to do with one overthrow of the institution. i did feel in '07 because of the -- not because of the problems, i did feel in '07 that i should not get a bonus. the reason was i felt that as my stag . . the institution by other purposes. soy went to the compensation -- so i went to the compensation and suggested that i did not get a bonus in '07 and i did the same thing in '08. >> well, this is -- you will be the only one in the end that can make the assessment of responsibility. a risk business always implies that there's upside and downside, it's not about the fact that there were failures but acknowledging and understanding are important. but that's up to you for people to judge. >> i agree with that. i think it's important to say what the institutions work and what they can play and cannot possibly play. >> you make your case, mr. vice

chair. >> here's my point before you leave the point --ing >> we're not leaveing -- >> excuse me. >> you didn't ask me my opinion. but i would like to state if i may. >> mr. robert rubin? >> i think it was absolutely wrong to suggest that mr. robert rubin had any responsible for the what happened attestedty -- at citigroup. >> i appreciate that. mr. prince, you were ceo. and you resigned? >> yes, sir. >> what happened after you left? >> is this a rhetorical question? >> no. who assumed the ceo? >> mr. crenshaw became the ceo the day i resigned. >> okay. then what happened in the terms of the office of ceo? >> at that point a search was

>> our problems with our technical issues with the southern republican leadership conference have been resolved. we're going to go back now live to new orleans. speaking now, liz cheney, daughter of former vice president dick cheney. >> as afghan president karzai whose support we need if we're going to prevail in afghanistan. is being treated to an especially dangerous and juvenile display from this white house. they dress him down on an almost daily basis and within the last 36 hours refused to say whether he was even an ally. you know, i used to work on the middle east and there is a saying in the arab world that it is more dangerous to be america's friend than it is to be our enemy. and i fear very much that in the age of obama that's proving to be true. now, the president's approach to nuclear disarmament which he also unveiled this week confirms the naivity of his

views about america's enemies. until this week, any enemy of our country that might be contemplating a chemical, biological or large scale conventional attack against us knew they might face the worst in return, a nuclear response. we have now surrendered that powerful deterent. the new strategy prevents america from building any more nuclear weapons or using our nuclear deterrents to defend our allies against a massive conventional attack. apparently the president believes that if america stops its weapons production program the iranians and the north koreans will follow suit. [laughter] and while the president works to limit america's freedom of action, the iranian mullas are making steady progress toward acquiring a nuclear weapon. the president likes to say he's

doing everything possible to prevent that from happening. well, that is just about as convincing as all of those deadlinings that have been put on the iranian government and ignored again and again and again. in this administration's dealings with iran, the deadlines are meaningless, the sanctions, worthless, and the speeches, pointless. our best hope surely lies with the iranian people themselves. they have courageously demonstrated and stood up for the cause of freedom. but even then, even during those mass protests, president obama offered almost no support or solidarity. he seemed much more concerned with whether the mullas in iran would be offended by his actions but as always, with the policies of appeasement, he ended up losing the respect of everyone. both the oppressed and the oppressers. -- oppressors.

ultimately, the only way that diplomacy will succeed in ridding iran of its nuclear weapons program is if the iranians know that the americans will use military force if the diplomacy fails. now, today they surely do not believe that. today we've watched as people offer their enticements without recognizing that there is nothing that the international community can offer the iranians that's worth more to them than a nuclear weapon. and every time we talk about imposing water downed sanctions you need to remember that we're just buying time for the iranians. the dangers grow to us and our allies in every hour that we waste. iran watches as this administration answers their threats with weakness, confusion and self-serving lectures that put down america and diminish our achievements. now that kind of talk, it could

win you a nobel prize. [laughter] [applause] but it dishonors this nation and the brave men and women who have fought and died for our freedom. here, with america's security in the balance, republicans and democrats and independents should speak with one voice to this administration. president obama, stop apologize ing for this great nation and start defending her. now last-year i founded a group called keep america safe and i believe that no cause can be left -- less partisan than that. when president obama does the right thing, when he makes the

right decision that serves the security of this nation, we should support him and we should ask others to do the same. [applause] the troop surge in afghanistan was the right decision, the decision to put general mccrystal in charge there was also the right decision. and america is succeeding in iraq and we ought to support any decision this president makes to ensure that our military stays on the course to victory. [applause] but we do have serious disagreements with other of this president's national security policies. to begin with, somebody needs to keep reminding this administration that foreign terrorists do not have constitutional rights. [cheers and applause]

and we all remember the president's promise that he would close the facility at guantanamo bay, cuba, within a year of taking office. now, the facility remains open today and it remains open because it is a safe, secure, humane and just facility where america can detain the hardinned al qaeda terrorists we capture on the battlefield. [applause] and guantanamo should stay open and the terrorists should stay there, not here. [cheers and applause] keeping guantanamo open is crucial to winning this war, but it's not enough. we've also got to have intelligence to prevail. and in the time this president has been in office he has degraded and diminished our ability to gather that

intelligence. a year ago, over the objections of the c.i.a. director and four former c.i.a. directors, president obama revealed the details of our enhanced interrogation program. a program that gained intelligence that saved lives and prevented attacks. now, there's a reason that these details were seast secret. they were secret because the program worked. but president obama stopped the program and he said, in its place he was going to establish something called the high value interrogation group. or the h.i.g. at that same time soldier -- holder said he was going to investigate c.i.a. officers who kept us safe after 9/11. we know now that the administration moved ahead with great urgency on one of these projects. for the last eight months, many, many c.i.a. officers have been investigated and questioned. but as recently as last month,

the attorney general could not even recall where the h.i.g. is located. and we also learned that it wasn't used on christmas -- the on the christmas day bomber because nobody had bothered to set it up. spending more time questioning c.i.a. officials than interrogating al qaeda terrorists tells you this administration is confused about who the enemy is. [applause] so let's help them out. attorney general holder and president obama, the intelligence officers who got terrorists to answer questions after 9/11 are american patriots. [cheers and applause] they do not deserve to be scorned and hounded, they deserve to be thanked and

honored for protecting this nation. [cheers and applause] the next time you hear president obama say he's using every tool at his disposal to fight terrorists, remember this , he revealed the elements of our enhanced interrogation techniques to the terrorists and then he stopped paying attention. he couldn't be bothered to follow up for nearly a year to find out whether his national security council had in fact set up a new interrogation group. and it turned out they hadn't. now, despite their casual treatment of real national security secrets, the administration has recently become very protective of information about just who is setting detainee policy inside the justice department. the american people have a right to know if lawyers who previously represented terrorists, who worked for the

release of those terrorists, are now setting american policy with respect to the detention of terrorists inside our justice department. plawpla -- [applause] and the attorney general refuses still to this day to disclose that information. now, in the last few weeks we've learned a lot of very troubling information about what many of the lawyers who represented al qaeda terrorists at guantanamo have been doing. we know that one of the lawyers who represented detainees at guantanamo was caught drawing a map of the detention facility, complete with the locations of the guard posts, in order to give it to his terrorist clients. we know that other lawyers who call themselves amazingly the john adams project have been tracking and stalking c.i.a. officers. they've been learning their

names and they've been taking their pictures in an attempt to get information they can then give to their terrorist clients at guantanamo. now, there are some who say we have no right to ask questions about the work any attorney has done on behalf of a terrorist client. they say we have no right to inquire or crit siles. but -- criticize. but let me tell you, as a lawyer myself, i do not believe that a law license puts anybody above inquiry or criticism. [applause] those who say that we can't ask questions are wrong. they're wrong as a matter of law, they're wrong as a matter of policy and they're wrong as a matter of national security. [applause] attorney general holder says the lawyers who represented detainees are, quote, patriots.

because they were representing, quote, the unpopular. well, for the record, unpopular is not the word most americans would use to describe terrorists feament -- attempting to attack this nation. and if eric holder is looking for patriots and heroes to bravely defend, if i suggest he start with the americans who have fought, captured, held and interrogated the terrorist enemies of the american people. [cheers and applause] in all of these issues, again and again it is clear, the american people deserve better. we deserve better policies and we deserve better leaders.

one of the greatest thinkers of our time in my opinion is charles crowdhammer. [cheers and applause] last october charles wrote about the decline of america. but he said, our decline is a choice. decline is not inevitable. but unfortunately as we sit here today the obama administration is putting us on the path to decline. now, you might hear that and you might think that the opposite of that is true. that if decline is a choice then perhaps american revival and american leadership and american predominance is also a choice. but i don't think that is quite true. because i think american leadership and american predominance are not just choices. those are moral obligations.

[applause] america has no choice about whether we lead or not. we must lead. because there is no other nation who has the capacity that we do because of our values, our resources and our freedoms to protect the freedoms of people all around the globe. now, it will fall to america's next president when he or she takes office -- [cheers and applause] takes office on january 20, it 2013, to show us a new way forward. and we have all seen in our own lifesometimes the power of truth spoken to the world -- lifetimes the power of truth spoken to the world by the american pt . when that kind of clarity is missing from the white house, it falls to the opposition, to

all of us gathered here and millions more around the country, to advance the ideas and the policies on which america's security and prosperity depend. ladies and gentlemen, it has never been more critical and more important that we stand up and speak out. 2010 and 2012 are going to be critical years in the long history of this great republic and we've got to make our voices heard. we have to stand and fight. [cheers and applause] we all know this won't be easy. the obama administration is accustomed to deference from their followers and from the media and sometimes those two are the same. [laughter] [cheers and applause] the president and his team don't respond well to challenge

or to correction. but here's a piece of news for them. 2010 is going to be a year of challenge and it's going to end in a major correction on election day. [cheers and applause] [cheers and applause] >> each of us -- each of us is here today because we have decided to join in a great and vital effort to keep america

strong and our freedom secure. [applause] we're going to give that effort our all and we can leave here today with confidence in the strength that we find in one another. like my father and my father before me, i am proud to be in the arena and i count myself fortunate to stand with great americans like every one of you in this room. i thank each of you for what you're doing, for fighting the fight and keeping the faith and serving the cause. now, let us carry that cause forward to victory this november and beyond. thank you very much. [cheers and applause]

>> wow. what great speakers. i don't think i've ever been prouder to be a republican. what do you say? [cheers and applause] and we're not finished. we've got another great speaker for you tonight and i'm going to ask he will endavis to come out. he ellen in her own write is the former executive director of the republican party of louisiana, the former political director of gopac and former executive assistance to our next guest. come on, ellen. [applause] >> our next speaker truly embodies conservative leadership in ate conscious and

the achievement of the american dream. jaycee watts was born in oklahoma. jaycee watts' parents instilled the character and values that helped jaycee succeed as a leader, football player, minister, public servant, author and most importantly to jaycee as a father and a husband. in his early years, he was a leader on the football field for the university of oklahoma. [cheers and applause] he compelled at the quarterback position and led the sooners to two orange bowl victory. fortunately for the l.s.u. tigers, when they faced the sooners for the 2003 b.c. national championship, j.c. was a fan in the stands and not a quarterback on the field. j.c. left the football field and soon devoted his life to serving others in this his community. first as anor daned minister and later as a public servant and member of congress.

as an integral member and foot soldiers of the 1994 republican revolution, j.c. became a part of history. a history all of us here hope will soon be repeated. [applause] not long after being elected to congress, j.c. was elevated by his fellow republican members to serve as chairman of the house republican conference, the fourth highest position in the u.s. house of representatives. after eight years of service in congress, he chose not to seek re-election. yet he continued to serve in the public as chairman of gopac. he also offered a memoir, "what colors a conservative: my life and politics" and currently he's the chairman of the j.c. watts company. please help me welcome the honorable j.c. watts jr. [cheers and applause]

>> thank you. thank you very much. i see some of my oaky buddies sitting over here. i know we've got some sooners here and i want to say to all the folks from louisiana, how about them saints? i am delighted and honored that the southern republican leadership conference would think enough of me to extend an invitation to come and be with you and see some old friends and make some new friends and as ellen said to you, and, ellen, thank you very much for your kind words. ellen and i worked together for several years. she was a part of my team and in washington and now she's got a family and two kids and her little daughter, looks like  they put ellen in the microwave

and shrunk her and got her little daughter. but we worked together and, boy, i'm sure proud of ellen and her great family, her beautiful family. so i'm delighted to be with you tonight. but, again, i'd left congress after the 2002 cycle and folks from oklahoma can tell you that when i ran i said that i was going to run for three terms, i actually ran for four. and so i am no longer a member of congress. i'm putting kids through college and making memories with grandkids and i'm just kind of enjoying getting a little bit of my life back. and i've got -- i'm in that time in my life in putting kids through college that i've got -- i'll have two kids in college at the same time for about three or four years and we graduated a daughter last may and she became gainfully employed about a month ago.

[cheers and applause] and then i've got a son that's a freshman at the university of tulsa and a daughter that's a sophomore at the university of oklahoma. so i'm paying tuition in two places and when i was in congress i did a lot of work for united neglect row college fund and raising money for them and assisting them. i do believe in their slogan, their motto, a mind is a terrible thing to waste. and i've -- [applause] as a matter of fact here in new orleans there's an hbcu and the fellow that used to be the president of dillards is now the president of the united negro college fund. president lomax. and he called me several months ago and asked me for a contribution. i said, i love you guys, i'm so proud of what you guys do, i said, however, today i am the

united negro college fund. [laughter] [applause] so i hope to get around to contributing again sometime next four or five years. you know, oklahomans and i've got such great friends in oklahoma and people, republicans, when i started my political career there, i mean, the oklahoma federation of republican women who just volunteered for me -- [cheers and applause] the guy is in this room tonight that wrote me my first political check when i ran for oklahoma corporation commission , lynn wendell. i didn't know him. he just sent me a check. he said, count me in. i didn't know if it was a man or woman, i just knew i'd gotten a $50 check and i was so appreciative that somebody had shown some support. but i've had such great friends

and when i started in politics in 1990, you know, i ran for a statewide office, oklahoma corporation commission. we are the public service commission here in louisiana or the public utilities commission in some states. that's who we are in oklahoma. we call it the corporation commission. and we all have oil and gas. we regulate public utilities, oil and gas trucking for hire. and, you know, i've traveled, got to travel quite a bit and doing lynn con day dinners and doing -- lincoln day dinners and republican events and i was in a state, you know, when i went to a restaurant with some of my friends and i said to the young man that was walking around putting cubes of butter on everybody's plate and so he came around and i was filling -- feeling pretty good about what i'd accomplished and we had been elected in oklahoma

statewide, the agency that regulated public utilities in oil and gas. and so i noticed that he put two cubes of butter on everybody's plate. after i'd eaten my two cubes of butter, i had my bread, i needed more butter. i said, young man, i said, could you bring me a couple of more pads of that butter. and he said, sir, we have a house rule. only two cubes of butter per patron. and i said, surely you're kidding. he said, no, no, that's house rule. two cubes of butter per patron. and i said, young man, do you know who i am? he said, no, sir. i don't. i said, look, i used to be the starting quarterback at the university of oklahoma. we were the winningest football team in president entire decade of the 1970's. we had more wins than any other college or university in the country. do you realize? he said, no, sir, i didn't. i said, do you realize that i'm the fellow that regulates

public utilities in oil and gas in the state of oklahoma? we directly impact about 65% of the state's economy and we indirectly impact the other 35%. do you realize that? he and he said, no, sir, mr. watts, i didn't. but let me tell you who i am. he said, my name is gary jones and i regulate the butter. [laughter] so -- you know, now the organization that we are all under their umbrella tonight have given an ordained baptist minister 15 minutes. it takes us 15 minutes to say hello. but i'm going to try to stick to that time. you know, being switched

between mary and liz and then having a fella that i've always thought a great deal of in newt gingrich who will come after me , i am just plum honored to be on the platform that these people have been up here tonight presenting to you. and i wrote some notes but i just never have been too good at using notes. so we'll just talk. you know, if someone -- [cheers and applause] if any republican or democrat economist was to go to some third world country, go to some foreign country in kenya or any of the soviet block countries or anywhere in the world that they were trying to develop their economy, what would be

the prescription for growing their economy and becoming a part of the global economy? what would the -- what would those economists say to them? and this is republican or democrat economist alike would say, transparency, rule of law, less bureaucracy, low tax rate, property rights, governing models that work, freedom, you name it. that's what any economist, republican or democrat, would say. and i've often scratched my head as i've seen over the last three or four years things unfold in washington, i've often scratched my head to say, if that's what we would say to third world countries and people in the global economy that wants to be a part of the global economy, that's what we would say to them, why won't we

do it here at home? [applause] why -- friend, i do believe that we live in the greatest most wonderful, most prosperous nation in all the world. and i have studied -- i have studied that world war ii generation who long before nike came along with the slogan, just do it, they just did it. they gave us prosperity, they gave us freedom and all they did they went out every day, they looked after their communities, they looked after their families and they defended their nation. if that world war ii generation, again, they just -- they just did it.

politics over the last six or seven years -- and i might add, not just under the leadership of democrats, we as republicans can't wash our hands clean of what happened or what we've seen unfold over the last six to eight years. [applause] and what we've seen happen over the last six or seven years, friends, that world war ii generation, they are rolling over in their graves, recognizing that we have squandered over the last 3035, 40 years, we have squandered all the values, all the principles, all the hard work they put into saying we're going to pass onto the next generation, our kids and grandkids, a better america. they didn't want our kids and our grandkids or they didn't

want their kids or grandkids to inherit a normal america. they worked every day to make sure that their kids and grandkids inheritted an exceptional america. [applause] and, friends, until we change economics 101, until we change the facts of a marketplace economy, this isn't rocket science. we made this a whole lot more difficult than it should be. and i don't think that as we protest and i would hope that as we protest and i encourage you to exercise your democratic rights as an american to protest, to say that, i'm unhappy, to say, i don't like

the direction we're taking our country. but also recognize we have a responsibility and an obligation to do it with christian love. [applause] but, again, this is not rocket science, how we do it or how we should do it or how we make things work. we have fought for years, it i've heard republicans even before i was a republican, republicans fought for a low tax base, friends, we don't need more taxes we need more taxpayers. [cheers and applause] not rocket science. look, we're going to have to

lay some ground rules. don't applaud. that takes too much time. [laughter] friends, the problem in washington is not that we tax too much, the problem is, we spend too much. and taxes -- and think about it. you've never seen anybody, all the people that say they're opposed to tax relief, when they get their tax relief checks, you've never seen them give it back to the government. and if you want to get in a short line, you get in that line of americans that believe that they are undertaxed. nobody believes that. because the reason is because the time you get up, you heard me speak, you've heard me say this, from the time you get up until the time you die, we get you. you get out of bed in the morning, your feet hit the ground, you get in the shower, we tax your utilities. put your clothes on, we tax your clothes, jump in the car, we tax your vehicle. go to work, we tax your income.

stop at the local gas station, get fuel, we tax your fuel go. home, slop down on the lazy boy, turn your tv on, we tax your cable. you fall on your knees at night and pray to a true and living god, you kiss your spouse, you think that's free but it's not, there's a marriage tax. and then -- [cheers and applause] and then you finally conclude, you say, i am sick and tire of being sick and tired of paying all these taxes, i'll just die. you can't afford to die, there's a death tax. [applause] so when we get people more of their money back, to buy their kids school clothes, to put food on their table, to make their home mortgage, to pay their house mortgage, it pay the car payment, to pay the car insurance, to get put in jail if you own your own health care plan, friends, that's a good

thing. if 70% of the economy is driven by consumer spending, why is it a bad thing to give you some of your money back for you to do what you need to do with it? we should never defend ourselves, it's not rocket science. we should never apologize for defending ourselves in a time of war. [cheers and applause] i don't want the president, my president, asking germany and france, can we defend ourselves? and let me tell you something, friends. some might think that george bush had his shortcomings, but let me tell you, friends, history's going to be kind to george w. bush. in defending this country against terrorists.

[cheers and applause] and a couple things before i close, we've gone through this big ordeal about health, about health care. there's nothing in the bill that i have seen and i have thumbed through the bill, i've read it, i've looked at it, different sections, i've gone over and over the bill. i have yet to find anything in the bill that says that in order for us to deal with health care we have to deal with health. all those things we learned in third, fourth grade health class, at 52 they all make sense now. you know, there was a time -- i've just concluded this, now i can hear the world war ii generation saying, j.c. watts, you want me to pay for your

health care, but you don't want to be responsible for your health. my mother was diabetic, my father had heart disease. the doctor said to me 10 years ago, you've got the gene, you can make it better, you can make it worse. you make it better by what you eat and drink and exercise. you make it worse by what you eat, drink and no exercise. that wased time in my life when i thought that paul said in scripture that we should buffet our bodies daily, i thought he said, we should buffet our bodies daily. i misread it. [laughter] but, friends, i promise you, i don't care what kind of reforms, all the things that we talk about, republicans or democrats, we cannot deal with health care until we get serious about our health. it makes a difference. it makes a difference. [applause]

and, friends, i've got 57 other issues i want to talk to you but my time is running out. so let me leave you with this. my wife and i have five kids, three daughters, we would have been married 33 years on may 7. in spite of my stubborness and my hard-headedness and my selfish pride and all those things that men can have, i have been married to a saint for 33 years. i am grateful for my wife. she and i have had five kids and today we've got grandkids and, you know, a buddy of mine in congress, dick army, ewe used to say, if i would have known it was this much fun

being a parent, i would have kipped -- skipped being a parent. [laughter] but, you know, we have five kids, three daughters, and now that they've all grown up and all of or our daughters, they don't do the doll house thing anymore on christmas eve. and that is -- that makes christmas such a more wonderful time for me because i don't have to stay up all hours of the night trying to put together doll houses. and there's dads and granddads and moms and grandmoms in this room that you can relate to what i'm about to tell you. at 4:30, 4:45, 5:15 i'm sitting there in the floor of my family room of the family room trying to figure this doll house out

and i've got the glue in one hand and the directions in the other and at about 5:30 i've asked dads and granddads, what was the most important thing at 5:30 in the morning knowing that they're going to be coming down those stairs at about 6:45 and they're going to want to see that doll house put together? are the directions the most important? is the glue the most important? most dads would say, the directions. i say, neither was the glue the most important, neither were the directions the most important, but the most important thing at 35k30 in the morning was that picture on the box that showed what it was supposed to look like. [laughter] friends, we're at an interesting time in our nation's history.

pibble so many americans, they've gotten this skewed view of what politics is over the last six, eight years. we've got kids that are growing up, we've got a generation of americans not only do they not know what a land line is -- [laughter] we've got a generation of meches -- americans that they don't remember when blackberry was a fruit. [laughter] but we've got a generation of americans that they've seen bailouts, they've seen stimulus packages that don't stimulate anything and, friends, they're

looking for a picture of what it's supposed to look like. at this interesting time in our nation's history, republicans and all of those who believe in a smaller, more accountable government, all of those that believe that we should allow people to keep more of their money to do what they need to do with it, all of those that believe that we should defend ourselves in a time of war, all of those that believe that government is out of control, we invite you to join hands with us and, friends, we've got an opportunity to paint a picture to the world of what it's supposed to look like. [cheers and applause]

as i close -- as i close, i need not go any further than my bathroom mirror every day to remind me of how exceptional america is. that a poor country boy from oklahoma that grew up on the east side of the railroad tracks, could not swim in his public swimming pool until he was about in the fourth grade, had to sit in the balcony of the movie theater until he was about in eighth grade, couldn't sit down below with my white friends, because that young man

chose to believe his coaches and his parents and those teachers that would kind of verbally twist his ear to force him to do what they knew he was capable of doing, that kid ended up serving in the united states house of representatives and walking the halls that men like abraham lincoln and frederick douglass and thomas jefferson at different times in their lives they walked some of the very halls that i did. why? because this place that you and i call home and the rest of the world calls america is a pretty exceptional place. thank you very much for letting me come. [cheers and applause]

>> that's called eloquence. [cheers and applause] and now i have the distinct honor of introducing a woman who has been a conservative political activist for over 30 years. i was in kindergarten at the time. maybe, maybe not. she is the current co-chairman of the republican national committee and she's presently building a national grassroots program designed to recruit, register, train and sustain the strong base of women activists and candidates. she's abilityively working to portray the g.o.p. as the clear and automatic option for female voters. please give ms. jan larmer a warm welcome. jan. [cheers and applause]

>> wow. what a crowd. we all know newt gingrich, we see him on fox news and on the sunday talk shows. but there's another side of newt gingrich that not a lot of people know about. for those of us that have lived and worked in washington, d.c., we've seen a familiar sight and that's newt gingrich riding the subway, the metro. even when he was speaker of the u.s. house of representatives you could see him riding the metro. reading the newspaper, working on something, but he was there with the people of our country. the republican revolution in 1994 and the contract with america are part of history now. to some folks that might not remember, here's a few things that really happened. they happened because newt

gingrich was in the fight and sometimes that was a lonely fight. for years newt gingrich would take to the floor of the u.s. house, sometimes alone, sometimes in the middle of the night, all hours of the night, to speak from the heart about our conservative ideals. he did this because he knew that even if he just changed one mind, one by one on c-span, that it would make a difference. newt gingrich has always made a difference. ladies and gentlemen, newt gingrich. [cheers and applause] ♪

♪ [eye of the tiger] ♪

[eye of the tiger] [eye of the tiger]

[cheers and applause] >> well, you know, when you speak from the heart, you don't need a teleprompter. [cheers and applause] first of all, let me thank all of you for such a warm welcome and it's great to be back in new orleans. i spent three years here at to you labor and my younger daughter was born here and we're always thrilled to come back to new orleans. it's great to be in a state that has a governor as reform-oriented, as intelligent and as honest as bobby jindal.

[applause] and, frankly, it's great to be nextdoor to a state that has haley barbours a governor, too -- barber as governor, too. haley was my partner in developing the contract with america when he was r.n.c. chair in a great moment. i have to say, because i don't want to get in trouble now with all you texans, it's also great to be in state next door to rick pery. i want everybody -- [cheers and applause] but i really want to talk to you for a few minutes about where we are. this is not a speech that i would have given a year ago or a year and a half ago. and i've thought about it a lot and i just finished and sent to my publisher, i wrote a new book called "to save america" and the subtitle of it is, "stopping obama's secular

socialist machine." [cheers and applause] and i don't think i would have imagined when can less at that and i went to the inaugural in 2009 that we'd be where we are tonight. tsdz really quite remarkable -- it's really quite remarkable. president-elect obama chose for his inaugural address a phrase from abraham lincoln, the first republican president. a new birth of freedom, which comes from the get areasburg address. a document which by the way also says, one nation under god. part what have i'm struck with a year and a half after watching president obama is how he only reads parts of things.

[laughter] and he picks out a couple words that sort of feel right and then he pretends that he understands the rest of it. but he doesn't. the republican party was founded on freedom, not serfdom. the republican party was founded on the work ethic, not the redistribution ethic. the republican party -- [applause] the republican party was founded on defending america, not hiring lawyers for terrorists. and i think we're at an unusual moment in american history. and what i'm about to say, i wouldn't even have said to you in december. that's how much this has all evolved and all come together. last year the president proved

they had a machine, when i say secular, socialist machine, i mean that. he proved they have a machine when they got $787 billion with no elected member having read the bill. now, no taxation without representation, a term obama might remember from history, which was used by the americans to explain why the british monarchy was unacceptable, actually means that representation has to know what they are taking your money for. [applause] so, if you have spending with no representative knowing what it is, you don't have representative self-government, you have a machine. and that was the first -- the first signal that this is very different, this is the most radical administration in american history. and i began to realize after a year of watching them that if you think about the group that meets together in the white

house, their experience is the machine politics of chicago, the corruption of springfield, and the radicalism of molnisk irving. it comes together in a format, they meet together with their two colleagues, pelosi and reid, and you have a perfect unrepresentative left wing machine dedicated to a secular socialist future. and what really got me to understand how different this is, i believe this is the most serious conflict since the 1850's. and the reason i say that is, the american people by last summer began to send a signal. they went to town hall meetings, they formed tea parties, the polling numbers got worse and worse. and the answer of the democrats was to cancel town hall meetings, if lie about the tea parties and tell all their

members to ignore the poles. then they lost virginia and new jersey -- [cheers and applause] exactly as in 1993 they had lost virginia and new jersey. and i thought, gosh, that would be a signal maybe they should slow down and think about this. and they accelerated. and they wrote this grow teske pair of bills in the house and senate that were utterly incomprehensible, the largest increase in government in our lifetime, absolutely unenforceable and represented a kind of ludicrous big government, big bureaucracy, high-tax, micromanagement washington-centered health system utterly incapable of working. no rational person could believe that the current federal government could implement this. [applause] at the center for health

transformation we had published a book last august called "stop paying the crooks." and we thought that was a fairly clear -- [laughter] look, when you talk to guys who have been educateded a columbia and harvard, you try to get the language down to a rhythm that -- and what we said in that book, which we absolutely stand by and the "new york post" d did an article which made it more absurd, we said, the federal government is such a totally bad, incompetent manager of the health system that in medicare and medicaid annually they pay between $70 billion $120 billion a year to crooks. .

they tell you they have a very low cost of administration because they write checks, no matter how stupid. you can have a very expensive administration if you are determined to know nothing. that is the group that lent to expand have american health care. at some point, you have to understand that this is not going to work. historians will someday write that the longer obama talked, the less the american people believed. [applause] and i am not saying that to be

negative about him, i am saying that to describe the polling data that showed conclusively that the longer he talked about health, the weaker the bill got. the longer he talked, the more they paid attention, the more they found out the bill was really bad. this is the problem with having a great orator and a bad project, you call attention to it. i was doing hannity or something, i would have said that the massachusetts election was the decisive one. people all over the country spontaneously rallied in the last 14 days. scott brown raised $10 million on the internet, i would guess $9 million came from people he never met. they're trying to send a signal. if the signal is that edward

kennedy's seat is taken by republican, how can you get a better signal? there is a moment of exaltation. i was in cincinnati the night after the victory in massachusetts, and we are all excited and all positive. the democratic party members have now heard from the tea parties, the town hall meetings, the polls, of virginia, new jersey, and massachusetts. surely, they will understand that there is a message here. it took about a week. they said, he know what? we're going to run over the entire country. they decided there ram through the health bill. it didn't get it. [applause]

-- they don't get it. the president of the united states, the most radical has now thrown down the gauntlet. he says that by all washington, and there is nothing you can do about it. i wanted to remind you that there are two rules. the first is that elections have consequences. in 2006, at 2008 and the consequence. consequences lead to elections. here is my promise. if we will go out and recruit at every level, school board, city council, county commissioner,

sheriff, a judge, state legislature, congress, not giving up a single day, stage one when we win the house and senate to -- [applause] stage one of the end of obamaism will be a new republican congress in january that simply refuses to find any of the radical -- [applause]

my friend says that it is unrealistic to talk about repeal and replace, but i think they forgot that once upon a time, i used to be speaker of the house and i understand the legislative process. the truth is, under our constitution to -- if there is no budget, they can't enforce capita trade. [applause] phase one of obama being gone is to simply win this fall and not funded for two years. stage two is to be prepared in a positive way -- we are in a

positive position to have president obama join jimmy carter as a one-term presidents. [applause] and in that context, that we be prepared to commit the republican president in the republican congress in february and march of 2013 will repeal every radical bill passed by this machine. [applause]

the former teacher in thme wants to give you three assignments because i can't help myself. i helped design the 1994 campaign. i ask you to take them very seriously. this represents the work we're doing in american solutions where we are trying to understand what has happened, not to the democrats, not to obama, but to america so that our children and grandchildren can even the most creative, most productive, most prosperous, and safest country in the world. the first thing i want to ask you to do will sound a little academic, but it is really important in setting up the arguments. i urge you in joining in talking about a secular socialist machine.

it is important to be clear who these people are. on every front, they are increasing government. they are trying to micromanage our lives. they want to raise taxes, spend more, have politicians become more powerful and citizens become less powerful. this is not in normal series of elections, it is not to groups that share the same ideas and we're struggling to overpower. is a fundamental fight over the core definition of america, and it allows us to talk in a very different language than normal politics. i think it requires us to talk about the american culture, not american politics. is redistribution the alternative? are we endowed by our creator with certain unalienable rights?

or does government to define who we are? i want you to think about the war we make this a choice about america, the weaker they are. i have spent several years trying to think about why sacramento is such a mess, albany is such a mess, washington is following sacramento and albany. what has happened is that you have a machine that has a set of values that are antithetical to creativity, productivity, and a work ethic. it it takes away your money, your goods, and redistributes. if you think is a secular socialism machine, the stimulus

bill was perfect. it is given away by politicians on behalf of politicians for your children and grandchildren to pay interest on. why wouldn't a secular socialist machine do that? why wouldn't they pass a $26 billion health bill that dramatically expands the power of government? that is the nature of that kind of organization. i think about what we're up against and what we are faced with. frankly, even more unusual for american politics, and i say this having been speaker of the house and spending seven years working in executive branches. the most important government slogan of the next 25 years is very simple and very different.

it is 2 + 2 = 4. i got to this because two years ago, we made a movie called "ronald reagan rendezvous with destiny. the leader of solidarity and the president of poland, we went to prague and the czech republic. both men said us, the decisive moment in the emergence of freedom in eastern europe was a year before yet reagan was elected. pope john paul the second it took a 90 day pilgrimage and went to poland. more than 1/3 of the people came to see him. they decided to do a movie called "nine days that changed

the world." it is about freedom through faith. we had a polish figure that was there that said, you know, there are more of us that there are of the government. why are we afraid of them? [applause] solidarity went from 300 or 506 hundred members -- 500 or 600 members. within two years, the soviet union disappeared. in that struggle, the polish people came up with a slogan.

it was 2 + 2 = 4. the communist leadership knew that it was subversive, but it was very tricky for them to go into a shop and say, you have to take that sign down. it made them look stupid. there are times when a man can be killed for singing and 2 + 2 = 4 because authorities can't stand the truth. i would suggest to you that congressman waxman personified the move.

[unintelligible] [applause] he promptly attacked at&t for telling the truth, and demanded they had public hearings, and i hope all companies were asked to come to the hearing there is a disastrous bill that is indispensable and grotesquely more expensive. [applause] and i think they should all just where little signs that say 2 + 2 = 4. the second example came from or well's "1984." if we tell you that 2 + 2 = 5,

it = 3. this is some things, what if it really = four? he wrote in 1984 about great britain, not the soviet union. he said that this is my warning that the centralized government could lead to dictation. baltimore planning to have at the center, the less freedom there is for the individual. in that setting, let's take 2 + 2 = 4. the president will have as believe that we can run up trillions of dollars because 2 +

2 = 7000. he can ignore iran and north korea and pakistan because 2 + 2 = 164000. he lives in a fantasy foreign- policy peak as he does not want to confront the fact that 2 + 2 = 4. the greatest threats are problems he doesn't want to describe honestly. let's close the dialog down and get the basic facts. -- lets slow the dialogue down and get the basic facts. you give me the second half of the sentence. if you can't afford to buy a house -- >> don't buy it. >> how many of you agree if you can't afford to buy a house,

don't buy it? raise your hand. you have had no national political figure have the courage to tell you this. for 25 years, we have lived a lie. for 25 years, we will say we will waive your credit rating. you don't need a down payment. don't pay any principle, just pay interest. we will give you below market interest rates. even at that point, buying a house involves costs that don't show up initially like plumbing or roof leaks. people that can't afford to buy a house can't afford it. if you do that to one person, it is a personal tragedy. if you do it to a million people, it is a national crisis. have you seen any sense of recognition of how totally and utterly wrong chris dodd and

barney frank car? the uc any signal that this whole system of rigged redistributionist housing cannot work? they cannot trying to find -- as they keep trying to find new ways to prop it up. if you're serious that 2 + 2 = 4, will find yourself on new conversations in health care, education, housing, the economy. this is very, very important for the future. i'll give you one last example. "been yorker" magazine -- "the new yorker" magazine says that the union contract takes seven years to fire back at -- bad teachers.

while they're sitting there, they are increasing their pension by 2% a year so they can survive all seven years of boredom. they get a 14% higher pensions for having done nothing. $50 million a year. i want us to run a national campaign on a simple model. everyone believes that $50 million the year could be spent better educating poor children so they can go to college instead of prison. your on our side. if you say it is important to pay the failed teachers, you are on their side. let's have a debate and see which side has a majority. i that we have an 85% or 90% did reject majority. [applause] -- 90% majority.

i am asking you to consider looking at american solutions that we will presently be producing bumper stickers, other things that say 2 + 2 = 4. this may be the biggest change, and we will talk to every republican candidate and every republican consultant. they know they can't win the fight if they are honest, so they will be dishonest about who we are. they want to say that we are the party of no. if you look at the legislative process and they only bring up their things in the big folks are on their fingers, so republicans vote no, they can say that we are the party of no. i will say, anybody who voted no on the health bill that exactly the right thing. [applause]

in the tradition of the contract with america that led to the first republican majority, in the campaign we ran in 1996 that led to the first reelected house majority since 1928. the first time since 1928, it is important to understand what your opponent is trying to do to you and set up a fight that they can't win. every candidate you know and every incumbent you know, every staff person you know, every consultant you know. we should be the party of yes. republicans can say yes to a balanced budget through controlled spending. republicans can say yes to more jobs through tax cuts. republicans can say yes to balancing a budget by reforming government. republicans can say yes to

stopping the crux from tate -- taking money from -- stopping the crooks from taking money from medicaid and medicare. they can spend money helping soldiers get better equipped rather than paying money to lawyers to defend terrorists. [applause] republicans can say yes to an american energy plan that reduces american energy to keep american dollars at home to create american jobs. [applause] republicans can say yes to the right kind of health reform. republicans can start by saying yes to litigation brought reform to protect every doctor in america from inappropriate and defensive medicine.

they can say yes to be able to buy health insurance at a lot lower cost with no government involvement. my point is, there are many things that we can say yes to. if we discipline ourselves to start out every conversation, let me tell you what i am for. we should go to first principles. this explains part of why i have secular in the term secular socialist machine. a friend of mine left and turn south, he came southa cross == -- came across a cross that

today is surrounded by a plywood box. a government employee decided they were offended that this cross was on federal land and the aclu has files a lawsuit. a secularist that is terrified of across is a totalitarian. they are so frightened of any choice of any freedom of any option that they verge on being arranged. -- deranged. and i think the country that was founded on the premise that the rights come from our creator can decide that our crater can appear in public life. -- creator can appear in public life.

i would say yes to allow the veterans of foreign wars two honor the american dead with out the offending anybody that doesn't have to go there. i tell them, don't go to that part of the desert. there is another 60,000 square miles. we need to get into the habit. we're going to face many challenges. we need to get into the habit of taking them head on. how'd you feel about the captain's trade regulatory energy tax business? i would say, let me talk about what i can say yes to. i can say yes to american energy, jobs, a lower cost, doing smart things to save the environment. i want to do smart things, not stupid things.

there are ways to do this that are totally effective and put us in the middle of the argument in a totally positive way. we are encouraged to go to every neighborhood in america, and if the naacp invite us to come visit, we would like to fundamentally rethink education so that the poorest children in america can go to college and not build a prism. -- go to prison. we want small businesses to create jobs so that students can find work. we should not bear the burden of ignoring the degree to which this administration is going to be a catastrophic failure. this is going to be the worst administration in economic terms since herbert hoover. will have a giant energy tax, a

giant health tax, the end of the bush tax cuts, it will end up a major burden on this economy. they said on sunday that it was a disaster for small business. an american solution is that we have five specific tax cuts for small business and business in general. they said they thought that business tax cuts are more effective than government spending at creative -- at creating jobs. [applause] let's be up front. we can cut the regulatory burden so people can focus on creating jobs. we can focus on saying yes to --

we propose a 50% reduction in security and medicare tax to jump-start the economy and increase the liquidity at -- the liquidity of small business. i am tired of figuring out new ways to help people that aren't working. i want to find new ways to help people that are working. [applause] in closing, if we're the party that believes 2 + 2 = 4, we're going to tell the truth about terrorism and not hide from it. we'll tell the truth about america and balancing the budget, the government being the fourth bubble, and we're going

to insist that from school board the city council to state and federal government, we're going to shrink the cost of government and increase the effectiveness of government to eliminate the bubble before the bubble eliminates the future for our show during and our grandchildren. -- for our children and grandchildren. and a positive campaign between the things we say yes to -- at lower taxes, more jobs, less spending, lower interest rates, and the things they say yes to. higher taxes, fewer jobs, bigger government, and let's see what the american people want to choose. i bet we will win in 10 and 12 because we represent the values,

the vision, and the hopes of the american people. they represent the future absolutely unacceptable to the vast majority of americans. with your help in every possible candidate every possible level, we have a chance to fundamentally reset american government and american politics, i think, for the first time since 1932. the radicalism of this administration in the incompetence of this administration make it possible to have a decisive choice for every american. we'd have to positive versions, america versus a secular socialist machine. [applause]

i know we have been running pretty long, i was told we could take questions. are their microphones, or is that not appropriate? what is the wishes of the conference managers? you don't know either. we are in great shape. in the absence i only see a few questions. there is a microphone person. good. is there second microphone person over here? find somebody. >> i am from colorado, not from the south. >> that is fine. you're not from canada.

>> personal responsibility is used to me, -- huge to me, and i find it amazing that the earmarks thing is so hard for the republicans to get their hands around. the question is, why is it not something that should be something for republicans to sign their name to to say, no more. it should not be a badge of honor bring it home. if it can be done locally, do it locally. massachusetts, i wanted to send money, whatever you want. >> the republican party is going

to move decisively toward saying no earmarks. it is the politics of the past, politics of the machine. we will win this fight. we will unanimously adopt the policy. and they have tho pass the courage to do it in office. don't promise things you can't do. >> what are your personal plans for 2012? [applause] >> that will turn out to be up to god and the american people. in 2011, we will have to make a decision about whether or not to run. this is very important. i am glad we have lots of great potential candidate. i like virtually all of them.

let's all get out and campaign this year to win this year's elections. maximize this victory. >> is obama the head of the machine, or is somebody over him? >> he is clearly the head of the machine because he is the president of the united states. the machine has grown over a long period of time. it is not personal to him. it is the news media people, federal judges on the hard left, the bureaucracy that is selected on the hard left, democratic politicians like policy -- policelosi. they all collectively for this organization, but their attitude is, they have to be a machine

because they will never win in an open fight. how you feel about their rooms of new york city. we don't care what people fail. that is why card check is a perfect model of a modern system. they can't win any war elections with secret ballots. how why eliminate secret ballots? that is a perfect example of a machine mentality. >> you said to recruit from school boards to senate. tell us what you think the perfect or the better candidates are going to be. >> my first rule, it almost didn't exist. we had no federally elected officials, in my first rule of thumb is simple. any candidate is better than no

candidate. if you sit around looking for the ideal candidate, that is very foolish. you can say that somebody is a weak candidate, but have you looked at the democrats? there majority includes about a third of their people or folks that you never were never treated. as their majority. recruit the best person you can find, but recruit somebody a rising tide does not raise both atom of water. we're going to have a rising tide. nick was saying that there were more governorships open this year than anytime in the last hundred years. 15 of 16 key states, we are now ahead.

and if we win the governorships, it can be worth as much as 25 or 30 seats in the house over the next decade. if you have state legislatures of the ticket along with candidates for governor, all the evidence right now is that there is a wave building between republican in democratic enthusiasm. my prediction is that it will get worse, not better for them. these things tend to compound over time and will sink in and people that shooting three-point shots may be clever, but it doesn't point -- put anybody to work. we need a president, not an athlete. somebody that focuses on getting people back to work. we will take two more.

>> speaker gingrich, i believe that this year and then 12, we will do a good job taking our government back. it will not do us any good unless we do something about our education system. our children are being subverted. they don't know what our real history is. they have no idea what our founding patriots were, what they stood for. kids are not even taking civics and high-school anymore. they don't know how our government works. we have to work on that. >> that is why we say consistently state legislators -- we'd have a direct choice between the 800 logical left wing efforts and a national left-wing association and the american federation of teachers along with the rest of us.

i wrote a book called " rediscover to god in america." of course, one nation under god is linked to's phrase in the gettysburg address. -- lincoln's phrase in the gettysburg address. we did a movie of the same name. i would say every state should adopt the law. that at some point in school, every child should encounter the declaration of independence. if you encounter the declaration of independence, you have the answer the question, what did jefferson mean when he wrote that we are endowed by our creator? the only way you can explain that is if he meant god.

if your rights come from god, to what degree is a change the whole theological fabric? it shatters it. i have a 12 step program in my book about rolex anonymous. 11 steps involve a higher being. we wanted a federal official that said if you drop that stuff about a higher being, we can finance the rest of the program. he said, i don't think you understand why it works. one last example, because this is a hat on fight that we should be prepared to take. we should be prepared to take on school systems and the boards of education. we should be prepared to take on schools of education. the founding fathers into writing the northwest ordinance

helped organize ohio, indiana, michigan, illinois, wisconsin, and part of minnesota. religion, morality, and knowledge are central. we must have schools. they edited the first three words in the capital. it began knowledge being essential. read jefferson, washington, adams, very carefully. you don't teach moral formations. you can't keep a free society because it degenerates. last question. >> would you comment on

republican socialism light? like paul ryan announcing the movement of the gop road map for america in which he proposes reducing the wealth in the proposes a flat income tax for a family of four. we cannot survive with half of the people paying no income-tax. while you're at it, send me some of his money. would you comment on that, sir? >> i don't feel quite as strongly as you do about that. when we first created the federal income-tax, but nobody below million dollars the year paid anything. it did not involve redistribution. if you look at paul ryan's roadmap, he is one of the most brilliant members of congress outlining transitional entitlements.

back towards a defined -- and moves people back to the idea that when you go to work, you will have to build up your savings. you can pay for your health care in your retirement in a way that encourages you to work. paul ryan represents a big step in the right direction. i would like to figure out how you have a radically smaller government and pay your taxes because you are redistributing. if you're not giving them earned income tax credits, but you say they want to find a new model, we are expecting you to be responsible for taking care of himself -- we are paying for

national security in the things that matter the whole nation. none of the founding fathers would have said that george washington -- he would have said washington did not owe part of his income for the toddler to live better than he earned. i just want to close of one last personal comment, because i really thrilled to be here. we have every reason to be optimistic and believe that the american people overwhelmingly preferred have a return to classic america of courage in the belief rather than a secularists -- a secular socialist machine. what i want to say you and i want you to go back and say every person you meet, i got

actively involved -- my dad was a personal trainer. we watched the death of the french force republic under the algerian war, 100% inflation, and the paratroopers literally landed in paris and killed the fourth republic. the young kid from pennsylvania that spent time at fort riley, this is all amazing. at between my freshman and sophomore years in high school, i decided this was all real. countries can die. countries can have terrible events. our ability -- what do we have to do to be safe, free, and prosperous? how do we elect people that do

we have the do? and how do we implement it so people try to continue the direction that is necessary for our freedom? i have done this now, literally, since august of 1958. the only reason that someone like me with no personal money or great background -- the only reason i can do all this is because people recognize me. these means really matter. we unifier cells, greengage ourselves, recommit ourselves. if you will talk to every young person you confined, tell them what this is really about. their country, their future, their life. we need them as citizens to do what citizens need to do. i leave that together, there is enough human energy and enough networking at this meeting that you could assess of the change the future of this country and

give your children in your grandchildren a new burst of freedom and enter that the government of the people, by the people, and for the people will not perish and will not be placed by the machine. good luck, and god bless you. [applause] ♪ ♪ [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> our live coverage of the event continues tomorrow with appearances by louisiana governor, texas gov. rick

perry, and former vice presidential candidate sarah palin. you can watch it on c-span beginning at 1:00 p.m. eastern. >> all this month, see the winners of c-span's studentcam video documentary competition. students submitted videos on the country's greatest strength or challenge. watch the top videos at 6:50 eastern just before washington journal and at 8:30 during the program, meet the students that made them. >> c-span, our public affairs content available on television, radio, and online. you can connect with us on twitter, facebook, and youtube. in sign up c-span.org.

>> at this signing ceremony, both leaders spoke about nuclear proliferation in the u.s.- russian relationship. this is an hour. ♪ >> [speaking russian] >> ladies and gentleman, the president of the united states, barack obama, and dmitri medvedev, are signing a treaty on measures for the further reduction --

>> [speaking russian] >> the president of the united states of america, barack obama, and the president of the russian federation, dmitry medvedev, are signing the treaty between the united states of america and the russian federation on measures for the further reduction and limitation of strategic offensive arms.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

[laughter] [applause]

>> good afternoon, everyone. i am honored to be back in the czech republic with president medvedev to mark the historic completion of the start treaty. let me begin by saying how happy i am to be back in the beautiful city of prague. the czech republic is a close friend and ally of the united states, and i have great admiration and affection for the czech people. their bonds are deep and enduring. they have made great contributions to the united states over the decades, and i want to think the president and all of those involved in hoping to host this extraordinary event. i want to thank my friend and

partner, without his personal efforts and strong leadership, we would not be here today. we have met, spoken by phone many times. it is a relationship built on candor, and each or respect. one year ago this week, i came here to prague and gave a speech outlining the comprehensive commitment to stopping the spread of nuclear weapons in seeking the ultimate goal of a world without them. i said then, and i will repeat now, that this is a long-term goal, one that may not even be achieved in my lifetime. i believed then, as i do now, that the pursuit of that goal will move us further beyond the cold war, strengthen the global nonproliferation regime, and make the united states and the world safer and more secure.

one of the steps that i called for last year was the realization of this treaty. it is very gratifying to be back in prague today. i also came to office committed to reset in relations between the united states and russia. i know president medvedev shared that commitment. as he said in our first meeting, our relationship had started to drift, making it difficult to cooperate on issues of common interest to our people. when we cannot work together on big issues, it is not good for either of our nations, nor is it good for the world. together, we have stopped that drift and proven the benefits of cooperation. today is an important milestone for nonproliferation and for u.s.-russia relations. it fulfills our common objective to negotiate a new strategic arms reduction treaty.

it includes significant reduction in the nuclear weapons we will deploy. the cuts or delivery vehicles by roughly half. it includes a comprehensive verification regime, which allows us to further build trust. it enables both sides the ability to protect security, as well as -- as well as america's commitment to the security of our european allies. i look forward to working with the senate to achieve ratification for this important treaty later this year. finally, this they demonstrate the determination of the united states and russia, the nation's that hold over 90% of the world's nuclear-weapons, to pursue responsible global leadership. we are keeping our commitments under the nuclear nonproliferation treaty, which must be the foundation for global nonproliferation. while the new start treaty is an important first step forward, it is just one step on a longer

journey. as i said last year, this treaty will set the stage for further cuts. going forward, we hope to pursue discussions with russia on reducing our strategic and tactical weapons, including non-deployed weapons. president medvedev and i have agreed to expand our discussions on missile defense. this will include regular exchanges of information as well as the completion of a joint assessment of the merging missiles. as these assessments are completed, i look forward to engaging in a serious dialogue about cooperation on missile defense. but, nuclear-weapons are not simply an issue for the united states and russia. they threaten the common security of all nations. a nuclear weapon in the hands of a terrorist is a danger to people everywhere from moscow to new york, from the cities of europe to south asia. next week, 47 nations will come together in a washington to

discuss concrete steps that can be taken to secure all vulnerable nuclear materials around the world in four years. the spread of nuclear weapons to more states is also an unacceptable risk to global security, raising the specter of arms races from the middle east to east asia. this week, the u.s. formally changed our policy to make it clear that those nuclear weapons states that are in compliance with the nuclear nonproliferation treaty and their nonproliferation obligations will not be threatened by america's nuclear arsenal. this demonstrates once more america's commitment as a cornerstone of our security strategy. those nations that follow the rules will find greater security and opportunity. those nations that refused to meet the obligations will be isolated and denied the opportunity that comes with

international recognition. that includes accountability for those who break the rules. otherwise, these are just words on a page. that is why the u.s. and russia are part of a coalition of nations insisting that the islamic republic of iran face consequences because they have continued -- continually failed to meet their obligations. . . are working together, the united nations security council, to pass strong sections -- sanctions on iran. we will not tolerate actions that followed the npt and threaten the international community and our collective and stability. while these issues are a top priority, they are only one part of the u.s.-russia relationship. today i express again my deepest condolences for the terrible loss of russian lives in the recent terrorist attacks. we will remain steadfast

partners in combating violent extremism. we also discussed the potential to expand our cooperation on behalf of economic growth, trade, and investment, as well as technological innovation. if i look for to discussing these issues further when president medvedev visits the united states later this year. because there's much we can do on behalf of our security and prosperity if we continue to work together. when you survey the many challenges we face around ", it is easy to grow complacent or to abandon the notion that progress can be shared -- many challenges we face around the world. when nations allow themselves to be defined by their differences, the gulf between them widens. when we fail to pepursue peace, its days beyond our grasp.

prague is a monument to human progress. old adversaries can forge new partnerships. i cannot be help but be struck the other day by the person who helped build the soviet union's first atom bomb at the age of 92. having lived to see the world war and the cold war. he said "we hope humanity will reach the moment when there is no need for nuclear weapons, when there is peace and calm in the world." it is easy to dismiss those voices. doing so risks repeating the horrors of the past and ignoring the history of human progress. the pursuit of peace and calm and cooperation among nations is the work of both leaders and peoples in the 21st century. we must be as persistent and passionate in our pursuit of progress as any who would stand

in our way. once again, president medvedev, thank you for your extraordinary leadership. >> your welco are welcome. [applause] ">> dear colleagues, dear members of the media, i fully agree with the assessment that has just been made by my colleague, president obama, concerning the fact that here in this room a truly historic event has taken place and the treaty has been signed for a further reduction and limitation of strategic offensive arms. this treaty has a 10-year duration. it will supersede the start treaty which has expired as well

as another existing crushes-u.s. treaty on reduction of strategic defense capabilities. first of all, i'd like to thank my colleague, president of united states of america, for successful cooperation in this very complex matter and for the reasonable compromises that have been achieved thanks to the work of our two teams. the aborted a bank to them, but let me do it once again in the presence of the media and the public. we thank them for their excellent work. i would also like to thank the leadership of the czech republic, mr. president, you, for this beautiful city and this beautiful springtime, thereby creating a good atmosphere for the future. and i believe that the this signature will open new cooperation among our countries

and will create safer conditions for life here and throughout the world. the negotiating process has not been --, but we have been working in a constructive way that has been a lot of work and very often are teams worked 24 hours a day. that enabled us to do something that just a couple of months ago looked like a mission impossible. within a short amount of time and be prepared a full-fledged treaty and signed it. as a result we have a document that maintains the balance of interest of russia and the united states of america. what matters most is that this is a win-win situation. no one stands to lose from this agreement. i believe that this is typical

of our cooperation. both parties have taken into account this victory of ours, the entire world community has one. this treaty has strategic ability and at the same time enables us to rise to a higher level of cooperation between russia and the united states. also, the contents of the treaty -- let me point out once again what we have achieved, because this is very important, 1550 developed weapons, which is one-third below the current level. 700 deployed icbm 's. and heavy bombers. this represents more than two fold reduction below the current levels. deployed and non deplore launchers for such missiles as well as deployed and non deployed heavy weapons, which

presents a two-thirds reduction below the level that existed prior to this treaty. at the same time can use its own discretion to determine the makeup and structure of its strategic defense potential. the treaty also includes provisions concerning -- change. we are quite experienced in these two matters. experts on these matters, they have the greatest experts in the world. the treaty also includes provisions concerning conversion and elimination, inspection provisions, as well as confidence-building measures. the verification mechanism has been significant and simplify compared with the original start treaty. it insures proper verification,

irreversibility, and transparency to reduce strategic offensive arms. we believe and our american partners are aware of it, this is our open position, we believe that the treaty can be viable and can operate only provided there is no qualitative orix quantitative increase in -- or quantitative increase in capabilities. this is the gist of the statement made by the russian confederation in the signature. in the post-senator period, we will achieve the ratification of the treaty, as mentioned by my colleague, mr. president of the united states. if it is also important to synchronize the ratification process. in terms of proceeding quickly

to present this document to the senate for ratification. we will also work with our federal assembly to maintain the necessary dynamics of the ratification process. by and large, we are satisfied with the work done. the result we have obtained is good. but today of course we have discussed not only the fact of signing the treaty. we have also discussed a whole range of important key issues of concern to all the countries. of course we cannot omit the iranian nuclear program. regrettably, iran is not responding to many constructive proposals that have been made. we cannot turn a blind eye to this. therefore, i do not rule out the possibility that the security council of united nations will have to review this issue again. our position is well-known. let me briefly outline it now.

of course sanctions by themselves seldom obtained specific results. although it is difficult to do without them in certain situations. those sanctions should be smart and name not only at nonproliferation but also to resolve other issues. rather [unintelligible] [president speaking in russian]

this should not only be between the presidency, but presidents do not cover all the issues that have to be tackled by executive structures. on the working level, contact should be maintained on all levels.

[president speaking in russian]

[applause] [applause]

>> the chicago tribune, christie parsons. [no audio] >> thank you very much. thank you for taking my question, mr. president. how will the two sides get around differences on missile defense to work out a fall on a treaty, since that seems to be the biggest problem, for their arsenal reductions? can you work out a cooperative agreement on missile defense? >> one of the things that we discussed when we first met in moscow was the relationship between offensive and defensive

capabilities. and what i made clear was that our missile defense systems were not directed at changing the strategic balance between the united states and russia, but instead were directed at protecting the american people from potentially new attacks from missiles launched from third countries. we recognize, however, that russia is a significant interest in this issue. and what we have committed to doing is engaging in a significant discussion, not only bilaterally, but also having discussions with our european allies and others about a framework in which we can potentially cooperate on issues of missile defense.

in a way that protects u.s. national security interests, preserves russian national security interests, and allows us to guard against a rogue missile from any source. i am actually optimistic, that having completed this treaty, which signals are strong commitment to a reduction in overall nuclear weapons and that i believe is going to strengthen the nuclear nonproliferation treaty regime, that sends a signal around road that the united states and russia are prepared to once again take leadership in moving in the direction of reducing reliance on nuclear weapons and preventing the spread of nuclear weapons as well as nuclear materials, that we will have build the kind of trust not only

between president but also between governments and between peoples, that allows us to move forward in a constructive way. . ,, but we also want to make clear that the approach that we have taken in no way is intended to change the strategic balance between the united states and russia. and i'm actually confident that moving forward, as we have these discussions, it will be part of a broader set of discussions about -- for example, how we can take tactical nuclear weapons out of theater, the possibilities of us making more significant cuts, not only in deployed but also nondeployed missiles. there are a whole range of issues that i can we can make

significant progress on. i'm confident that this is an important first step in that direction. >> i would like to say a few words on the issue. interrelation between missile defense and start was one of the most difficult subject -- at present, the language that has been in the treaty signed -- proceeding from the bases of the newly signed treaty. it matters to us what will happen in missile defense. we will watch how these

processes develop. the preamble, the language that extends, replicates a legal principle of change ability of circumstances that were the basis of the trading. a flexible process, and we are interested in cooperation with our american partners. in terms of decisions in the area of missile defense -- this does lead to progress. does not mean there are no digressions in understanding what we should address these issues.

to help establish a global missile defense system. given the ball more ability of our world, the terror challenges -- vulnerability of our world, the terror challenges, and nuclear arms by terrorists in this world, and i'm an optimist as well as my american colleagues and i believe we will be put to reach compromise on this issue. >> [interpreter] i have two questions. president obama, the first time to agree on reduction of the offensive arms. but as you mentioned, russia and the united states are not the only countries who have nuclear weapons. how specifically can it be

achieved similar to today's documentation on limitation of nuclear arms. how soon will we see others sign the document and will you move with the russian federation? president of the russian federation, a dimension -- you mentioned not able to agree on anything else except reduction of mutual arms. will we see any counter -- anything that counter such a statement and what will be agreements be? >> first of all, as i mentioned in my opening remarks, the united states and russia account for 90% of the world's nuclear weapons. and given this legacy of the

cold war, it is critical for us to show significant leadership. that, i think, is what we have begun to do with this follow on start treaty. other countries will have to make a series of decisions about how they approach the issue of their nuclear weapons stockpiles. as i repeatedly said -- and i am sure dmitri feels the same way with respect to his country -- we are going to preserve our nuclear deterrent so long other countries have nuclear weapons. and we will make sure of the stockpile is safe and secure and defective. i do believe that as we look out into the 21st century, that more and more countries will come to recognize that the most

important factors in providing security in and peace to their citizens will depend on their economic growth, will depend on the capacity of the international community to resolve conflicts. it will depend on having a strong conventional military that will protect our nation's borders and that nuclear weapons increasingly in an interdependent world will make less and less cents a as the cornerstone of security policy. but that would take some time. i think each country will have to make its own determination. the key is for the united states and russia to show leadership on this friends because we are so far ahead of every nation with respect to possession of nuclear weapons. the primary concerns we identified in a recent nuclear posture review essentially a declaratory statement of u.s.

policy with respect to nuclear weapons. our biggest concerns right now are actually the issue of nuclear terrorism and proliferation. more countries obtaining nuclear weapons. those weapons being less controllable, less secure nuclear materials floating around the globe. and that is going to be a major topic of the discussion we have in washington on monday. the united states and russia have a history already come a decade-long history, of locking down loose nuclear materials. i believe that our ability to move forward already on sanctions with respect to north korea, intense discussions we are having with respect to iran, will increasingly send a signal to countries not abiding by

their nuclear nonproliferation treaty obligations that they will be isolated. all those things will go toward sending a general message that we need to move in a new direction. i think leadership on that front is important. the last point i would make is, i would anticipate or approach the question about other areas of cooperation. our respective foreign ministers -- secretary of state hillary clinton and foreign minister lavrov have been heading a bilateral commission that has been working intensively on a whole range of issues. president medvedev and myself identified a series of key areas on the economic front, a trade relations, essentials for joint cooperation on various industries, how we can work on innovation and sparking economic growth. we already worked it gathered -- together closely on the g-20.

i think we can build on that bilaterally. there are issues of counterterrorism that are absolutely critical to both of us and i just want to repeat how horrified all america was at the recent attacks in moscow. we recognize that that is a problem that can happen anywhere at any time and it is important for russia and the united states to work closely on those issues. and there is the people to people context, figuring out how we can make sure there is more interaction and exchange between our two countries on a whole range of issues within civil society. so i am optimistic we can come to new to make progress -- but we need to -- it speaks to not only security of the nation but security of the world. >> [speaking in russian of]

>> [interpreter] yes, we have 9% of the stockpiles which is from the cold war legacy. we will do what we can to be taken in mind the special issue of the united states and russia on the issue. we do care about what is going on with nuclear arms and other countries of the world and we can't imagine a situation between the russian federation and the united states, taking efforts to disarm and the world will move toward a different -- printable different direction. we are in charge of our peoples and the -- so all the issues related to the implementation of

the treaty and nonproliferation and the threat of nuclear terrorism stood be in a complex and integrated way. i would like the signing not to be regarded by other countries as stepping aside from the issue. on the contrary, they should be involved to the fall and take an active participation in it. they should be aware of what is going on. so, we would welcome the initiative that has been proposed by the president of the united states to convene a relevant conference in washington and i will take part, which should be a good platform to discuss nonproliferation issues. as far as the linkages in nuclear arms that are concerned. in this world we have a lot that brings us together.

and today we have had a very good talk that has started not with a discussion of the documents -- they were coordinated -- and not without discussing iran, north korea, middle east, and not other press shrink -- pressing issues of foreign affairs but we started with economic issues. i said there is a gap in our economic cooperation. looking at the figures of you would've investment of the united states in russia. -- cumulative investment of the united states and russia. it is small and the figures have decreased a bit in terms of russian investment into the u.s. the line it is nearly the same. with all countries would not have such a volume of investment. but if we can compare the figures with figures of foreign

investor presence in the american comment -- economy, other countries, including states that can be compared with russia. it is a difference of 20 or 30 times. so we have a field to work upon. to say nothing about the projects we talked about, high- tech economy establishment and russian federation. we are open to cooperation and we would love to use american experience -- issues of energy, cooperation in transport, and i suggest that some time ago returning to issue of creating a big cargo plane as such a unique experience. only two -- u.s. and russia. issues of nuclear cooperation

are important. there can be a lot of economic projects. it is not the business of presidents to deal with each of them but some key issues are to become told -- controlled by us. relations between business, between those depend on business ties. people to people context are important. it is significant that we do our best so our citizens respect each other, understand each other better, so they are guided by best practices of american- russian culture and not perceived each other through the lens of information that sometimes is provided by mass media. so we should more attentively, more forcefully in -- have more

-- and i count on this. >> thank you, president medvedev and president obama. for president obama first. could you an elaborate on how the year-long negotiations over the new start treaty had advanced u.s. cooperation with russia on iran and give us a sense of when you will pursue or move forward in the united nations or next week with sanctions discussions and what those sanctions might look like? for president medvedev, could you address whether russia could accept sanctions against iran, specifically dealing with its energy industry and energy sector? thank you. >> discussions about sanctions

on iran have been moving forward over the last several weeks. in fact, they have been moving forward over the last several months. we are going to start seeing some ramp up negotiations taking place in new york in the coming weeks. and my expectation is that we are going to be able to secure strong, tough stank -- sanctions on iran this spring. now, i think there are two ways in which the start negotiations have advanced or at least influenced russia-u.s. discussions around iran. the first is obviously president medvedev and i have an able to build up a level of trust and our teams have been able to work together in such a way that we can be frank, we can be clear,

and that helped to facilitate than our ability, for example, to work together jointly to present to iran reasonable options that would allow it to to clearly distanced itself from nuclear-weapons and the pursue a path of peaceful nuclear energy. that wasn't just an approach that was taken by the united states and russia, but an approach taken by the p5 plus 1 and the international atomic energy agency. iata. -- iaea. what we have seen from the start is a host of country is -- countries, led by united states

and russia, have centered around, we are willing to work through diplomatic channels to resolve this issue. unfortunately iran consistently rebuffed our approach. i think russia has been a very strong partner in saying that it has no interest bringing down iranian society or the iranian government but it does have an interest, as we all do, making sure each country is following its international obligations. the second way in which i think the start treaty has and will start discussions around iran is it sent a strong signal that the united states and iran -- the united states and russia are following our obligations and the nuclear nonproliferation treaty.

and our interest in iran or north korea or any other country following the mptnpt, is not signalling out one country but sends a strong signal that all of us have an obligation -- each country has an obligation to follow the rules of the road internationally to ensure a more secure future for our children and our grandchildren. so, i think the fact that we are signing this treaty, the fact that we are willing as the two leading nuclear powers to continuing the work of reducing our own arsenals indicates the fact we are willing to be bound by our obligations and we are not asking other countries to do anything different, but simply to follow the rules of the road that have been set forth and have helped to

maintain at least a lack of the use of nuclear weapons over the last several decades, despite obviously the cold war. and the concern i have particular, and the concern that i think is the most profound security threat to the united states, is that with the further proliferation of nuclear weapons, with the state's obtaining nuclear weapons and potentially using them to blackmail other countries or potentially not securing them effectively or passing them onto terrorist organizations, that we could find ourselves in a world in which not only state actors but also potentially non-state actors are in possession of nuclear weapons.

and even if they don't use them, would then be in a position to terrorize of the world community. that is why this issue is so important and that is why we will be pushing very hard to make sure that both smart and strong sanctions end up being in place soon to send a signal to iran and other countries that this is an issue that the international community takes seriously. >> [speaking in russian] >> [interpreter] let us ask ourselves the question. what do we need sanctions for? do we need them to enjoy the act of imposing reprisals or is the object of another one? i'm confident all those present here will say we need sanctions and ordered to prompt one or another individual or state to

behave properly, behaved within the framework of international law while complying with the obligations. therefore when we are speaking about sanctions, i cannot disagree with what has just been said. and this has been the position of the russian federation from the very outset. although they are not always successful, those sanctions should be smart sanctions capable of producing proper behavior on the part of the relevant sides. what sort of sanctions? today we had a very open-minded, frank, and straightforward manner discussing what can be done and what cannot be done. let me put it straight forward. i have outlined our limits for

such sanctions, our understanding of these sanctions, and i said in making decisions like that, i, as president of the russian federation, will proceed from two premises. first, we need to behave properly. secondly, but not least, is to maintain the national interest of our countries. so, smart sanctions should be able to motivate certain parties to behave properly. and i'm confident that our teams that will be engaged in consultations will continue discussing this issue. >> [interpreter] vladimir -- now everyone is concerned whether it will be ratified by the parliament. you mentioned everyone will be

working to achieve such ratification. what difficulty do you see and how dss chances for success? the question is addressed to both presidents. >> [interpreter] well, and all appearances, -- believes we might have more problems with the ratification. perhaps it is true. let me say what i think about this question. of course, such agreements of major importance, international under our constitution and our legislation are subject to ratification by our parliament. and of course for our part we intend to proceed promptly and to do all the necessary procedures to ensure that our parliament, our state duma starts discussing this treaty. i will proceed from the

following -- i believe that we have to ensure the synchronization of the ratification process so that neither party feels in one way or another compromise. -earlier one state would ratify but another party would say sorry, the situation is changed. this is something we have to avoid. that is why i say we have to proceed simultaneously in the conditions of an open-minded and faithful discussion with subsequent ratification by our parliaments. that is what we need. and we will not be found amiss in that regard. >> the united states senate has the obligation of reviewing any treaty and ultimately ratifying it. fortunately there is a strong

history of bipartisanship when it comes to the evaluation of international treaties, particularly arms control treaties. and so i have already engaged in consultations with the chairman of the relevant committees in the united states senate. we are going to broaden that consultation now that this treaty has been signed. my understanding that both in russia and the united states, it will be posted on the internet, appropriate to a 21st century treaty. so people not only within government but also the general public will be able to rebuild it and open and transparent fashion what it is we agreed to -- review in an open and transparent fashion. they will discover this is a well crafted treaty that meet the interest of both countries. that meets the interests of the world. and the united states and

russia, reducing its nuclear arsenals and setting the stage for potentially further reductions in the future. so i'm actually quite confident that democrats and republicans in the united states senate, having reviewed this, will see that the united states has preserved its core national security interests, that it is maintaining a safe and secure and effect of nuclear deterrence, but that we are beginning to once again move forward, leaving the cold war behind, to address the new challenges in new ways. and i think the start treaty represents an important for step in that direction. and i feel confident that we are going to be able to get it ratified. all right, thank you very much, everybody. >> [interpreter] thank you, see you next time.

[applause] >> coming up tonight on c-span, the financial crisis inquiry commission questioned citigroup executives about their lending practices. then a discussion about the structure of u.s. intelligence agencies and later, president obama and russia's president sign a nuclear weapons treaty. [captions copyright national cable satellite corp. 2010] >> on tomorrow morning's "washington journal," a look at the country's economy with paula dwyer. we'll discuss this week's coal mine accident with mine safety executive gregory wagner and gary stangler discusses a study

of people who grew up in foster care. "washington journal" is live beginning at 7:00 a.m. eastern time on c-span. ♪ >> what in the world is more ridiculous right now than american politics? for the past year using clips from various media outlets, including c-span, the gregory brothers have become viral hit makers. we'll talk to them sunday night on c-span's "q & a." >> earlier today, former citigroup c.e.o. chuck prince apologized to americans. he and robert rubin testified before the financial crisis inquiry commission. this was the second of two

hearings they are holding this week. the commission plans to publish a final report by april 14. this is three hours. >> good morning. >> the meeting of the financial crisis inquiry commission will come to order. as everyone who joined us yesterday knows we are in the midst of three days of hearings on the issues of subprime lending and securitization and how the subprime origination phenomenon and securitization phenomenon may have impacted our financial crisis in which we have dealing with in this country today. heard from alan greenspan from the federal

reserve, and from officials from citigroup. today we are hearing again from officials from citigroup, both mr. rubin and mr. prince, and later today from officials from the office of the comptroller of the currency. and tomorrow we will continue our hearings in this same cool, not really air conditioned room on fannie mae. so with that, i would like to begin our hearing. we have two witnesses today, mr. chuck prince, the former chairman and c.e.o. of citigroup and mr. robert rubin, the former treasury secretary of the united states of america, as well as the chairman of the executive -- former chairman of the executive committee of the board of directors of citigroup. thank you, gentlemen, for being with us here this morning. what i'd like to do to start off as we are doing with all witnesses who appear before us in the course of our hearings, both before you and after you,

is we are customarily swearing every witness in, so with that, i'd like to ask each of you, both of you, to please stand up, so that i can swear you in front of the commission. [witnesses sworn in] >> thank you very much. gentlemen, you have provided us with written testimony, which we have in hand and i'm going to ask each of you this morning to provide us with oral testimony of not to exceed 10 minutes. and so with really no further ado, mr. prince, i will ask you to start this morning. please turn on the microphones and pull them as closely to you as you can and let's commence. mr. prince? >> thank you.

chairman angelides, vice chairman thomas, members of the commission, let me start by saying i'm sorry. i'm sorry that the financial crisis has had such a devastating impact on our country, i'm sorry for the millions of people, average americans, who have lost their homes, and i'm sorry that our management team, starting with me, like so many others, could not see the unprecedented market collapse that lay before us. i was the c.e.o. of citigroup from october 2003 until november 4, 2007. before becoming c.e.o., i held various positions in citi's senior management. for nearly 30 years, until november 4, 2007, when i resigned, citi and its predecessors was my professional life. i have given a great deal of thought to the unique events that led to the financial crisis

and which bring us here today. i wanted to share some of my views, which i believe are important to set the context for the problems that arose at citi, as well as many other financial institutions, and eventually led to citi's receipt of government assistance. the financial crisis resulted from the confluence of several factors. the absence of any of which would likely have caused the crisis to be averted, or significantly moderated. first was the unusually long period of low interest rates, stemming from a change in the pattern of global funds flows following the 1998 emerging markets financial crisis, as well as the stimulative action of the federal reserve board following the bursting of the tech bubble and. terrorist attacks of 9-11. as a result, investors were reaching for yield and many people from investors to traders who rating agencies to regulat

regulators believed that a new era of generally lower risk had begun. during this period, securitized products as an asset class grew dramatically, in an effort to satisfy investor demand for products that had hyper yields, but were -- higher yields, but were still believed to have a high degree of safety. the growth in securitized products also reflected a growing belief in and reliance on financial modeling by traders as a basis for risk decisions. and a growing reliance on rating agency determinations by investors. as a result of the rapid growth in demand for assets to be securitized, together with long-standing and bipartisan federal policies, encourage being the expansion of homeownership, the asset class of subprime mortgages grew very quickly. the patch work nature of state

regulation of the origination of subprime indeed of all mortgages, led in hindsight to the origination of more and poorer quality subprime assets to be securitized. eventually, the rating agencies dramatically downgraded their ratings on the securitized products, collateralized by these subprime loans. the precipitous nature of the actions by the rating agencies, together with the widespread holdings of these securities, caused a broad and generalized freezing of the securities markets, as investors could no longer be sure what standards and models of risk and safety could be relied upon. and who held what levels of risk. this general freezing of the credit markets then precipitated a severe contraction of trade that led to the general recession that still afflicts us. it is against this backdrop that the events at citi and at many other banks and financial

institutions took place. specifically, on november 4, 2007, citi announced an estimated $8 billion to $11 billion in write-downs related to subprime related holdings. that same day, i resigned as c.e.o. of after i left citi incurred even greater losses, which eventually led citi to receive over $45 billion in federal tarp funds. as the commissioners are no doubt already aware, the largest losses at citi emanated from what were perceived at the time to be extremely safe, super senior tronchs of c.e.o.s that carried the howest possible risk of default. it bears emphasis that citi was by no means alone in this view and that everyone, including our risk managers, government regulators, other banks, and cde structurers, all believed that

these scattered showers held virtually no risk, a perception strongly reinforced by the above aaa rating, bested by the ratings agencies. citi's writedowns on these specific securities totalled some $30 billion over a period of suction quarters and i -- six quarters and i believe it is fair to say that this factor alone made a substantial part of the difference between citi's ultimate problems and those of other banks. while i was not aware of the deaf exists being made on the trading desk to retain the super senior tronchs, given the universal perception that these soup he were senior positions were extremely low risk, it is hard for me to fall the traders who made the decisions to retain these positions on citi's books, having $40 billion of aaa plus rated paper on the balance sheet of a $2 trillion company would not raise a concern.

moreover, it is important to appreciate that the cdo business, which was a small part of a large and complex financial organization, was being managed by highly experienced traders and risk managers and was fully transparent to our regulators, who were embedded across the company. in retrospect, it turned out that that risk assessment, while widely held, was dramatically wrong, given the wholly unanticipated and significant collapse in residential real estate values across the board, in nearly every community and geographic location nationwide and across many parts of the world. in that context, let me safe something about risk. i always believed that the resilient -riskfunction at citil part of our business. after becoming c.e.o., one of the very first things i did was to name david bushnell as the chief risk officer of the company and to change the

reporting structure, so that the risk function was then completely independent of the businesses, which it was not before. the risk professionals were not paid on profits, were not paid on volumes or revenues of the business units, and i believed that that was good governance and i believe that we were ahead of best practices at that time. mr. bushnell was known as one of the most sophisticated risk managers in the investment banking community, with a strong, hands-on trading background. as serious issues unfolded in the late summer and fall of 2007, relating to the subprime market, and our lower rated cdo holdings, as well as certain other businesses, such as leveraged lending, our senior management was fully focused on the unprecedented issues the company faced. we had multiple special board and committee meetings to apprise the board members of the issues as they developed in realtime and to solicit their

valuable vips and counsel. -- advice and counsel. regrettably, we were not able to prevent the losses that occurred, but it was not a result of management inattention or a lack of proper reporting of information. the lessons learned from this experience are many. but let me address two issues that seem to come up repeatedly when discussing citigroup. is citi too big to fail, and is it too big to manage? these are separate but related questions, as you know. let me start with the latter. i personally do not think citi was too big to manage. to be sure, it was a challenge. but we made efor must strides during my tenure to improve the way in which the various parts of citi worked together. and i think the company as a whole was much better for it. in any event, i do not think that the broad, multifaceted and diversified nature of citi's businesses materially cobu