president of the washington institute, martin gross. [applause] >> thank you, rob. good evening. i am martin gross, the president of the washington institute. on behalf of the board of directors at a board of trustees, i welcome all of you to this reception to celebrate the twentieth anniversary. -- the twenty fifth anniversary. at 25, we are no longer a startup. we are no longer the new kid on the block. we have a mile long paper trail that defines the excellence of our research and the credibility of our scholarship. . .

>> a solid, matured institution that is now a fixture for the washington policy community. please join me in thanking our founding president.

our chairman emeritus. fred leiper. and our current chairman of the board. [applause] i would also like to recognize the more than 130 members of the institute's board of trustees, who have traveled from every corner of the nation to be here. one of the finest aspects of this organization is that when these men and women enter the room as a trustee of the institute, they cease to be republicans or democrats. they understand they are here to advance the national interest, above party politics. it is for that reason we are here today, welcoming a representative of the fifth president who has been in the white house since we put out our

shingle 25 years ago. we believe that commitment to non partisanship is a principale that stands the test of time. these are not simple times for america in the broader middle east. the litany of challenges is well known -- two wars, the specter of nuclear proliferation, the ever-present threat of terrorism, and the scourge of radical extremism. a deficit of democracy, governance, and human rights. the on the film promise of recognition, reconciliation, and peace between arabs and israelis. the list goes on. but we are not without tools for change. one of the tools is the impressive human capital that is brought to address these problems. our special guest today is a prime example of this. in or out of uniform, general

james jones has devoted a lifetime of service to our nation. as a marine, he saw combat in vietnam and was a commander in northern iraq and bosnia. he rose through the ranks to serve as commandant of the marine corps and supreme allied commander, europe, commander of the u.s. european command. immediately after his retirement from active duty, he decided to take on an easy job. he was appointed by secretary of state connolly's a ridoleeza rik with palestinian and israeli officials to further the police process -- the peace process, to strengthen security for both sides. in 2009, he was named by president obama to be the assistant of national security

affairs, the top adviser on all aspects of national security. general, we have a history of moving mountains to get our job done, but we did not realize it would take an icelandic volcano to make it possible for you to be here today. let me thank you and welcome you to deliver this year's lecture on u.s./middle east policy. ladies and gentlemen, general james jones. [applause] >> thank you all very much. your very kind introduction, and for your leadership as the institute's new president. you have 25 years of institute history to live up toand 25 years of institute presidents watching to make sure you get it right.

in order to set the stage for my remarks, i would like to tell you a story that i think is true. it happened recently. it was in southern afghanistan. a member of the taliban was separated from his fighting party and wandered around for a few days in the desert, lost, out of food, no water. he looked on the horizon and saw what looked like a shack. he walked towards that shaq. as he got to it, it turned out it was a little store owned by a jewish merchant. the taliban warrior with up to him and said, "i need water. give me some water." the merchant said, "i am sorry. i do not have any water. but we have a nice sale of ties today." the taliban erupted into a

stream of language that i cannot repeat about israel, about jewish people, about the man himself, about his family. "why are you trying to sell me ties? people do not get it." he waited until this man was through with his diatribe and said, "i am sorry i do not have water for you. i forgive you for all of the insults you have levied against me, my family, and my country. but i will help you. if you go over that hill and walked 2 miles, there is a restaurant there. the heavy water you need." the taliban disappeared over the hill, only to come back an hour later. walking up to the merchant he said, "you have to sell me a tie to get in the restaurant." [laughter]

thank you rob satloff, for welcoming us tonight. on this, your 25th anniversary, let me commend all those who have made the washington institute for near east policy the respected institution it is todayespecially past presidents barbi weinberg, fred lafer, michael stein and your chairman howard berkowitz. i also want to thank your distinguished trustees and board of advisorswhich has one empty chair tonight because of the recent loss of one of your longtime advisorsa public servanta true warrior- diplomatand one of my predecessors as supreme allied commander europe. tonight, we remember general and secretary of state alexander haig. [applause] for a quarter-centurythrough five different administrationsthis institute

has provided an invaluable service, to policymakers and the american people. instead of partisanship, you've given us scholarship. instead of simply recycling old arguments, you've given us fresh and objective analysis. so i want to thank rob and your entire staffand 25 years of scholars and fellowsfor your insights and your contributions. i've seen it myself. you continue for another 25 years, and 25 years beyond that. [applause] a few years ago, i served as special envoy for middle east regional security. our work was strengthened by the advice and counsel of many experts, including one of our special advisorsand your senior fellowsmatthew levitt. we benefited from discussions with other institute fellows, including david makovsky and dennis ross. and, of course, president obama's administration was all too happy to steal dennis away from you, and he is now helping

to lead our efforts in the region at the national security council. and i believe dennis is here tonight. dennis, would you please stand and be recognized? [applause] i especially want to thank the institute for your work on behalf of the effort that president obama called for in his speech last year in cairothat is, greater understanding between the united states and muslim communities around world. the president called for "a sustained effort to listen to each other, to learn from each other, to respect one another, and to seek common ground." in that spirit, you've been promoting mutual understanding for many yearswhether it's welcoming to washington scholars from cairo to baghdadyour arabic-language websiterob's weekly arabic- language interview showor his recent documentary recounting the little known story of how arabs saved jews from the holocaust. so thank you allfor analysis

that has strengthened our national securityand for promoting the mutual understanding that can lead to a safer, more secure world for us all. and i wish you continued success, because, frankly, our nationindeed, the worldneeds institutions like yours now more than ever. indeed, since taking office, president obama has made it clear that his first and foremost priority is the safety and security of the american people. to this end, he has pursued a new era of american leadership and comprehensive engagement based on mutual interests and mutual respect. in the coming weeks, we'll be releasing a new national security strategy that formalizes the president's approachan approach that is rooted in and guided by our national security interests. these interests are clear and enduring. securitywe have an enduring interest in the security of the united states, our citizens and

u.s. allies and partners, prosperitywe have an enduring interest in a strong, innovative and growing u.s. economy in an open international economic system that promotes opportunity and prosperity, values we have an enduring interest is upholding universal values, at home and around the world, and, international orderwe have an enduring interest in an international order advanced by u.s. leadership that promotes peace, security and opportunity through stronger cooperation to meet global challenges. security, prosperity, universal values, and an international order advanced by american leadershipthese are the interests that the president and his administration are working to advance around the world every day, including in the middle east. to strengthen our security, we are responsibly ending the war in iraq. as evidenced by the successes this weekend of military

operations against al qaeda in iraq, iraqi security forces are in the lead. the united states will end our combat mission by the end of august. in accordance with the u.s.- iraq security agreement, all u.s. forces will be out iraq by the end of next year. now, the most immediate challenge is for iraqi political leaders to form an inclusive and representative government. as they face the longer-term challenges of expanding prosperity and opportunity, the iraqi people will continue to have a partner in the united states. in afghanistan and beyond, we have refocused the fight against al qaeda and its extremist allies. we've struck major blows against their leaders, who are now hunkered down in the tribal regions along the border between afghanistan and pakistan. at the same time, we're forging partnerships that isolate extremists, combat corruption and promote good governance and developmentall of which

improves the daily lives of ordinary people and undermines the forces that fuel violent extremism. and to confront the greatest threat to global securitythe danger that terrorists will obtain nuclear weapons or materialsthe president hosted last week's historic nuclear security summit, where 46 nations joined the goal of securing the world's vulnerable nuclear materials in four years. to advance our prosperity, the president has worked with allies and partners to expand the global economic recoverypursue growth that is balanced and sustainedlaunched a national export initiative to double american exports and support two million american jobs. and reformed the international economic architecture so that the g-20 is now the premier forum for international cooperation. and as he promised in cairo,

next week the president will host a summit on entrepreneurship with business leaders and entrepreneurs from more than 50 nationsincluding many muslim-majority countries and israelto promote our common prosperity. to advance values that are universal, the president has made it clear that the united states will uphold our ideals both at home and abroad, including the right of people to have a say in how they are governed. as the president said in cairo, the u.s. is committed to supporting governments that reflect the will of the people, because history shows that these governments are more stable, more successful, and more secure. so political reform and effective and accountable governance will remain core elements of our vision for the future, in the middle east and around the world. and to advance a just and sustainable international order, the united states is working to ensure that both the rights and responsibilities of all nations are upheld.

for example, the new start treaty with russia is part of the president's comprehensive agenda to pursue a world without nuclear weaponsan agenda that reflects the three pillars of the nuclear nonproliferation treaty, nations with nuclear weapons will reduce them, nations without nuclear weapons will forsake them, and the recognition that nations have a right to peaceful nuclear energy. whether or not the rights and responsibilities of nations are upheld will in great measure determine whether the coming years and decades result in greater security, prosperity and opportunityfor americans and for people around the world. perhaps nowhere do we see this more than in the middle east, where we face two defining challenges that i want to touch on tonight, preventing iran from acquiring nuclear weapons and the means to deliver them, and forging a lasting peace between israelis and palestinians as part of a

comprehensive peace in the region. when president obama took office, iran had already assembled thousands of centrifuges and accumulated nearly a bomb's worth of low enriched uranium. iran was in active violation of five un security council resolutions. moreover, iran's sponsorship of terrorist actors in iraq, lebanon, and gaza signaled a continued determination to sow its brand of violence and coercion across the middle east. clearly, a policy of not engaging iran did not work. that is why president obama made clear his commitment to engage iran on the basis of mutual respect on the full range of issues that divide our countries. as the president repeatedly said, he was under no illusions. he knew it would not be easy to overcome decades of mistrust,

suspicion, and even open hostility between our countries. but he also knew that engagement was necessary to present iran with a choice and to unite the international community around the need for iran meet its international obligations. so to advance our interests, president obama extended his hand and the opportunity for dialogue. american and iranian diplomats met in geneva in october, and through the international atomic energy agency. with strong support from the united states, france, and russia, the iaea put forward a creative offer to produce nuclear fuel using iran's own low enriched uranium. it was an offer with humanitarian benefits, ensuring that iran would meet its need for medical isotopes. it gave iran the opportunity to show that its nuclear program

was for peaceful purposes. it would have built confidence on both sides in the possibility of further agreements. in addition, the united states went to great lengths to demonstrate our commitment and establish assurances for iran. to date, we have seen no indication that iran's leaders want to resolve these issues constructively. after initially accepting it, they rejected the tehran research reactor proposal. they have refused to discuss their nuclear program with the p5+1. the revelation of a previously covert enrichment site, construction of which further violated iran's npt obligations, fed further suspicion about iran's intentions. iran recently increased the enrichment levels of its uranium to 20 percent. all the while, iran continues to

brutally repress its own citizens and prohibit their universal rights to express themselves freely and choose their own future. these are not the behaviors of a responsible international actor, and they are not the actions of a government committed to peaceful diplomacy and a new relationship with a willing and ready partner. indeed, iran's continued defiance of its international obligations on its nuclear program and its support of terrorism represents a significant regional and global threat. a nuclear-armed iran could transform the landscape of the middle east, precipitating a nuclear arms race, dramatically increasing the prospect and danger of local conflicts, fatally wounding the global non-proliferation regime, and emboldening the terrorists and extremists who threaten the united states and our allies. therefore, we are now working actively with allies and partners to increase the costs

of iran's continued failure to live up to its international obligations. this includes a u. n. security council sanctions resolution. as president obama has stated, our offer of engagement with iran stands, and we remain prepared to pursue a better and more positive future. iran has rights, but with those rights come responsibilities. if iran's leaders do not fulfill those responsibilities, and if they continue to violate their international obligations, they will face ever deepening isolation. iran's government must face real consequences for its continued defiance of the international community. we hope that iran will make the right choice and acts to restore the confidence of the international community in the exclusively peaceful nature of its nuclear program. however, should iran's leaders fail to make that choice, president obama has been very

clear, and i want to repeat it here, the united states is determined to prevent iran from developing nuclear weapons. [applause] in so doing, we will avoid a nuclear arms race in the region and the proliferation of nuclear technology to terrorist organizations. of course, one of the ways that iran exerts influence in the middle east is by exploiting the ongoing arab-israeli conflict. iran uses the conflict to keep others in the region on the defensive and to try to limit its own isolation. ending this conflict, achieving peace between israelis and palestinians and establishing a sovereign palestinian state would therefore take such an evocative issue away from iran, hizballah, and hamas. it would allow our partners in

the region to focus on building their states and institutions. and peace between israel and syria, if it is possible, could have a transformative effect on the region. since taking office, president obama has pursued a two-state solutiona secure, jewish state of israel living side by side in peace and security with a viable and independent palestinian state. this is in the united states' interest. it is in israel's interest. it is in the palestinians' interest. it is in the interest of the arab countries, and, indeed, the world. advancing this peace would also help prevent iran from cynically shifting attention away from its failures to meet its obligations. and since there has been a lot of distortion and misrepresentation of our policy recently, let me take this opportunity to address our relationship with our ally israel. like any two nations, we will have of disagreements, but we will always resolve them as

allies. and we will never forget that since the first minutes of israeli independence, the united states has had a special relationship with israel. and that will not change. [applause] why? because this is not a commitment of democrats or republicans, it is a national commitment based on shared values, deep and interwoven connections, and mutual interests. as president obama declared in cairo, "america's strong bonds with israel are well known. this bond is unbreakable." they are the bonds of historytwo nations that earned our independence through the sacrifice of patriots. they are the bonds of two people, bound together by shared values of freedom and individual opportunity. they are the bonds of two democracies, where power resides

in the people. they are the bonds of pioneers in science, technology and so many fields where we cooperate every day. they are the bonds of friendship, including the ties of so many families and friends. this week marked the 62nd anniversary of israeli independencea nation and a people who have survived in the face of overwhelming odds. but even now, six decades since its founding, israel continues to reside in a hostile neighborhood with adversaries who cling to the false hope that denying israel's legitimacy will ultimately make it disappear. but those adversaries are wrong. as the president said in cairo, for the entire world to hear, the state of israel "will not go away." as he said at the united nations, nations "do the palestinians no favors when they choose vitriolic attacks against israel over constructive willingness to

recognize israel's legitimacy and its right to exist in peace and security." so america's commitment to israel will endure. and everyone must know that there is no spaceno spacebetween the united states and israel when it comes to israel's security. our commitment to israel's security is unshakable. it is as strong as ever. this president and this administration understands very well the environmentregionally and internationallyin which israel and the united states must operate. we understand very well that for peace and stability in the middle east, israel must be secure. the united states will never waiver in defense of israel's security. that is why we provide billions of dollars annually in security assistance to israel, why we

have reinvigorated our consultations to ensure israel's qualitative military edge, and why we undertake joint military exercises, such as the juniper cobra ballistic missile defense exercise that involved more than 1,000 united states servicemen and women. we view these efforts as essential elements of our regional security approach, because many of the same forces that threaten israel also threaten the united states. i can also say from long experience that our security relationship with israel is important for america. our military benefits from israeli innovations in technology, from shared intelligence, from exercises that help our readiness and joint training that enhances our capabilities and from lessons learned in israel's own battles against terrorism and asymmetric threats. over the years, and like so many americanslike so many of

you here tonighti've spent a great deal of time with my israeli partners, including my friends in the idf. these partnerships are deep and abiding. they are personal relationships and friendships based on mutual trust and respect. every day, across the whole range of our bilateral relationship, we are working together for our shared security and prosperity. and our partnership will only be strengthened in the months and years to come. in our pursuit of a two-state solution, we recognize that peace must be made by the parties and cannot be imposed from the outside. at the same time, we understand that the status quo is not sustainable. it is not sustainable for israel's identity as a secure, jewish, and democratic state, because the demographic clock keeps ticking and will not be reversed. the status quo is not sustainable for palestinians

who have legitimate aspirations for sovereignty and statehood. and the status quo is not sustainable for the region because there is a struggle between those who reject israel's existence and those who are prepared to coexist with israel and the status quo strengthens the rejectionists and weakens those who would live in peace. obviously, we are disappointed that the parties have not begun direct negotiations. the united states stands ready to do whatever is necessary to help the parties bridge their differences and develop the confidence needed to make painful compromises on behalf of peace. as we do so, we will also strongly support the palestinian authority's efforts to develop its institutions from the ground up and call on other states, particularly in the region, to do their part to support the palestinian authority as well. we also continue to call on all sides to avoid provocative actions, including israeli actions in east jerusalem and

palestinian incitement that fuel suspicion rather than trust. as secretary of state clinton has said many times, "we believe that through good-faith negotiations, the parties can mutually agree to an outcome which ends the conflict and reconciles the palestinian goal of an independent and viable state based on the '67 lines, with agreed swaps, and israel's goal of a jewish state with secure and recognized borders that reflect subsequent developments and meet israel's security requirements." so it is time to begin those negotiations and to put an end to excuses. it is time for all leaders in the regionisraeli, palestinian, and arabto support efforts for peace. it is time for today's leader to demonstrate the courage and leadership of anwar sadat, king hussein, and yitzhak rabin. i want to conclude tonight by

returning to some simple words that president obama spoke in oslothis is a "moment of challenge." and when it comes to the middle east, it is a moment of many challenges. it is the challenge of transitioning to full iraqi responsibility for their future. in afghanistan and beyond, is the challenge of defeating violent extremists who threaten us all. it is the challenge of preventing iran from acquiring nuclear weapons and the means to deliver them. it is the challenge of forging a lasting peace between israelis and palestinians as part of a comprehensive peace in the region. it is the challenge of realizing greater prosperity and opportunity for all who call the middle east home. alone, any one of these would demand extraordinary patience and perseverance. together, they will require a comprehensive and coordinated approach. this is the work that president obama has undertaken.

and this is the work we will continue to pursue in the months and years aheadnot only for the sake of america's security, but for the world's. thank you all very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> here is what we are covering on c-span 3 tomorrow. at 10:00 a.m. eastern time, a senate hearing with the proposed head of nasa. at 3:00 p.m. eastern time, the second of three debates between britain's party leaders. this will cover the topic of foreign policy. this year's parliamentary season

is the first to feature u.s.- style television debates. watch them live on c-span 3. now, our interview with zalmay khalizad about afghanistan. he has served as ambassador to afghanistan as well as to iraq and the un this is 40 minutes. journal" continues. host: zalmay khalilzad, a former ambassador to iraq and afghanistan, thank you for being with us. what is this organization? guest: i do two things since i left government. one is starting a consulting firm of my own focused largely on iraq and afghanistan to assist businesses and help economies of those countries grow. because i think that the success of both economic situations have

to improve the the people. second, i am also assisted with the council or a policy -- associated with the council were id policy work. host: let's look at the latest news coming out of afghanistan. this from "the new york times" -- "assassination in kandahar for the roads faith in government -- further erodes faith in government." the article goes on to report that "killings of local notables have become a routine occurrence in kandahar, but this slaying shocked people to the core. as american and nato troops are preparing for a summer offensive in kandahar, any sense of safety in the area is being worn away by assassinations, bombings, and other attacks on american and western contractors, political officials and religious leaders."

guest: kandahar is the center of gravity, if you like, in the taliban, the struggle in afghanistan. that is where they started, the capital, and it is in play now, kandahar, because we have made clear that general mcchrystal plans to go in slowly but build up to provide security for the people. the taliban has also been having activities. it is like the anbar of iraq, where al qaeda decontrol -- gained control and that they had to change the circumstances so that people could change sides. here, too, security for the people -- without that, at incidents such as what we saw, the killing at the deputy mayor,

is likely to continue in the coming weeks and months as the fight for kandahar escalates and matures. host: the article goes on to say that over half of the todd heap on -- over half of the taliban are "incorruptible." what are the implications of that? guest: that is a worrisome number in that paper today about increase support look taliban. -- trees to support for the taliban. this is attributed to the corruption and the government. and people are tired of the war that has gone on for eight years. there is a sense that at least

under the taliban there was a greater sense of security, although there was obviously a great deal of repression and lack of personal freedom, particularly if you or a woman. i think that if people would have their way, it would like to have security and freedom, but if you don't have security, security comes first. i think the numbers you read reflect disenchantment with the government and the corruption and being tired of the war that has been going on for a long time. host: afghan president hamid karzai has been the center of much controversy over the last couple of weeks. this editorial piece from cathy parker in "the washington post -- kathleen parker in "the washington post" action calls on you as someone with a prior relationship.

it said that you and karzai dined together six nights a week during your diplomatic tenure. guest: that is true. bybee it that the issue of off dennis -- i'd be paved that the issue of afghanistan was important not only for afghans, but for is it was also important that they acquired a partnership between the afghan government and the international community led by the united states. therefore, we worked very closely together, coordinated -- i obviously coordinated at the highest level with president karzai, and treated him with respect publicly and privately, try to solve problems, providing what he did not have a times -- at time,s the u.s. capability with information as regarding

was happening, the options to deal with problems. when he pointed out to why an option was problematic that we wanted to pursue, i tried to bring to bear how one could hedge against those implications of eight negative from his point of view. if one, for example, wanted to remove an official who was not performing, and he thought that if i remove them, he will go with the opposition, i will face a challenge, i would point out that what one could do with the opposition and figure to make sure he does not joined the opposition. so we worked together and there was a good relationship, mutual trust, partnership that was based on respect and commitment to success of the project. there was, if you like, no room or note that in terms of -- or no gap in terms of trust we were

both committed to success in afghanistan. host: what is your impression in terms of karzai? he threatened to block any offensive and even threatened to join the todd heap -- he threatened to block and nato offensive and even threatened to join the taliban. guest: the problem is a fundamental one, which is a challenge for president obama to deal with what president karzai comes next month, which is to establish a relationship of trust with him again, because he is the president and we need him in order to succeed in afghanistan. he understands that he needs as an order for the country to work. -- he needs us in order for the country to work. there has been distrust that has built over the last few years. host: can you give us more insight, having worked with him

so closely come into president karzai's thinking? guest: i think he thinks we have plotted against him in the election, which is wrong, in my view, but that is what he believes, and some key figures in the administration supported opponents, and that he intentionally pushed his vote down -- we intentionally pushed his vote down and carry out military operations in areas where he was strong to decrease turn out on the date of election. there have been meetings and interactions with him -- we were so close to him and treated in so nicely in the early period that now the administration has been at times, shall we say, < embracing of them -- less embracing of him and sometimes

been publicly critical and in meetings disrespectful. i think that is heard him -- that has hurt him emotionally and given them a sense of insecurity about future of relations with the united states. that needs to be fixed, the fundamental issue. only the president can do that in perhaps a one-on-one meeting with president karzai. the president did not have that with him when he went to kabul recently. i think they can charter a course or they can work again on what afghanistan's government needs to do, what we will do. i think that is absolutely necessary. and then trying to have a type of interaction with and that works with him, because for success, we need to make sure he plays his role. i think we have not found that. that is hard. sometimes we know what we need to happen, policy-wise, but operation lies in it, making it happen, -- operation allie --

operationalizing it, making it happen -- host: let's go to our calls. good morning, fred. caller: thank you very much for c-span. on your last note that you just read, i don't understand how that al qaeda and pete todd heap and -- and the taliban could desecrate a mosque in that way. could you explain that to me? guest: sure. i think that the taliban are called islamists, they are strong believers in islam, but

they are more of a political movement that seeks to dominate and use islam as a means to that end. they have done quite a number of things, like killing a clerics, that would be anti-islam, suicide, fatwa -- suicide is not allowed by islam. there would be of course the killing of the innocent. when you go into a marketplace and explode a bomb and killed a lot of innocent people, not allowed by islam or by any religion. i think that the commitment to islam is a political one, a tactical one. and in fact they are in violation of many of the major tenets of islam. host: in "the new york times" ps we were talking about earlier,

it sounds like some children were killed. what kind of factors that have on -- what kind of effect does that have on the afghans to that have on the afghans to witness these incidents or what can the u.s. due to work on hearts and minds? >guest: in order to make progress on issues like the economy, security is fundamental. the way to make progress, including bringing about a change on the part of some taliban to join the government, to reconcile with the government, you have to secure and area -- secure an area and protect the people. insecurity after eight years on the part of the people has produced doubts about the

strategy -- the commitment, the efficiency, the effectiveness -- of the government coalition. that is what you see in the poll numbers we refer to. so i think i support this adjustment that is focused upon protection of the population as a core objective, going forward. host: we are talking with ambassador zalmay khalizad, former u.s. ambassador to iraq and afghanistan. let us go to joe in orlando. caller: good morning. i would like to make a reference to a news story that came out of afghanistan two or three years ago regarding a young -- a man from afghanistan who went to germany to study. , subsequently decided to convert to christianity.

upon returning to afghanistan, his luggage was checked by customs and they found a bible and interrogated him, and when they found out he had indeed become a christian, he was arrested, because came to light that the afghanistan constitution states that anyone who change their religion from his lawn -- and is on to any other religion is subject to execution -- from islam to any other religion is subject to execution. the solution was that he was declared mentally incompetent and given asylum in italy. that is the story. as an american citizen, a veteran, and an uncle of the young man who was about to go to afghanistan, for that reason, and for the apparent corruption in the government, i really have some serious misgivings about whether or not our presence there is really in the best interest of the united states of

america. guest: well, i don't know the details of the specific case, but the afghan constitution does not say what the gentleman stated, because i was a special envoy at the time when the constitution was drafted. it does recognize freedom of religion, the constitution. but it is true that in islam, abandoned islam to convert to another religion -- abandoning is on to convert to another religion is blasphemy and severely dealt with. the afghan constitution does not deal with this specific issue of what if somebody leaves islam, to the best of my recollection, and what is the punishment di.

but as far as the mission in afghanistan is concerned, the primary goal is, of course, to make sure that afghanistan is not controlled by al qaeda and the taliban, because those two in combination, but to the late al qaeda, since al qaeda has sort of -- particularly al qaeda, since al qaeda has sponsored the taliban, we do not want that to be restored or a similar situation to come about. that is what drives u.s. policy, to not allow that to happen again. host: ed, independent line. are you with us? one last time, good morning, ed. caller: can you hear me? host: we can hear you great. caller: osama bin laden is al

qaeda, right? guest: right. caller: if we left afghanistan and he took over because people wanted him to take over, will be wrong with that? i don't know why we are there -- what would be wrong with that? i don't know why we are there. guest: all the opinion polls we are seeing shows that support for the taliban is in the single digits, although the recent poll in kandahar is disturbing, this may indicate a change. but prior to this poll, that is what the polls indicated. this idea that the people of afghanistan what the taliban has not been correct, number one. no. 2, what is wrong with what he suggested is that taliban coming back, you get osama bin laden back in afghanistan -- have at terrorist taking over by

state and using the infrastructure of the state to plot attacks against the rest of the world, and extremism would gain throughout the middle east and this would look like the terrorists and extremists defeated the united states in afghanistan, defeated the soviets in the 1980's, and in the 21st century be defeated the united states. imagine what life would be like a cross the border police and -- across the broader middle east and the effect that have for the rest of the world. it is not only for the united states but we forget that. we clearly think about ourselves, but this the most important challenge facing the world right now. geopolitically it was for a while the balance of power in europe and then it was the soviet union. we did not go looking for it.

on 9/11, it came and visited us. we have to deal with it. and we have to bring others together with us to deal with it. this is the defining issue. host: matt is calling us from the republicans line on st. thomas. caller: good morning. my question today is if we are there to the break, what is the population of afghanistan? to liberate -- -what is the population of afghanistan? guest: about 30 million. caller: we just liberated people, and we did it in iraq, too. where is the rest of the world coming to our side saying thank god you save these people? guest: well, if you talk to

iraqis, you see that an overwhelming number are grateful for what has happened. there are significant opponents of what happened there, but if you go to the kurdish region of iraq, much of the south, where the bulk of the population is, they are happy with the overthrow of saddam hussein. now, iraq has had some terrible things in afghanistan, a substantial part of the population is happy with the overthrow of the todd heap and -- at the taliban. now, there would like our progress, it would like to have the government work better for them in terms of services and rule of law. they want u.s. military operations to not do some of the things that happen in war -- for

example, a civilian casualties. they are unhappy that we have not been able to stop infiltrations across the pakistani border, and that leads to a suspicion about motives. how come we over to the taliban for so many days and for so many years -- over through the taliban in some days and for so many years we have not been able to prevent infiltration across the border? but it would be a mistake for people of afghanistan and people of iraq to a post -- to oppose what we did or not express their appreciation. i have heard repeatedly their appreciation for what we have done in those countries. i think that is true. but as far as the region is concerned, the idea of building a democracy in iraq is not popular with some of the governments in the area, because

they are not democracies. they fear that. there is a push by extremists to defeat the efforts to stabilize iraq and afghanistan that is part of the broader struggle that i mentioned earlier that is so important, and something that will shape the future middle east that now to politically -- now geopolitically is like what you wrote was -- like what your up widespread -- like what europe was to rid the world needs to find a way to protect itself from its problems and help overcome the difficulties as we did with world war ii in europe. host: you had a meeting in the state department yesterday. who did you meet with and what was the progress from that? guest: i met with ambassador

holbrooke and we talked about the situation in afghanistan. i just came back from afghanistan, about five days ago. we just exchanged views with regard to what the situation was in afghanistan. my discussions with afghan officials, including president karzai. we had a good chat. host: democratic caller, new york, new york. caller: hello, everybody agreed hello, mr. ambassador. guest: hello. caller: i have been listening to you for about half the time you have been on people want a greater sense of security -- it struck me when you talk about people wanting a greater sense of security. how do you have greater sense of security if you do not know what will get you killed? you literally do not know if you'll get killed for wearing the wrong clothes, flying a kite

in the ave. you just don't know. but you have is a sense of insecurity. guest: right. caller: it struck me also that this goes back to the times that people like stalin and mao zedong. you still have that frame of mind that they are going to give us security and they promised us security and they don't do it. they don't get it. they give what they want, they do what they want, and you are left with the results. guest: right, i think the caller is quite right that there is a tremendous sense of insecurity. you get suicide bombers, people are not sure if they are safe in their homes. one thing we should remember is that this not true across the vast country of afghanistan, and

you have areas that are quite safe, life is quite normal, but areas, particularly in the south and parts of the east, with the insurgent presence is strong. it also happens in the capital city of kabul. that, i think, as a way to move forward and achieve success, reconciliation, i think the idea of population protection and strategy of counterinsurgency is very smart and the right adaptation in our approach. but i think besides that, what is needed is to deal with some of the underlying issues of government corruption issues, providing services, and that is where the effective partnership where the effective partnership

of a coalition is required. i agree with the caller that regimes provide security, but at a huge cost of personal freedom. that is the answer to the desperations of human beings. host: karzai's rent for half- brother and not against obama -- his concern for his brother may be fueling his antagonism towards washington. "the roof reporuche report" sais lashing back at washington for reports that his half brother might be targeted in the military push through southern afghanistan. he is seen as a political force and someone who perhaps might be

on the line. guest: sure. i think president karzai has a couple of issues going here. one, at times he believes, and i have told him myself, that he is much better informed about the west and sometimes he indicates. he believes that the media, when they have stories like this, it is because official washington is telling the media to do this. . . media with stories like this, officials in washington are telling them to do this. and that this indicates a hostility to him from washington, from the obama administration. otherwise, an article like that, in his view, would not appear fingering his brother. host: and there are concerns about his brother and heroin trafficking. guest: and the media about him in fought in these various

nefarious activities. -- him involved in these various nefarious activities. i sat with him for hours and he was saying that one part of washington conspires articles like this, and another part of washington to working with them -- another part of washington is working with him. why don't you get your act together is his point. i asked officials to come and visit me, give me the evidence you have, and you don't trade on the other hand, you also work with him and he works with you, and there are allegations of contracts from the u.s. government, working with different parts of the u.s. government. which one is it? are you partnering with him, or are you after him? if you are after him, did you have the evidence for the charges that he make? can you share that with me?

i believe he bases this issues with the senior current and in this -- raises those issues with senior current administration officials to visit him, putting some of these articles next to some of these articles next to himself and saying , did i ask you to give my brother or contract? have i ever asked any of you to give him a contract? the complexity of washington sometimes puzzles him. he thinks there must be a grand design somewhere in one of the buildings in d.c. where everything is related to everything else and decisions are made by the chaos of our policy making process -- and decisions are made. but the chaos of our policy making process is something he does not appreciate sometimes. host: independent caller, pennsylvania. caller: thank you for taking my call. my question is, the big fat cats

that are running these heroin outlets over there -- you going after those directly, assuming they have support from other countries and all of this -- are you investigating and of the to that development? -- investigating enough into that development? who are the big fat cats -- i am going to call them that -- who are running all these things, and have you got after them? that would eliminate a lot of the people in the bad politics. guest: first of all, we have to recognize with heroin and opium and so on, now a big area for supplying these things is in afghanistan. unfortunately, a group of people in afghanistan, in association

with the international drug- traffickers, are involved. the afghan farmers that produce the opium get the least amount of benefits, if you like, a financially. the biggest money that is made is made by the traffickers, when opium is converted into heroin and that is supplied to the world market, if you like. it has been issued for the united states, how to treat -- it has been an issue for the united states, how to treat the drug traffickers but for a long time that was not part of the u.s. military mission. i think increasingly now there is a perception, especially if you see in the operations in marja, a big area for drug trafficking, it seems we are

moving more to deal with this issue. that is what it appears to me like -- of course i am along with the government -- i am no longer with the government, so i cannot say exactly in detail what we're doing, but from the outset i recognize the essential part of the resources the insurgents have to attack us comes from drug-trafficking and therefore we are being more attentive to it. host: atlanta, georgia, republican, timothy. caller: we went into afghanistan because we are attacked for a war for israel. host: concerns about our relationship with israel. guest: well, i think the relationship with israel -- it

did not have anything directly to do with the decision to go to afghanistan. summit said that some -- would say that the extremism and the terrorists at that extremism produces -- much of that in part has to do with the israel- palestinian conflict. because we support israel, because the palestinians are not doing well, the muslims, or the muslim extremists at least, are hostile to us because we support israel, in their view. i think all administrations, including the present one, recognize that in order to normalize this region, you need to deal with the israel- palestinian issue. there are tactical differences about how best you can achieve that goal, how you can be

helpful. but there are other distinct issues in need to address as well. you still have a lot to do with it with the issue of islamic extremism. you have to deal with iran and all the other issues. host: less go to west virginia -- let's go to west virginia, tom, at democratic caller. caller: pleasure to talk to you this morning. i went to university in the 1970's and we had an international dinner club each week. i had the pleasure of being able to meet many people from the middle east, iraq, iran, and also from afghanistan when i went to university there. the impression that i got was that there was not all that is

going on now. it was very simple and people got along and people came to get a good education so that they could go back and have professional careers did i understand the previous years in our country, dictatorship from bush and cheney, but now we have are no president in the white house who understands the reality -- have a real president in the white house to understand the reality. but i don't understand why you allow in the middle east religion to intercept and your government, because that is a disaster waiting to happen 24/7. guest: well if i understand the gentleman's question, that at one time religion was not as preeminent in the politics of the middle east as it is today, i think there is truth to that.

but the big question for the muslims of broader middle east is a kind of crisis of civilization. there is a debate that is going on over 100 years, or at one time the muslim world, the arab world was doing so well, civilization on the march, universities. an open, multi-cultural society. and then there is in a period of continuous decline. what went wrong? what to do? two questions that they have argued and fought over. some have bought the way to achieve greatness again is to imitate -- thought that the way to achieve greatness again is to be secular and western- oriented again.

the even changed the alphabet to latin alphabet and made sunday, the weekend, a holiday, and similar -- and a dress code similar to western dress code. and others who say that the way to achieve greatness is to go back to the period of profit mohammed. -- prophet mohammed. especially after the iranian revolution of 1979, this view that you go back to his long, a particular interpretation of islam -- go back to islam, particular interpretation of islam, it is the way to achieve greatness again. that is why we have seen more of an islamic dimension. the afghans fighting against the soviets, there were also a lot of islamic insurgents fighting the soviets with our support during that period.

there was another period or the islamic forces gained and -- that was another period where the islamic forces gain and became part of the scene. there are groups like that and we don't pay enough attention to them because we pay attention to the problem more. but there is a struggle going on inside islamic civilization and forces are doing for universal values and keeping their -- forces arguing for universal values and keeping their values as well. officially and unofficially, we don't pay enough attention to those, and we don't do enough to support -- a lot of our attention is on weakening the more extremist elements. host: independent from california, john, welcome. caller: i have a question for mr. khalilzad most of the west

perceives afghanistan as an arco state. going forward, i guess my question is how is it was supposed to proceed afghanistan specifically -- how is the west supposed to perceive afghanistan that specifically? we have committed to resources and manpower and our troops -- committed huge resources and manpower and our troops. how does afghanistan go forward, from that point of view? i would like to hear your comments. guest: there is no question that our products is a big part of the afghan economy. -- that narcotics is a big part of the afghan economy. there's a lot of money in the hands of powerful forces that they can use for elections, bribing people in government. by influence -- buying

influence. that is why going forward, how did you build an effective state apparatus that will require strong leadership to address it and support the alternative livelihoods' for people? you have law enforcement, but you have got to do justly and fairly and make examples of people in or outside government. and at the same time, have alternatives, especially for -- my approach would be that he to law enforcement use of the drug traffickers and people involved in a -- you do law enforcement vis-a-vis drug- traffickers and people involved in it. i don't think we have the kind of strategy and cooperation between us and karzai on this

issue that is needed, and that is why reaching a new understanding, updating our strategic partnership with afghanistan and karzai, specified tasks that each of us will do going forward, will be an important delivery of the upcoming visit. restoring [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> popeyes discussion on the case against goldman sachs. we will talk about the empire meant with the top republicans on the house energy committee and a book that independent voters. we are live daily at 7:00 a.m.

eastern time on c-span. coming up on c-span, the senate budget committee begins work on the annual budget resolution. the house paster be to civil rights leader dorothy height. president obama meet with members of the senate judiciary committee to discuss possible supreme court nominees. >> i think there is a huge lack of knowledge about how this town works and how congress works. >> when you are doing the research, you have to do that. >> this weekend, richard norton smith and douglas brinkley will talk about their work, books, and profession, and revisit their first appearances on our network. >> earlier today, the senate budget committee began its markup of the annual budget resolution, a blueprint that

sets up the government's spending. centers gave opening statements but no votes were held. the committee is to consider resolutions and 9:00 eastern tomorrow. this is to 0.5 hours. >> i would like to welcome people here predict i would like to begin with just a few procedural announcement. i would ask members to limit their remarks to five minutes, given the late start that we have because of the vote. i understand there are a number of meetings that we have to try to work around, that members will have to leave for, and we after opening statements, we will lay down the mark. there will be no votes today. tonight my staff will be available to answer any questions other staff may have of them. members will then reconvene at 9:00 a.m. tomorrow at the

suggestion of the ranking member to begin considering amendments. we will stay here tomorrow as late as it takes. i would remind members that our committee rules prohibit proxy voting on budget resolutions and its amendments, so all members will need to be here in person to cast their vote. it would be my intention to have one series of stacked votes around noon and another later in the afternoon. i have discussed this with senator gregg and he agrees. as in past years, we ask that all amendments other than full substitutes be fully offset over the total of the year covered by the resolution. amendments need to be paid for over that time period to be considered here in the committee. i would encourage members not to offer sense of the senate amendments. we have excluded them from day of market sell. i think we've done a very good

job in recent years and not doing sense of the senate amendments in this committee. in addition, i would note that we would be consulting with the parliamentarians on amendments that are offered to be and should -- to be sure that they are in our jurisdiction, because we have that issue to consider. we intend to file the resolution and the committee print on monday. that will give us us typically going right to the floor. we have not been able to wait until monday. in this case, we are able to wait until monday. that would give us extra time for use by members. we invite members to fight -- to file written views pilot -- by no later than noon on monday. if you could make sure it that our budget committee staff be given any member comments that you want filed. before i begin with the description of the mark, i want to note that this will be

senator gregg loss last budget resolution marked up, because he will be leaving the senate at the end of this session. let me just say what a pleasure in has been -- it has been to work with him as the ranking member of this committee. you could not have a better ranking member. you could not have a better chairman and senator gregg. we have not always agree on every detail, and certainly we've had policy differences, but in terms of recognizing the debt threat to this country, we have had very significant agreement. and we have had, i think, strong and substantive debates on this committee. and that is a credit to every member. >> i note relief in your voice and happiness in your step that you are leaving. >> know, truthfully, i will very much ms. you. and i am particularly proud of

the work we have done on the approach of the fiscal commission, and while our proposal to not get the required 60 votes, we did get a strong bipartisan majority and i'm very hopeful that this commission, that some of the members of this commission will serve on it, and bear fruit in facing up to the debt threat overhanging this country, because i think it is one of the most significant threats facing america. >> if i can break in on that point, i what i thank you for all of your courtesy. and for a really positive and constructive relationship, the type of relationship that we approach things in a professional way, and when we agreed, work together very aggressively such as the debt commission. and we have disagreed substantively and it is set a

nice town and i appreciate your leadership in that area, and your staff has been open and available to my staff. and i would also note that another senator will be heading on. >> that was the next thing i wanted -- the next thing i wanted to say that this is senator bunning's last marked up because he will be leaving us at the end of the session. i have always been a big fan of jim bunning, whether on the ball field or in this committee or in the senate of the united states, because you have been a serious legislator. i also serve on the finance committee with him, and many times he and i have teamed up on amendments successfully in the finance committee, and i will miss him very much. oooooooooooooooo

i also want to welcome senator begich from alaska who is joining the committee. the former mayor of anchorage and a businessman so he brings an important perspective to this committee. i also want to say in reference to senator bunning and that i thank him for war -- working with senator warner on a task force for government performance. i think that is a work effort that is going to produce dividends over time. santer bunning has put in significant time on that to improve the efficiency and effectiveness of government. that is a daunting challenge, but they have made a meaningful contribution. let me begin by noting some of the key statistics regarding the mark that i will be presenting later. it cuts spending as a share of the national economy by 11%. it cuts the deficit as a share of the economy by 70%. i your share of the economy or percentage of the gross domestic product because it, stella's that is the best way to measure changes over time, to provide an apples to apples

comparison. the chairman's mark also include $671 billion more in deficit reduction than does the president's budget. and it cuts taxes by $780 billion over the five years. most of that, a middle-class tax cut. hear some of the polish -- the policy highlights contained in the chairman's mark. it includes importantly measures to promote economic growth and jobs, provides for a tax cut on small business investment, and it includes investments and highways and transit. it extends unemployment insurance and cobra, it includes a reserve fund to remote employment and job growth that must be paid for, and it

includes a reserve fund for tax reform and tax relief. i personally believe that the time is right for fundamental tax reform. we need to make this system more efficient, more effective, and allow our country to be more competitive on the world economy and also we need a system that is more fair. the chairman's mark also promotes fiscal responsibility. it reduces the deficit to 3% of gdp by 2015, which is the interim goal of the president with respect to the fiscal commission. but i think we need to do that in the work of this committee. it includes a non-security discretionary freeze for three years. it comes very close to a freeze for four years. it sinks up the senate paygo

rule with the statutory paygo enacted earlier this year, and retains the requirement that reconciliation be used for deficit reduction only. now the chairman's mark makes important progress on reducing that deficit over the five years. more must be done over the longer term. the president's fiscal commission has been tasked with addressing the long-term problem. the chairman's mark assist in this effort by providing a reduction reserve fund to ensure that savings from the commission cannot be spent and are used to reduce deficits and debt. the one thing we have been concerned about is that we could have the commission work effectively and in congress command on the side and take those savings and use it for some other purpose. we're doing what we think is the best read it to prevent that from occurring. the chairman's mark also allows for investment in education and

energy. it provides funding for early education, elementary, and secondary schools, and college affordability. and it provides funding for alternative and clean energy, energy efficiency, and green jobs. as i noted before, spending as a percentage of the gross domestic product is cut 11% on to the chairman's mark. it makes that 11% cut in three years. that deficit is cut from 1.4 -- $1.4 trillion. the deficit as a percentage of the gross domestic product is cut 70%. from 9.8% in 2010 to 3% in 2015. economists believe that under current economic conditions, the deficit of 3% would roughly stabilize the federal debt. that is an interim step. it is not enough. more needs to be done. that is why the work of the fiscal commission is so important. the turnaround in our economic book -- outlook has been really quite remarkable. the actions taken over the last

1.5 years by the federal reserve, by the congress, and the administration has clearly helped pull us back from the brink. economic growth in the first quarter of 2009 was -6.4%, and in the last quarter of last year, that has turned into a positive 5.6% economic growth. and we have seen steady improvement in the job sector. january 2009, the economy was losing almost 800,000 jobs by this march, the economy was gaining 162,000 jobs in the month of march. here is the latest cover of newsweek. it reads, "america is back." i would be the last one to argue that we have fully recovered

because we have stubbornly high unemployment and stubbornly high underemployment. they're still far too many of our fellow citizens that are unemployed and underemployed, and they are struggling and we clearly must respond to their needs. to help restore fiscal discipline and bring down the deficit, the chairman's mark freezes non-security domestic spending for three years. the 2011 non-security discretionary level is actually slightly below that 2010 enacted level. within the context of this freeze, the chairman's mark still makes room for certain high priority investment. education -- to improve student achievement and make college more affordable, to help prepare the work force to compete in a

global economy and generate economic growth. specifically, the germans broke -- the chairman's mark bonds the remaining pell grant shortfall and assumes a maximum grant of $5,550. it extends the simplified college tax credit which provides up to $2,500 a year for students. our energy investments will reduce our dependence on foreign energy. i personally believe there are very few higher priorities than reducing our dependence on foreign energy. many of the members here were part of the group of 10 that became a group of 20, 10 democrats, 10 republicans, putting together an alternative energy policy for this country. many of those initiatives are funded in this budget. it provides a reserve fund to

accommodate legislation to provide clean energy and address climate change issues. it includes $500 million above the president's level of discretionary funding for energy in 2011. it builds on the economy -- the economic recovery package investments in renewable energy, efficiency and conservation, low carbon coal technology, and modernizing the electrical grid. we have gridlock on the grid, and one of the most important things to improve the competitive position of our country is to break the grid -- break the gridlock on the grid. the chairman's mark is also strong on national -- natural defense. it matches his request in 2011. it also provides for an assistant -- an additional money requested for ongoing operations. we are not deferred or excluded from the budget the war costs that we know will come by supplemental 2010. and the full request for 2011.

the next chart shows the breakdown of the discretionary funding levels in the chairman's mark compared to the 2010 enacted level. it shows that we had a 3.5% increase in defense, which equates to $20 billion. we have a $4 billion increase, or 7.7% increase, for international. all of that is dedicated to pakistan, iraq, and afghanistan, and the middle east funding requested in the budget. the rest of the president's initiative will have to compete with his other proposals, because we have cut his 2011 proposal for international by $4 billion.

non-security funding -- well, i should also indicate we have an $8 billion, or a 8.8% increase in veterans and homeland security, equally divided between the two, in line with the president's request for veterans. largely to an increase in veteran health care but also an increase in homeland security to respond to threats that have been determined by the administration. non-security funding is actually below the 2010 levels, although modestly, about $1 billion vote, so it is actually provided for in 2010. in terms of revenue, but chairman's mark has a net tax cut, $780 billion over the five years of the plan. it provides for the permanent extension of the 2001 and 2003

tax provisions for couples with incomes below $250,000 and single individuals with income below $200,000. these policies include the 10% bracket, the child tax credit, the marriage penalty relief, certain educational provisions, and certain energy provision. it provides for two years of amt relief and for two years of estate tax reform. all of these provisions, including the income tax relief, are consistent with the exemption in the new statutory paygo law. for the amt and estate tax, the chairman's mark estimates the cost will either be paid for or resolved in the context of tax reform being considered by the president's fiscal commission.

let me be clear and direct about that. some will criticize that approach. i believe we have to say, if we want those things taken care of us, -- taking care of, and i think we all do, they have to be paid for in the context of our current fiscal condition. the chairman's mark also provides additional relief for families through the so-called extenders, including all of the research and experimentation, the state and local sales-tax extension, all of those extenders are funded in this budget. and the cost of which are all set. again, it totally provides a net tax cut, not growth, net tax cut. the chairman's mark includes a number of budget enforcement mechanisms. it includes discretionary cap for 2010-2013. we have discretionary caps for

all those years. it sinks up the senate paygo rule with statutory paygo. and as i noted earlier, it includes the deficit reserve fund to preserve the savings from the present fiscal commission to ensure that those savings cannot be spent and are only used to reduce deficits and debt. this year's health care reform effort will begin to slow the rise of health care costs but it will not be enough to resolve the long-term fiscal imbalance in the health-care accounts. we also face a demographic tidal wave from the retirement of the baby boom generation, and we face an outdated and inefficient tax code that is bleeding revenue to offshore tax havens and hurting u.s. competitiveness. so we will remain on an unsustainable long-term course

that must be addressed. i am hopeful the president's fiscal commission will develop a bipartisan plan that will make significant progress in this area. let me just conclude by talking about the commission and its responsibility. it is tasked with coming up with a plan to address the nation's on sustainable long- term fiscal condition. the plan will have a medium- term goal of reducing the deficit to 3% of gdp by 2015, something that is accomplished in this budget proposal. if enacted. it leaves everything on the table. including spending and revenues, it has 18 members, 10 democrats and eight republicans,

bipartisan cochairs, erskine bowles and alan simpson, the senate republican whip. the rope for will be submitted by december 1 of this year and importantly, the commission is coupled with firm commitments from congressional leaders to bring the panel's recommendations to a vote before the 111th congress adjourns, if 14 of the eight team members can agree. with these commitments, president's executive order is as close as we could get to the statutory commission senator gregg and i have proposed. it is going to take a lot of hard work and real dedication and difficult choices, but i am hopeful that this commission will come up with a bipartisan plan this year to address this nation's long-term budget crisis. with that, i wouldn't turn to senator gregg to make his opening remarks and then turned to individual members for their spirit again, i want to say to senator gregg, it's we appreciate the leadership you

have given this country. we could not ask for more. >> thank you, senator conrad, and thank you for those kind words, and there reciprocated by may, the pleasure to work with you and members of your team on your side of the aisle and also work with our side through these years. it is a difficult issue, the budget of the united states, because we're charged with the responsibility of having a fiscally responsible nation, and in the past we have not been and in the future it looks like we're not going to be. i do not at all or in any way underestimate your commitment to doing something about the debt which is saddling this nation and will unfortunately strangle the nation if we do not do something about it. you're the one that came up with the term, and it is a very accurate summation of the

problem. on this budget, however, i find it lacking, unfortunately. i wish it was more aggressive on the issue of the debt. it is for lack of a better word a budget that kicks the can down the road. more spending, more deficits, more debt, less prosperity inevitably for our children as a result of that. and why do i say that? as much as you have put it in the context of being a budget which brings the deficit down in relationship to gdp, it does better than the present request in relation to gdp one deficits and on percentage of gdp, but it really does not do a whole lot. if you back out the amt language and you back out the estate tax language, what you're left with really is a $4 billion cut and an adjustment to the

pell grant situation which is affecting discretionaries versus mandatory. other than that, there is no significant difference that i can find. of course we have all seen what happens with amt, and i suspect we will see what happens with the estate tax, that when it get past the two years, you will not find that it is paid for and therefore these numbers will not close as a result of that action and the way that you are hoping that they will. spending remains as you mentioned very high, historically high -- 22% of gdp under your numbers, and i suspect it will be higher because of the health-care bill and emergency spending. we're not going to get our revenues up to that level and it is a structural problem that we

really need to address. i am concerned about a lot of the elements of this. for example, the whole paygo issue. only remaining issue we have is budgetary paygo, and now that is going to be eliminated and to this bill. so we're going to subtract the statutory language, specifically structured so that a.m. tee is not address, and so there is no paygo requirements on those outside of the two years. as i mentioned, discretionary cut in here is simply a $4 billion cut relative to foreign operations next year. there is an adjustment and i respect the way that you did it relative to pell grants. as we know, pell grants were moved into the mandatory account, $5 billion, and it should estate on the discretionary side, but you approves the appropriated accounts by that, but you still have a $5 billion expenditure on

the mandatory side so i don't think that can be scored as a reduction. the real issue here, when we get down to the bottom line, is this -- we are on an unsustainable path. this year our percent of interest payments as a part of income will be 10%. 2014, it will be about -- it would get up to about 20%, 50%, somewhere around there. 2020, it will definitely be at 20%. those names -- those numbers mean that our debt will be downgraded. we are on a course to have a junk bond government. and this budget does not do anything about that. you cannot run a deficit at

these levels and expected you're not going to end up with the world looking at our debt and saying, we cannot pay it back, or if they're going to pay it back, we have to pay a huge premium. and the assumption in this budget is that we're going to maintain interest rate levels which are fairly favorable to us right now because of the world economy being flat, recession is worldwide, and therefore we are able to sell debt at a fairly cheap price. that is not going to continue. our debt price is going to go up and the assumption here that it will not is, i think, flawed and that means the numbers go up significantly as a result.

we know where the money is. it is primarily on the entitlement accounts. regrettably, and this may be old ground but it needs to be mentioned again, when the health care bill was passed, it took trillions of dollars that should have been used to stabilize our medicare and medicaid situation and moved here in that should not happen and it will aggravate dramatically our ability to address this as we go forward, either through the fiscal commission or through regular order. it will be hard to find the funds to straighten this out. this bill does not address social security because we cannot in committee, but that is the other major entitlement account that needs to be addressed. remember, both social security and medicare go into negative cash flow in terms of this budget. for the last 20 years, we have used the social security funds and the medicare funds to fund the general operation of the

government instead of borrowing from the public. we will not be able to do it next year on medicare. we will not be able to do it on the five-year period on that basis. we will actually have to borrow now to fund social security payments. we will have to borrow to pay for medicare. and we're going to have to borrow to pay for general operations of the government. and that is why our debt is at such risk and our nation is on an unsustainable path. and regrettably this budget does not address any of those issues in a substantive way. on our side of the aisle we're going to offer a series of amendments which will try to correct that. and i am sure they will be roundly received with enthusiasm and energy, things like senator sessions who is much more aggressive than this budget is, proposals on protecting medicare, on how we affect more aggressive ways of disciplining ourselves on emergency spending -- a whole series of proposals.

we will also have a reconciliation structure that is real, because the reconciliation structure in this bill sustains is. it is not his intention and he says he will protect this reconciliation structure pecan, but this is a $2 billion reconciliation instruction. did we use that word to mark congress used it to extend $2.6 trillions on a $2 billion reconciliation structure. i don't know what the $2 billion reconciliation structure means. to me, regrettably, it means that opportunity has been put on the table again to dramatically increase the size of government using the reconciliation vehicle to

accomplish it. the chairman has represented to me that this will not happen with cap-and-trade. that would be most logical when you look at the scenario and congress, but there are other places that i worry. and you reconciliation should have no more than 20% spend. we will offer that amendment again. the only way we can protect from last year is that it exploded i am concerned about the reconciliation destruction -- construction. there are committees that will be doing that.

i do want to respect and acknowledge the vein which --it is good language. it is the right way to handle the language. the war costs are accounted for which is very appropriate and are built into the budget. the unemployment extension should occur. that is good budgeting. we have a very serious reservations and they come down to the bottom line. the bottom line is pretty simple. this is it. this is off feet president's budget but the differences are simply the issue of how you score amt and state tax through the fifth years. the gap is there. if we did not close it, it

continues to expand. what is most disturbing about this gap is that we are looking at a projected revenue which exceeds the historic base of our revenue as a nation. up to almost 20% of gdp. still, the gap grows. it is not a revenue issue. it is a spending issue. until we are willing to step up on the spending side ledger, we are absolutely guaranteeing that we are passing on to our kids a nation which will be less prosperous and with their of standard of living will be less than ours. >> thank you. thank you for your very serious and substantive critique. i think, as you know, for the long term, i'd not agree with the characterization of the short-term but i very much agree with the characterization of where we are headed not dealing with the structural gaps that exist. it is absolutely imperative that

as a country, we face up to it. that is why you and i worked together in a very collegial and hopefully successful way. i truly hope that this commission will take on the structural gap. senator murray. >> thank you. thank you and congratulations on your last markup. i do respect your passion and commitment to this country and what you do in following through in fighting for what you believe in. congratulation. chairman konrad, thank you for your leadership and hard work and dedication to the priorities. it is never an easy process but you do make a true effort in investing in theories that you think there will make america stronger in the long term and putting our nation on may better path.

that is what our charge is again this year. a budget is a statement of priorities. hours are clear. we put our families and small business owners first and we begin to put this country back on track by investing in our future. we have inherited some huge challenges under the bush in the station, the american people were told we could have it all. two wars paid off without sacrifice except for those of the service members and families and tax cuts for the wealthiest 1% of americans. some people did have it all. wall street ceos and big banks. for average americans, the consequences were stark. by the time president obama took office, we were losing 700,000 jobs per month and our economy was shrinking rapidly and our national debt has ballooned over $12 trillion. turning that around will not happen overnight. thanks to the hard work of this committee, we have begun doing

the hard work of turning this economy around. there is no doubt we have a lot of work ahead. turning around our economy requires continued investment in health-care and infrastructure. these are priorities that will make our families and small businesses more competitive in the 21st century, the point that we need to continue the middle class tax cuts that were put into place last year as well as targeted job creation that puts americans back to work and help our small businesses hire and grow. we will not be able to maintain our long term strength unless we make sure that workers have the education and skills and training to fill the in demand jobs of the future. we have to continue working to help all of our students achieve a post secondary education and to help them move into a career whether through apprenticeships our committee

colleges or four year institutions. i will continue to support the retraining of america's workers in merging industries like renewable energy and health care. as we invest in our future , we can never turn our backs on those who have sacrificed so much for us and that is our nation's veterans and families and make sure that they have a health care and benefits and job resources they need when they return home. thank you for investing in that in is budget. we have to commit to cleaning up the nuclear states reject new -- nuclear sites which is a moral obligation and we cannot ignore it. another obligation is the future generations by balancing the budget and reducing our debt in smart ways.

i have a grandson. i did not want him to inherit a crumbling infrastructure or an economy in which he cannot achieve the same dreams of his parents or grandparents. i also know we cannot pay for the future on the backs of his generation. i strongly support president obama's freeze on discretionary spending. it is why i have been a long term -- longtime advocate of pay as you go. we will continue to look for places to decrease spending while making the right and smart investments to continue our recovery. i will continue to fight that the voices of the families of small businesses are heard loud and clear and we do not stop making the responsible investments that need to do that you address in this budget. we need to keep moving our

country forward in a responsible way. thank you. >> thank you. thank you for your fears advocacy of the people you represent. -- fierce advocacy of the people you represent. we will go to senator michael enzi. >> one quirk is that members are provided -- asked to provide opening statements about a problem not -- about a product we have not seen. pre-empted criticism seems unsportsmanlike grant me the opportunity to express optimism of what i hope to see in this budget. it has been said this cannot be turned around overnight but i am worried we did not have very many nights. the congressional budget office looked at the proposal last month and offered a chilling assessment of the impact.

we have all seen the numbers according to the cbo. publicly held debt with a triple from $7.50 trillion to $20.30 trillion in 2020. debt relative to the economy would explode from 53 to 90% of the economy. net interest would more than quadruple. this path is clearly unsustainable. that is the tip of the iceberg. moody's credit bridging agency revealed it looks at the proportion of federal revenues dedicated to paying interest as a key element for maintaining the aaa rating. they expect a large, creditworthy sovereign borrowers like the west to devote less than 10% of federal revenues to pay interest. under the president's proposal, we will hit that mark this year. lucky for us, moody's will grant the u.s. action wiggle room because in judgment, we can writes our canhip. -- our listingship.

i supported the creation of a bipartisan commission to restore some discipline to the federal ledger. now that you are an official member of the president's commission, congratulations. i hope you use this market as an opportunity to lay a foundation for that effort. we are prepared to assist you in process by establishing greater discipline. the key is tax reform. when the u.s. first implemented income tax, the internal revenue code could have been contained in a single 400 page textbook. the current is now over 4000 pages and that does not count the volumes of technical advice that the irs publishes every year to understand the law. adding insult to injury, between tax expenditures, income tax cuts and state tax, individuals small businesses

have no guarantees concerning taxes. and individuals and businesses cannot make hiring and investment decisions in this on certain tax and garment. current tax policy is a major impediment to economic growth and recovery. i hope this budget establishes some parameters for reform and prevents our tax code from becoming one general -- giant annual extender. i am very concerned that the new health care reforms will exacerbate our debt crisis rather than he left. we know that the new law will increase insurance costs and raise premiums for millions of americans.

it will kill jobs and reduce wages. it will also raise the deficit. i know my democratic colleagues will point to the analysis of the health care bill to refute the statement. we note that report has shortcomings. this court does not include the cost of fixing medicare payments. democrats show no stomach for offsetting the permanent fix. the score relies on gimmicks like offsetting four years of spending with eight years of revenue and the new law creates entitlement and body by the class act. on the education front, i would like to remind my colleagues that this is historically a bipartisan policy issue. given our current economic policy, it is a key tool to speed recovery. the most immediate action this congress can take is to reauthorize the workforce investment act to fill the jobs that will come on line as our economy recovers. we need to make sure our workers have the skills they need to be successful. i will look to the budget with his priority in mind. we have been working on this diligently.

it could be done with relative ease. being bipartisan does not mean writing a bill behind closed doors and then negotiating to reach the 60 votes needed to clear. and my hope is that the chairman's mark reflects priority is common on both sides of the aisle. otherwise, i fear this will be a party-line exercise and i cannot believe that is the change americans voted for two years ago. >> thank you. let me say before you begin how much i personally appreciate the extraordinary and productive work you have done with respect to health care reform. along with another senator, as well as your significant contributions on energy. . .

that is illustrative of the kind of approach you and senator gregg had taken on these tough issues. although we did not get passed, i think the work you have all done is exactly what we still have to find a way to accomplish. i want to pick up by way of my opening remarks from what senator michael enzi just touched on. he correctly says we have to find a way to fix this. we all know that these tax breaks, these are expenditures. these are the people's money. everybody just filled out their 1040 form, this joyous experience, sense of their tax form into washington d.c., and in congress, we bit judgments

about where that money should go. i want to say that i think senator enzi is spot on. we have introduced comprehensive proposal that the heritage foundation, and i will admit that i do not quote them every day, my service in the senate, they said it would create 2 of congress says it does not add to the deficit. there is a substantial tax cut. we take away the tax breaks for shipping jobs overseas and use that money to slash rates and have a one page 1040 form. your point about laying a foundation for meaningful tax reform, boy is that overdue. when you look at this tax system, we now have things like reductions for punitive damages.

you go through this system and it is just breathtaking at how the people's money is being wasted through the tax code. i looked over to working with my colleagues and we have spent two years on this particular area. i think it will allow us to grow the economy. we had this big debate about value added tax. why don't we all come together and fix the current system that is so broken? i am absolutely certain we can grow the economy if we get these fundamental reforms in place. you and i have talked about this and i'm glad senator marie -- murray mentioned the veterans, as well. the pacific northwest has a huge number of veterans coming back. we are trying to transition. these folks have skills. we need people to fill law

enforcement jobs. we have military folks that can fill those positions. we have to make a handful of investment. forestry is an area at using about. -- you have singled out for a landing, -- thinning,that prevents the fires that we see. transportation, you give us an opportunity to america bonds program which is something that has generated more than $90 billion of investment in the structure while saving money. with the kind of bipartisan leadership the two of you showed and the effort to force cut the budget and spending in thousand 10, we can keep building on -- in 2010, if we can keep building on that. particularly to incorporate what senator enzi about with respect to tax reform, we can finish our work knowing we are laying the foundation for a brighter future. thank you. >> thank you. senator jim bunning.

no, isn't senator sessions next? i realized, to go which rules are you going by? >> we are going by the rule that senator sessions is only recognized after the markup is completed. [laughter] that is a joke. senator sessions. at the marked up, we go in a pure seniority order. even though you were not here at the beginning, senator sessions is recognized and we will come over here to senator bunning. >> one of the things we lost sight of is that nothing comes from nothing. there is no way you can enjoy a benefit to date that has not cost somebody in the future. we somehow think we can make

unlimited investments which are another way of talking about spending and this will necessarily be a benefit in the long run. i remember the cbo's score on the stimulus package. during the time the money was spent, we would have economic improvement in what would otherwise be the case but they concluded that over 10 years, the economy would grow less than if no stimulus bill were passed at all. why is this so? because there were probably too generous. of the bill was poorly written. mainly it is true because it crowds out private borrowing. other people could have borrowed that money to create income and so forth in their

community. when the cover meant crowds out -- when the government crowds out that bar wing, the money has to -- that ball rolling, the money has to -- that ball rolling -- borrowing, the money has to come from somewhere. it diminishes the economy and the growth. we had the testimony from an economist from the university of maryland. she has written a book about debt. when that reaches 90% of gdp, it results in a reduction of 1% in gdp growth. if the economy is growing at 2% and you are actinide% of gdp -- 90% of gdp growth, it will only grow at 1%. we verified that when she said 90% of gdp, she was not talking

about just the public debt but the gross debt. we are very close to 90% of gdp as a percentage of the gross debt. this is a very serious matter. we are threatening our economy's health and a lot of different ways. nothing comes from nothing and we cannot continue to ignore the reality of the increasing debt. senator gregg mentioned the interest on that. last year, it was $170 billion. that means the first $170 billion dollars of tax revenue we had to use to pay the interest on the debt that we borrowed. that increases steadily under our current projections based on the president's budget of the fact the president's budget is effectuated in 2020, cbo says it will be $840 billion.

one year annual interest payment, $840 billion. this is so large that it will deny us monday that many of us -- deny us money that many of us would like to see for our highways, schools, health care, other things. it is going to crowd out spending for valuable things. it will instead take the money we are taxing the american people and have to pay it on interest. as was noted, the likelihood of such extensive borrowing costs and interest rates to exceed that is very real. they project some increases, 5% or so. right now, the prediction is 4% by the end of the year from their extraordinary low rates.

we could be at a point where these bills the be up to 9%. -- t-bills could be up to 9%. i am worried about where we are headed. 38% of the national savings last year was consumed by government borrowing. money that would normally be available for a business to borrow or a homeowner to borrow to buy a home or to expand a business and to hire people, that money is being consumed by the government. some would say that is fine. the government can do just as well as the private sector. i do not agree. some do not mind the trend we are on for extraordinary growth in the size of government is a

-- as a factor in the economy. i do oppose that. it is a deep feeling for me that we have too large of growth with spending and government. that is where i am hearing wherever we go. people think we are expanding out of control. we do not have the money so we spend more. we should spend less. our city has to worry about how we can pay our policeman. our governor is worried about how to balance his budget. you guys are spending at record levels. counting the stimulus, spending has increased 80%. this is a huge increase. our baseline budget was a 30% increase. 35% for epa, this is unsustainable. let me say that i do believe that center greg and conrad are -- senator gregg and conrad are

correct to tell us that our fundamental long-term difficulties rest with the unsustainable actuarially unsound practices of social security and medicare. medicare being worse than social security, and it is a fact that that is so. i believe until this year, and maybe this year with the economy being down, every bit of the debt that we are incurring is a result of discretionary spending is because of social security and medicare that has returned a modest but declining surplus. in the next year or two, there will be in-and will continue at -- they will be in negative, and will continue at a precipitous downward spiral. do not think that discretionary spending is not a factor in this debt. the deficits we are running fundamentally are part of the

deficit that has got to be under control. i look forward to the discussion tomorrow and my amendment that would put statutory caps on the budget to make it harder to break our budget. if we can do that, it will be a help. it will not solve the problem, but it is a good systemic reform. thank you. >> thank you. next is senator feingold. let me thank him for his serious commitment to fiscal responsibility. thank and for his strong support for trying to bring the deficit down. and bring it down sharply as a share of our economy. >> thank you. i congratulate you and your staff for once again crafting a budget resolution.

it is a very tough task in the effort made by you and your staff deserves all of our thanks. your resolution is a second as a response to requests by the administration that was handed the worst fiscal mess in our nation's history. we have seen some improvement in the last year but nobody should be unfurling mission accomplished signs just yet. unemployment is still a significant problem. businesses may be beginning to recover but there are still 15 million people who are officially unemployed and millions more working part time who want to work full time or are so discouraged that they have given up on looking. but we have to take steps to help businesses put people back to work. and i support those efforts. putting our economy on sound footing also means addressing the physical mess that the -- addressing the fiscal mess that the president largely inherited when he took office. over the next 10 years, the bulk

of the massive projected deficits come from the iraq and afghanistan wars. fiscally reckless tax policies enacted in 2001 and 2003 and the effects of the worst recession since the great depression. the budget resolution that will be presented to committee starts to address that mess. we have to do more. tomorrow, i will offer an amendment to address one of the factors driving are projected -- driving our projected deficit, namely the iraq and afghanistan wars. that has cost trillions of dollars and it has not been offset. it has simply been added to the budget. i will want to seek a more fiscally responsible path. i oppose the president's strategy in afghanistan. i think it hurts our ability to go after allocating it globally. -- going after al qaeda globally. if we continue these military operations, we should pay for them and avoid going deeper into debt and adding to the enormous burden we're asking our children and grandchildren to bear. i look forward to supporting

other efforts for a more sustainable path. i want to close by joining you and others in commending our colleague from new hampshire. senator gregg, i have thoroughly enjoyed working with you. we entered the senate together at a time when deficit reduction was a priority. our freshman class brought some energy to that effort although there were many others that were committed to that action and it was very much a bipartisan enterprise. they were reaching out across the aisle toward deficit reduction proposals. i was pleased to work with all of them on these efforts. i especially enjoyed working with you on this committee. we have worked on a number of proposals. appeal of those may have given some heartburn. when that happens, you may actually be about to change something. we're fortunate in being led in the budget by the two of you. i don't think either caucus

could be better served by the two of you. the committee and the senate will miss your service. this is a tough task and i look forward to tomorrow. -- ford to looking at the mark. >> thank you. next, we go to senator bunning. [inaudible] [laughter] >> it has been done before. >> before he speaks, i want to remind members this will be senator bunning's last markup. >> thank god. [laughter] >> you will sincerely be missed. >> thank you. as almost all americans know by now, the u.s. is facing an unprecedented level of debt. the outlook for our debt is catastrophic and our children and my grandchildren, all 40 of them, are going to be left with the tab. last year, i pointed out that the budget would doubled in then tripled in 10.

-- that the budget would double in five years and triple in 10 years. the budget drives spending to $3.80 trillion in fiscal year 2011 and pushes the deficit to a new record level of $1.50 trillion in fiscal year 2010. both the congressional budget office and the chairman of the federal reserve have said that the debt of the u.s. is unsustainable. chairman bernanke and i do not often agree on many things. this one statement he has made, i heartily agree with. under the president's budget, the debt held by the public would grow from $7.50 trillion, 53% of gdp, to $20.30 trillion, 90% of gdp, by the end of 2020. as a result, interest costs on

borrowing with more than -- would more than quadrupled by the end of the decade, reaching at least $840 billion in the year 2020. even this estimate is optimistic because it assumes that the spending levels will not cause us to lose our current aaa bond rating. these numbers are more than just frightening. the health care legislation that just passed by the congress and signed into law. it is full of budgetary remics -- gimmicks and it will add to the mountain of debt that our country is facing. when fully implement pfft about $2.60 trillion. to help pay for this bill, congress boroughs over $500 -- ball rose -- borrows over $500 billion from the medicare

program. medicare is going to be insolvent. it is unacceptable. if further jeopardize the solvency of the program in the future of our children and grandchildren who will be stuck footing the bill. we just passed paygo legislation. that was that congress had to spend -- pay for what we spent like every body else. i support the concept of paying for what we spend. i knew it would be ignored and it has been. in just three bills since it has gone into effect, the majority has added almost $80 billion to the debt but the bottom line, congress is considering other deficit-increasing legislation that could make this amount go up even more. so much for paygo. it is more like wave as you go

and kicked the can down the road for future generations. i applaud the president's proposal of putting a freeze on discretionary spending. however, freezing spending after the binge of last year which included such irresponsible measures like the $862 billion stimulus package means that we are freezing spending at a level that is already historical high. we should not view this move as anything more than a start. freezing discretionary spending for a few years will to nothing to address the looming entitlement crisis we are facing. according to the social security and medical board social -- and medicare board of trustees most recent report, social security is projected to be facing deficits in 2016 and medicare will become insolvent in 2017.

however, as if it were not bad enough, the cbo released their own estimates indicating that social security will begin operating with a cash flow deficit this very year. a three-year freeze of discretionary spending will do nothing to fix these problems at all. it is important. this is my last 32nd period. it is important but we have to do more. the longer we wait to address these problems, the harder it will be to fix them. everybody knows we cannot solve our debt crisis by spending more. that is exactly what the president's but it does. -- but it does. -- budget does. it spends more, tax is more, borrows more.

enough is enough. it is time to cut up our national credit card and gets serious about paying down our debt. thank you, mr. chairman. >> thank you for your service not only in this committee in the senate and the house before. senator nelson. before you start of a when we negotiated on a backup in case the proposal went down, there was no better support than bill nelson who went to a key meeting at the vice president's's residents with me and was tough as nails with respect to getting something that could actually lead to a vote if the commission is able to agree and senator nelson, i deeply appreciate that. >> thank you, mr. chairman. senator bunning, as you are departing, let the record show that the senator appreciates very much your public service and this particular senator will miss you.

but especially your wife. [laughter] if we had more to leadership in the senate like the two of you, we would be a lot smoother in our operation around here. you two model not only the personal friendship but the best of public service in how you get along working in a bipartisan way that is extremely in a partisan process. it is a lot easier for me as the chairman of the science and space subcommittee, because space is bipartisan, but when you take something as partisan as a budget has become and the two of you model the kind of

leadership role we appreciate. we will miss you. i want to thank you mr. chairman because in order to make this budget work, what you have done is produce a revenue by closing some needed tax loopholes and although there might be a little bit of a shell game here, the fact is that you basically keep the deficit down to 3% of gross domestic product and that is a significant achievement and a very needed goal. thank you for that. in the process, you have a loud

-- allowed for a number of things that are important to this senator -- the appropriate funding for one of the world's greatest treasures as we try to restore the everglades. likewise, on transportation projects such as high-speed rail and regional transportation. something that you even provide here that we have not been able to appropriate because it is costly and that is helping the widows and the orphans in the offset that occurs in a technical program known as survivor's benefit plan dependence indemnity compensation which is something that is important to our veterans and military retirees. thank you for that. i just want to make my closing comments by saying the president went to the kennedy

space center last thursday and gave a very visionary speech about the future of this nation's space program and how he has set the goal of mars and how he has spent specific timetables -- 2025 to land on an asteroid. a flyby of mars. eventually to mars. in all of the excitement and spinoffs and education results, engineering, mathematicians, scientists, technicians, that spins off from that program. the space program, because of a perceived lack of interest and lack of leadership, has been in near cardiac arrest. you have allowed, mr. chairman,

me to suggest to you, fortunately, you put in your mark, and additional cushion of $1 billion so that as we are confronting a program of testing a large diameter solid rocket motor which is critical to the department of defense and of which it is a good example of one hand of the federal government not knowing what the other hand is doing, the defense department and nasa and nasa goes in and cancels this test. i just came from having on the telephone a bunch of our senate arms services committee staff with dr. carter, one of the

preliminary architects of the future defense needs of the country. all of this is to say that you have allowed in this and the flexibility of continuing the testing for that big solid rocket motor called the the aries 1 x, which is important for us to get out of low orbit by building a heavy lift vehicle for nassau, -- nasa, but it will be critical to the solid rocket motors that protect this country cost national security and our submarines and silos and so forth. i want to thank you you for that. we have $1 billion over the fiscal year 2010 level.

if senator sessions were going to be here, he would be very happy to hear this because he has some interest in this not only from armed services but from his space center in alabama. >> with the senator yield on that point? there are classified discussions we cannot go into here with respect to this initiative. but i would say to my colleagues that this is absolutely essential for the national security that to this go forward. i think every member of this committee to understand what i am talking about. i very much hope that this will be retained and we will have to fight for this.

>> senator mike crapo, thank you for your contributions to this committee. always substantive answers -- a substantive serious member and we appreciate it. >> thank you. i reflect that sentiment, as well. i know there has been some discussion over the last few months of whether we were going to have a markup on a budget. i appreciate the fact you have made a decision to move forward and let us engage in this debate and hopefully to produce a solid budget document. i have to say i am concerned about the budget that is going to be proposed. we have not seen the mark up yet. i was carefully looking at your cards and making sure i understand what you're going to do. if i understand correctly, it is going to be very similar to the president of budget proposals and most of my remarks are going to be and what i do know about the president's proposal. those are the concerns that i am going to raise. i hope we are able to make some

difference. the reason i say that is because as i look at the proposal we have seen, it is more spending, more debt, more deficit, more government, less in terms of the smaller economy and lost prosperity. i believe this congress must stop following the philosophy that we can spend ourselves into prosperity. that is like thinking you can drink yourself sober. we have got to start facing up to the difficult issues that we face fiscally. what do i mean when i talk about that? i will be focused on that cbo report did not get much attention because it was as we were analyzing the health care bill and in middle of the final actions on the health care debate. it did not get a lot of national or congressional attention. what did the cbo report say? by 2010, under the budget, the

deficit will reach 5.6% of gdp and never dipped below 4% to the entire budget window. under the president's budget, the debt held by the public would grow from $7.50 trillion or 53% of gdp at the end of 2009 to $20.30 trillion or 90% of gdp by the end of 2020. about $5 trillion more than the assumptions in the baseline. if we do nothing but maintain our current posture, we would be $5 trillion better. that interest would more than quadrupled between 2010 and 2020 and swell to 4.1%. from 1.4%. there will be more spending. government will grow.

i see virtually no entitlement reform. none. the amount of discretionary spending reform, as has been indicated, is represented by a $4 billion reductionin international accounts. there is talk about the freeze in the budget and i appreciate the fact there is a proposed freeze. i hope as we see the mark up the that this will be backed up with caps on spending that will be enforced procedurally. the freeze is a freeze at levels that have been increased in the discretionary budget by 17%. we have blown out spending at a 17% increase when all americans have been cutting their budgets. what has happened in congress? we have blown the budget up. and now we're going to freeze

it. at least i am glad we're freezing it and i am glad we're not talking about another 7% or 8% addition this year. we have got to do better. in addition, less growth. looking at the report that i wish got more attention, for 2016 through 2020, the cbo estimate is the president's proposal would lower by 0.2% on average. we will have a smaller economy while facing this growing debt and growing spending. the supply side effects of the president's policy would probably lower output between 2016 and 2020. the policies would result in a smaller stock of domestically owned capital, mainly as a consequence of the increased deficit and that effect become stronger overtime as budget deficits accumulate. each year between 2010 and

2020, national saving would be reduced. i think that we have to do a lot better. i do appreciate some of the steps in the budget and i want to work with you to strengthen them. you mentioned the middle class tax cuts. i am glad to identify those. those are the tax cuts that i believe we enacted in 2001 and 2003. we debated over since that time over whether that was a tax on the wealthy or not. the budget now enologist at $619 -- now acknowledges that $619 billion of them were tax cuts for the middle-class. i am glad you're budget to tax those cuts. but does not mean people's tax rates are going to go down. we will stop them from going up. the credit and responsibility

for that effort should be appropriately place. i share the remarks of our ranking member on paygo. i think pay-as-you-go should have tougher protections. i wish it would protect -- we should have more flexibility for tax relief and not have to subject all tax relief to those provisions. i understand the argument by those who do not want to say -- see efforts to cut taxes be given a more favorable treatment. i would also remind us that as we have pay-as-you-go rules, we must honor them. i have not gone back and counted the votes but i think we may have waived pay go more than we have honored it as it has happened. i hope that that pattern does not continue.

the chairman also indicates that there is a $2 billion deficit. we had a $2 billion reconciliation construction last year and what we got from that to dollar billion reconciliation -- $2 billion reconciliation instruction was say 2.6 trillion dollar increase in spending and hundreds of billions of dollars of their taxes. i do not mean to go back and debate that again but that entire proposal was able to be implemented because of a small $2 billion instruction. i am over my time. i do say that as a member of that commission, i look forward to working with you and others on that. i hope we can get some more on that. i hope we can start the process of meaningful reform. >> thank you. senator debbie stabenow, thank you for your steadfast work on this committee.

we could not have a better ally then senator debbie stabenow. i serve on three committees with their. everyone, she is a major player. your middle name should be jobs. nobody is more focused on that than the senator from michigan. >> thank you. thank you so much for putting together a budget that is solid and focuses on our values and priorities and the wife or all -- 94 all -- thank you for all of your wonderful work. i want to thank senator gregg when he comes back again because even though we did not agree on many items, i very much appreciate his fairness and leadership. i have talked about this before but i feel compelled to take us back to 2001 when i first came on the budget committee. we were debating the largest budget surplus in the history

of our country. it was brought about because of president clinton and balancing the budget. it was focused on innovation and investing in people and families and small businesses. we created almost 23 million jobs. but be focused on priorities that middle-class families care about. at that time, we heard from colleagues that deficits do not matter. we heard that the tax cuts and the ones we're concerned about were able to be put into place without paying for them. i remember at the time that an alternative was proposed that if we had done, we would not be here today. hearing so much from my friends

about deficits. you suggested at the time we take that surplus and we divided into thirds. 1/3 to invest in middle-class tax cuts, business, if there to -- a third to invest in the people and innovation, education, health care, jobs, and a third to prepay the deficit going forward on social security. that is the democrats' proposal at the time. as i hear colleagues who supported the policies that got us into this mess now coming forward, and i know we will hear this on every single amendment and over and over again, i just want to remind us that in 2001, but we had another choice, another road. i would argue it would have taken us to a much better place for the country and one and one i was proud to support with you. i want to say that i want to

join with colleagues. we may not agree on the debates in terms of the budget but i have a genuinely enjoyed working with you and appreciate your fairness and i want to thank you for that. the reality is this. in terms of where we have been, the mass that president obama inherited and going forward, last year, the economy was on life-support. we were going over the cliff. not only because of tax policies and spending policies put together medicare prescription drug for not paid for, hearing over and over from the vice president that the

deficit does not matter, we were at the brink of a catastrophe coupled with no oversight on wall street that happened during that same period of time. we have now walked that back to the president obama came into office with a hundred thousand -- 800,000 jobs being lost every month. we put into place the recovery act. i have a very different view of the recovery act coming from michigan. your continued advanced manufacturing tax credits that is actually creating jobs in michigan. 14 different companies are investing and making american products. they are creating jobs. we have approximately 150 companies across the country that have received that the manufacturing tax credits in the recovery act along with a number of other important job provisions. it would be great to say the

government was borrowing so there was not money for the private market. private markets were frozen. there was no credit. if it had not been at the recommendation of every conservative and republican economist that we are hearing from to be able to create capital and opportunities for growth, i would hate to see where we were given the fact that one year ago, it was almost a hundred thousand jobs lost per -- 800,000 jobs lost heper month. mr. chairman, i appreciate that because we do not get out of this whole if we cannot go out of work. that is why we are where we are. i am a very grateful for your focus and for president obama's focus and our focus together on

jobs to get people back to work. unfortunately, during the last eight years, with the policies represented and advocated for five republican colleagues, the bush budget helped corporations who outsource jobs. this budget helps businesses that create good jobs here at home to get us back on track. the bush budget ran up huge deficits to pay for tax cuts for a few wealthy people. this is responsible for cutting deficits for our children and grandchildren. the bush budget cut education budgets. this will help us invest in our children which is so critical. this budget focuses on our great american middle class and our small businesses who create the majority of jobs in this country. that is why i am a very grateful for all of your efforts in investing in those areas and

i am also very appreciative for including president obama's national export initiative which is also about jobs and for efforts i hope we can all agree on to create more markets for manufacturers, for agriculture, and to create jobs here at home and export our products. i also appreciate the fact that the budget includes funding for trade enforcement and we have a level playing build on trade. i also want to thank you for something important to me and those of us in great lakes, continuing the commitment of $475 million for great lakes restoration. we have serious challenges, including 100-pound fish called

the asian car coming up the mississippi river into the great lakes that could absolutely destroyed the great lakes. i am willing as for your appreciation to support my amendment on that. these are wise choices about investment in our future, and i believe they point to a budget process that is focused on creating focusing on middle-class families, supporting small businesses, and frankly, continuing to clean up the mess that we have been laughed. -- left. thank you. >> we will go -- think you for your serious minded commitment to the work of this committee. >> thank you, mr. chairman. i would add complement's to both of you. a lot of committees don't work the way -- there are real differences in philosophy on this committee, but we have serious debate and we have

serious debate in a way that is constructive serious debate. it does not get personal. i attribute that to the way the u.s. senator gregg works -- you and senator gregg worke togethe. i applaud both of you the way -- not just what we do here in the committee, you handle when we go to the floor and a very professional manner. i want to address a few other things and go back to history just a little bit. there were a few facts that were left out. i opposed a lot of the spending that happened under president bush. i opposed whether it was the prescription drug bill, the farm bill, or some other spending. you do have to go back and look at exactly what happened. it was a republican congress with bill clinton that got us to balanced budgets and surpluses because we held the line on spending as the economy grew. in 2001, we had a devastating -- we were questionable on the

economy a little bit at that point, and then we had 9/11. we have to understand that took $1 trillion out of the economy. and then we have wars. we obviously spend a lot of money on wars. it does not excuse the increase in spending that we had. i criticized the bush administration and the republican congress at the time for doing that. that is the past. now we had a devastating impact on our economy last year. that is still the past. as legislators, what are we going to do. we can play the blame game all we want, but what are we going to do now for the future of the united states. the actual future of our country is on the line, and it is not 10 years out that we used to think, tenor 20 years from now, we will have budget problems.

we're looking at this year, over $200 billion of interest payments on our national credit card. $200 billion is money that can't go to education, roads, health care, anything else we want to do. by the end of the decade, we're talking almost a trillion dollars in interest payments on the debts. those numbers don't include it increased rates on the bill, or if we get downgraded by rating agencies. if we get downgraded, we're heading to that place. we're heading toward a banana republic as far as the agencies are concerned. the interest rates skyrocket. we have to look at this thing as legislators and say, how do we stop this catastrophe, the economic catastrophe that could be upon us. as one of the reasons the debt

commission has serious work to do. we have a responsibility. we can't wait several years. we need to get serious. a couple billion dollars here and there is not going to cut it when you talk about a trillion dollar deficits as far as the eye can see. when you are adding that much debt, it is like a family that says, you know what? we can't afford the interest payments today, but we're going to continue to just spend and spend, add to the family credit card, and eventually we know we will end up in bankruptcy, but we're not going to do anything. state governments, local governments, across the board, family businesses, families are tightening their belts. the only place that isn't tightening its belt is washington d.c.. we are doing is printing money.

i am sure all of us have been visited by these close-up students. it is great to see young people learning about our government. they asked me about help with schools. i said, you know, i would love to be able to help the schools and we will probably do that in the supplemental bill. the problem is we are borrowing from their very future, the money that we will be sending to the states. we are printing the money, and somebody has to pay that money back with interest, and those young people that are standing before me are great deal of who is going to have to pay it back. they will not have the same kind of america because of the debt burden. i don't care whether you're a family, business, local government, state government, local government, too much debt will destroy you. that is where we are headed. in the old testament, there are plenty of scriptures about too much debt. we are in that situation today, and we have to make serious

choices. they are not easy. it is easier to get reelected if you are giving money away. it is difficult to say we're going to cut spending in areas. unless this committee or this congress gets serious, not two years or three years from now, starting now, getting serious about cutting spending, we are not going to do it. forget the blame game. we can go back and forth about the blame game. the responsibility is ours for the future of the united states. i think this committee has important work to do, and i hope we can lead the rest of the congress into making very serious and tough choices. >> senator cardin, we're very fortunate to have somebody of your background and knowledge on this committee. i am appreciative of your willingness to serve here. >> i want to echo the comments that have been voiced on both sides of the aisle to

congratulate the leadership of this committee. senator conrad has done a very good job under very difficult economic circumstances at bringing forward a budget that reflects, i think, the right priorities during a difficult -- a difficult economic time. they have worked with great professionalism, and the quality of the debate is a model as to what we should be doing in the united states senate. i applaud them for making it a pleasure to serve on the committee. it is not true too often in many of our committees. i want to agree with senator and set on a couple of points. i agree that the deficit is a very serious situation, and we need to work for it. thank you, mr. chairman, your budget has done that. it has taken the deficit we have currently had and reduces it by 2/3 over the next five years. you have done it by taking the

tough steps, including freezes on domestic discretionary spending, including living up to our pay-as-you-go rules, including denying a lot of the things that people would like to see us do but are not high priority. but it is doable. what you're asking us to do, we can achieve. we can reduce the deficit by 2/3 over the next five years. i want to take exception with the comment that senator and san -- ensign made. i don't want to look back because we have to look forward. i have to correct the record, because i was part of congress in 1993. i was one of the democratic votes that allowed us to bring our budget and debt balance. we didn't get a single vote from the republicans in the house or the senate. it was tough medicine, and cost some members of their seats.

but we balance the federal budget. but it was our responsibility to do that. we brought 2000 to a surplus situation. i didn't vote for the policies that led to the deficit. i didn't vote for the tax cuts and the vote and the vote -- and the wars that were not paid for. we have to take responsibility for solving the problem. i applaud you, mr. chairman, the budget that responsibly deals with the budget deficit. you do it in a way that also creates jobs, and that is how we get out of this economic problem, by protecting the environment and improving our economy, improving educational opportunities. these are priorities we should be able to agree to because we need to be competitive in our international environment. mr. chairman, i want to thank you for working with my staff as we incorporate into the

budget a lot of priorities that are important to me. i chair the water and wildlife subcommittee at the department of public works committee. the senator mentioned a great lakes program -- it late -- great lakes program. you have made water quality a priority in this budget. that is good for jobs because you have increased the state revolving fund for the infrastructure by $3.50 billion. it creates over 20,000 jobs, so we're not only going to have these water main breaks stopped, just a short distance from here it became river, and more recently had a flood in baltimore county, we can get to those types of problems. he also provided money for the chesapeake bay program to improve the chesapeake bay program and to reauthorize the infrastructure financing act. those are provided bork for -- and those are provided for by reserve funds. we are all interested in health

care and reducing costs. i have brought to the attention that the dealing with minority disparity will reduce health- care costs. hundreds of billions of dollars are spent because we did not deal half -- with the health disparity in this country. the congress accepted an amendment that i offer that elevates the center for minority health -- to an institute. this budget that comes forward provides the resources to make that a reality. thank you, mr. chairman. it is the right thing to do, and it will also save money. in 13 years, when this arbitrary cap was put in, it hurts people that need not -- that he held the most. those who have strokes and knee replacements, you did that. one last point i want to mention that is a small