assured that. senator harry reid, speaker nancy pelosi, and di, the commission must come to a consensus in congress must act on the proposals by the end of the year. the president has appointed two proven budget balancers. erskine blwles and alan simpson. i hope congressional republicans will take the work as sincerely and seriously as the chairman takes it. i hope my own colleagues will do so as well.

they will come to the table without preconditions, ready to contribute their ideas and not just their criticisms from the sidelines. the commission has -- is bipartisan and won the vote of 16 republicans in the senate. i was disappointed to see that several republican supporters of t!e bill voted against it. as soon as president barack obama endorsed it. social security reform was worked on in the '80s. the real work of cutting deficits is so easy to demigod that rarely succeeds and will not succeed in my opinion on lusby have support from both sides of the aisle. that is one reason why the fiscal commission must not take any option off the table, from

raising revenues to cutting spending. both parties have a duty to appoint members who are willing to compromise and make tough decisions. it is clear to me that the commission takes -- if it takes a one hand approach, it will fail politically and substantively. i want to say a word about the senator ryan's conscientious budget proposal. it relies entirely on cutting spending. he should be commended and i have commended him for putting together a serious and detailed plan to tackle the deficit. it does not raise a single tax but significantly changes medicare part c we can argue about that but what we ought not to argue about is that somebody has put on the table a very serious and politically risky proposal. that strikes me, in terms of cutting medicare to accomplish

the objective without any thought of additional revenues from any source, it strikes me as very much the wrong solution. the plan deserves respect for its honesty and he is one of the few members of his party were either party to tell the public exactly what he's got. as much as his party's leadership tries to distance itself, all right and's program is a logical outcome of the other party's rhetoric of cutting taxes and deficits at the same time. it seems to me that the only solution that can win this for both parties is a balanced approach, one that cuts some spending and raise some revenue while avoiding extremes in either direction. a balanced approach would sped the effects of change across american society rather than

concentrate them simply on seniors. on the side of entitlement spending, americans are living longer lives and raising the retirement age. you can peg the and retirement age to life span. another option is to make social security and medicare benefits progressive while strengthening the safety net of low-income americans. on the side of revenues, president barack obama was correct in my view in refusing to take any options off the commission's table. no one likes raising revenue. if you are going to buy, you need to pay. president clinton proposed an economic plan aimed at accomplishing fiscal balance.

he paved the way for the greatest american prosperity in generations. he had a bipartisan tax compromise in 1986 which showed the importance of a simplified, more efficient tax cut. if need be, i am hopeful that both parties will agree to look at revenues as far as a solution compromise that cuts spending and balances the budget. none of this is easy. it will take bipartisan trust. there is not much of that and supply nowadays pri presidential leadership, i think there is a lot of that and supplies. we need a public spirit that many assume is beyond america's breach in the year 2010. i do not share that sentiment. america has made a career of proving such cynicism long. as jim fallow said ,"when

theodore roosevelt set aside land for national parks, when dwight eisenhower created the pentagon research agency that gave rise to the internet, the american system seemed open to it. saving america from debt would be long next to those accomplishments because in every era, these very fiscal issues are among the greatest tests a nation can face. we are not the first great power to meet the challenges within and will not be the first to fail. spain, france, the ottoman empire, the british empire in the 1920's, all of them were crippled by borrowing, by interest payments, and by desperate we are not exempt." these are questions of national

security and national success. in a democracy, there are questions of national character. they are not technical puzzles for few of us in seminars, think tanks, and back rooms. they are a defining challenge for all of us. you hear commissions on the radio and the media and our willingness to face reality will be a measure of our character. our willingness to reject easy answers from our leaders is a measure of that character. our willingness to put the welfare of our children ahead of her own, to plant seeds for them for fruit they would never taste is a powerful test of our character. more than a wealth, more than might, those of virtues that have made america flourish. those are the virtues we need to meet that test. i can say with confidence that

if we are unable to raise our heads even for a moment above the daily partisan bite, if the collapse comes, we will deserve it. but, if we regain a measure of our lost trust and support one another through shared sacrifices and would turn our country to fiscal health and strength, we will deserve that as well. thank you very much. [applause] >> ok, i am taking questions, i am told. >> what about the crisis faced

by people outside the beltway. unemployment benefits are being cut, medicare is being cut and people continue to use -- lose their homes and jobs the obama answer in legislation discusses not to return to a national bank and its policies but make more cuts. how much longer do you think the population will tolerate these policies from obama and why shouldn't they asked for immediate impeachment? >> first of all, let me say something about president obama. president barack obama, in my opinion, probably took office and one of the most difficult

times in our history since abraham lincoln. franklin roosevelt had a deep economic crisis he confronted but there were two aspects to that crisis. he did not have an international crisis until his second term, until the middle to late 30's. secondly, he had a populace that was educated to the fact that he needed to take substantial action because this economic crisis that confronted them for 3.5 years needed to be dealt with. that was not true when president barack obama took office in january. most of america became convicted of the depth of the crisis only in september of 2008. that is when we passed the so- called tarp bill. i have called for bipartisanship to make tough decisions for it we hear a lot about the lack of bipartisanship in the

congressman the from the minority party. i want you to recall the tarp bill and the secretary of the treasury, the president of united states, and head of the federal reserve came to congress on thursday night in a congress led by democrats and said that we're confronting the crisis and if we do not act and act immediately, the fiscal crisis may well result in a depression. not a recession, but a depression. confronted with and administration, albeit of the other party that said we were in a crisis and having consulted many economists across the board of the depth of the crisis and convinced that it ministration's representative calculations were correct, the democratic leadership responded. we expanded the bill they sent

us four or five times, it was a pretty short bill. $700 billion was put on the table. that bill passed only after the second effort, as you recall. the president's own party did not support it. 1/3 of them did and almost half of them did the second time around. we passed that bill. the president took office and the economy was in very bad shape. there were 726,000 jobs being lost in three months prior to his taking office per month. the stock market was declining very rapidly. the gdp was in some of its lows to declines. in the last four quarters, we went from 726,000 unemployment

35,000 lost on average in the last three months. that is progress but not success. it is not getting to plus of jobs. the clinton administration group 216,000 jobs per month, on average, in the 1990's. it creates and the best economic times this country has seen in terms of growth and expansion of the economy. those people had investments in the stock market and savings accounts, shortly after the passage of the american recovery and reinvest and act, it was down but now is up 65%. that is increase of well for

people and their savings accounts. cheapie went from -6.4% 2 + 5.4%. that is in 12 months. my view is that we have taken very substantial efforts to stabilize and to start growing the economy. statistically, we have done that but there are 8 million people who lost jobs. unemployment is still at 9.7%. that is way too high and that is why we continue to address job creation. we did that in september when we passed the jobs for main street act through the house. the senate has passed it smaller jobs bill. we are considering that this week and hope to pass something this week. certainly, it is not serious to

say that anyone should consider impeaching this present who were shown a great deal of courage and effectiveness in confronting a dire situation and he has taken a lot of heat for it. i think he will continued to stay focused on growing the economy and growing jobs. we have seen success. we have seen progress. success will be women get back to creating at least 100,000 jobs per month per that will keep us healthy. ha h>> i want to take you as wes president obama to have the courage to take on this issue. i think you guys in the house are doing a great job of

balancing the agenda the american people voted for in 2008. the senate, not so much [laughter] if you guys do nothing, then the bush tax cuts expire. doesn't that give you leverage to play harder game to get things done? if president obama said that he will veto any bill that extends the bush tax cuts unless it balances the budget over a period time, wouldn't he have a hard leverage that would be needed to build the trust, the bipartisan trust we meet? need? i think there needs to be a

health -- a helpful push to bring the republicans to the table. >> first of all, let me address briefly the concern that house members have americans should have with the senate. let me say this in a constructive way. the senate was designed as a more the erotically -- theoretically more thoughtful body. it was supposed to represent not the citizens of america but the states of america and selected by a representative of each state. it was converted to a direct- elected body in the early part of the last century. culturally, it conceives itself, however, in my view, as a group of one of the people each of whom has the opportunity to stop

progress i don't think the founding fathers thought of it that way. last friday, one senator stood in the way of what we had paestum unanimous consent with no boat. democrats and republicans agreed but for all intents and purposes, we believe that 99% of everyone thought we should extend unemployment insurance and co protection. there was a highway bill in their, and some other extensions, i don't think they will work in the bill but one senator objected. therefore, there are millions of people today at risk of not having the unemployment insurance or cobra. we need to do something about that as a people. the '70s to do something about it as a senate.

it is unrelated to party. it happened to be a republican senator named bunning who is he was worried about his grandchildren. he was worried about the costs senator durbin was concerned about the families who could not put food on their table. we have 280 bills or so. republicans and democrats in the house agree on is that the senate is a conservation at best. we have 270 bills that we best at 70% with more than 50 republicans that are still pending.

>> in terms of encouraging our republican friends to come to the table, i think we want their ideas. >> absolutely. >> one thought that i have this they are pushing for the bush tax cuts. i don't figure will do any good. >> because the tax cuts weren't paid for, the budget rules expire and because the budget required longer payout, this looks good and your budget. the president indicated that we would not raise taxes on middle- class. clearly in my view, we would not want to raise taxes on the middle class in a time of deep recession. families are stretched. we have no intention of doing

that and still, we will continue that. we specifically delineated middle-class. i think you will see the we will continue with the statutory pz aygo. is a political rationalization which i think is accurate. we would use them at baseline without having to raise additional taxes. you don't want to raise taxes because of where we are in this recession. what paygo does is focus the

mind on having to pay for things like entitlements. it does not apply to discretionary spending. as we move forward, and we keep statutory paygo, in fact, we will not fiscally -- pursue fiscally irresponsible positions. we don't have a balanced budget amendment. the only constraint upon the country as wealthy as america

although we're getting to appoint where -- the political constraint of my asking people to pay for what i am prepared to vote to buy. but take second straight away -- if i take that comes straight away, we started incurring substantial debts as we reduced revenues. we did not reduce commensurate spending. during the reagan and two bush administrations, we encourage -- incurred $4.80 trillion of operating expenses. in the clinton administration, we had $62.9 billion surplus. it is a different approach,

paying for what you buy. we had a republican congress that did not want to spend a democratic president who did not want to cut revenues. the combination got us to a very good balance. fiscal irresty and regulatory neglect this last decade led us to a fiscal debacle in the private sector ended fiscal $1.50 trillion deficit up to 2008 and was exasperated by tarp. are we quit? >> this will be the last question. >> [laughter] you pick, alice rivlin. >> you spoke early in your talk

about the anchor of the american public, about deficits and debt. what do you think it will take for -- to get the american public's understanding, what it will take to bring those deficits -- deficits and debt to down. down? >> by dick ross perot made a wonderful contribution into the country in 1992. it was not until then the people started to focus on deficits. ross perot spent his own money to go on commercials and say we need to lift up code and find out what is wrong. people got focused on it. we got away from that focus. people were not as angry then as they are today. they are angrier today because

they think much of the debt was the courage to give to which people. hopefully, that will animate them to focus on what the real problem is of where we are today and how we will get to where we need to be. angkor can be a destructive -- a constructive motivator or a- impediment to figgie. let's hope -- or an independent -- an impediment to thinking. i have great respect for bill friendenzel and the had a real handle on what we should do it had the courage to stand up and say this is an american problem.

we have to have a lot of built frenzels, a of alice rivlins, a lot of barack obama stand up and say none of us believe these are easy answers or politically popular answers. but they are answers which will get us to a better place for our children and grandchildren and a stronger country in the long run and will be less dependent america on foreigners loaning us money when we have crises or when we do not have crises. thank you all very, very much for all you do. [applause] >> i would like to ask you to stay in your seats so mr. hoyer

can get to the door. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> steny hoyer was talking about federally fiscal responsibility. we are looking at your comments on what he had to say this afternoon. from facebook," there is nothing like a $3 trillion program to demonstrate fiscal responsibility." paygo worked during clinton's term and it is a shame we have to mandate this again. another viewer said he hoped he had a teleprompter.

pork = tax dollars so your local economy can benefit from it. you could reach as. at ascom/ cspan. us facebook.com/cspan. you can share your thoughts and comments on this or any cspan program. you can tweak us at cspan. a look at the capitol this afternoon. both the house and senate are in business this week. hr 4247 is setting broad

requirements for personnel using force on student. the senate will be in a couple of minutes at 2:00. senators are working on expiry tax cuts as well as health insurance for the unemployed. you can see them live on c-span 2. the cato institute will post a discussion on second amendment rights and the state's live here on c-span beginning at. 4:00 p.m. at eastern. >> our content is available on television, radio, and online. you can connect with us through different social networking site. you could also go to our website at c-span.org. >> our white house briefing has been delayed and we hope to have

that live for you when it gets under way. journal" continues. ççhost: a look atç the week d in congress andç capitol hill. joining us is pstricia murphy with "politics daily." and we havew3 willç englund fr" the national journal." thank you for being with us this morning. patricia murphy, i will start with you. the end of the week last week president obama held a health care summit with republicans and democrats. that is done. what are we going to see legislatively this week on health care? guest: of the first thing people on the hill will be looking for is this message from president obama how he once again to proceed. at the end of the week he promised to give directions to congress about that. it actually represents the first time he has done that for congress. he spent the last year listening to people, listening to both

sides, saying he is open to we have not gotten a whole bunch of direction from him on 22@ ess. 222222222)s)m 22222s 22222 s

>> they are making the argument that there are large areas of agreement between the parties. i do not know whether they have any expectations that the republicans will join that bill. nancy-ann deparle wio is the inside white person handling white house reform will talk to democrats and republicans over the next several days as the white house tries to come up with its plan for how to go forward. they are expecting a statement from the president probably wednesday -- host: on health care? guest: yes.

host: nancy n. deparle was on television yesterday. she said it looks like they may have the votes to pass this. >> given the results of the summit that to have to move forward with reconciliation. this calls for a simple majority. rtunity to bring republicans along? >> look, he will have more to say this week on how he thinks is the best way to move forward. i think what is important is we have fundamental problems with our insurance market. we have insurance companies sending up premium increases of 39% out in california. these are problems that need to be fixed and the president hears every day from americans. host: but you have to go through a procedure to get there. i have heard from some people a decision has been made -- reconciliation, go through unless what is talking about is not possible. >> i do know this, health care

reform has passed both the house and senate would not just the majority in the senate, but a super majority for not talking about changing roles. all the president is talking about the we need to address this problem and it doesn't make sense to have a simple up and down vote on whether to fix the problems? host: she talked about the rising insurance rates. does that play into the advantage of the folks who want to get the legislation through? guest: i think the biggest argument is to say if we do nothing your insurance rates will go through the roof. people are seeing it in their daily lives. people and california -- in california, in individual markets, rates going up almost 40% this year. republicans agree, too, there is a problem. that is the only thing they agreed about last week. yes, we know something is wrong and we need to fix it. there was little agreement,

though, on thursday on how to fix it. democrats were having an incredibly hard time convincing the american people -- at the same time when trust in the government is at an all-time low, >> it is on its way. the canadiens have kept in very close contact. we are working on delivering that and figuring it the best way -- i'm definitely and medium -- i am definitely a

medium. before the week is over, you have the opportunity to see that. it was a fabulous game. one quick announcement before we get going -- on monday, march 8th, president obama welcomed the president of el salvador for a meeting at the white house. the president looks forward to discussing a wide range of issues that comprise the dynamic relationship between our two countries, including economic security and immigration-related topics. >> can you tell us what the president has been doing since the health care summit to get a bill to his desk? who has he been lobbying? >> i can look and see what calls he has made. i don't know if he has talked to members of congress or not. >> is he involved in the tax proposal? >> absolutely. this has been brought up in a number of meetings over the weekend and this morning.

>> when the white house calls for an up or down vote on a bill, doesn't that mean it reconciliation? isn't that one and the same? >> the president will speak on this later in the week, likely on wednesday. i will wait until we have something from the president then. i do believe the president believes and upper down vote is necessary -- and up or down vote is necessary. i think the republicans could decide not to filibuster and that would be one way. >> does the president believe the american people care about process or that the bill itself is important regardless of how it gets done? >> the bill that passed -- the basic bill has passed the senate and passed with 60 votes.

that legislation passed the senate with a super majority, not just a majority of votes. again, we will have time to discuss this later in the week when the president makes an announcement on moving forward. >> on that broader issue, regardless of how this gets done, does the president think the american people are watching this and they care about process congress uses? the process they used to get a bill passed? >> i think the american people care about what is in the bill. that is why you have seen them take out a number of things added in the process and changed it to make it more to his liking. >> 1 follow up on that and then a question on financial regulation. can you get -- can you give us any idea what is in the @zç:a7cñ& which are t would be hard to do. >> what does the president want

-- >> i think the president will outline what the next steps are and what the way ford is on health care. >> does that include a revamped proposal? >> your first question, i found it harder to do. >> moving on to financial regulation, the concept of the consumer financial regulation agency -- center shall be suggested that it be housed in the fdic. is that -- senator shelby suggested it should be housed in the fdic. >> there has to be strong independent authority, an independent head and an independent budget. an independent authority to do what it needs to do. that will be the test we will look for as this legislation moves forward. the president's -- a president

is very serious about this proposal. if you look back over the course of what has happened as a result of and what may have caused a good portion of our financial downturn, subprime lending, the easy availability of creditçó cards, these are things that should come under greater per view in a consumer financial protection agency. >> can that -- >> i don't know the degree to which we have looked at what senator shelby has discussed. to my understanding, at some point this week we are likely to see legislation unveiled.

we will certainly evaluate that, but our test and the president's test is to ensure strong independence for consumer financial protection. >> even without commenting specifically on his suggestion of the fdic, the crux of the debate that might lead to financial regulation bill getting through is will the white house allow or support this being in another agency all? >> i don't think the address is the seminal test for this proposal. i think we have to determine whether or not the proposal put forward has sufficient independent -- is sufficiently independent. can it sufficiently make the decisions it needs to do and affect consumer financial policy in a way that helps consumers,

not just the development of loans and the easy availability of credit cards that in many ways penalize consumers. >> the president told diane sawyer that not having health care negotiations been more public was a mistake because he campaigned on process just as he campaigned on the substance of health care reform. i'm wondering if going forward, as there will be serious lobbying to get 216 votes in the house and 51 votes in the senate? are you guys planning on any additional steps in the name of transparency, whether it is releasing names of members of congress that the president or whoever -- is there anything you are planning on doing in the

name of the form you had on thursday to continue that kind of transparency or are there additional steps are planning on taking? >> i can check. >> in terms of the president's health report, i know he was given a clean bill of health, but there was talk about his cholesterol being hire and smoking cessation needing to continue. is there anything for the americans struggling with cholesterol and cigarettes you or the president want to say about either? >> the bad cholesterol measure was slightly elevated from where it had been previously. i think the doctor had told me that he is a few years older

from when it was last measured. candidly, if you ask him, the diet the campaign is not as conducive -- we were all living and breathing examples of that. i think he would be the first to tell you that he has probably had a few more cheeseburgers and i think you it admittedly tell you he has had more desserts in the last year than i've seen him meet prior to this. >> because of fancy events or because he has his own kitchen? >> i think most people will tell you that if it is available, you are more likely to eat it. i think he has had more access

to sweets and deserts in the past year -- those guys make good desserts over there. he has come on more than one occasion, sampled more than he needed to. the good news is the number is only slightly above where the doctor would like to see it. we were talking on the helicopter on the way back that he probably had to push away from the table when the pie came more than he had in the previous year. onñr smoking, the president continues to chew nicotine gum and i. you to the comments he made in june -- that point you to the comments he made in june of last year, that while he has quit smoking, he occasionally falls

off the wagon when it comes to that. like many who have struggled with kicking that have it. >> is it more difficult because it is the most stressful year has ever had? i would assume. >> i can't imagine that helps. doctor, you saw the report, he continues to chew gum and works hard at it as well as struggle with the each and every day. >>ñi [unintelligible] >> i don't smoke, so i don't know the answer to that. >> of the minority whip told the speaker that if in fact they rammed this bill through the house, the democrats would lose their majority. does the white house believe that is true and is there any sense of the calculation --

>> when you say ram it through the house, what do you think he meant? >> reconciliation -- not reconciliation -- but put pressure on the numbers to get this thing through. >> i will let eric try to explain what he met -- what he meant. the president'sñr -- president believes strongly that he was elected to make progress on issues. issues that come founded and conducts -- compounded and next congress for years and health care is one of the bigger ones. congressman kantor is probably focused entirely on the next election. -- congressman cantor is probably focus on the next election. the president is focused on the next generation and making

progress on some of these issues. i'm sure a number of you saw the numbers in the newspapers this weekend -- it was about the cost of doing nothing. what happens if congressman possible ca -- if congressman cantor's of the play went out? a nonprofit health care group in new york says we will have substantial deterioration in what we have. çóthis is bill -- nearly every mainstream analysis calls for medip& costs to continue to climb over the next decade, outpacing the growth of the overall economy and increasing faster than the average paycheck. those higher costs will translate into higher premiums which means fewer individuals and businesses will be able to afford insurance coverage. more of everyone's dollar will go to health care and government programs like medicare and medicaid will struggle to find the money to operate.

it will break all of our banks if we do nothing said peter lee, who oversees the pacific business group on health. it is a course that is bankrupting the federal government, businesses and individuals across the country. the fact that the typical price of family coverage now runs about $13,000 a year and premiums are expected to double to $24,000 for a family by 2020. if we do not act, this is what the future is. if we do not act, insurance companies like and some that are sending letters to individuals on the market saying they will rise 39%. that's what will happen. congressman cantor says let's start over, but health care inflation is not starting over. being dropped because you have a pre-existing condition is not starting over.

>> is their analysis from the white house that the possibility of losing a certain number of seats -- is there a political calculation? we're focused on trying to move forward95cñrñrw3çdc?; the milk of health insurance each day. çóñi>> why did the presidá6u3jtt give any voicejf to the single payer and the government plan during the whole debate? second, why are the republicans and some democrats so solidly ñrñiñiagainst everything propos? >> an excellent question. ñiñiñióñrçq(ñiññiñrxdxdbut thed

question. i was reading an article before i came down about the fact that the filibusterçó is on a record- breaking pace in this congress. we have seen that the no(ajz of either actual filibuster or the threat of a filibuster use and like we have never seen before. ñiwe mentioned this on friday -- we cannot even get an emergency extension of health and unemployment benefits for those whose benefits expire at midnight. we cannot even get agreement on moving forward on that. you can't even get an agreement with the person holding that up to let the senate vote on what he wants to hold up. >> [inaudible] >> i'm trying as best i can.

the senator from kentucky -- sometimes even using their names does not create theñr shame you think wouldó normally engender when there are people that lost their unemployment benefits because one person decided they're going to go up the works. it's just not how it's ever worked. i don't know why. >> why did he not fight for a government plan? >> we have debated this number of times. >> he never explained. he always acted like it was out there. >> i think president put forward a plan he thought was best for the american people. >> and he doesn't think government planned -- >> i think there are strong elements in the exchange that would set up the types of choice

and competition the american people need to get access to affordable health care that creates a benefit and a plan that works best for them. çóthere were a bunch of differet options for this and the president has landed on one that not only does he think will be effective, but he thinks that the ability to become law. >> does he think medicare and social security do not work? >> i think he believes there are programs that have, for many decades, worked enormously well. we have to put them on a sounder financial past. but there is no doubt that whether it is through measures of senior citizens that are no longer either in or facing the threat of poverty or no longer have or face the threat of not having health care at the time in which they need it most, those are tremendously valuable programs. >>ñi i think some people think

it's a trivial issue -- since he is setting an example for our entire nation when it comes to smoking. health is obviously a concern. have you ever heard him talk about smoking from that point of view of setting an example? what it means for those -- ru%ì+ it means for his health? >> in the remarks i pointed you toward, he says i don't smoke in front of my kids -- i think he understands that what he struggled with this not a good thing for his children to see or for anybody to see. ñii do not doubt he would tell you he wishes one said for all he could wipe away that struggle. i know that he works on it each

and every day. he understands. ñi>> do you know where and whene does it now? he manages to avoid the cameras and children -- >> we are all running around here, so i'm not with him 24 hours a day. >> is still at 95%? >> yes. >> he hasn't made any progress since then? >> staying at 95% doesn't change the percentage, but he is controlling the problem and an addiction that i think he has talked about struggling with and, in all honesty, millions and millions of people across the country do. my father struggled with quitting. he was not as good as sneaking çóitçó as some people have, ande

did not quit until a doctor told him he had lung cancer. so i think there is a lot of struggle that goes on with this and i think he is one of those whose troubles. >> he said at one point during the campaign that he smoked five or six a day. he is not doing that? >> not that i'm aware of. i don't remember when he said that. >> on the campaign -- >> let me take a look. >> on health care, is it wednesday about the way forward on process or the way forward on [inaudible] >> my sense is both. >> so we may hear some new proposals we haven't heard before? çó=sqj the president feel it is part of his job toñiñi explain r justifyçó the use of reconciliation orñjr educate the americanñi people on what thatñ, given the fact republicans are

referring it as -- referring to it as ramming the bill through. ñi>> i think he would hope that would be the cause many of you would take up. xdiñrñiçóx#%nk he willñiñi discs andñiñiñi policyokiãas ás haveñd in here. çói don't want to get ahead of with the president might decide. -- get ahead of what the president might decide. i think we have spent a lot of time over the last two months, whether on theçó issueñr of aree serious about creating a deficit commission, how and where are we going to try certain terrorists q!%m=)ñ country, and things le reconciliation. it is enormously informative to watch a groupxdñkoñkóx, of peo

through each of these examples, but we ought to setx@÷ up añ!óçt i% voteñi onñi it and then decidedy were not for what they were co- sponsor in just a few weeks earlier. or, when criticismsñi about how asia ballmer are dealt with -- how a shoot ballmer are dealt with and don't get called out for eight years and an analogous situation happens in detroit and suddenly everyone wants to handle it differently than they said they wanted to for the previous eight years. then you take the view of something like reconciliation, something that has been used, it was the vehicle for welfare reform. it was a vehicle for the bush tax cut in 2001 at a cost of 1.3 trillion dollars. it was the vehicle for the tax cut in 2003 at a cost of $350 billion. it is how schip came to be.

it is how cobra came to be. that provides the ability for an individual loses their job to çócontinue their health care coverage when that happens. ñiñiñit(t(i think there are virt limitlessñiñiñrñiñjm quotesçó s they view it differently now. ñiñkó>> i was wonderingñi whethe e needed to advocateingñi whethe that? >> i do not know whether he will address it specifically, address the specific hypocrisy or not. >> is he irritated at all that's his medical report has to be made public and the whole world knows about it? >> i don't think so. i spent time with a doctor friday and saturday going

through the release of this. it's obviously important for those concerned about medical privacy to understand that the president had given permission for me to have a discussion with the doctor about his medical records as well as for the doctor to release that memo. the president understands that his health is more than just something that should be of concern to him and those who know and love him. that his health is important based on the responsibility the american people gave him in the election. he might not want to explain why he had a few more desserts last year that he did the previous years. >> he is so skinny, you know.

>> i was joking with the doctor about this -- you guys think that he eats carrots and celery. there's more cheeseburgers, fries and by the previously knew. >> when senator michael but got a primary challenge, [inaudible] are you going to take a position in the lincoln senate contest? >> we support center lincoln as an incumbent senator. >> does the president fielded a responsibility [inaudible] >> the president helped get votes in all the go-arounds.

i don't doubt he will do the same thing this time to get the votes necessary to pass health care. >> candy participants in last week's meeting expect to hear from the president -- can the participants in last week's meeting expect to hear from the president? is he going to talk to both sides and tell them what he intends to say? >> i don't know whether he will call each and every one of them are not. >> but the leaders on both sides? >> let me check and see what the plan is for notification. >> is this part of the agenda tomorrow? is he going to talk about healthcare reform in georgia? >> no, he will focus on jobs and visiting a couple of businesses to borrow, talking specifically about details for whether its

asian and retrofitting as part of the economic plan. that's an idea we rolled up in december, but details will have more of later today. >> does the white house subscribed to the notion that there is more than one way to register bipartisanship on health care? mainly that it some republican ideas are inc., it doesn't matter whether the bill ultimately get any republican votes? >> ultimately how republicans vote on their ideas is up to them. obviously there is a part on our website where we posed the bill that shows the number, a sampling of the number of ideas that had been accepted as a result of the committee process. you saw some agreement last week on additional ideas. quite frankly, taking

individuals and individual small-business and putting them into a collective pool is an idea by many republicans which is in many ways a foundation for a great part of the bill that governs individual insurance coverage. as the president said a few weeks ago, bipartisanship can be all of your ideas and of our ideas. that's not bipartisanship. whether it is getting our economy moving again, whether it is health care, whether it is energy, you will see the president has ideas republicans have said they supported and

enunciated in the past. whether that drives them to supporting comprehensive reform will be up to them. i said this on friday -- what you saw in many ways last week, there was no doubt a fundamental difference in the regulation of insurance and the regulation of the insurance market. i think you have a plan from the president that, through the exchange, will allow policies to be purchased across state lines. the plan the president proposed has a minimum standard for what that insurance has to entail. i think that is important for a number of reasons, not the least of which, consumers have to feel confident that when they are purchasing insurance, it is not something that is too good to be true. it also matters for the rest of us because those of us who do get access to affordable insurance, if their insurance to

continue to not provide them with the ability to get the treatment they need, that cost it passed to you and i.. >> can the white house claim bipartisanship on content is not on votes? >> i think without a doubt i can say quite clearly the legislation includes the ideas of members of both parties in washington. >> [inaudible] it will be a much smaller proposal that we had in the house. that is where we can gain consensus, but it will be a big enough one to put us on a path of affordable, quality of care. does of the speaker have that right? a smaller proposal coming from the president that will put us on the path toward these goals? >> i don't think i would

disagree globally with what she's talking about, keeping in mind that there were differences between the house and the senate in terms of the viewpoint of the house on their bill. >> would you disagree of locally? [laughter] >> i would think globally and act locally. [laughter] i don't -- i think a summary is about right. >> and much smaller bill -- that encompasses taxation and all these sorts of things. >> i have not seen this does of the quote. i'm not saying you don't have a right, but not having talked to her staff, i don't know what she is predicated on. >> [inaudible] >> i think you will see a decent amount of overlap. >> is this going to be the new

bill? both sides are saying we don't have a bill right now so we can i get a whip count. >> i don't know -- i think it will be the next thing for them to consider, but i doubt it will be in late legislativese. i think one can evaluate the broad outlines of where you would be based on the specificity on the internet now. >> you said on friday that one of the tasks of the weekend was to look republican suggestions from thursday's summit and see if they fit with something the president wants to endorse. can you update us on that cluster >> that -- can you update us on that?

>> that is an ongoing process. >> warren buffett says we have that fundamental change that will and the constant increase in medical costs as a percentage of gdp. he was asked if he was in favor of scrapping this and starting over. i would be, if i were president obama, was one of the's answer. -- was warren buffett's answer. >> in the same interview, he speaks equally eloquently if not more so about the notion of doing nothing, about the notion of what happens. as i said earlier, the cost of doing nothing on health care, we know what that means. it doesn't mean a lot for warren buffett because he's ok. but for somebody that lives in michigan, they're watching a lot -- they're watching their health-care premiums go up and watching the small business

there working for a drop their health insurance. he says clearly in there that if it is where we are as opposed to nothing, the senate bill is a good place to start. >> he says that he would vote for the senate bill but he would rather see a plan that really a tax cost. >> -- >> do you think what he -- do you think he is saying what the republicans are saying? >> i think mr. buffett -- i don't think he would evaluate the proposal the house republicans put forward and think -- i don't think it scratches the surface on dealing with virtually every issue, including costs. it does virtually nothing on costs, does nothing on coverage, it leaves regulation

up to insurance companies. if the choice is between the senate bill and nothing, he supports the senate bill. >> the president is not persuaded by his suggestion? >> what has animated his actions from the beginning is dealing with cost. i do not think the last word on health care will always be just be the legislation moving forward. i think the president will continue to look at ways to cut costs in health care. >> on financial regulation, does the white house consider it somewhat of a victory that republicans are talking about a consumer protection agency when it appeared to be a potential sticking point? can there be some headway here

even if there is one without its own address? >> honestly, what is most important is the authority that entity has. if that authority is something that is not constrained by other forces, that is the judgment the white house will make about its efficacy. if you have republicans like senator shelby and others beginning to understand the importance of protecting consumers against various financial instruments, i think that is progress. i think this is many steps to get to where we need to go. the bottom line for the president is we have to have a

very, very strong mechanism for protecting consumers. >> i was wondering if president obama was concerned about the three vacancies in coming up on the federal reserve board of governors and how quickly he plans to pass -- how quickly plans to act on all three? >> i know on the current vacancy, the one announced today, the plan is to nominate somebody in time for their confirmation prior to the term expiring. >> in terms of three vacancies, i think [inaudible] is this of concern to the president that this is a seven member board and is quickly evaporating? i think the president will seek to have nominees -- he will seek

to nominate somebody quickly in hopes they can be quickly confirmed. obviously we spent some time and energy earlier in the year working for ben bernanke's confirmation. as the continuity and stability in the financial system, the president and the economic team believed to be very important. same can be said for the board of governors. >> do you think this will be a difficult way forward as it was with ben bernanke? what he liked to hold off -- would he like to hold off until he can get some other legislation through? >> the goal is to, particularly in the most recent announcement, is to get somebody there nominated in time to and confirmed in time to take up the

seat as the term expires. >> in his speech on health care wednesday, what kind of venue is that? is it an address to the country? >> it will likely be off campus, but in the d.c. area. >> in the form of a speech? >> yes. >> last monday, you were asked twice about the claims of congressman sestak that he had been offered a high-ranking position? >> i have not made any progress on that. >> just to let you know, i was in touch with someone at the pentagon is said there was no discussion at all. but a spokesman for mr. sestak says the congressman sent by his story. >> i was remiss on this and i apologize. there's not much to follow up on. let me check into it. >> thank you very much.

>> does at the white house see [inaudible] >> i think we are trying to draw attention to is the fact that hundreds of thousands of people who have lost their jobs and health care because of that, all that is threatened because one person has decided to stop the entire process. normally, the way this can be dealt with, they can talk about this and -- i can't imagine a scenario in which in almost every other aspect of life, offering that individual a vote on what they proposed to do with not remedy the situation. it's hard to bargain with

somebody when you say i won't do that because of this and you say how about we vote on it and then you say i object. what we are trying to do is highlight the fact that because of the games of washington, hundreds of thousands of people are without the benefits they need to continue as they look for work. it seems to me to be pretty common sense. >> over the weekend, the speaker gave herself and a four effort. given that capitol hill has they have yet to pass capt. trade, health care and financial reform, what grade would you give capitol hill and the speaker? >> as it relates to the health care, financial or foreign, and comprehensive energy legislation, none of them are in law, but understand the house has passed all three of those.

it's hard to argue they haven't accomplished their end of the bargain. i think that is what the speaker was mentioning. if you look at credit card legislation, cutting funding for wasteful defense projects, an economic recovery plan, i think there are a host of things with which the house has played an enormous role and becoming law. in addition to making progress on the president's priorities that you mentioned. >> what about the senate? >> we're working on getting them caught up. >> there has been a lot of focus on the issue of broken government. does the president believed paralysis in washington has raised -- has reached a point where systemic reform idea

worthy project, worry focus on redistricting? term limits or maybe even changing the filibuster rule? >> i have not heard specific conversation here about the issues that you mention. the presidents of the point, and i think last week demonstrated some progress on these fronts, until friday. but last week, the senate passed with 70 votes on a bipartisan basis, passed the plan to provide tax cuts for businesses that hire the unemployed. the house, with over 400 votes, in a less bipartisan way, passed removing the antitrust exemptions for insurance companies, therefore increasing competition available for individuals.

as is true for most things in washington, is that and start. one step forward and one step back for two steps back. as it relates to some like center bombing, -- senator bunning, what confounds 99 other senators is when one decides to stop the entire process while the will of a majority or supermajority continues to exist. the comments from senator kyl over the weekend we are going to get this done -- what center -- was an inter bunning has done has frustrated all lot of people across the spectrum. >> [inaudible] as far as the wednesday thing goes, will we have a definitive answer on whether or not

democrats will consider reconciliation? >> it does not make sense for me to give you the president's announcement wednesday on monday except to say -- what i said earlier is that what he discusses will point toward not just a policy, but a process moving forward. >> [inaudible] >> i think you have a good idea of how we will proceed. >> he mentioned a number of items that passed under reconciliation. but republicans say there was bipartisan support for that. this is strictly a partisan deal. what is your response to that? >> my response would be a continued to move the goal posts. when judd gregg says of the have 51 votes for an idea, it passes.

what did he mean? i think he meant reconciliation was fine for what i want to be reconciled and it didn't mean it if i didn't want it, therefore pay attention to not what i said in the past but what i say in the future in hopes of you not catching the hypocrisy of my argument. >> are you talking about the objection [inaudible] >> the base set health care bill passed the senate not with 50 or 51, but with 60 votes, right? >> [inaudible] >> i said i would check on this. it's hard to me to do polyps -- >> [inaudible]

>> i said i would check on the situation. >> it is march 1st and the national black farmers' association says this appropriation is a 1.2 $5 billion appropriation for this appropriation -- a $1.25 appropriation has not been attached and they're concerned their moneys will not be approved by congress, pushing this to another year or two. >> let me check on where the process would be from our end. i cannot speak to the appropriations process on the hill. >> has the pastry shell -- as the pastry chef been given a mandate? [laughter] >> the president of the pastry chef. >> that's the problem. >> mrs. obama is the woman of

the house and she has talked about healthy eating and has a garden outside. >> on behalf of the president of the united states, i will do this -- he doesn't look like me, right? he's doing just fine. i would love to go to bethesda and have them tell me i was where the cholesterol was on him. let's not -- the doctor would like to see it lowered -- >> are there going to be more of fruits and vegetables in his diet? >> i love this. >> it's a real issue. >> first you guys sound like there is our rugalach in his pocket to snack on and now he is breaking into my office looking for quarters for the vending machine. >> but the potato chips down. >> will there be apples and in the oval office?

>> which she eats a lot of. i had an apple today. i'm going to get myself in trouble. in all seriousness, i think the health report is important. on helicopter ride back, he was the first one -- he said i just have to say no to desert more often. i don't think there is a magic formula accept, as he said, pushing away from the table before they put pie in front of them. >> said the pastry chef has not been given a mandate? >> to keep baking, but use more presidential restraint. >> it's a demand problem, not a supply problem. [laughter] >> not untrue.

>> going back to the cfta, if it's not given sufficient authority, is that not a reason for president to threaten or conduct a veto? >> i don't want to get that far ahead of the process given the fact we have not yet seen all of what the senate bill will be? the house is on record with a strong cfpa. let me just leave it at the president believes strongly that final legislation must include strong consumer financial protections. this is something he outlined earlier. it has been through the house. he is enormously serious about ensuring that as part of the final process.

thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> wraping up today's white house briefing -- the u.s. house is in session tomorrow beginning at 2:00 eastern. they will be working on legislation setting standards for school personnel when using physical restraint on students. you can see the house life here on c-span. the senate dabbled in this afternoon, coming in at 2:00 eastern. senators are working on expiring tax cuts and health insurance for the unemployed. right now, they're giving general speeches. you can see that on our companion network, c-span2. coming up later today, discussion of recent and

upcoming supreme court deliberations affecting gun ownership rights and states. that is live from the cato institute starting at 4:00 p.m. eastern here on c-span. taking a look at the $787 billion economic stimulus plan, now more than one year old, over $343 billion has been committed to various projects while over $190 billion has actually been paid out. these are the latest figures released on february 24th. we have a web site devoted to following the money -- c-span.o rg/stimulus. >> tonight on "the communicators" senator patrick lee it -- senator patrick leahy kick off a technology exhibition highlights emerging internet technologies for congressional members and staff at 8:00 eastern on c-span2.

>> the world bank president, robert zoellick, talks about his organization's role in the global economic recovery. he spoke at the annual bretton woods committee, an international meeting of financial leaders aimed at promoting global economic growth and development. this is just over one hour. >> it is a great pleasure for me to welcome the 11th president of this institution, someone whose ability is well known but whose special contribution to this organization is becoming apparent every day. i think all people associated with the world bank are very happy indeed at your leadership, robert. thank you for your commitment and very hard work. bob's ability to lead the institution is based on a broad record, including a position as

deputy eric -- as deputy secretary of state and trade representative. before that, he held a variety of positions that interestingly fit him for this, ranging from his work in fannie mae to agriculture -- even a short stint in a little-known investment bank called goldmansachs, where he spent a little bit of time learning about the world outside. we have in this president someone who has an extraordinary breadth of vision, breadth of experience, and deep commitment to the challenges that face us now in the international community, and in particular in this organization, which is in such acute need to have additional resources, for which he is an exemplary advocate. bob is going to talk to us

today about global recovery, the role of the world bank. it is a great pleasure to introduce robert zoellick. [applause] >> well, i want to thank all of you for coming here today. i first encountered the bretton woods committee when i worked for secretary baker at the treasury department in the late '80s. i know that this institution and the committee has played a very important role, i know particularly on the u.s. scene. it has been important in trying to pull together bipartisan support for the bretton woods institutions and multilateralism. i want to have particular thanks to jim and to the executive director who does a lot of the lifting. i also want to have a special word of appreciation to jerry cordon bgan, who served as co-cr

for many years. i want to thank all of you for your interest in this. i started the week in an event with shakira. it only seems appropriate that i should close with bretton woods -- the bookends of my existence. i do not know if we can match the crowd we had here on monday. it was outstanding. you can see at those events that your main job is to get off the stage as quickly as possible for the main guest. but i appreciate the excellent program that has been put together. i see i am sandwiched between pascal and dominique strauss. one of the ironies of my life is that i spend a lot of time working with french socialists. i have found some good ones. i thought it might be useful to share some impressions and then

hear your questions and comments. it is an extraordinary time in the world economy, and for development as well. i will open with brief observations on how i see the world economy, and the increasingly important role of the developing come -- the developing countries to grow and sustained growth. i will outline some of the world bank's response and close to some of the challenges we face and ways we can work with the bretton woods committee on those challenges. the good news is that the world economy is no longer staring into the abyss. it gave us a good fright last year. but we are definitely not out of the woods, by any means. one point i have been trying to make atg- g-7 or g-20 meetings is that we have to be alert to the dangers we face in the world economy, but also to some

opportunities. i believe we are in a recovery. i do not believe that a double dip is likely. i think the pace of the recovery is going to be quite uncertain. the reality is we have multiple paces. the recovery is stronger in east asia. this will pose particular challenges for the nature of policy cooperation. you can see this in some of the g-7 amd g-20 discussions. unemployment is likely to remain high in the developed economies. this means we have to@@@@@ )@ @

struggle with bad losses. i had an opportunity to listen to my friend pascal. as he said, so far we have dodged the bullet of a strong protectionist response. but we have to be alert that but we have to be alert that anytime y uing unemployment one has to be careful about protectionism. political leaders will feel the pressure to do something. that is always a tempting tool. another issue we are watching is the fact that a number of the stimulus programs ran their full force through the later part of last year and the middle part of 2010. there is a question of a hand off to a private sector recovery. i tried to watch this closely and to reach out to others.

we saw some signs of inventory recovery. we saw some business investment, gradually, in some sectors. people do not expect the consumer to play the role that he played in the past. frankly, i still have a sense that the uncertainty seems to leave all good reports aside. there is no market for positive expectations. we are not capturing any momentum on this. . .

you have seen in past weeks some of the high-yield bonds have gone up. if you have seen pullback in corporate markets. this is an area one will have to watch all year. from developing countries perspective we are concerned about their continued asset -- for their continued access. i had an opportunity with dominique to attend a meeting in canada near the arctic circle. it was a wonderful opportunity.

just to share with you the sense that i got, i had a feeling that for a number of ministers, there was a sense that they have been able to cooperate effectively when their backs were against the wall, but now they are -- but now that they are feeling political pressure, there is a sense of fatigue to come together. there is a desire, but it will be a challenge. from the central bank, one had a little bit of a sense of caution, that in the early days, people could respond strongly with monetary and sometimes fiscal policies. we are joined a place where the heavy use of those will not necessarily be effected. where all of these add up is that i think we are in a time where there is still considerable uncertainty. in east asia, we face a

different issue. when we take the combination of the growth we see in china and liquidity, i do have the danger of the asset bubbles. i wrote a piece about this in the "financial times." i was worried this was not giving full attention. what you can see in such countries such as australia, that are responding by raising interest rates. they wait to follow the fed. if they do that in this case, they may find the price bubble's growing. if they are caught in a bind. if they raise interest rates, you will see some deviation. -- some deep appreciation. you are going to get some sense from developing countries of some of the challenge of this.

it leads to the broader question of when you attend meetings is always present, how does one moved to a more broad rebalancing? another part that may be inevitable, but i think is an issue, undoubtedly when you have a huge economic downturn like this, it focuses a new look on public policy issues. that creates its own sense of uncertainty. if you would look at potential investors in health care, the environment, automobiles, it is not clear how these will work out. i think that is another attention leaders will have to face. if the consumer is not the source of growth, how will business investment respond next what i think -- respond?

what i think is worth noting is that it is the developing world leading the recovery. you saw the picture in china and the numbers out of india. what is different -- from this crisis is that a lot of the developing countries had paid down their debt. coming back to the trade issue that you just heard from pascale, some of the numbers tell the story. the imports for the developing countries now exceed their prior peak, which was april, 2008, by 7%. for high-income countries, that are below that peak by 14%. now, this is one reason why we and others have tried to support them with financing and tried to learn some of the lessons of the

past. one of the things coming out of the 1990's was a look at what worked and what did not. macro-economic stabilization was not enough. if he did not focus on safety net programs, you could lose a generation or part of a generation. that is what happened. with poor nutrition, kids did not get a fair start. devastating effects. one of the things it we have tried to do in response a share the experience about our programs -- how to expand and build those, or in some countries work with u.n. partners like the world food program and, again, one always has to keep one's fingers crossed, we have been able to

support that. one other area we looked at, for many of you looking at the chinese situation in the 1990's, you can recall that they put a lot of money in infrastructure and created jobs. we have been trying to work from both the public and the private side to support countries with the infrastructure polish, because it is not only a question of command responses, but a question of future productivity. we are trying to emphasize that. that they have done a fantastic job. we have tried to put up some new facilities to try to deal with some of the particular challenges to have the private sector respond. so the question of the handoff to the public to the private sector is not only a developed country issue, it's clearly a developing country issue. i think from a bretton woods conceptual perspective, some of

the issues that pascal was touching on, i think an important observation is that over the medium and long term, we're going to be moving to an international system with multiple poles of growth. the response is no longer going to be of what happens in the north america or europe. you can't open up the newspaper without seeing the discussions of what's the developing world and compare that with the late 18990's, where the question is will china hold the currency pay. if you look at the stories, you didn't respect the response to come from those countries. well, i believe over the next decade, this is not just going to be a china or india story. it's a southeast asian story, a latin american story. there is potential in africa and other points as well. that's where we can come in on the development side. now just to give you the, kind of the bottom line number. since the crisis hit its full force about the middle of 2008, we have done about $89 billion of financing across all our arms. that's the ibrd lending, the

and our risk insurance and others. if you look at the numbers in the 1990's, there was a big increase in support, but this more than dwarfs it and the demand is frankly not slacking in any amount. now if you look at what i also emphasized and i really compliment the team here at the world bank group, while we were trying to support our clients in this fashion, we also tried to keep an eye on particular problems and to innovate. here we had a little bit of a head start as many of you recall for many of the poor countries before the financial crisis hit, it was a food and fuel price crisis. we worked with our board to put in a sort of fast response facility to try to help with some of the problems, particularly in food prices, whether it be some programs like school feeding, whether it be fertilizers, other types of support. that is more morphed into a broader agricultural turel effort that you saw coming out of the g-7 and g8 meeting and

the united states has played a particularly important role on this. on the private sector side, pascal was referring to trade finance. our i.f.c. team identified early on that the guaranteed programs we had weren't getting picked up because at that point was a problem of liquidity. we were working very closely with clients to add global liquidity pools. as many of you know, at that point credit markets were sort of frozen, the key was to bring back the private players, create finances is usually not a risky line of business. everybody had pulled back. we tried to design these so for every 40 cents we put in, we would get 60 cents from the larger banks and tie in the international fans trade network with some of the smaller players. with the help of the japanese government, they put in $2 billion and we put in $1 billion to a bank capitalization effort. so part of the discussion you obviously read in developed countries is well what would be how you support the banks and

did you nationalize and put money in. we were concerned that in many developing countries, if there were nationalized it may take a long time to come back. so we use this fund to partly capitalize them. this has been very also valuable in working with other partners, for example, the european bank for reconstruction development and the e.i.b. because as many of you know, you had the particular problem in the banking system in eastern europe. microfinance, many people know the value of it and are unaware they are not deposit institutions. they depended on cross border flows. we work with governments to put tooth a pooling system to help microfinance. infrastructure, we would put something together with public-private structure because we wanted to make sure we didn't loose the process of how do you connect them together, not only in financing, but also in the management of these projects. one of the interesting changes

about what's happening in the world economy is there is some fantastic innovations happening in developing countries such as india in the infrau practice structure sector that it would be useful for some of the developed countries to look at. i met a couple of the governors from the u.s., had a national governor's meeting and people are talking about the problems of obviously large budget deficits. frankly, a lot of states are sitting on big assets called infrastructure and there is some possibility of using financing methods that we see in india to help some of the financial needs in some of the developed countries. and this is partly what i think we're going to see. 20 years ago we're at the start of the bretton woods system, it was a north-south exchange for developing countries. we're seeing south-south exchange and i believe the possibilities for some south-north terms of exchange of knowledge and information. another key area that we came up with, distressed debt.

we have tried to help in some cases, we're working with russia and central and eastern europe and some others as to help some of the countries be able to restructure their debt, get back on their feet and move forward in a process. some interesting innovation, and what was particularly interesting about this is that with these different facilities we created, really over the course of the past 12 to 18 months, we brought in about $10 billion of funds from others. so it's a good mobilization device. we're also planning some seeds that i think are going to be very important for the future to be a little cautious here with the s.e.c. requirements and probably early next months, we're going to be launching an equity fund with@@# ok

in the developing >> we have had a very good record over the years. really important over the long term, many of you know the history for the bank is to raise debt and make loans or make equity investments in the case of i.f.c. this is a model that we created an asset management corporation as a subsidiary of i.f.c. to help manage some of the capital flows using our platform. now, fortunately, as the crisis hit, we were in the position where we had the capital to expand and, again, one of the great sort of unsung success stories here and it really is

due to the financial team, i think most of you are pretty aware this is a sophisticated financial institution. this is not plain vanilla stuff we do all over the world. we're all over the different innovations and trying to use risk management for developing countries. and i think we're one of the few institutions that didn't get hit badly in this process. that really is a compliment to the financial team. at the last annual meeting we had in istanbul in october, i alerted our governors and the ministers that while we were in a position to lean forward and support the developing countries for a time, we were going to have to look at the possibility of developing more financial resources if we were going to continue to do so. so as jim mentioned, we're in the process of seeking the first general capital increase since the bank since 1988, bill will remember this from the

ways and means committee. i ironically remember it because i was with secretary baker at the time so i got the other book end from the treasury side. i get it from this side. the other part that is important -- and this again i think tells you a changing nature of the bretton woods institutions. we zined this request as part -- designed this request as a part of a larger financing package. what is most striking if you think. developing world area where there is a question of liberalization in the growing markets or if you think about the meeting in copenhagen where there is a question of sharing low carbon growth, we're putting together a package where 50% to 2/3 of this will come from the developing world. so this is really emphasizing the muletity of this institution. now a.part is we raise prices once and we are looking at another price change related to maturities, but another aspect is we're combining this with a

change in the voice. we're moving up some of the shares for some of the developing countries though we'll have to pay for those shares. one other aspect where i'm appreciative of the willingness of the developing countries to work with us is the history of the bank was if you were a developing country, you purchased your shares with 10% sort of reserve currencies, 90% with local currencies and we often didn't have access to those local currencies to be able to count as capital. we have worked with the chinese, i was in russia last week, they were forthcoming. work with the sawedies and the mexicans are forthcoming. we will pick up at least $1 billion of capital through access to those terms. these are things that jim, it was sort of untouchable 10 years ago. as part of this, we have committed to also be keeping a flat real budget, but as important as this is for theñi financial resource package, the point thatñr i stressed, i was paris last week with president

sar, i have been talking with members of -- sarcozzy, i have been talking with members and it's important to have a common set of interests. maybe people will contribute some slightly different ways. we are trying to think about as we look at the next replenishment. i.f.c. is constrained now in terms of its growth but we are looking at a special capital increase for i.f.c. and one of the things that is quite interesting is that for some countries that might actually go down a little bit on their ibid shares, they're interested in contributing more through a special capital increase for i.f.c. we have a market test about willingness to do this. frankly, the pament that we can raise on this depends on how much the u.s. is willing to let its share come down. another good aspect of this is that many of you know the u.s. share at the ibrd is a shade under 16%. it's 25% at i.f.c. people haven't bought the

shares. this lessens the burdens for the u.s. if it's willing to go down into the some degree and we're having discussions with the u.s., the same time that it raises capital. another idea that year exploring that i think has its own merit is we're looking at a rather long-term of a counsel nature that we believe a substantial percentage would allow us to have capital. that's a useful device in any vent. that multiapplies our financing. it would not change the voting pattern. again, the purchasers of this would be the developing and transition countries and it's a way where we can get resources to do good things, get buy in and also emphasize some innovative methods. one of the things that at the start of the last time when we came in that we were able to do was i.f.c. had some very good returns. so really for the first time we were transferred about $1.75

billion of i.f.c.'s earnings. frankly, the danger of this is you get much more volatile returns. one of the issues we are working with if we can change the core basic business of i.f.c. and this is what lars and his team are doing to focus on these countries and about 50% of our activities in those countries, subsaharan africa, some of the states, that might emphasize in a way the broader holding company nature of this. as part of the capital request, the development committee also wanted us to develop some papers and approach the compliment the general capital increase. one is what will be the directions after the crisis. another is this voice issue where we got a commitment to try to work out the numbers to increase the ibrd shares for countries from 44% to at least 47%. we also added another share

already for subsaharan africa and a set of internal reforms. and i think together we'll put together a pretty impressive package on this that will continue to focus on africa and the poorest, an area where i have had a particular interest and i see it -- residents of this everywhere. the special challenges of post conflict countries or ones that have suffered natural disasters, the afghanistans, the liberias, the haitis, where you have a special mix of security, governance, development, rebuilding legitimacy. these are special problems beyond the special development discipline. and this year we'll try to bring together the state of knowledge on that. collective action issues, for example, global climate change where we have done -- i have been very impressed with the work kathy and her team, we have created these climate investment funds with contributions of $6.5 billion

with some of the developed countries. so far with our commitments, we have been able to leverage these about 10 to one. so at a time that the developed countries are worrying about budget expenditures, i was, again, up on the hill yesterday and saying, look, we can multiply these 10 to one with other bank resources, 30% is the private sector. it's a power case. we have continued to focus heavily on the governance issues and the anti-corruption which are obviously fundamental to this, but going back to the point i mentioned about this recovery, recognizing this is not just a world developed in the poorest. it's a question of how do we get these multiple poles of growth and how do they also contribute to the other players. the critical development of the private sector, also. internal reforms is a full list, just to give you a flavor of some that you know how multilateral institutions work, a lot of these took a lot of lifting. we're now substituting an access to information policy

that is basically like the freedom of information act that the u.s. has. so unlike the traditional approach where you would just have what's called the positive list, you would list the information you release, we are moving to a negative list. you release everything unless you exclude it. we're putting up a special appeals body, judges, to make this determination. what is also interesting is part of the success of this was the strong support we got from india because india has put in a new freedom of information act. so you can see, again, some of the commonalities across traditional lines. mr. volcker is doing a lot of subjects these days. he did one on the corruption issue and he put together a commission that identified a series of changes we need to implement. we have those well implemented. he has been very supportive. many of you know the traditional lending from the bank was the investment loan. given the structure of the institution, huge amounts of time spent on investment lending to bring the

presentation to the board, but perhaps not the proper balance in terms of monitoring what happens to the loan afterwards and frankly making a risk management calculation based on the nature of the loans. we're changing the nature of the investment lending. one of the things that jim started here which i'm in some ways always amazed how we operated without it is a decentralization policy. we have decentralized a lot to the countries, but we have to recognize if we're bringing knowledge and learning, we can't have experts in each of those countries. so how do we use the matrix of the organization to combine knowledge and learning across countries. we do that relatively well within our six regionses. we don't do it as well as we need to across regionses. we're looking at some of the decentralization and matrix and knowledge and learning issues. in general, this also only works if it relates to the people and our head of human resources has started"áz move the system in some very

significant ways. many of you know the bank and know multilateral institutions would recognize how sensitive this is, we have started to of term contracts. it doesn't mean they can't be renewed. it doesn't mean that we won't have people inñi a permanentçó position, but, frankly, if you're going to change with the changes in the international community, you can't have everybody tenu@ef for life. it just won't work. if you're not going to be growingñr added personnel. if you look at some of the early changes in the bank that came at the time that the personnel was increasing and this requires a lot of sacrifice by people in the bank. if you think this is easy, (i how many civil servicers you know are willing to go to term contracts. this package is trying to come together for our spring meeting. that's why this session is very, very timely. in a way,çó thisñi is a wonderf connection to the bretton woods committee because what i refer to what we're doing is modernizing multilateralism.

gr institutions created out of the multilateral bretton woods system in 1944 and years after yards and try to overhaul it for a different networkñi that pasc3 described. a keyñ2i part of this is a sha of responsibility. some of you know when i worked with china, imy coined this phrase responsible stakeholder. >% trying to doçó here. it recognizes it's a network system. to be effective, we have to work with n.g.o.'s, regional development banks, private sector. we're not a month nop list or ol gone listñr in anything. something that i know jim pushed very strongly and i think that is something that will always be a challenge, we >% institution who are very smart and analytical. we need to have our focus on problems for clients. sometimes the first solution doesn't solve theçó problem if doesn't meet the political economy needs.

so bringing that into the culture is something that i found as we, frankly create the space for peopleñi to do so, people respond very well. it's something we need to keep focusing on. a key point here and this was made by a european colleague. i thought i would really hit it at home. when i go to talk to members of the congress, parliamentarians in france as i did last week, there is a sense the world bank is there as a sense in american english, it's a charity for the poor. in europe, it's a sense of solidarity for the poor. this is a transformed world because what we're really talking about is mutual self-interest. if you're talking about sources of growth in the world and from the developing country, if you're talking about sources of ideas, if you're talking about having developing countries help you on climate change. if you're talking about brazil help you in haiti, this is a transformed type of model that@ #

>> the last point i would say, as many of you are from the u.s., the u.s. administration has been very supportive. obviously, congress has a lot on its hands but response that is pretty good. assuming that we have this package done in late april, coming out of our spring meeting, we will face the challenge of an authorization process. senator kerry has already been supportive. chairman frank, as many of you may recall, in the case of the bank, we go to the bank committee in the house. overall package. to give a a rough sense is i think for the u.s., the general be a little bit, $100 million a

year over fiveñr years. while that's notñi insignifican when you think about the benefits we get where in the case of the u.s., it's leveraged atñi 30-1ñr with othe shareholders and other borrowing. in germany, it's 100-1. you get a lot of development benefit for the investment. another issue of this and because i know many of you have broader interests. this will be done as a package with some of the regional development banks. we work it$ them on their resources, their reforms to bring this together. and then we will face, as i referred to the challenge this year of bringing the momentum for the next ida, the 79 poorest countries where we give grants or long-term loansñi without interest. again, in the spirit of trying to think through these issues, we're going to be talkingñ@vith the donors about some different ideas about trying to approach this. times the bretton woods committee has been help and

bill is somebody who soldiered on this over theçó years, this process will obviously require authorizations andçó appropriations. i saw the senior house appropriator this week and the senior senate appropriator this week and we have pretty good relations. in a time of conflict, i have been trying to emphasize, from the u.s. perspective, this could be aq bipartisan issue. if you look at what the bank does, we're one of the key players in afghanistan and pakistan. as many of you may not know, but i got an email already this morning, we got a fantastic team in afghanistan but bombs have gone off and they were reporting how they have taken care of people. the programs in afghanistan, they have been one that the bank has been at the center. when you read about tony blair working with the palestinians creating hope and opportunity, those are ourñi people and resources. we pair up with him just as jim had done after he left the bank.

liberia, yesterday we approved some lending again for iraq connected to several reforms. probably about a week from now, i'll be headed down to haiti and we're trying to work with the different consequences sis on haiti. i dealt with central america at certain points in my lifeñi fro diplomatic and trade. i would like to use some of the development and regional integration to support the central american process, food security. a lot of this lending, if you think of the countries that it's gone to and you think of u.s. interests, well, frankly, we have done a lot of lending to mexico. i think mexico's stability and growth is pretty darn important to the united states. colombia, egypt, indonesia, and what we're seeing it doesn't hurt u.s. companies. we have gotten a lot of support from the u.s. business community and put together letters of support for us on this issue. as i mentioned in the area of climate change, frankly, i think we have not only brought more people into this in the

developing world, we could use theñpi resources quite innovatively for clean technologies and for adaptation. we look forward to working with the bretton woods committee. you have been a great partner in the past. we hope particularly asñi we de with some of these legislative issues we can tap some of your expertise in relationships. and,ñi bill, you and i have don this in different aspects before. i think in particular, one of the things that i know that, may give a better chance is when i talk with some of the republicans about this i get some resonance on some of these issues. i think we can try to bring some people along. it wouldn't be bad to have something done in a bipartisan way in washington. so thank you. [applause] >> well, i think i can appreciate more thançó most people the breadth and the innovative quality andñr the stamina that bob has brought to

this institution and firstly, let me thank you on behalf of all of us for the leadership you have given and areñr giving and the great strength that the institution, building on the good things of the past and adapting to the present and i think all of us are grateful to have you in this job at this time. i have a series of questions and let me ask the first, which is as follows -- it comes in, congress will soon be asked to fund major capital increases for the world bank as indeed you mentioned and some of the regional institutions. what are the best arguments that can be used to convince lawmakers to support assistance that seems to go to the countries that compete with the united states? you touched on it, but if you could amplify it would help this questioner. >> well, one of the nice things about economics compared to some fields is there are

win-win possibilities. the core point here is i think in the case of congress and the american people, they can help themselves if they are helping to provide the financing for a number of these countries, not only because it's important for their stability, but also it becomes an important source of growth. what i found, jim, is probably the most effective way with members of congress is the way i touched on at the end. you bring it home to real countries. i talk about what we're doing in afghanistan in the middle east. there is a lot of interest in liberia and i just met with ellen johnson when i was in africa about two weeks ago. but also some of the bigger countries. if you think aboutñr you know, the roles of indonesia or mexico or colombia, these are countries where, as i mentioned, a dollar put in for capital in the united states, well, with 15% share you get a

multiplier effect of at least six and on top of that we borrow about four or five times, you get a 30-1 use. so when people want money spent, that's a very important dimension. another key part which i touched on is this notion of a shared responsibility. and i really am very pleased -- and this is a compliment to our board and the capitals working on this to be able to come up with a package where everybody kind of shares some of the load in the process which i think will help politically along the way as well. so i think those are some of the core arguments, and i think also from the perspective of some of the issues that in an american political context are important on the reform agenda, we got a pretty good record. we're driving those forward effectively as i mentioned. i guess one of the things that was interesting was when the prospect for a capital increase first came up, we were without

much trouble and my colleague was part of this. we were able to get n.g.o.'s as well as american business groups writing letters of support. this is a support to the testament years ago that they weren't so friendly with the banks. and working with the partners in food security and get the business community, that's not a bad place to be in terms of the political model. one other point you mentioned is kind of the -- is the competition aspect. and here again and one of the things it's important to keep in mind is that 70% of the poor people in the world are still living in what are so-called middle income countries. if you're concerned about issues of health or you're concerned about education or giving kids a fair chance, those are programs that we need to customize for those that might not be the absolute poorest. >> i have a second question, in fact, i have many questions,

but the second one is despite major advances in the fight against poverty, the global economic and food crisis now raise questions whether the millennium development goals are still attainable. what is now the realistic assessment of the attainment of these goals? >> well, i always felt that these goals were important to try to focus the attention of policymakers in developing and developed countries on priorities, whether it be cutting poverty in half, some other nutrition issues and some of the health topics. not surprisingly, you're going to see the results vary by country and region. it was already difficult before this crisis and clearly some countries were not going to attain them. some would attain some but not others. i think it's a north star for us to navigate towards and continue to try to emphasize

these points. let me give this in a very realistic context. one of the issues that came out of the millennium development goals that i have tried to advance is the first my lenan development goal which is to cut poverty in half has a subgoal related to nutrition. right before the start of the food price crisis, a read an article that talked about nutrition as being "the forgotten" millennium subgoal or goal. it didn't get the attention or resources. when you look at the criticality of nutrition for a healthy start to give kids a chance to go to school, the brain development, other aspects of productive society, it's absolutely fundamental. and that's part of the thing that led to the event we had with shakira which was the matching event for the bretton woods committee. she is now a proponent of early childhood development. we have some records and experience with this. we are going to try to use some of the latin american summits

to try to drive this higher on the agenda in latin america. i would like to take the experience with this region and expand it to others. i see the goals, not in a sterile sense, but i see the goals as sort of a living target of what should be guiding some of the policies. >> thank you. you touched significantly on india and china and the move to asia in the current economic climate. could you give some further amplification of your views for the future for africa given the increase in population and the projections of reduced per capita income compared with asia and many other countries? >> well, i was just in africa about two to three weeks ago. i did a stop in west africa. i was in sierra leone and coat var which is frustrating because it needs to move forward with the electoral

process. i went to the african unit summitñi also. i guess subsaharan africa is such a diverse place, it's always risky to generalize. i would divide the development prospects into three categories. the first is there are about 17, 18 countries with about 1/3 of the population that prior to the crisis were growing at about 5.5% to 6% over the years over 10 years. not insignificant progress. these are the countries that are drawing more investment and the equity fund possibilities and in general, if you visit the leaders of these countries and you ask them what are their priorities, it's very interesting. they talk about energy. they talk about infrastructure. they talk about regional integration because many of them are small markets or don't have access to the sea linked to global markets, the point that pascal was making.

they want a healthy private sector and of course they want to focus on the basis of social development so their people can participate. if you think about that agenda, it struck me since i have always had an interest in history, very similar to the agenda you would have heard in western europe in 1945 or 1946, the energy, the infrastrarbgs the regional integration linked to global markets. the only difference, if you took european thinking circa 1950 and african thinking in 2010, the africans have a higher value for the private sector than the europeans did in 1950. the europeans have come around. those are markets we want to invest in. the second category, maybe nine, 10 countries also grew quite well, in fact, maybe 9% a year over a decade, were the oil producers. and there they're challenges is governance. how do you make sure the benefits of energy or other mineral production gets more

inclusive growth, how it benefits other people, how you avoid exchange rate problems like the dutch disease. so that defines the nature of the challenge with those countries. the third, and this referencesx the particular interest we have in sort of post-conflict or conflict countries, are those that drag themselves and their neighbors down because of conflict and security which is one reason we focused on it. in west africa it's so striking to see, when i was6z talkingçó people inñr sierra leone, many the people in the united states may not recognizes it stemmed from charles taylor coming over the border and stirring up difficulty. i mentioned the other, the infrastructure is good until you get the political unify indication, it's going to hurt all of west africa. so these notions about conflict states are important, not only for their own people, but we have done the economic research that shows if you're a neighbor

of a conflict state, your growth will be 1.7% less a year. so it's important to see those issues in the broader development context. so i'm actually bullish on african prospects. there is a "newsweek" piece that comes out this week or last that looks at some of these. there are some great investment possibilities. take one at the african union summit. this is a good example of a potential with a little bit of novel thinking. in the past, i think it was eight or 10 years, there has been $50 billion invested in subsaharan's africa's telecommunications industry. this wasn't all done by government. the government created the enabling environment and you have people who created incredible systems. now, we're doing work withñrt( i.f.c. that is lof[hng at some offsolar grid development. we're looking at private health care. we're doing a private project with the gates foundation and again, some people don't recognize about 60% to 70% of

the health care in africa is done through the private sector. this isn't top-end stuff. the public sector isn't providing it. in india it is 80% to 90%. india has some fantastic examples now of not only hospital-based care, but frankly we're looking to see how they could be applied in africa, but as some of you may know, if you look at the cataract and the heart surgery work being done in indian hospitals, it's as good as it is in the u.s. it's much cheaper probably because they don't have some of the lawsuits for malpractice but it's productivity issue. they move people in and out. there are some very interesting lessons here, particularly if k"táechnooéy. telecommunications, this is another one from the indian context, but you can see the south-south connection. for enough you who have worked in the telecommunications industry, you know that the business model is y%á@@@ @ @ r

>> it is not too costly now. these are interesting examples, where it people look at the african market with its true potential, and we try to deal with some basic issues, it could make a huge difference last -- difference. the last point is to connect the china with the african model. i do not want to oversell this. the provincial party secretary in china, as one newspaper points out if it were a country, it would be one of the top 10 exporters in the world. there was a pointed observation. has this crisis moves on, we

should not be involved in the christmas toy and shoe market. we could take production and move it elsewhere. they want to move up the value chain. i admire his courage. if you had said this in any country at a time where you have 30 million people losing their jobs, it is not too popular it signals an interest in some of these chinese firms to relocate to africa. what do they need? they need ports, infrastructure and it is not just for exports. if we could create slightly larger -- larger integrated markets, you start to create demand for some basic consumer and other types of goods. our chinese chief economist came to the meeting and brought a number of goods from local

stalls and in ethiopia. there were made in china. he said these are things you could be making here. how do we take that knowledge, perhaps bring that to an african context, and then support the overall development process? for those that have seen the process starts with textiles and milan, keep in mind that one of the things that was so popular, you have business people that started out in four different economies. they moved their operations to different countries. when they moved, they have the marketing networks. if you could build the basic production, they could market it. in many countries, that is the challenge. even if you build the facility, how deep it into the marketing networks? if we can make this work, this

would be huge. i think all of us have seen these asian examples. it basically started with low- level manufacturing. one of my worries in africa was would the africans be able to follow that path when given the amount of low-wage workers. le series of questions and i apologize to those i won't be able to pose. let me ask the next question. all the m.d.v.'s are seeking capital increases simultaneously. are steps being taken to harmonize policies and procedures and to improve division of labor and to reduce overlap? >> yes, i hope so. i think as the world bank we have a particular responsibility here. from the time i came in, i wanted to emphasize closer cooperation with the regional development books and fortunately we have an excellent set of presidents.

they're a fine group across all of them. we have regular calls from our chief economists, our chief financial officers. we're integrating at that level. we're going step by step. as part of the governance anti-corruption efforts, we build sanctions and tribunals and others. it's a fixed cost. we are trying to work with some of the other developing institutions to see whether we can combine efforts. here is what should be a no-brainer. if we sank a company for corruption, why should they do business with somebody else in the developing world? there is a lot of opportunities in that. when it comes time to the capital increase, i think reality, jim, has forced all of them to say let's to scale down to see what well really need. we have been trying to look at the amounts, see the respective roles. you used a phrase about the division of labor, this is one you really have to customize

and you would have seen this in your own experience. there was a point where people said, oh, well, the banks should get out of agriculture and infrastructure and the banks can get out of the financial sector. we learned the hard way, those were not smart things to do. on the other hand, depending on the competencies of the other players and here i just don't mean the regionals, we'll adjust. let me give you an example from the human services area. a decade ago, something that you were very involved with, the bank was one of the leaders in h.i.v. aids. you now have vertical funds doing a lot of h.i.v. aids work. we're still doing significant work in h.i.v. aids but we're starting to transition to the health care systems. we have funds but the real challenge is how do you interconnect some of these systemly. we're trying to see -- systemically. we're trying to see where we it's a critical area. one other thing i point to and

this is one i was pleased with in particular. in this crisis, some of you watch central and eastern europe know they got hammered because it was the integration model over the past 20 years that was put in reverse. the financing came back, the trade, the remittances and the people came back because in part by the historical in the region. the head of the reconstruction bank and development is as good a partner we could get. we worked closely with him for the european investment bank. we brought in the commission through this process, too. we put together a combined funding mechanism and then we tried to do something similar in latin america. this will have to be the way of the future. and the only way i would say it is, we can't stop with them. we need to work with u.n. agencies on this. we need to connect with private sector players, see it as a

much more complex network model. >> we have time for just one last question and again i apologize to those whose questions i didn't ask. would you discuss a little more the direction you see if you're anti-corruption program, what are its primary immediate program objectives? >> well, the key in this to really start is that jim started this effort and anytime you deal with an issue like corruption, it's going to be sort of potentially contentious. and the question was really how do we main street it into our work. to be very frank when i came here, one of the problems is we had a series of reports, the best way i can describe it is my first week a got a number of 50 and 60-page reports in sealed envelopes that said only you can look at this and can't talk to anybody about it, not exactly a system that works.

one of the things that volcker did and he had some specific recommendations. it was a tremendous help. he basically went through the drama of when we do this -- drama of when we do this work, it a lot of purex accusation of blocking and tackling which we are trying to do. but in addition, the point that i have tried to emphasize, and again, we have a series of mildstones in each of these areas, we need to integrate it with our procurement work, our risk management work and the hardest thing for this for people is you don't want to create a culture where people the issue. the key is to get people to understand this is part of a risk management challenge like other risk management challenges, how to share information, how to draw on others and probably one of the most valuable things that we have launched and this is

something that is a working project is to take the knowledge that we have from cases and be able to develop preventive measures. to give a a practical sense of this, when i was in india in direction the former commerce minister is now the head of national highways, he has very ambitious plans to build highways. you look around the world, highways are very vulnerable in any country to cartels. we have learned some red flags. we briefed him on the red flags. one of the other set of issues here is whether we can build into the design of those projects ways that you frankly minimize the risks of corruption going forward. so we had already started a project looking worldwide on what we learned in the roads areas and we're sort of moving it faster to try to support the indian context. so it really runs through everything that we do. one last point, when i meet with the procurement officers,

i emphasize another aspect of this. and that is it's not just a question of dollars and cents. the more i spend time in this field, the more i recognize the criticality of governance and a public that has some sense of trust in its governing authorities. true for developed or developing countries. i point out that for our junior people they're going to be observed in these countries. if it looks like a dollar here or dollar there doesn't matter to them, that's a lesson that people will take. that's not a question of waste of resources but a waste of erosion or trust in the government. in developing countries, they have been doing it for 100 years or more, you can have a residue. in developing countries, you can lose it and not get it back. part of it is building a sense of integrity, not only as financial fiduciaries but public sector fiduciaries.

it's a critical element but in some ways there is analogy to gender. how do you integrate this in everything you do. >> thank you so much. i think on behalf of everybody. [applause] >> thank you for today and thank you for the way you're running the institution. >> starting shortly a discussion of a recent court decisions affecting gun-owner rights. there will also discuss the implications of possible decisions. the discussion live from the cato institute will begin in just a couple of minutes. we will bring it to you live.

the u.s. house is in session tomorrow. they will be working on legislation setting standards for school personnel when using physical restraint on students. you can see the house live, but here on c-span. the u.s. senate gabbled yen reaching gavel dien bien. you can see the senate in session this hour on our companion network, c-span2. the former health and human services secretary tom thompson is securing financial backing for a campaign. he is contacting clients about the prospects of challenging senator feingold. also this, the transportation department will lead off two thousand employees today,

halting construction problems, reimbursements to state governments, and they are being offered furloughs without pay. once again, we are waiting for the start of a discussion on the supreme court's and d.c.'s ban on handguns. a discussion should get underway here on c-span. . .

>> this is a live picture from the cato institute. tomorrow, the court will hear oral arguments on whether the statute relates to states and local municipalities. this is live coverage from the cato institute on c-span. >> i want to welcome you to the cato institute. i am the director of the qaeda center for constitutional studies, which is your host today. we are here to talk about a case that will be argued before the supreme court tomorrow morning.

one might say that it is the second act in the second amendment series that began a year ago in the heller decision in which the court, for the first time, decided that the right to keep and bear arms, which is discussed in the second amendment, protect your right not simply as a member of the militia, but as your right as an individual to keep and bear arms. it was the first time that the court had decided that -- had decided that matter quite so frontily. the question now is does this wright applied to the states? -- does this right apply to the states? the bill of rights was originally written and applied against the federal government

did not until the ratification of the 14th amendment did the bill of rights applied against the states. then it became a question of what rights in the bill of rights were applicable against the states. the unfortunate event that followed five years after ratification was the slaughterhouse cases. in those cases, the court eviscerated the immunity's clause from the 14th amendment, section one. thereafter, the court would try to do under the less substantive due process clause what would be done under the substantive privileges or the immunity clause. it became a very vexing issue after that. there emerged the theory of substantive due process, which has given many conservatives, including those on the court, some sleepless nights because they see it as an opportunity

for judicial mischief to find rights know where included among even our unenumerated rights. the case tomorrow raises the question not simply does the second amendment applied against the states, but on what grounds does the second amendment apply against the states? most people are of the view that the court will find that the amendment does apply, that individual rights goes against states and municipalities. so draconian statutes like that in chicago will be found to be unconstitutional. after all, one of the key purposes of the 14th amendment ratified at the height of reconstruction in 1868 was to allow the newly freed slaves and white unionists to defend themselves against southern reprisals by protecting their rights to keep and bear arms. so the question -- the second

question tomorrow will be whether this will be decided under the due process clause, as all other rights protected by the bill of rights have been found to be protected, or under the privileges immunity clause. will the court for the first time since 1873 revive the privileges or immunity is clause and therefore allow for a while -- a wider array of rights to be protected against the state's? in particular, of various economic liberties. that is one of the issues we will be discussing today. we have three experts that i will introduce just before they speak. we will begin with thames and for who wrote the brief that the qaeda's institute filed -- he is a debt -- we will begin with

the brief that the cato institute filed. having filed briefs in many eminent domain cases, including and a kilo of the new london case -- he is a prolific writer. he has published many scholarly articles along the way on a wide range of subjects. he is also a contributing editor to "liberty magazine." he has written for many national

magazines. in february 2006, he became one of the youngest attorneys ever featured on the cover of " california lawyer magazine." he has been on the lawyer news hour, cnbc street signs, and c- span's book tv. he is a graduate of hillsdale college and of the chapman university school of law. please welcome timothy sandefur ai. [applause] >> thank you very much. i would like to talk more generally, not particularly about the gun rights, but the more abstract constitutional issues that are involved in the macdonald case. this is one of the cases where, if the supreme court goes the way that i certainly hope it goes, it will be one of the cases where, 10 years from now, we will look at this as a major

decision from the u.s. supreme court. understanding the issues in the case requires understanding some issues of constitutional structure and political philosophy. the 14th amendment was intended to be the final word in a debate over the nature of individual rights and the relationship to federalism that had occupied the 19th century. that debate was ultimately the cause of the civil war appeared with the end of that war, the leaders of the victorious union, the republican party, of course, wrote the 14th amendment in order to make their model of sovereignty individual rights part of the american constitution. as in all things in intellectual history, it is hard to categorize things neatly. i will try to do so by labeling the two sides of this debate the state's right to view and the republican he appeared republican, of course, is somewhat inaccurate because that is what they took in the 1850's

when they organize the republican party, but it is as good as any. as i wrote, i brought copies of this if you want one. if we want -- if we run out, send me an e-mail. i would be happy to send you one. the conflict between these two groups did back to the limits of sovereignty. according to locke, a pyramid is limited by our -- government is limited by our natural rights. the government legitimate powers are limited by those rights. no government made a private -- may deprive us of them.

[unintelligible] on the other side was william blackstone writing in the 17 sixties who explicitly rejected that theory. he said its u.s. supreme, irresistible, absolute authority the parliament could do whatever was naturally -- whenever was not naturally impossible. thomas jefferson expressed some concern over the increasing popularity of blackstone. before the revolution, he wrote to james madison five months before he died, sir edward coke was the elementary book of law students. our lawyers were then all wings. but when the honeyed words of

blocks down became the phone book, from that moment, the nursery of their congress began to slide into toryism. american lawyers relied on blackstone to formulate a theory that, upon separating from england, parliament's absolute supreme irresistible authority went to the states. the states enjoyed power not limited by the natural power of individuals. this is a very convenient idea for those defenders of slavery to embrace. opposed to these states' rights terrorists were the liberals who would then formulate the republican party. john quincy adams was the son of john adams, and after being president, he served in the house of representatives and became the leader of the anti- slavery movement in congress during the 1830's and 1840's

touching on the political and legal implications of the declaration of independence and its natural rights philosophy, he believed that it was not just political rhetoric, but a binding legal document, part of the organic law of the united states. it did not separate america from britain, but set limits on the powers of the state's on government. the notion that sovereign must be unnecessarily uncontrollable is a hallucination. sovereignty thus defined is in direct contradiction to the declaration of independence and incompatible with the nature of our institutions. the states' rights doctrine that he was arguing against threatened to render the declaration of independence a philosophical bdream.

john quincy adams was enormously influential. his closest protege was charles sumner. adams served in congress with abraham lincoln. the dispute between the states' rights followers of blackstone and the republican followers of lock was not the nature and limits of sovereignty, but about the location of sovereignty. before 1787, we were governed by the rows of confederation, like a treat of sovereignty among states. the most important accomplishment of the 1787 constitution was to replace that model. under the articles, congress was dulled by a state legislature. under the constitution,

congress and [unintelligible] beginning in the 19th century, pro-slavery politicians devised a constitutional theory to resist federal power and rising anti slavery opinion, which denied that the federal government was saarinen held that the states alone worked sovereign -- that the federal government was sovereign and held that the states along were sovereign. state governments with no practical limits on what they could do to their people. this was the argument of the states rights party led by people like john and a man named jeremiah black, the chief justice of the state of pennsylvania. he was an interesting figure.

in 1853, he issued a decision that's really articulated these rights. he said that the transcendent part predictions and a pair of the parliament were -- he said that the transcendent power of the parliament were given to the states. although he conceded that the states have delegated some of their power, he concluded that state legislatures contained a vast field of power, full and and come close -- full and uncontrolled. chief justice black left his seat as the chief justice of the pennsylvania supreme court when he was appointed united states attorney general by buchanan. he continued to make these

arguments. sovereignty is in its nature irresistible and absolute. no government ought to violate justice. the idea that national citizenship was paramount to state citizenship and that states could not trample on natural or common law rights was inserted into the creed of the abolitionist because they suppose it would give some plausibility to their violent intervention into the affairs of the states. his belief in supreme irresistible state sovereignty was so strong that, after the war, he committed himself to defeating reconstruction. just as he and other states route rights theorists held that

states were sovereign, others held that the federal government was sovereign. the united colonies had declared independence, not 13 separate sovereignties. and the constitution was issued in the name of the people of the united states. american citizenship was then a different and superior to state citizenship. the reason that is so important is that it meant that all americans enjoy certain rights because they were americans, not because they were georgians or new yorkers or pennsylvanians pin many republicans believe the death -- pennsylvanians. many republicans believe that the rights applied to the states as well as the to do government. on one hand, the states rights

party agreed with blackstone that sovereignty was absolute and unlimited and belong to the state and not the nation. then the constitution was a treaty among the states to limit individual rights at will. on the other hand, there were people like john quincy adams whose theory of paramount national citizenship held that sovereignty was limited by our natural rights and that the nation was sovereign, so that all americans enjoyed their rights as americans, not as citizens of the state. after the civil war, republicans found an opportunity to adapt their ideas into the constitution. they hoped to remove any ambiguity by amending the constitution. if you read the 14th amendment,

that is how it works. that is the order its start seeing. all those born in the united states are subject to the united states and the state wherein they reside. it was the first time that the constitution identified citizenship. it was by undermining this achievement and eliminating the idea paramount national citizenship that the state made its most fundamental error appeared the most important legal error was failing to give effect to paramount federal citizenship. before this amendment, the states had supreme authority over all of these matters. after the civil war had closed, the same authority was asserted.

the 14th amendment was not primarily intended to confer citizenship on the negro race. it was intended to justify legislation extending the protection of the national government over the common-law rights of all citizens of the united states. it recognized a national citizenship and declared that there immunities' that embrace all fundamental rights should not be abridged by any state. a parallel development in state law -- in 1857, the california supreme court issued a decision called billings vs. hall, striking down al that took property away from -- striking down a law that took property away from absentee landlords.

others contend that there are boundaries to the exercise of the supreme power of the state. in 1870, of the same court, the california supreme court, reversed it completely by 1870, californians were engaged in a war against chinese immigrants. one way was to pass a law that no chinese person could testify against a white person in court. if a violent crime was to be committed against a chinese person, the witnesses would be other chinese persons who could now not testify against the defendants. the great mass of governmental powers are reserved to the state, the court said. the absolute right of uncontrolled local legislation upon all subjects most

intimately connected with individual rights was reserved. the federal government was greeted by the compact of sovereign states and their continued existence in the and control the exercise of their cars is an essential element of our system. if the 14th minute had been intended to restrict state powers, we should regard it as we should bail law apparently legalizing murder or robbery. this same retreat from the doctrine of paramount national citizenship can be recognized in the slaughterhouse cases when justice miller's cases said that italy protect those rights that 0 their existence to national citizenship. but then he goes on to say that those rights of national citizenship are a very narrowly limited set of such privileges as the right to travel to washington, d.c., the right to demand federal protection on the high seas -- a guess what?

the state of arkansas? they do not have a navy. miller did not discuss the legislative history of the amendment or anything about why it was drafted. the doctrine of paramount citizenship or anything. the great tragedy after the civil war, officials attendinabd reconstruction. the assertive -- the assertion of states rights principles in the 19th century eliminated federal protection for many fundamental human rights, segregation, eugenics, censorship were all allowed. during the civil rights movement, from the 1950's to the 1970's, there was a revival for protection of some of these rights.

other constitutional provisions, like due process or protection clauses, as well. state and local governments today are still permitted to violate and ignore fundamental human rights. this includes not only the right to defend oneself against violence by owning and possessing firearms, but to earn a living as one chooses. today, of entrepreneurs and business owners are still basically an unprotected against the abuses at the hands of state and local governments. occupational licensing laws and other restrictions deprive people of the right to earn a living and making economic choices about employment, running their own businesses, and the burdens of these restrictions fall the heaviest on those who have no political power to defend themselves, precisely those people who need

it -- the constitution to defend them. fish in the case of adam smith, an oregon college student who started a moving business, ore. required him to get a license for spirit to get a license, you had to ask permission of all of the existing moving companies. you laugh at this, but this is the way every major metropolitan city regulates taxicabs. it is not surprising that the state of oregon had not issued licenses in many years. the general public was not even allowed to issue an opinion on the issue. this law violated his right to earn an honest living, not to protect the public, but to protect the settlers companies against competition. -- but to protect the established companies against competition.

the arrival of her free speech, religion, the press, -- the right of free speech, religion, the press -- if the supreme court chooses to turn over the slaughterhouse clauses, it would be a welcome day for all americans. thank you. [applause] >> we are now like to talk with doug kendall. he previously founded and

directed the community rights council, constitutional accountability is centers predecessor organization. he represents clients form \ state and appellate courts. he is the co-author of three books and of the lead author of numerous reports and studies. he lunged and helped direct the judging the and permit the project -- he launched an helped direct the judging the environment project. he has appeared on television programs and on radio broadcasts. his academic writings have appeared in scholarly journals. his commentary runs in "the new republic."

he is a blogger of "the huffington post." he received his degrees at the university of virginia. please welcome doug kendall. [applause] >> thank you, roger. thank you for having me today. the one thing he did not mention is that we also filed a brief in the macdonald case. it was not on behalf of the constitutional center, but on a collection of some of the most preeminent legal scholars in the country and across a broad spectrum of ideology, ranging from jack altmabalkman and eight

preeminent scholars. it builds upon a much broader collection of scholarship. that includes some of the recognized in giants of constitutional law for the last 30 years. nowhere is the disconnect between the constitution's text and history and the modern supreme court doctrine more pronounced than in its interpretation of the protections and immunities clause. there is broad consensus that indicates that the privileges and immunities clause was supposed to be the centerpiece of the 14th amendment.

the way in which fundamental substantive rights, liberty writ interests are protected against infringement by the government. correspondingly, there is almost universal agreement that the supreme court badly erred in the 1873 slaughterhouse case. virtually no serious modern scholar, left, right, or center, believes that slaughterhouse is a plausible reading of the 14th amendment. that is really the consensus that is embodied in the brief filed in this case. with the privileges or immunities clause read out of the constitution, the supreme court turned to the due process

clause as a vehicle for applying substantive protections against the state and for recognizing and protecting unenumerated rights and liberties, starting with the case of myers vs. nebraska about the right to control the education of children. the result is a doctrine known as substantive due process. it is less than a perfect constitutional actor for the role. this has led to the constitutional equivalent of a food fight for the last 30 years among progressives and conservatives.

conservatives have attacked substantive due process as exhibit a in their case that progresses and liberal justices on the court denied respect constitutional history. [unintelligible] the whole debate should make anyone who cares about constitution text and history want to scream because of the entire discussion is the void of any real consideration of the text and history that really matters. that is the text and history of the privileges or immunities

clause. i want to rehearse and go for a little bit, point by point, the points that we make in our brief that informs this discussion in little bit. the first point is that the privileges or immunities clause was crafted against a backdrop of rights suppression in the south. it was written and intended to protect against state infringement. some of this went through before. the remarkable thing about the 14th amendment that has been lost in modern debate is that we have a history of its that is out there looking to be discovered and looking to be looked to which is being forgotten right now. the drafters of the 14th amendment created a joint commission -- a joint conference

which was made up of members of the senate and the house. they did hearings for about six months in 1866, which led to the drafting of the 14th amendment. at those hearings, they went throughout the south to determine what the needs work, why we needed a second amendment to the constitution. the produced a book that reported to the joint committee every construction. they had 165,000 copies of this report. it was 1000 pages long. it had 165,000 copies at a time when america was tiny compared to the day. it was distributed around the country. you see what they cared about. they cared about the suppression of rights by the southern states of both the freed slaves and unionists in the south.

the talk about things like freedom of speech, about some economic freedoms, about the right to bear arms, as well as these rights of heart and home. the treatment of the slave families in the south and continuing into the reconstruction was where husbands were taken away from wives and children away from parents. the history of the abuse of slaves in the reconstruction. is what inform the privileges -- in the reconstruction period is what informed the privileges or immunities clause. it included fundamental rights. james madison, when he introduced the bill of rights to congress, called the bill of rights the choicest privileges of the people. what that indicates and what

scholars have documented it is that, while the terms privileges or immunities are kind of foreign to us today, they were not foreign to the framers of the original constitution and the 14th amendment. they had a very distinct meeting which included fundamental rights, both in new married in the constitution and unenumerated. -- both enumerated in the constitution and on enumerated. george washington defined the privileges and immunities clause of article 4 of the original constitution. he defined it in a way that echoes of the declaration of independence and the believe it -- and the nfl rights and the pursuit of happiness -- and the inalienable rights and the pursuit of happiness. that is the public meaning of the term privileges and

immunity's. there were 27 of the 37 states that had constitutional provisions that were basically the declaration of independence or echoed closely [unintelligible] there was a very defined meaning of privileges or immunities as the protection of substantive fundamental rights. the congressional debate about the 14th amendment very clearly indicates that the privileges or immunities clause were supposed to incorporate the protections of the bill of rights against the state's and protect other enumerated or unenumerated fundamental rights. the clear statement of that is one by jake -- by jacob howard, a senator from michigan.

he was designated by the joint committee to present the 14th amendment to the senate. he does so in a speech that ways out clearly that privileges and immunities are a broader set of substantive liberties. that is echoed by a number of critical framers and founders of the 14th amendment and is not really disputed even by the opponents of the amendment. the fourth point is a little technical. the awarding -- the wording is broader in important ways.

most important is that the article for clause is a quality permission or a nondiscrimination provisions. it prevents discrimination whereas the 14th amendment is really a guarantee of substantive rights. the founders of the 14th amendment intended that the right to bear arms would be a privilege or committee of the united states citizenship. when we debated keller, there was a back and forth about what it was all about. we talked about this history

from 1787 or 1789. i think that was a cloudy history in some ways. the amendment is a little bit tricky with its preamble and the court divided very closely on that. when you look at the 14th amendment, you see that the framers almost all cared about the rights to bear arms for the reason that all the rebels in the south had guns. the people who did not have guns were the unionists who work in the south and the freed men. any property or possessions or families of the former slaves, the property and everything that they were able to get after the war were under assault. one of the things that the founders of the 14th amendment,

one of the reasons they wanted to adopt the 14th amendment was to make sure that the freed men had the ability to protect themselves and their families from the first reformer rebels [unintelligible] the final point is simply that precedent does not prevent -- does not prevent the court from recognizing that the clause pretext infringement. in three cases, in the late 19th century, the court held that the second amendment does not apply against state action. the court will have to revisit

portions of these cases. the slaughterhouse case has already been effectively gutted by a subsequent ruling. the court in slaughterhouse has this very idea that the civil war and the 14th amendment really did not change anything in the relationship between the states and the federal government. the supreme court has reversed that all already without actually reversing the slaughterhouse cases. so the court has already gutted slaughterhouse in many important ways. it is going to have to go back and revisit its barrier to the cases. it is not too late in the day. you're going to do that anyway. you should go back and write what we think is what -- is one of the most egregious wrongs in supreme court history.

thank you. [applause] >> thank you. we are going to hear from our own kibillionilia shapiro. from 2004 to 2007, you wrote a column for "tcs daily."

he is the co-author of an oracle with to josh blackmun on the privileges or immunities clause. it is a very long scholarly article. he regularly provides commentary on legal and political issues for various tv and radio outlets. he is an adjunct professor at george washington university law school. he is a washington fellow at the national review institute. he lectures regularly on the -- on behalf of the federalist society. before entering private practice, he clerked for a judge e. grady jolly.

he is a graduate of princeton university where they master of science from the london school of economics. he and his jtf the university of chicago law school. -- he earned his j.d. at the university of chicago law school. [applause] >> thank you. those of you who are blogging or writing about this event, make sure you attribute all the quotes correctly. doug's briefing and their brief in the seventh circuit were recently selected by the green

bag as one of their selections for top legal writing this year. i never thought that we would be talking about the privileges or immunities clause or the 14th amendment or any of these big issues in the context of guns. you might have seen some references in the media about the differences that have come out between the gun nuts and the constitution nuts. i am on the side of the constitution does. -- constitution nuts. this has been a long-term project force callers across the ideological spectrum -- for

scholars across the ideological spectrum. we have agreed not to talk about the specifics of the diversion, although feel free to us in the q&a. we never thought that the way that we would get to the supreme court with this reinvigoration of the gem of the constitution was through the right to keep and bear arms. 10 years ago, if you would have asked roger pilon, one of the key figures in the libertarian legal movement and scholarship that advances public policy here and across the country, how would this part of the agenda be advanced? the second amendment or gun

rights would not be forefront in his mind, i would wager. yet, this is how the wheel of his returns. to get to the actual case and how i think the argument will go tomorrow and some of the more specific issues, you have to go back to 6101 or constitution 101 parent -- go back to civics 101 or constitution 101. before you even get to the bill of rights, the first six articles, the original constitution provides the governmental structure. there was a big argument between the federalist and the anti- federal it's over whether we need a bill of rights anyway -- anti-federalists over whether we need a bill of rights anyway.

if we start writing down what these rights are, we will spare six others. that is why we had a compromise. in the ninth amendment, it says that these enumerated rights cannot disparage unenumerated rights. that is the structural version of the constitution. that was all well and good. the old lead to the federal government. until these several war, none of these rights could be applied as against state governments. they could be free to send the state militias and force you to house them or what not.

but then we have the civil war which affected a fundamental rethinking or reconstruction of the relationship between the federal and state governments and between the federal and state governments respectively and the individual. the 14th amendment was a huge part of that. what did it do? did it just say, okay, those rights that we enumerated, the first eight and the other ones covered in the ninth amendment, those sean bell applied to the states? that could have been the text of the 14th amendment. you can easily understand the sophisticated lawyers and politicians that were pounding the amended to say that. but that is not what they did. therefore, the 14th amendment, specifically the privileges or

immunities laws, cover more and less than the bill of rights. a corollary of that is that the whole doctrine of in corp. -- of incorporation is a misnomer. senator jacob howard and representative john bingham, the primary movers of the 14th amendment -- those are the framers we are talking about in this context -- senator howard and rep bingham were not talking about just incorporating the second amendment, the first amendment, the fourth amendment, what have you. what they said was that we will now give all individuals or persons or citizens, depending on which clause you were talking about, it will protection under the laws, due process of the laws, and privileges or

immunities. that means that privileges or immunities based on the understanding of that term in 1868 -- if you're a much to try to understand what the public meaning of that meeting is and with the text and history of the 14th amendment lead you to, you have to do it and the ratification of that amendment, not 2010 or 1937 or what have you -- and what that meant was that building upon the decision owas that there were natural rights and certain political and civic rights. that is what that meant. it does not mean that, all of a

sudden, the second amendment, the first amendment, what have you, are incorporated. but the codification of the rights in the first and second and fourth amendment is persuasive evidence of what privileges or immunities are. when we're talking about the macdonald case, it is not really right to say is the second amendment inc. against the state's by the privileges or immunities law or even by the due process clause. it is notñi even correct to say whether the second amendment is applied or extended by one of these clauses. the right formulation, the way to think about this, if you're going to be faithful to the constitutional text and history,

separation of powers, how the constitution was constructed, is whether the right to keep and bear arms supplies or is extended to the states and how is it extended? i suggest to, first of all, that it does apply. if the only reason the you came here is to find out whether the right to keep and bear arms is going to be applied to the states and whether chicagos gun ban is going to fall, lend -- chicago's then dan is going to fall, let me and your suspense. yes. there you go. the bigger issue, as we have

discussed, is what this means for the future of liberty and for the fidelity of the constitution, fundamentally, the rule of law. we have warped our understandings of what rights are covered and which are not. justice scalia is not my favorite justice, but he is certainly the most quotable. what the justices do when they try to figure out when something is protected by the constitution is that they said around and they say is that fundamental? is that undue burden on something fundamental? that is not a principled way of doing constitutional jurisprudence. that is why wethat is beyond thr

discussion here. given what we have just gone through -- the right to keep and bear arms -- you look at what it meant, whether it was understood to be a privilege or immunity in 1868. it clearly was.

the 14th amendment was put in in large part to protect the individual liberties of freed slaves and unionists in the border and southern states. it is deeply rooted in our tradition. the article that i mentioned, we suggest that the test is applied [unintelligible] i think that is an appropriate method of seeing whether a particular rite is covered by the privileges or immunities clause. it is quite clear that the right to keep and bear arms is so deeply rooted, so specifically described, that there really is

no controversy that it would be protected. to stay or to get more faithful to the constitution and to do far more for the cause of freedom than merely extended the right to keep and bear arms, the court, if it interprets the constitution as it should, will say that privileges or immunities is the way to go, is where we find the right to keep and bear arms. therefore, complete prohibitions on hand guns for self-defense have to fall. i doubt we will get nine votes for that position. -reti