there is a critical impact if they try to retain the governorship. remember, he was impeached and his successor is facing off against a very conservative downstate republicans named bill brady, guaranteed to be in the headlines for another few months, amounting to political advertising for free for republicans in ill., insurer in the us a spectacle -- insuring of us expect to call -- a spectacle. i would even suggest that our good friend, brian lamb, should sign him up for some night q&a. he would be there in 10 minutes, even though ryan would have

trouble getting in the wake that help and the democrats, certainly?

it is america's greatest idea factory. on sunday, leaving get the history of malaria and why it kills nearly 1 million people every year. for a complete listing, visit booktv.org. >> according to a new survey, more than half of large u.s. employers plan to change their health benefit programs next year. it is carried out by the national business group on health. this is one hour. >> good morning, everybody. i am the president of the national business group on health. it is a nonprofit membership organization for predominately large employers. with me is the director of the benchmarking analysis unit. if the have very technical

questions, we will call on karen for that. we are very glad to be here. this is an exciting time in history. we are in the middle of a transformation of how health care is financed and delivered in this country. we are very busy trying to figure out what will happen, what could happen, especially to large the players and their retirees and dependents, and try to help navigate these complicated transitions. we are excited about some of the changes. we think that every resident of the united states should have access to affordable, quality health insurance. we are ready and have been working with everyone else, including policy makers, to make certain that that happened as soon as possible and that care and affordable health insurance

are available to every resident of the united states. i am here to report on a survey that we conduct every year. we usually do it in the summer. most employee a benefit surveys, including 1 redo with powers watson -- that we do powers of what sen, are put out in the late part of the year. we started seven years ago during this survey to try to anticipate what is coming up. what are you planning to do for the following year? it happens that this year with health care reform, the following year it is a transformation year, a transformative period. we ask a number of questions about the impact of the legislation and some of the regulations aboard a rigid regulations. the u.s. employers have long

struggled with health care costs. they have been serious for 20 years in the united states. we know that if employers are able to use cost management practices and make choices about programs -- for example, that will help employees -- then you can bend in the cost curve. instead of 10%, you may be looking at 6% or 7%. that is real money out the bottom line. we know the affordable care act has driven in full years to rethink their health care strategy and to make decisions about what they will do now and in the feature. we have a fairly long time line. we have a lot of changes that will have an impact immediately. we also have things coming

online at different stages. employers have pretty stepped back and said, "what do we need to do to be lined with where the nation is headed?" this is the first year that this is occurring. this survey was quite timely. in terms of the overview of the study, we asked members to provide information. this is for what they will be offering to their employees for calendar year 2011, which for most of them start 20 -- january 1. most are sending the opening enrollment packages and announcing to their employees what their choices will be for next year. the fall is usually open enrollment period. we have said they too large -- we had 72 large employers respond.

we asked the question of what are you basically telling your cfo you need to put in the budget for what medical claims costs are going to be? for 2010, because it is not done yet, we have what they believe it will be in 2011. the 2011 budget projection include any changes that might have made it not as the expensive as it would have them. this is what they believe they will have to spend. as you can see from the document you have, in 2010, we estimate that the mean for the employers surveyed in 2010 was a 7% increase. these are virtually all self insured employers. another point worth mentioning,

they pay administrative cost for health plans. this-head tells you what people are doing. -- this? it tells what people are doing. -- this data tells you what people are doing. this is sylvia been hearing about in reform. this is the underlying use of medical services. for 2011, our employers are budgeting 8.9 is term as the mean -- 8.9% on the mean. it is higher on the mean. the median was 8%. you probably all understand this, but the important thing is the median it tells you why it is the midpoint of a 50% above

or below the number. that washes out any of the allied years. amy can be higher or lower -- a mean can be higher or lower. a median gives you a point along a continuum. we estimate that about 1% of that has to do with the mandated changes that employers have to include for 2011 under the affordable care act. another 1% of cost increases. this is a softer number. it is harder to demonstrate in the short term. we have seen evidence of hospital prices going up rather substantially the them the other one -- substantially. the other one is te1% is bringin changes that are likely to occur.

they feel their cost will go up because of health care reform or because of what is happening in the economy. i do not want you to think of it as his health care reform. they are raising their charges. employers are the only ones to pay actual charges. in the government pays what it chooses to pay. private payers may have some negotiating room, some health plans. they really do have to pay the cost shift from the public sector. is a home of their subject anyone wants to talk about it later. another question asked is what plan design changes are you considering? what might be a fact of wanting

to be or not caring about being a grandfathered plant? the president promised from the very beginning that if you like your help plan you will be permitted to keep it. one thing they did was put out rules that basically said that you can not make too many changes to your plan. if you do, you will lose that began grandfathered status. the theory was that employers would want to maintain grandfathered status. there and make sure it was as like a plan as it was. most of our employers are continuing to make the plan changes that they were going to

make. i will make a little aside. there is a misunderstanding between those who run health plans and self insured employers. most employers really offer the same plan year after year. they are always tweaking them. you might in this geographic area -- an employer might offer the ppo product of united healthcare. you as an employee thinks that is your plan. every year when i get my open enrollment package, of thei -- there are changes. most employers think as the plan as something that has a lot more flexibility but in it. the broad strokes remain the same. one of the ways they have written the regulations would make it hard to make even some

of the typical changes that are made every year. 53% said they will be making plan changes. 19% will make changes but are scaling back the changes%. 19 -- 19% are making no adjustment. it is not likely that before as many as 19% would have made no changes. it was maybe 10 is term or 15% -- 10% or 15%. they usually have contracts the last three years. if your at the beginning of a contract, you might not make that many changes. internes and the design changes according to the health care legislation, even the

grandfathered plants are required to meet certain requirements. the first one is if you have an overall lifetime limit of $5 million, you work for a company and when your claims reached 5 million in theory you would get no more. that is what an overall limit wouldp belan -- would be. 70% of our employers are making a lifetime changes. it is probably very high. if they have a lifetime limits, it is really very high. the only time you see low ones are in plans that are another subject. another is changes to annual or lifetime limits on specific benefits. 37% of those responding said

they would make changes because of the requirements. 26% would remove annual dollar limit on overall benefits, annual. the plan might have something like 300,000 in a year -- maybe the lifetime limit was 5 million. this is another one that would be eliminated. 13% removing pre-existing condition exclusions for children under 19 burda most employers do not have a pre- existing condition exclusion. it did not even have them for adults. it could be that he might have a six month waiting period. you would not -- it might be

that for the six months -- first six months things will not be covered. there is generally coverage for children that is pretty comprehensive. there is also another part of the affordable care act that includes an opportunity for employees to voluntarily enroll in a sort of insurance program called "the community living services and support act." it is put in the bill because senator kennedy wanted it in the bill. it would require that someone voluntarily pay -- it could be as much as one of under $23 -- a month for five years. it at the end of five years he met certain criteria for having

disabilities, of then you could get a cash payment of as much as $50 to cover your living household expenses. if you have to have someone to come in to help you say there is something like that. -- help you bathe or something like that. the statute makes it clear that employers can offer it voluntarily. it is expensive to it minister a program like that. -- administer a program like that. as you know, if the statute changes, the deductibility -- i

apologize. basically, there was a take away a of a tax benefit that employers got. they got a subsidy for their drug benefits pe. they did not get taxed on that. what are you going to do about it? 169% had it under review -- 69% are under review. there is a temporary reinsurance program for early retirees. a lot of employers still provide coverage for those who were retirees before medicare. that is the most expensive place for coverage for anybody.

the act allowed some subsidies for retirees to help employers pay the bills for their early retirees and their 62% said they intend to -- for their early retirees. 62% said they plan to apply for that. we also asked them what are the top three most effective steps to control health-care costs that you are taking now or planned for 2011. you were to put the top three. the slide on page 10 tells you what were the most effective tactics. you will see that 21% rated the most effective tactic offering a

consumer directed health plan. 6% said was the second most effective. 10% the third most effective. next were well on his initiatives. 20% thought those were the most effective. 17% the third most effective. those together are really considered very beneficial in terms of helping to control costs. you can also seen the fourth one down, disease and condition management, also has a rather substantial number in being in the top three. interestingly, one of the biggest concern is that the policy makers has been is on the cost sharing side. employers think kashering is important. they do not see it as the most important thing by far. there is a misunderstanding

between the way employers view what is happening and what policy makers are thinking about. if you go back several years to some of the other surveys, what you find our employers saying they feel they have reached the maximum volume of cost sharing as a tool for getting the attention at some point, they will not get the care. you want some combination. in terms of cost sharing, you can see what they are doing in 2011. increasing contribution to the premium costs. this is what the employee has to pay toward his or her own coverage. 63% are doing it. it could be as little as one is te -- 1%.

it be going to 16%. -- it could be well below 16%. they are increasing it. also, out-of-pocket maximums -- if you hit it, what ever it is, and say $5,000 -- once you hit it, usually 100% is paid for everything else in a given year. it is a safety net. you can see that it is being increased. in network deductibles are being increased. they were increased 47% in 2010. that is another point i would make.

employers tend to make two or three year plans. they try not to make too big of a changes and in any big year for a lot of reasons. with the financial meltdown, there are a lot of concerns about the fact that most people 's pay package may have gone down, but there is a recognized -- recusing the most households have two working members in the family. he may have not only had no increase in your own pay for some hours reduce, but you also you may have someone else in the household. there is concern about that. with health care costs going up around 7%, even if employers

only pass on the 20%, those are real hard dollars. they are very sensitive to that. only 21% were changing copays for specialist care. because there is more and more positive attention on primary care, only 6% for changing the code pay -- copay. ibm just eliminated copays for primary care. there is an intense to reduce or eliminate copays for primary care and not just for preventative benefits. this is seen as a very important tactic for controlling health-care costs and improving consumerism. in 2011, 41% are offering it as

an option. 20% have gone to full replacement, where you have no other choice. the details may vary. they may or may not be a high deductible health plan. the high deductible health plans that are technically high deductible are not met higher than the average plan. a study found that the median deductible was now over $1,000. a high deductible is only about $1,200. there are higher and higher deductibles for everybody. the movement probably between 2010 and 2011 were those of the move removing it -- the mood from having it as an option to rifle replacement -- are those

that moved from having it as an option to having it as a replacement. there are wellness programs that target overweight employees, spouses, and children. 576 said they would offer it -- 76% said they would offer it. for spouses and domestic partners, 42% said yes. it that is a growing number. that is assuming some of the regulations do not keep us from doing these things. we will see more of that. then we begin to see a small number offering wellness programs to children. we have a national crisis in that regard.

you will see what the kind of things are being done for wellness activities in 2011. 41% are providing a premium discount for participation, in this case. health assessment. five% have a surcharge for non- participation. 17% are offering other instances relating to the health plan. 27% are offering other financial instances. -- incentives. 22% provide a discount for participation. % 11 based -- 11 deser% a surche

for non-participation. there are reasons for how easy or how hard it is to administer something like that. this is really good news of what is going on. you can see the average amount of the incentive in a year to employees is $386. that is true money -- real money. we have seen small changes just as we have seen consumers change their behavior across the board. some of the benefits, people are much more positive. if one of the things you are doing is giving them a discount or a surcharge that did not get their attention three years ago, it is getting their attention now. 73% are using prior

authorization. that means you have to get approval for a particular drug. 63% are using step therapy. step therapy is where you are required unless there is is a clinical reason for going to the more expensive drug that you use the first one first and then if that does not do what it should do you go to the next one. you are required to do that unless you have a clinical exception. 63% a 3-tiered design. there are sometimes slight variations.

mandatory may loader -- mail order. if something yet taken for a -- if they are sending yet taken four years, and literally comes almost automatically. requiring that you either used mail order for the medication or you pay the full cost difference between what you get that retail. it tends to get people's attention. a mandatory generic substitution, 37%. you can see that employers are moving ahead with the changes of the affordable care act. they are not holding up the changes that they want to make to retain grandfathered status. they do not think it is that important. they are attempting to control health-care costs. they understand they are stuck

paying for all these cost no matter what. the matter what else is going on, they will be paying the tab for a very long time. the exchanges will not be in place until 2014. large employers would not have a choice of using them even if they wanted to until 2017. that is a long way away. they are increasing some employer cost sharing. most employers are not increasing it very much. most importantly, if they are focusing on health improvement activities. they would like to be able to continue that. they think it is really important. they do like more consumer directed health plans. if they have not done it recently come if they are doing

depended eligibility audit -- recently, and they are doing independent eligibility audits. there areno restraints on that. a be your task is buried our lives elsewhere -- it could be your child that lives elsewhere. the parent is that taking care of them. they want to make sure that every individual they are covering is an eligible dependents. they are increasing cost sharing for non emergency uses of emergency rooms. they are using data warehouse as more and more to target programs on the conditions that are hurting people in terms of making them sick, diabetes, heart disease.

they are using the data and analysis to identify what part of the country to concentrate on particular programs. [inaudible] the southeastern part of the country has always been called the stroke bell cousin dietary habits that the two strokes. if you do not even know what it is. it used to be a common term. when you know that those are places where strokes and heart attacks are still serious problems, they are trying to concentrate programs in places where there are particular problems. more employers are contacting with the centers for excellence.

if you need hard surgery and you are a lowe's employee or a dependent and you want to go to the cleveland clinic, and then they pay 100% of all the cost including the travel costs for you to do that. i think we will see more of that. there is a growing interest in second opinions for conditions when someone has a diagnosis or a recommendation. employers are paying for organizations like the mayo clinic to provide a second opinion. they are trying to find all sorts of ways they can control costs to improve quality and safety of care and not just control costs. they are still trying to do everything they can to improve the help of their employees and control costs. they know they have to do both.

i thank you for your attention and your time. i welcome any questions on any of these topics. >> 8 thank said was due to medical inflation -- a chunk you said it was due to medical inflation. providers have less unaccommodated care. they have less of a need to raise their rates. why are they boosting their rates even more? >> i guess everybody heard it. right? we wonder about that a little bit ourselves. i can tell you what they would say. i think there certainly correct. it is a question of how correct.

even though the act to help cover another 30 million people, we have around 48 million people who by now have no health coverage and it is probably boar's then that. that was a couple of years ago. the second thing, the really tricky one, the more the patients come in the door who are paid by public pay years with administrative pricing, which in most instances will be below what they consider their actual cost, there is still the differential. as long as there is that differential, we have to make it up from someplace. on the employer side we would say maybe we should be bringing down the cost of care delivery so that we do not have that

disparity. we have been saying that for a long time. it has not made a difference. that is one of the things they would say. what we would like to see is a combination of everyone working together. we cannot continue to work -- rely on the private sector to pick up the slack. we have to pick up the change. in terms of payment, medicaid payment to the actual underlying cost of a hospital or a doctor is the worst payment from their point of view. there is the biggest gap. medicare there is a gap, but it is not as big as medicaid. the more people we have in medicaid, the more people we have who are coming into the hospital and the hospital is not getting what they believe is

100% of their cost. >> [inaudible] >> did everybody hear that? he said, so the difference between uncompensated care and undercompenstated care. many would argue that it is not under compensated. >> do you have any idea of how many employers would lose their grandfather does that is because they are making these changes? -- grandfathered stat is because they are making these changes? >> you believe you have maintained your grandfather ed status. it is a step the have to take. we do not know how many. if they do not lose it this

year -- the constraints for how much you can increase the cost sharing, even if it is a modest amount -- it could be below the national average. you could already paid more as an employer than anybody else in the country. if the figure they look at is if you have increased it anyway. if your only% charging them 12 -- if you moved from 12% to 18%, you'd be out of compliance. we estimate it would be somewhere over 50%. by the second year, when you have more planning time -- by the way, the plans -- each plan someone offers is separately

determined to the grandfathered. you have a traditional ppo and that is the one you do not mess with very much. then offer a more attractive consumer directed health plan and to do not bother to grandfather that one. you can be really creative with that. you might do more things to do you do not want to have to say this is a grandfathered plan. every plan is different. most employers do offer more than one plan. >> the survey was conducted in may and june. it seems like there is been a lot more and permission coming out about how restrictive the rules will be. any sense -- are you hearing

anything from members that it may be lower? >> i think they have a pretty good sense of where this is headed. there is always more detail. i think where they are right now -- the belief is that next year is going to be the bigger problem for most. now they have more certainty. in this case, it is not particularly good certainty, certainty that pleases them. here is an example of what we live by tuesday. this would deal with the problem of how you are penalized. if you were a generous employer in 2010, you are the worst off. the changes are fixed on the assumption that you were at the national average.

if you were more generous, the changes are things like five percentage points. if you are concerned is 15% -- if you are coinsurance is 15%, you cannot change it at all. the more you did for your employees, the worst off you are. i realize that is not a good answer. everyone is saying now we know where we have to be. there is not enough and the grandfathere -- to being grandfathered to worry about. it makes sense in the small insurance market. it is not that difficult for a large employers.

it is not something that you say, i'm so sorry i'm going to lose the status. there has been additional reporting. this is often is understood. large employers are regulated by the labor department for their health plans. they have very rigorous rules that they live by. i used to work for xerox. i can tell you everyone, it is burned on your head o -- it is very demanding. there is a statement. you have to sign it and put it in your document. it says you should know that if this plan is grandfathered, you do not get the consumer

protections. it is not say that you have all the other consumer protections because the department of labour. it is that kind of disparity in how these things are being viewed between the policy world and the people who administer the plans. yes? >> i wanted to ask about the survey on cost sharing. you mentioned in the list of things that employers get that were effective, that increase in cost sharing -- over time, you said employers are finding that to be less useful. the same survey shows 63% of the company's you talk to -- companies you talked to plan to increase it.

how you reconcile the two? >> it is a question of how much. they are going to be increasing them for several reasons. one is the cost of going up. they are going to increase their costs. the increase is determined by what is already built in to the premium. right now, if they may charge 15% or 17%. they usually do very small increments. 8 our people and are in charge of benefits. -- h.r. people are in charge of benefits. they are notorious for trying to keep people happy. i do not think the increase in

cost sharing is very much. those changes are frequently used to encourage people to make choices that employers would like them to make. for example, if there is used a differential between what an employee pays on a monthly or bi weekly basis for a consumer directed health plan. i think our survey found that 36 is term -- 36% of our employers charged 30% more or less for that health plan. one thing they do is that they want to encourage people to make different charges -- choices. they increased the premiums on hmos and decreased it gonna

ppos. they are always doing things to encourage people to make different choices. the straightforward numbers mask some of those complexities. that is when the concerns we have about the grandfathering. most employees make a lot of changes. what we like to see is an equivalent ballots of the problem. if you have a super rich client and you want to make small changes that behalthey would tru out a grandfather, as long is your equipment is very high, then that would be ok today as your -- as long as you are equivalent is very high, that would be ok. that is one of the problems with regulation. they will be looking very

specifically at one thing. a lot of employers cover dependents that are not in the list for dependents, the new list of covering dependents. the way the rules read, you do not have to be a dependent under the irs ruled to be a dependent. some employers cover dependents who are different. it could be someone with no relationship, but they cover them because they are financially responsible for them and they are an irs accepted dependent. right now, but that depended will not be allowed under the new role -- that depend it would not be allowed under the new rule -- dependent would not be allowed under the new rule.

there are those kinds of complexities. yes? >> in terms of more plants, what does it mean for the providers? what can they expect? >> the providers should expect they will have more people coming in with higher deductibles and the deductibles will have to be collected eventually. there will be higher cost sharing. what we all hope is that people will actually be asking tougher questions about what is being done for them or to them.

if someone is killed we think we should do and mri -- if someone is told we think we should do and mri, maybe they can ask, what difference will that make in my treatment? the patient may say, i do not want it. i do not want it. the patient then has made the decision. if it is the one to affect treatment or make a difference -- if it is not going to affect treatment or make a difference, maybe the patient would say it is not essential to me. we hope there will be more questions. >> consumers are becoming more aware. they are becoming more self-

sufficient. we know from the plans that exist that they do that. they go online to get more information. they ask questions. did i answer your question fully? >> i will follow up. part of what you were saying is that 63% said they will shift at least some more of the premium costs to their employees. [inaudible] >> i think it could be 1%. there is the premium and the

cost sharing at the point of care. the other? this suggests it is more likely to be on the premium side -- the other data suggest it is more likely to be on the premium side. 10 years ago, people pay very little. the costs were less. what is happening is a stark and painful for everybody. if you look at a chart that shows what has happened to the dollar cost -- no one says, my health plan went of 6%. they say my plan went up $100 a month. it is not only what it is costing in absolute dollars. it is the flat or negative way to scale. the affordability gap is much

worse. before the meltdown, we were all talking about -- and some of you know -- how horrible the affordability gap was. america cannot afford this. if the economy was crippling. suddenly come everything else collapses. the bottom dropped out of the economy. the amount of national wealth went away overnight. it was huge. health care is untouched by that. it is still growing at the same rate or more than it was. it is like they are impervious as to what happened to the economy. do you have any other questions? >> down the road, it may be

cheaper for an employer to terminate coverage, paid the penalty is that are set under the law, if employees extra money to buy coverage. do you see that scenario developing? >> i think the employers are thinking broadly into ways. number one, and they know that the matter what happens down the road, they have to provide comprehensive health benefits today. they are trying to navigate the transition as effectively as they can. what could happen in the future is, why do not they -- what happens in the future is wide open. a lot will depend on the extent to which we can get a handle and

begin to control costs. that is what peter orszag always talked about. more people realize as they moved in and out of the labor market and there are exchanges operating that if the exchanges themselves become a place that people feel more and more comfortable and the exchanges are doing a good job of managing health-care costs, it then that made the more attractive. -- it made them look more attractive. it may vary by location. it will vary by culture. in places like silicone valley, of their benefits that are provided that are not provided everywhere in the country. they have people at one site.

they want people to be happy and not distracted. they want them to be making money. in other places where benefits are really important, the companies may decide to do more. it may become a more valuable benefits. -- benefit. it will vary by industry and part of the country and state. it will vary by how these exchanges come out and what happens between now and then. is something like a voucher program, were some people could go into the exchange's which would select -- where some people could go into exchanges, if all went in or none went in, it would be different.

employers are recognizing with their obligations are today. the biggest ones are improving health and reducing cost. the thing about business is that they are pragmatists. they live in the real world. they are competing like crazy. for the most part, we are not winning. we have to do something about that. we are struggling with almost no job growth. there are questions about how we will actually restart the economy and start creating jobs. some of these requirements play into those concerns. i have heard members talk about how every new mandate is added onto a base there right now in america and a family of four has

the local cost of over $18,000. this is just the claims costs. when you think about creating another job, you have to think about what does it cost me to have that job? it is pension retirement. it is a vacation day to hold the dates we hold and paid time off for holidays -- it is vacation dates we hold unpaid time off for holidays. we have to change all of those things and do something about it . there is not an easy answer in this transition period. this is a transformative time. most of us cannot guess what will happen in eight years. what we know is that we have a path forward that we follow

because we live in this real- world. that is really what this survey reflex and the work we do. how do we get through to 2014? after 2014, what does it look like? by 2017, what does it look like? by the way, we are putting in all of these higher cost increases due to some of the mandates. looming out there in 2018 is the cadillac tax. employers are already about to hit it. that is a lot of years forward. if they do not change it, there'll be many employers and employees paying a tax on that. some the things that are driving these costs up are the mandates. we are hoping that every time

someone talks about the catalocc tax, they remember their behalf to avoid costs -- they need to remember that we have to avoid costs. that is what we need to be doing between now and 2018. alright? that is it. thank you for your time and being here on this rainy day. i hope you enjoy the rest of your summer. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> good morning and thank you for coming out on a wet august morning. i am bill taylor. the united states institute of peace. very pleased to welcome back ambassador christopher hill. as everyone knows in this room, he just completed a tour in baghdad. ambassador hills had a long career starting with the peace corps and cameron aong time ago. he has been an ambassador in many places including libya and macedonia and iraq. he has been the leader in north korea, assistant secretary of state, so this is the end of one

chapter but he now goes on to the next chapter in his career where he will be the dean of the korbel school of international studies starting very soon. we're very pleased to have him here. he takes off shortly cut -- to go to little compton, rhode island. all well-kept secret in rhode island, the home of the best ice cream parlor in the count, i am convinced. also, watching from a distance from colorado. we're very pleased -- yes. we're very pleased have ambassador hl and hoping he will be able to look forward, with where we're going beten this relationship between the united states and iraq. we will have a good opportunity for questions.

if there are people in pakistan and their root watching us online. we may get some -- in baghdad and their root -- beirut loten is online. please silencer phones and please welcome ambassador hill. [applause] >> thank you, bill, and thank you for being to the old u.s. building. showing its age, i guess. i guess you are looking forward to the new building which is about the size of the houston astrodome, one of the eighth new wonders of the world. i am leaving the state department, not only bause our view of the atomic has been obstructed by the new building. [laughter]

if always liked the view and i did not know that that was liberal. -- literal. it is a great pleasure to be back here. i just had 16 months into iraq. i went into extra time there. i was planning to make it 12 months, but i did try to see if they could be helpful on the issue of government formation, which is a bit of a labor of love. it is day to day of very painful process. but it will get done, it will get done. let me just say that for those who have served there, there is no more exciting time to work in baghdad at war on one of our

provincial reconstruction teams. we have a strong team there. ambassador jim jeffries is probably a riding as we speak. i think it is a place where the foreign service has embraced the monumental challenge of the civilian-military transition, and also the transition of iraq or broadly and the transition of the u.s. relationship in iraq and i am very proud of all foreign service officers who ha gone there. as you know, people do not go with their families. instead of living with one's wife and children, you live with a roommate. you fill out forto make sure the room made does not smoke or does not party late or does not wake up too early or too late. it is quite an experience. and you also experience the thrill of getting the so-called duck and cover all our at

certain periods -- in fact, we just came off of several weeks in which we have a rocket fired just about every day on the green zone. so you get this stuff in cover, the new people leap out of bed and hide in the bed, and the old people just keep on going. and if you were there for a couple more days, you continue to do that. it ian experience to live the there, to be sure. if you look at where we have been there and where we're going, that it is definitely going in the right direction. i arrived there in april. i remember arriving at 830 at night and prevented -- 8:30 p.m. and presented my credentials and at 11:00 i presented the actual credentials to the president. at midnight, i sat down to a banquet of kurdish food which

included a circuit -- a seing of turkey. and at 1:30 a.m. in t morning, i returned back to my home. at 7:00, i had leon panetta at the breakfast. at 8:30 a.m secretary clinton arrived. and by the end of the day when she arrived, i said that tomorrow is sunday. and they said, no, that is the first day of the work week here. getting there grabs you by the throat and does not let you go. it is an extremely energetic, very busy place where you throw yourself in the things. as i said, i am very proud of the americans to come there and continue to go there to make it all work. in iraq, it is one sort of series of problems after the

next. when i got there, we were dealing with the fact that we had u.s. troops still at the hundred 40,000 level and we were beginning to reprocess and relocate those cities -- them out of the cities into the countryside. we were turning over responsibilities to the iraqi army. i know there was a lot of concern at that time, could the iraqi army manage the process? and soon after the completion of this process, there were a number of high-profile bombings -- that is an awful way to put it. but the point being that took down the foreign ministry and the finance ministry and a single day, and a couple of months later, there were additional bombings of public buildings, and then again a couple of months after that. and yet the iraqi military stepped up. if you go back and google the

moments in august and october, read the mainstream media on them to see what they said, you would see a lot of argument that somehow iraq is not going to survive those bombings, it is not going to be there after a while. itould imperil everything that we were doing, and yet if you look at iraq today, it is still very much moving forward. i think there is a resiliency -- in any society, it is difficult to predict, but in iraq society, people need to understand it is very much there. as i left last week, i checked and a number of u.s. troops because when i arrived it was over 140,000. when i am leaving, i realized it was around 55,000. and it was on a glide path to make the 50,000 level by the end of august. thu.s. troops have already turned over -- already switched

their mission to moving from combat operations to an advise and assist brigades, assting the iraqi military -- that has been the mission for several months. it had been implemented in the south and going to the rest of the country. it is not like anything big will happen on the 31st. on the 31st of august, it will look like that 30 of august. but almost in most plac like the 31st of july and the 31st of june. i would say that the securities such operation which is very difficult, one that is not going to be at a completely satisfactory level -- but it will continue to improve. the iraqi forces are capable of handling the security problems.

they will have problems. there will be mistakes. we will make mistakes in how we handle it. they will learn from their mistakes as we learn from ours. i think you will see continued improvement in the security situation. i think similarly we e in the midst of a very difficult process of government formation. this is a process that if you have the stomach to follow every day, letter its impact of this small -- you had better get some pepto-bismol. you thought people would be in one position on tuesday and they are in another place on thursday. it is hard to follow and sometimes hard totomach. but one has to step back from that knowledge in and look at thoverall situation of where iraq is and where iraq will go.

with respect to the government formation, as difficult as the process and he did as the processes, i recommend not trying to follow it from the press because you will find it even more heated through that medium -- you will see that at some point, like every country, iraq will have a government. the real question for us is not whether they are going to have a government -- they will. the question is -- hallett is the united states going to interact with this country? can we say that we're going have to long term special relationship that we have been talking about for many years? a couple popsicle i was privileged to go to the korean embassy and meet with people who were the first educational exchange people with what later became the fulbright program in the 1960's.

i ask one of them, what was the bigges task for you to come to america in the 1950's? one of thesaid to me, it was to convince americans that korea is not a war. korea is a country. about a month ago, i had the occasion to meet with the iraqi fulbrighters, ani tell them that one of your big tasks would be the same, albeit a struggling country with many problems, but a country that is very much in the middle east and will at some point us in its role and responsibilities commensurate with that side -- its size and very dynamic population. it is today a coury under majority rule -- shi'a who are the majority there among the

sunnis and the kurds, they have the prime ministership, and it is hard to predict who will have the prime ministership in the future. but most iraqis expect to see that the prime minister of iraq, the next prime minister will be a shi'a. ma americans look at this and say, does this mean that somehow sectarianism has prevailed in iraq and that your identity as this go forward is somehow a setback -- as a shi'a is somehow a setback from the suttles decided that one was to create? i would argue that the civil society in iraq igrowing. the tendency is to have more secular than sectarian tendencies. but the political identity will be an identity based in the time being on sunday, shi'a, and

curtis affiliation -- sending -- sunni, shiite, and kurdish affiliation. when people look at the united states and save police states and read states and regional identities, i think you can argue that politics is going to be based on some kind of identity, and as long as she got, sunni, and kurds know how to work together and they can reach across the identity divide and cooperate, that this is not something that we need to fear. and when you look at the politics in iraq, you see shi'a having differences with other shi'a, you certainly see senator having differences with other senator -- sunni having

differences with oth sunni, and the overall structure is not to be. baez. i think that we can work with the overall structure in iraq. when the government is finally formed, when iraqiya prevails, whether the state of law, or some amalgamation of other groups, but when it emerges, if you will see that the kurds will ve an important role in the baghdad government. you will see that the city's -- sunnis have an important role and the shi'a have an inborn a row. no one is suggesting that somehow if you can run at iraq -- that you can run iraq except through the three components. i think that that will get done. from the point of view of the

united states, is this country going to embrace theemocratic principles we need them to embrace? even though this political process set in very difficult, if you look at what happens in iraq in terms of the free press and freedom of speech, there is a lot that people have absorbed thconcept of these individual rights. carter's human rights abuses in iraq? of course, like any country, but the question is not whether there are abuses but what is the trend line? is it getting better or worse? most observers would argue that despite the horrific violence which unnerved many people, overall the trend lines in iraq for human rights are improving. what is iraq trying to do with its nehbors? is iraq trying to be a stable and good neighbor in the region? there again, you could look at this equation and take some

sense of optimism from the fact that iraq has worked very hard to tamp down regional problems. there places where iraq needs to do more, but it does not mean that iraq is setting itself up in any kind of historical adversarial role with its neighbors. in fact, it is looking for ways that it can work better with those neighbors. i think all of the ingredients would argue for the fact that the united states can have a longer-term and a special relationship with this country. it is a relationship that is going to depend on our people's willingness to see iraq more -- not as a war. it depends on our willingness to work and to stay the course in iraq. obviously we are facing many budgetary issues today. it is not easy at all, but when yo look at the overall national

security costs of our staying in iraq, every time a stryker brigade leaves iraq versus standing up another rule of law module, something like that, the overall nationalecurity cost for the united states are falling dramatically. even though the civilian component is coming up and the military component is going down. this is not some never-ending obligation. rather, we can see that overall the allies for this country -- our outlays for this country are falling and it will take a few years, to be sure, but we can look forward to the days to win iraq will be self sustaining, will be able to pay its bills, and whether it is eight years or 10 years, it will be in a position to pay all this bills

and be a sstantial economic player. when i got there in september -- april, there was a lot of talk about the hydrocarbon law. we made thatudgment at the embassy, we said to ourselves, what is the purpose of the hydrocarbon law? it is necessary for foreign investment i think what we determined and i think the iraqi government is determining this, if we want foreign investment, why don't we get foreign investment? we went ahead with some oil contracts, production contracts and oil service contracts with major oil companies, and by that time this process was done by november 2009, iraq has now contracted with 11 major companies representing all of the major oil companies in the world.

well companies from china, russia, the u.s., britain, france -- all of the countries of the un security council, but many others as well. if all of these cringe -- all of these contracts are realized, or ron will be producg oil in the neighborhood of what saudi arabia produces. in other words, it is gog be a major player in the oil market, a year with its own oil. this was never about the u.s. taking its oil. the u.s. share of these contracts are fairly small. we had a big one, but only two of the major oil companies are actually u.s. iraq will be a major player. it will be economically successful, it is a matter of time. you can see the economy growing day by day.

you can see a nascent development of basrah, you can see the developments in kurdistan. once i went up to see a shopping mall there which had a food store on the ground floor, and on the third floor there was a bowling alley, believe that are not. things are happening in iraq. they are -- there are continuing pockets of very difficult security issues, mosul is one. if you talk to the security of there, you'll hear that it was never handled properly. there were always issues up there. but the iraqis know what those issu are and they are managing securi and i think that you will see that in these remaining areas for security has been a problem, you will see it continuing to turn in the right direction. the u.s. is looking forward to

this relationship with iraq. it will be based on these economic relationships, and it was quite gratifying to be hosting in iraq some 22 u.s. agriculture firms that were there. there will be another major trade mission this fall. these are firms that are in the infrastructure and telecommunications. not necessarily an oil, so you'llee some diversification in iraq. i think we have stood up the largest academic exchange program in the middle east. the government has been very committed to it, and when you look at the amount of bonds that the iraqi government has put out -- the amount of funds that the iraqi government has put out for outgoing students, it is the highest in that region with a bilateral program with us.

i think that we look to develop across a range of cultural activities. we work with their sporting teams, and we have looked to make sure that we have a balanced and fl retionship with iraq. i think the iraqis want to make sure that we care about iraq, and not just as an element of the war against terrorism, but as a relationship with the country and its people. and i think we're on the way doing that. a government. i am not going to predict when. i can predict that it will be difficult and painful, but we will get a government there, and i think the u.s. and ok forward to a very important relationship with this country up 30 million people. i think it is a country that will be, because of its mix of , and occurred --

kurd, if you look at where it lies, next to ron on the one side and gnomon on the other side. turkey and saudi arabia, therefore if you see the importance for u.s. policies. i think there will be a lot for our diplomats to do their, and i want to stress as the u.s. military draws down, the u.s. interests in iraq remain. we have very much interest in their success and thanks to their own efforts in terms of these zero contracts, it is not just the u.s. but other countries that have a great interest in iraq posset says. one of the things that we will have to do when there's a new government is try to go out to the regions and make sure that

iraq has as good relationship with the region as it can. it has to overcome terrorism and be able to come over dictatorship and a sense of being estranged from his neighborand from the region. i return from iraq from reels -- which they sit -- with a real sense of optimism about its future. if you do get enmeshed in the day-to-day events, but when you step away from that, if you can set the progress. we have gone from 140,000 down to 50,000 troops in just the 16 months that i was there. we have gone to a situation where their local governments is very much engaged in the process of in getti -- of getting investors in. we have many relationships with their universities, banks to the security situation.

i've been able to travel outside of baghdad into all the provinces of iraq. i am sure my successor will be able to do the same. i think when we look at where this place is began -- where this place has been and where it is today, i think you can see it as the future. how about some questions? >> thank you very much for that overview. a review of what has happened during a period there and your expectations about the future. let me open it to a question. we're very pleased that the iraqi ambassador to the united states is here with us. welcome back, sir. if you like to ask any questions, you have the first opportunity, but i will look for your hand. and the first question is in the back here, sir. there is a microphone coming to

you. >> good morning. my question to you -- where does national reconciliation play in the priorities iraq? you mentioned the hydrocarbon law has just contractual think, while it is really very deep. >> i think the effort at getting this on to the framework was actually one that was impeding the actual purpose of the framework of law. he points out that the point was national reconciliation, but the other purpose was attracting foreign investment and getting it moving. it did not seem like the right approach. now the foreign investments are there, and the need for this

framework law is clear. they need to do something about the institutional at the structure toward dealing with oil. it is also -- moving on the contracts also has the effect of getting the problems of contracts, those of also moved in there h been agreement on those issues as well. i think the result of just getting the process moving has resulted in some success in terms of, first of all, investment and national reconciliation. i think after reconciliation needs to be looked at more broadly than just the hydrocarbon law. they are a variety of issues, including territorial issues, on the edge of the krg, the so-

called disputed internal boundaries. this is something the u.s. and has been working in the u.s. military has started to facilitate per confidence- building measures, including joint patrolling and checkpoints. the have been very good initiative but frankly much more needs to be done. not only in terms of confidence- building measures, but including trying to address the governance issues in these disputed territories. i think that is something the u.s. can do. in fact, the u.s. can be helpfu in doing, and the un needs to be engaged in this, and they are. i would see the u.s. continuing to engage. we will have a person doing the northern issues who will be engaged very much. he is sitting in the room,

george, great to see. we've got to get you to iraq. what you doing here? [laughter] i think we will continue to be engaged on that. when you look at some of the anbar, they are unni.hi'a-sendi if you look at some of the problems down in karbala, they were shi'a-shi'a. against makingn the national reconciliation is a sunni-shi'a issue, for a shi'a- curd issue. the need to strengthen their independent judiciary and

strengthened the ability of a service-providing institutions, because at the end of the day, what the iraqi state from their government is not -- need from their government is not sectarian cheerleading, but the provision of more servic. i would like to think that some of the pressure to get on with government formation is coming from the public that is demanding that they get on but the process of providing more services to the people. electrity production is still woefully low. they continue to have water issues. investments in these areas need to be made, and the trouble with these issues is you invest one year, and it will not be for a couple of years until you see the return of your investment. >> bank.

we have a very wet terrain the came here with, as marines did, with no umbrella. >> thank you, ambassador taylor. it is a long time since we work together. -- i spent four years altogether in iraq. my question is a little bit complex and may touch upon some things that most of the people do not know about, so forgive me. just give me 20 seconds of back room. it strikes me that the problems we're seeing in the formation of the central government stem from the fact that constitutionally the constitution of iraq is designed to serve on monolithic totalitarianegime we have ministerial control and dgetary a party. -- budgetary authority they

administer the budget right down. there'd been some effort to overcome that with regionalization. the tension at the center stems from the fact that even though the provinces and the regional governments are fairly stable, politically stable, the center is struggling over those ministries -- who is going to control the money, including the hyocarbon sales? so with that fundamental tension between political stabilization at the sub- provincial level and the struggle for power at the center we see playing out, at the uc them overcome in that? the eupepsia resolution of that any time in the near future - do you see any resolution of that any time in the near future? we saw a breakdown between allawi and others.

thiseems to me to be a big part of the reconciliation, and the stuff that goes on what bombs going on, that can be overcome eventually. but that tension at the center does not look like to me it is going to resolve itself very easily without modification of the constitution. can you comment? >> i think they can achieve a new government without modifying the constitution. one of the issues that has come up is the question of whether the constitution, which inventions of council of ministers, whether there is too much authority that has gravitated to the prime ministership instead of the council. their situations where some security structures that should be on the the ministry of interior moved to the prime minister. now what you are nuri al-maliki

,ou would say that you do not want security structures under me. but we were facing a life and death insurgency and we had to move fast and deal with a tough situation. but i want them back in the ministries where they belong. and what i also want, if you are nuri al-maliki, i want to say that not only is power redistributed, but responsibility redistributive. what he does not want is a situation where you create a power-sharing government and then people from another party say, wl, that is up to the shi'a, they are in charge of this. froms to say, if you're iraqiya, you're going to have ministry x, and you need to take ownership and responsibility for these issues. part of that is the responsibility sharing and i

thk maliki has a plan for that. i would disagree with your notion of the constitution being a totalitarian concept. but thatany countries in the world. there is a central issue that everyone deals with, the power of the center versus pyrites of the regions. in the country -- rights of the region. even in our own, you have this problem. key issue is to find a balance. certainly in iraq's case, but there were concerns that the draft would be toward too many powers in the region's and this would weaken the center d create a situation where the cohesion of the country might suffer. they tried to deal with that in the constitution and make sure that there was a strong center. when you look at the kind of

issues that need to be addressed in iraq, the investment laws and the various problems of services and things like that, a case can be made for needing a strong center that can do this. but when you look at the issues -- you alluded to, and anytime you visit a place where people will say, we do not have -- our provincial councils are not properly funded. the money is in baghdad and you have to go to the ministry, and once you're there, you will not get the services. it is a problem and something needs to be corrected. but the provincial powers laws can address some of these things. i do not suggest that there needs to be a new constitution. but like any country under a new constitutional order, theyad

to strike the balance, and it is not easy to do in any country, and it is especially difficult to do in iraq were there were centrifugal forces at work seeking to pull the place apart. when we look at some of the things that need to be done in the context of government formation, we felt that a lot of the things that could be done did not involve constitutional changes. i think there are a lot of things that could be done by statute. one of the problems with this long period of government formation, technically the council -- the council of representatives is in session but it is really not. no one is prosing new laws, no one is moving ahead. that is another reason to get moving on this process. >> i'm going to recognize right here, but maybe you could follow on this issue? the issue of distributing powers

within the center. there have been proposals recently about a new political committee for national security or what they call the national council for strategic parts that would establish a fourth center ofower. each group would have one of the minister's. and this would be at fourth. what is the current thinking on that? >> that is different from the issue a region versus center. but when you look at -- you have the main political groupings, you have a concern about how power has evolved under nuri al- maliki, a lot of power coming to the prime minister in your major concern that the prime minister position is a looming large.

and then you look at some of the otheelements of the system, including the political committee for national security, where you have the prime minister convening a meeting that looks like the presidency. and leaders of the parliamentary blocs, there is a moribund that has not been called on a regular basis. you start looking at the question -- could that element be strengthened? and strengthened in a way that you preserve the prime minister as commander-in-chief, but strengthen the ability of the broader government to be providing policy guidance. i think a number of people have looked at this with the understanding that you do not want to go into a new constitutional arrangement. i think that feeling is that you could create a st up -- souped

-up political committee, and put it in statute, where it was done through an agreement with people but not through a statute. if you look at what that they ha got the right national security strucre for what they are dealing with, i wou argue that they could make some improvement there, but i will argue that tested the united states in 1947 put together the national security act without changing one word of the constitution, you can do something like that in iraq. but there is a mountain of mistrust to deal with. there is a zero some notion -- sum notion, that if you do x, you must somehow be weakening y.

when-when is considered -- win- win, they do not quite get. -- get it. [inaudible] he said tt it they get to the playoffs, he will be back in. he may be on crutches. >> associated press. you talk about security problems. it is the situation -- do you have concerns that that might be one way that iraq might turn? >> am i concerned about how they might turn? >> is there the danger of a coup in iraq? >> i don't think the issue of a coup is an issue that comes up

or is on the table. i do not think that there is any scenario -- any realistic scenario that wouldnvolve that sort of problem. the kind of problem that they have it is continued terrorist attacks. do not believe that terrorists are using car bombs in killing wom and children because they're dissatisfied th the flow of government formation. i do believe that iraqis have an expectation that they wl have a government. frankly, it is the kind of place where they expect a strongish government. the longer that this goes on, the more people ask the question whether it is affecting the security situationut on the streets. i must say, the polic are working very hard. the army is working very hard. our forces are working very hard

with the iraqi forces. i cannot personally. two examples where government formation is impeding the law- and-order efforts. but certainly one was to seek government fortion sooner rather than later, and security is one such region -reason. >> we have a question from an iraqi in baghdad to ask this question on government formation. what happens if no government is formed soon? will the united states intervene? >> thad allen have asked -- what does she mean intervene? u.s. embassy, i can tell you, has been working daily on this issue. there have been days when the political counselor there, gary who left just a week ago, he would have upwards of 10 meetings a day with every single

iraqi political party or political coalition. i myself would frequently have meetings with all the leaders. almost on a daily basis. some people would call it intervention, i would call it being helpful. it is not in our interest to be pushing ourselves on people who do not want to assemble. -- want us to be involved. i think we need to be respectful of their sovereignty. if you look at air ron's efforts in iraq, they have not done very well because they have not observed the first rule which is to be respectful of the country's sovereignty. i think we are respectful and as such i think we are listen to. but we need to be very careful here.

there are a lot of minefields in that country, literally and figuratively, and we do not want to put ourselves into the position wre we appear to be somehow taking sides in a way that will not be understood by the iraqi public. to the questionnaire, i will tell her that there will be a government. i cannot think of too many places, maybe somalia is an example, but not too many places where there have not been a government so there will be a government. and it will include all three components, the question is, it can do what -- who can do what? >> i am with the american kurdish affirmation that work. -- information network. the bible is not included there

and sometimes it should be. some things say that tripod should be set next to an iron kettles. -- should not be setext to iron kettle. [unintelligible] do you think the arab population is going to be respectful of the 20% of kurds without a balance of power? >> i lost you on the clay po [laughter] kurds and arabs have been neighbors for centuries. i think the kurds have achieved ofroad autonomy in t republic of iraq. and moreover, the kurds had been part of the solution rather than the problem.

i think the fact that president barzani is one of the most respected politicians in iraq, and the fact that all the political leaders in baghdad, whether allawi or maliki, all of them have been able to discuss the issues. i would say the kurdish -- the krg, the kurdish regional government, plays an important and positive role. i think they have the autonomy which has enabled them to create a region, that i think meets the aspirations of its >> to be able to live their lives free of oppression.

when you traveled with the president and -- we were going over to many countries. he points out these sites where they met with the iraq the army over this difficult dictates. he can see the krg is in a much better place and it has not even moved. when you look at the investments and the mall -- you should see the university there or the investments going on. the krg is done well. how do we address the issue of the internal about boundaries? these are overlapping claims.

one sign does not -- it is hard to deal with the other side's claims. we need a long-term process. i think the people need to believe the rest of iraq is increasing democratic principles. when you look at the history we are talking more about hope than history. what i do know is they krg leadership understands these issues vy well and is a force for progress. we will continue to work with a krg. the u.s. has a special relationship with the kurdish people, but we have made it

clear we see they krg as part of iraq. >> we had two related questions. they are both on line. do think they should intervene and support partitioning iraq into ethnocentric regions or under one government? jaye says the same question. is there a solution or option? >> the letter was from beirut and the earlier was from an iraqi citizen.

>> i love beirut, but the rest of the world cannot be ke lebron -- like lebanon not all of their political solutions can be replicated. first of all, the notion of partition has been raised. i don't think any person can support that. it would involve horndous sacrifice. think any serus person is talking about that. i try to address the identity politics. i think those identities will evolve over time. we may have people who gain a greater sense of identity as a

southerner as opposed to a portia -- as opposed to a shiite. people having a concept of being iraq key is also strong. people can have more than one identity. you see many hyphenated americans. they have one identity sunday afternoon and the rest of that is they are american. that kind of thing can be managed. this government formation has taken a long time. i think the dutch still have the record on that. it is painful, but people don't need to start pulling out that

the ideas. >> yes, sir. >> my name is jesse bernstein. i was pleased t hear your comments about [unintelligible] all lot of us were concerned about displacement of forced christians. i wonder if u could talk about protection of religious minorities. i met with many refugees and they said they would never want to return. my second question is about u.s. affiliated iraq is. iraqis. affiliated i i wonder if you could talk about

the steps u.s. is taking t improve processing. >> on the issue of the christian minorities, i had regular meetings with leaders of this christian minorities and i have been out to some of these towns, includg to e a monastery. these are ancient communities. the assyrians, for example. it has been difficult for christians during this time in iraq history. many were accused of somehow .upporting saddam hussein' when you talk to the leaders of

these communities one of the things they are coerned about is western countries have made room for iraq christian refugees, meaning they christian populationsontinue to be decimated by people trying to help. one of this christian leaders told me you should refuse visas for them. even the days are perfectly legitimate programs. we will not refuse visas for those with eligibility. these are tough issues to manage. we have worked in the area to make sure you get local peace -- police will reflect local conditions.

we are doing ok on that. when churches have been attacked reworked with the iraqi government. they have reacted well and in termof providing protection. these problems are not government-inspired. ey come from other elements of the society. it has to do with the we need to stay engaged on this issues. i know ryan crocker did those sorts of things where you meet with the command of a to be helpful to -- meet with the community. i know we have backlogs.

i have not heard it is a year. if you talk to people and refugee affairs they will say it is less. where't want a tuation the affiliation with the americans -- we want to see examples where people are being threatened for affiliations. we monitor these questions and there are many examples where people have been treated poorly. >> there is a related question. what steps is the government taking to ensure iraqi police have been trained?

>> we have a robust training program. that is something we spent a lot of time to make sure civilians continues this training program. it is not just training lice on the beat, but forensics. police training is one of the major elements of the training transition. >> [inaudible] >> you mentioned that several times the need to convince american people iraq is a country and n a war. how coerned are u that people will not be willing to

provide resources for a small scale going forward? this was an unpopular war. >> we work a lot with congressional staff with congressional members. iraq was a difficult seven years. it was quite emotional when you look at thousands of americans killed and the concern the objectives has changed. that is why we went in there. you have to respect the person on the other side of the issue.

you cannot just dismiss concerns as coming from those who are uninformed. we have gotten to the point where our programs are slimming down. even though there are different committees doing this, so the state deptment made think the numbers are going up, but if they look at what the hit is, the numbers are coming down. we live in an era where we aren't doing this civilian ops, and it is time people took a holistic vie of how to measure our engagement. if you consider it military operations and a civilian

operations as apples and oranges, that is not the right way to look at it. i think the military has done a fabulous job of police training, but that has to be doney civilians. want thisituation where we have to keep tasks on the military side. the military has a couple of major deployments. we have about 178 other deployment. just all go to iraq and afghanistan we have major

relationships. even the embassy. smith is a major relationship we have there. -- even the embassy paris. we need a first rate embassy in paris. we have to balance these. it is not easy but we have talented people working with the congress, so i think we will figure it out bause it makes sense. >> staying on the topic of the transition, we have a question asline on the use o prt's they draw down continues. there has been the auction for

five embassy branch offices and there may be four. if you could tell usore about that? >> i thought this issue was very hush hush, but here we are discussi it. to manage your relationship d iraq, you cannot just do it from one place in baghdad. in an ideal world he would like to in many areas. when you start costing these things out, therere not cheap. the issue is when you look at

life sustainment. if you look at transport issues, it is not easy to put people back there. paulison this is the time after the agreement expires. there cannot be any u.s. forces unless they are an illegal agreement. you have to assume there will not be u.s. troops. to take a provincial reconstruction team out of the military could can and try to -- out of the military cocoon.

some of our people are transported courtesy of the military. do you want to have -- you don't really need them? you have to make some assumptions about what e security situation is. you have to start -- before you know it you are into some big numbers. it is a lot of these things -- you have to work out what is the most crucial? can you handle issues through a more robust travel plan from the embassy?

where do you need people stationed all year long? you come up with -- i bet the usip building was twice as large as the one finally built. what i can tell you is what ever finally emerges in our footprint -- we have informed the iraq a government on this. i can assure you we will have a footprint where we will have the right people in the right place. it will be commensurate and consistent with our country's objectives.

>> there are some in iraq when they look at their history of conflict when it comes to cultural, wonder if the current system of government will work. they fear that the government may be weak and unstable. are these fears justified? what can be done to ensure it this is effective? >> iraqis are used to strong government, but fear it as well. the alternative is strong govement is weak government. i am convinced that democracy is the best form of government

because it is difficult but better than the others. i don't see any other model for iraq. if did that this is difficult, let's go back to mass murder -- it is tou to keep that a little. the notion you can go to some other model and said it will be authoritarian some -- i think they have the right system. the issue is to t to make it work. obviously it will be difficult, i am sure people will look back at this time and there will be lessons learned. i don't panic about this.

people need to stay calm and it is hard to do when its 120 degrees out. we just have to get tough this. as for what iraq had in the past, ifou look at their past there is not a lot of inspiration for good governance. >> [inaudible] [inaudible] [inaudible] whoever becomes the next prime

minister in iraq wl ensure [inaudible] [inaudible] [inaudible] [unintelligible] thank you. >> iran, d you said? it is not up to us and it is not up to iran. it is up to the iraq news how

long theyant mr. maliki tuesday. the other queion is interesting because it goes to the question of term limits. we have had this issue come up about term limits. he worried about issues like corruption, so should you have term limits? a lot of countries have term limits. we did not have them until after world war ii. it would not surprise me if the iraq people had a debate. because of this feared that you mentioned. it in hell governance is done in the region.

sure that is necessarily good for any count. what didou do? people need to look at it. running iraq is not for amateurs. it is a complicated matter, so you cannot just say you will have six months and as you go. you need some more professionalism. the concern that the gernment stay is something the iraqi people ought to have a discussion about. i s this to the point where i believe myself, but iraq is unique and its problems are not unique.

th notion that iraq discovered term limits and no one has contemplated that is wrong. there are a lot of problems all over the world in the iraq can learn from how other countries ha dealt with it. i note it is obvious, but it needs to be restated. >> there are representatives from embassies here and overseas questions. it relates to the iran issue. does the lack of respect for iraqi sovereignty posed a threat to a newly formed government? >> lack of respect for iraq's sovereignty?

does that pose a threat to a newly formed government? the latest one -- how do you do coordination among allies? this talks about engagement and the next phase. [unintelligible] is the u. working with other countries to making sure [untelligible] >> on iran, there is more talk about this in washington than baghdad. iraq is -- i don't care who you are, you don't plan to sell your country.

i heard a lot of people described as pro-iran and. i reallyhink there is a lot of exaggeration in the degree to which there are iraq is looking to sell the country's interest. what is not exaggerated is the degree to which i ran inside engaged in mischief and iraq and the fact that some of these extrist groups get equipment from iraq is a fact. a rocket that landed in my yard a few months ago -- it had iran markings on it. if i werehe iran hinske and i thought to myself, what ever we

do will not determine that country's fate. it will be determined by its own people. i would be looking to build a good relationship overcoming one of the most horrific war is in the 20th century. i would do a much better job of looking at what my long-term interests are. iran cause long-term interests are not served by allowing rockets to come over the border. i think iranians have acted recklessly for these activities.

when i look at their efforts to affect the political situation, they have not been very successful. iran made it clear they oppose open less. iranians made clear they did not want to see opened lists. they wanted all shiites together to turn this has been to shi'a curses cine issue. -- vs sunni issue. there are statutes for [unintelligible] but the i iranians clearly engaged in trying to hit did not

work -- it did not work. they have tried to put their weight behind various candates. they have invited all the shia parties and a kurdish party is to have a government in to run. when you look at how influential they are, i would be careful with the notion that they call the shots. even iraq says who want to have a good relationship with this neighbor -- i would be careful that those people are doing iran's work for them, they are not.

i would take a deep breath and ok at what my long-term interests are. >> [inaudible] his are really good ideas. we have been pleased with the nato countries that have been interested to help the iraqi army. i want to emphasize terrorism and a dictatorship, we know about those. isolation has been a serious problem. polls have been there as part of it. we have seen meet danish

involved, the french have been interested. i look to see more of this. what is most gratifying is to say iraq is more understood to be the important player that it is. it is not just a u.s. issue. i went to the convocation of the swedish embassy attended by the swedish foreign minister. it was a pretty serious and to say. the swedes are talking about doing other things in northern iraq. the more european countries get involved, the better.

>> [inaudible] >> yes. >> you gave us an optimistic scenario. >> here i always do. >> do you see on the horon any [inaudible] >> [inaudible] the car or the president? [laughter] not to bring down the optimism, i would like to see more iraq is engaged in the political process.

seven years into their democracy, one would have liked to have seen some new faces and yet there are not a lot of new faces. i think it is important for young people to understand this is their country and they have a great opportunity to build a new state. when i have gone to some universities i don't hear the iraqi kids talking about sunni or portia. most of them asked if their energy -- engineering degree would be good enough when exxon mobile comes? i hope that democracy will

spawn an interest in political activity. it is encouraging the government went ahead with an ngo law. in many of these democracies, -- protoplasm of democratic structures. in the middle east sometimes those have not than positive structures. with this law and i see it as very positive. i hope we will see these political parties get some fresh blood. maybe you will say some great leaders emerge.

it is easy to be critical of the current crop of leaders. you can't complain they spend too much time out of the country. this is easy to criticize find a lot of these guys risk their lives they take a lot of criticism. it is not an easy job and somehow i do believe they country is going in the right direction. we need to have the iraqis

blazing the trail. it is easy to be critical, but we ought to cut them some slack and encourage a new generation of leaders. >> the last question will be here. i have two online. >> i am a grad student at texas a&m university. my question is how about nato members in iraq. turkey is pursuina more assertive foreign policy. what affect will this have on the development of a new government in iraq? >> turkey has a great interest in how iraq develops.

they are inviting leaders and are engaged. from u.s. policy perspective, turkey is a positive influence. economicurkey's investments and it is positive. i don't think more of a regional interest means less of a western aspiration. we are very much engaged with the turks on these issues. i know the secretary clinton talks to the [unintelligible] i talk to the turkish ambassador a lot. we have a good all in iraq.

they have a history there. is amazing when you talk about the turksnd won some iraqis ght be critical about what they have done in terms of engagement with the parties. when you look at the history of the ottoman empire, you see the complexity. if it is always difficult. but we have a great relationship with turkey. >> at the beginning of the occupation, one of a primary focus this was to remake the economy into a free market. what will be its legacy?

>> i would not call iraq a socialist economy. in some respects it is a race between dissipation and rise of the private sector. i think the private sector is winning. it is going in the right direction. you stub your toe a lot on it. i avoid wide sweeps of socialist versus catalist. i would rather talk about the direction it's going. >> the last question is, what is the extent of the optimism for

the deployment? is he more or less optimistic? >> first you get therend you said this is not so bad, and then you get to know more people and you start understanding the dimensions of the problem and they go into a view nothing will get better. then you figure it out and sort out what the issues are verses what issues will take more time. then you finally leave and you look back and say, i think they will make it. it is usually because you cnot

see the alternative to making it. iraq is in no danger of being a failed state. they have been through the toughest time, so i have an optimistic sense they know what they need to do. i am not sure us telling them what they need to do will get them to do it. i think the iraqi people need to be consistent they get some things done. you are seeing some pressure building, but there was an interesting piece over the weekend about american clocks

and a sometimes i don't understand the stuff he writes. it will not be done in our time schedule. it will never be when you want it. i made the point the other day, if this is instant gratification, you better look elsewhere. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

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one or more of these goals will be named -- will need to be laid aside health lee, we will not lay down into this effectiveness. i think that has serious implications. pursuing sanctions will become more difficult and lonelier. countries take this issue seriously. what does that mean? i will wrap up here sam. i think the q and a will be more interesting. i am only going to briefly discuss the options that do remain.

i want to talk about the options i do not think our options. in negotiated solution is necessary. they are involved in every single option if you envision. at some point, it involves negotiation. or should not hold off as an option in itself. any relies solely on negotiations absent pressure or other approach. it will not work if you accept my arguments that the iranian regime is determined for the desire of a nuclear weapon. what are not options? it is a highly security guarantee. it had a century of bad experiences. i do not think it will trust one

u.s. administration to get a security guarantee. nor would i like to see it as a good thing. it is not something that a confident country does. at the same time, i think we would be quite low to trust it about a nuclear program. what about a grand bargain? to me, a grand bargain would take far too much time -- far too much time to negotiate a might -- negotiate. it might embolden iran to speed up the negotiation para. i think we have to consider the effect of what we do on the opposition on a run logic on an bob -- on iran.

it is the best long homterm hop. i think we need to put aside the idea that containment is an option for resolving the problems. containment is what we do if we fail to resolve the problem. we are trying to contain iranian influence. hollywood tried to do is contain them with the capability. -- all we would be trying to do is contain them with the capability. it is a military option. it is not a diplomatic option. it is not an alternative. what do we do?

given that sanctions are not having much effect, it seems to be proceeding a espada -- why would time work against the regime? i think it is significant. there are the social undercurrents and we are seeing. bev this is a bigger topic that i will not engage in. the second is a precarious economic situation.

i iranian oil production is diminishing. imago down by as much as 20% by 2015. revenue accounts for 50% of the revenue. it is significant. it the combined with the gross mismanagement, it is not a rosy picture for a run -- iran economically. it'll cause they are reaching to come under greater pressure. time could work in our favor. we have to mbehalf -- we have to impede. it is a good step. rather than standing back and

waiting for the sanctions to work, it is important that we can mean -- we continue to keep it from adjusting to the sanctions we are imposing. it is easier said than done. it is necessary to be creative. part of that has to be trying to prevent iran from gaining on the oil. people have talked about the idea of a "commercial blockade." trying to get iran's customers to stop buying from them. it is easier said than done. people involved in the u.s. allies in china. we have to pamper efforts to promote power in the region. this will frustrate the defense

strategy and enhance the feeling of isolation. i do think the we should increase our support for human rights and democracy. we need to be clear with the i iranian people fell we will not -- siding with the regime that is oppressing them against the populist of iran. it'll help those other trying to pressure on the regime as well. i have run out of time. i want to say very briefly the when it comes to military strikes, i do think the military option has to say on the table. this tells everyone involved just how vital we think this interest is to the united states. if we say it is a vital interest, that means we are

contemplating military action by making that clear, if you make it more likely that you will not have to take military action if they are making that analysis and they see that the end is a possible military action in the reason backward, that makes them more likely to take what ever deal might be on the table now. let me stop there. i look forward to hearing from frita and your questions. thank you very much. [applause] >> thank you so much. thank you. it is a great pleasure being here. i will try to keep my remarks as brief as possible. we can start addressing each other's premises as he mentioned. taking a look at what is happened in the last year, if we

were to take a look at what we are wrong and why we are not in a position right now in which we can say that progress has been made, i think we have to recognize that it has been more disappointing than people had expected. i have differences when michael bennet comes to the broader analysis. -- with the michael when it comes to this broader analysis. there are elements of the iranian government [inaudible] they may feel forced to sit at the negotiating table. are they willing to go all the way? you have other factors as well. some are actually benefiting from sanctions. they have enriched themselves tremendously as a result. i think it goes beyond that.

even when you have a case in which two countries actually may have a common interest in being able to avert a disaster and be able to find solutions, and the absence of trust and confidence , one should not be surprised if they felail. it is in the context that this article actually has some interesting ideas. we have had diplomacy. it is not as methodical as it has been in the past the due be --past. we had two meetings. there were a couple of messages. after that, we entered into the sanctions phase. it should be mentioned that the primary reason as to why

diplomacy did not succeed is because of what happened in iran with the fraudulent elections, and human rights abuses, and chaos in iran. they could come to the table. they could talk. when it comes to an agreement, it became too difficult when they were literally at each other's throats. that situation has not necessarily change dramatically. it has cast a lot of doubt about what diplomacy can do in the short term. we entered into this ancient days. immediately, some of the same voices in favor of them have come out and claimed that there are failures. part of the argument for going to sanctions that was used by the administration as well was a must reduce emissions, we may be

sitting in a situation in which another country may take military action. paradoxically, it is the other stations we have seen the voices in favor of military action increase quite significantly. i do not think that is a coincidence and still focusing on why they won't agree, i agree. it was invaluable to try to redress what the possibly make diplomacy succeed. what can make sure that the strategy to achieve the objectives of the previous attempt to not. the official press for a couple of ideas i think are worth taking a look at. it is not surprising that he had to write this under a different name. assumptions are clearly not the official plans. but only iran recognizing only has a right, but arguing that

the argument -- [unintelligible] recognizing that pursuing a solution that is based on zero enrichment is simply not feasible at this stage. the mutually justified absence of trust between iran and the eu has made it difficult for the eu to play a diplomatic role that it started of seven years ago. precisely because of this issue of trust, it may be necessary to look at other types of solutions. they lead diplomacy in order to make sure.

there are some that people have to address after seven years of failure, there is a lot of exhaustion. it is interesting to see during the first month when they are having an iran review meeting with officials who have had extensive experience. it was quite clear the skepticism, seven years of which they had not succeeded in getting a solution. there is even a year that the u.s. and the obama administration would perhaps force them to go through everything they already went through a couple of years ago. this exhaustion is affecting the

political will. i will get back to that. you also have the situation in which some of them are not necessarily seeking the exact same goals. they are not viewing that it is problematic for them. in one of the descriptions of the process to negotiate, it is very much in the process. they made sure that every economic duel was made exempt. it is a very small segment. that is the price of getting some of those countries included. what that did is as the

europeans really agree to put a lot of economic pressure on iran and to draw on the market, they can benefit from that. european countries have been some of the main benefactors of the american companies. now the europeans are seeing the same thing happened to them by other states. trust is a very important issue. in many instances, the iranians

do not have a good relationship with a single state. they may have the economic ties, but they do not have trust with any of them. it raises a very interesting question. if one is only seeking to be able to find a solution, froands not -- and one is not seem to have the instruments, then perhaps convincing would be a more successful route to go. if you want to convince the entity that is seeking to convince it, this is where it currently is.

-- where it currently is suffering. they have their very own poor relations. i think the turkish example has proven itself to be able to achieve things that the europeans have not managed. if not only are we going to be innovative and the creative and making sure that we find new ways of putting pressure on iran economically, perhaps some of the creativity also needs to come and loamy addressed how we can make diplomacy successful burda -- successful.

beyond other countries, there are other important issues. there were massive human rights violations. not putting human rights on the agenda is a mistake that will cause a loss in the long run. i'm not arguing that they did not seek --- never the less, the first issue was a nuclear issue. human rights is currently deteriorated. one in the most effective way is to be able to find out if trust exists or not is to try to make

sure the we are a bit clearer. i do not think they have been for to go the fair either. part of it is trust. you can live with the desired and state of the other state. i will stop and look forward to your questions. >> why do not you go stand here at the front? it is an interesting analysis. we need to be more clear about the end results. one of the argument is that we

should abandon the euro in richmond. -- zero in richmond policy. -- in richmonenrchimentichment . >> it is not the end goal. this is always how it was presented. the logic behind this is that -- this is forgotten quite easily. it was too cited. there is also a pledge in the resolution that further sanctions would also be suspended. this is meant to ensure trust and confidence. one side cannot simply use the negotiations.

it serves as a very clear marker of when negotiations are over. it is not so unlike the procedures of the iee. it is a clear indication of policy affecting the it makes sense. the fact that iran has not considered it shows that they are not that interested in negotiations, do they do not show up to meetings. you talk about to engage not working. the i iranians are not being p5 plus 1 that have refused to schedule a meeting or a discussion. >> last year, the ambassador was

the french ambassador to tehran. he made a statement that i thought was quite interesting. he mentioned that the original modalities of the negotiations were such that suspension was supposed to continue as long as the negotiations continued, not as long as there was progress, but as long as they continue. as soon as they manage to get them to suspend, and the sense of urgency ended. the i iranians had a different expectation. they thought it would be something that they will move rather quickly toward a solution. during that time in which there was a suspension, it is actually the european side that did not

see bible to move quickly. that is how they feel the suspension that any suspension requirement is a slippery slope toward that objective. whether that is wrong is a different issue. if we are increasingly coming to the conclusion that the richmond is not achievable, that is not an isolated view. let's be clear about that. it talks are successful, would consider giving it up. there is nothing explicit.

i am not so sure that it'll give the amount of confidence that any then. make sure the talks is sustained. i'm concerned about the iranian side of this. there are plenty of elements that do not necessarily want to see negotiations succeed. they are investing in making sure i ran iran get moments. to succeed in promising, yet have enough political capital and will to overcome the last hurdle. on the first hurdle, it collapsed are ready. that is an indication of insufficient political will. >> we will take to questions at

a time. >> thank you. i think this was a good point. we have not seen a consensus formed about the nation of the i iranian and in the -- regime and do they want to overturn the u.s.-led world order? are they try to find their own proper and respectable place within the order? they have realistic views of what they are trying to achieve. i wonder if you could share your view on that. >> we will go right into the questions.

by pursuing -- i personally think that the regime is focused on iran. i didn't think they have a vision for a new world order, at least not pragmatically. i do not think they are a status quo power. i do think there is something very good that our friend wrote about. he laid out the principles. it is clear that they are not interested in being a part of the world order. i think they die self- sufficiency. i think a value of the pillars

of the regime of the islamic republic. i do not think they are interested in being part of a broader order. >> thank you. i just had a question on the sanctions. can you talk about how they will affect the iranian people? there have been reports saying it will actually hurt the people. he suggested there should be a new wave of sanctions. students who are here that have parents but spend the money may not be able to get ahead. >> thank you. i think that is important question. this has been an explosive

objective. one can compare the track record. a couple of days into the latest stint in, it is clear that it does not work out quite well. there the very sinister into out on the streets trying to make a difference to make sure they got proper representation. to to the depression that has increased in iran, one of the few ways they can get out of the country is to get it said it into a university abroad. it is when the few channels they currently have for themselves. as a direct result, the company who is giving the tests decided to withdraw and not give those tests to iranian nationals

anymore. that was changed to some intervention. other countries have not been written about. s made it much more difficult. as long as you could show it to buy address, you could give a test. now they are required to see your passport. even if some of the things can get -- it shows how sanctions - how they do affect the larger population. there were opportunities on the hill to make sure they were couples with efforts to make it easier for them to work together, to live some of the sanctions. the efforts were not included in the final sanctions. how will that affect the

population in their view of the government and their ability to put pressure on the government? well contradiction is that they tend to be far more successful and effective when they are imposed on democratic government. the population has an ability to affect the policies at the government. when you are dealing with nondemocratic governments, it has shown a tremendous willingness to completely disregard the use and wishes of a large section of the population. he had a more limited ability to do so. the sanctions in the last 10 or 20 years have not resulted in that type of a popular pressure. i have little faith the bill be able to do so in the future. it has something to do with the psychology of the population. it is vital to take a look at what happened in 2007.

the government rather rapidly put into place the gasoline. it meant that a lot of people who were moonlighting as cabdrivers, including university professors, suddenly had much of their incomes taking away from them. they had to ration how much gasoline they could buy. it led to to clarify days of riots. i have seen different figures. compare that to what happened on the monday after the june 12 elections in iran. this shows what people react.

it does not seem to be the thing that gets people out. that sense of lost hope has cause and to react in a way that very few people know. >> i will direct this to michael and to both of you. if it is unfavorable to building trust, how can obama preceded the engagement? you both mentioned using other countries. what you think about the agreement on to by turkey and brazil? was it a joke? one is expected that iran and mid to nuclear weapons? >> an actual date -- i do not

think the local environment -- [unintelligible] i do not think the political environment is a suspicious to having a successful conclusions. there is a tremendous amount of bipartisan agreement on this issue. i do not think anyone was to see a war with iran. i think both sides want to see the current approach -- it requires for negotiations to take place. we have not seen in take place in earnest. if there were taken place in earnest, i think the president would have the support of just about everyone in washington proposed -- in washington.

very few people in washington have much hope for that right now. the response has been so negative. >> it is interesting. we are talking of the many missed opportunities for diplomacy. the iranians have projected it in strange ways, not picking up the phone. in my view, it is disappointing to see that this opportunity that arose from which may not have been on crocupurpose -- evn though the terms and the brazilians negotiated according to the benchmark that have been forward by the united states itself.

i think one could have seen this as an opportunity to start a process. he cannot get anything done unless you start talking. 1,200 kilos would have been shut out. it would have been predicted it would not have been instantaneous. -- it would not have been instantaneous. a lot of people in washington were surprised to see that they agree to it. we will never know how it would have worked out. for the last 30 years, opportunity for diplomacy between the united states in iran have been few and far between. when it occurs, one to be careful and steady in very carefully before choosing to rejected. the rejection of the deal may actually be more important than the fact that it was rejected. >> your view?

>> i have a different view. i think that the october 2009 integration of the deal was an attempt by the obama administration to test the iranian regime's intention, to build confidence. if the deal would not have gone very far at all. they are doing with the research reactor. it is a separate issue. are they interested in working with the united states? it turned out if the answer was no. we can argue about why. it did. that is the end result. the october 2009 deal was meant to build confidence. the second reiteration that came as the sanctions are being finalized was really confident destroying. when a edit document, there was

no deal. it was a principle that would have led into a rehash of what happened october 2009. the intention was to stave off sanctions. i do not think that the united states or others saw this as anything but a transparent effort to stave off sanctions. they have no confidence that this was a great opportunity for diplomacy. that is not to say it cannot be picked up again in the future. i think there is a guy you in international relations. there are the consequences for specific actions. so your word mean something later on. >> speak up please. >> analyst talked about the difficulties of sanctions and hurdles ahead. have you predict a military

iran or military attack? let'hope >> i'll give you a mine to think. i. that it options for diplomacy -- i fear that it ofoptions for diplomacy fail, you are going to have increasingly is situation in which the options are going to become to take military action are make sure these tensions are successful. many people in it ministration is in not to be fully convinced that the sanctions really will work. many critics are convinced that stations will not work either. we are seeing a trajectory toward a much more difficult situation i do not foresee personae that in the short term,

in the next two years, that there is necessarily a very eminent threat of military action, including by israel. i do believe that one can interpret some of the latest articles and commentary on this pleasant effort is being made to depicted ministration as weak. they made as to who will bomb the u.s. or israel. this is moving as into a situation that it can be utilized for political purposes. the president will say that he will say -- will not iran the nuclear on his watch because of the unwillingness to ask. when you have a different president, that can be a fundamental game changer. i do not foresee a civic unrest

in the short term. >> i didn't think i could responsibly predict how this will end. i do think there is still a window for a negotiated solution for diplomacy to work. i have given me a view on diplomacy to work. they are trying very hard to create an auction that is not one of those two options. other countries still the same way. no one is eager to see either of

the things happen freudenthal >> -- have them. >> both of you have mentioned the human rights. [unintelligible] this will help the relationship between iran and the u.s. government. can it be used as a tool? >> did you follow the question? i think i did. i do not think human rights is to be used as a toe. human rights is an ending of itself. using other types of instruments to make sure that iran is up to

its obligation to uphold human rights. iran had obligations. is a signatory to many different treaties. not speaking about this issue, it is an easy issues to address? it is a complicated issue that brings in cultural factors bahia i think it will risk losing the strategic assets that they have propelled -- factors. i think it will risk losing the strategic assets. this is something that really came to the forefront last year.

one official told me that he described it as the first moral moment for the administration. if they commit to get the process started, they will have a better ability to face that. as a go forward, i hope we do not sacrifice human rights for the sake of a quick nuclear deal. we certainly do not sacrifice human rights to get sanctions. >> uc they can they have on the

people. we see a regime that does not act. >> we have a question from the group. we will start with michael. do you agree that the lack of trust has been a stumbling block for engagement? do you agree that that it is a threat? >> i will study it i do not think the lack of trust of the main stumbling block. trusses above their successful negotiations. -- trust is gained through successful negotiations. if you look at the history of

iranian relations, iran does not have good relations with anyone in the p5 +1. russia essentially in the first part of the 20th-century control the first half of iran. they were brutal. now we think the rest is a country that is a partner iran partne. these play a role in subtle and complex ways. i think iran was down and negotiate with the united states if it saw it in its own interests. >> the other is to it they are seeking a nuclear weapon. my assessment would not be it. i think they are pursuing -- they want to have the weapons option. he wants to have a because of

various strategic factors. i do not think we can say that a decision has been made to get the weapon. i am afraid the we may be moving closer to that for various reasons. the consolation itself has changed as tacitly -- has changed drastically in the last year. summit conclusions we had about their and objectives need to be revalued. we may not know how this has changed. at the same time, i would say that one of the short his ways of insuring that they would make the decision to go for a nuclear bomb is to bomb iran. i think the debate there would end. we have seen historical precedents that after such an event, of various things can happen including they can withdraw from the nct invoking

article tim. have the ultimate objective is to make sure we prevent proliferation, bombing iran seems to be the worse options. >> to get any other questions from the press? are you pressed? bob-- press? >> michael, you mentioned that sentencing to be having some by now. were you referring to the importation of gasoline and other refined products? can you talk specifically about what you think is manifesting in iran ran down? >> i do not know what the effects are. i have not seen evidence. others may have it. if you look at the range of sanctions, the banking and

insurance, shipping sanctions, restrictions on arms dealings, i think those of do have some bite. they really do make it difficult to engage in the kind of business that they want. >> one last question. >> i am retired from the department of defense for the one of the destabilizing aspect of the nuclear program is the prospect that it stimulates proliferation and nuclear weapons around the region. how would you think that this factor has been considered by iran in the assessment of its own national security? >> my understanding is that it

is very much a factor. and i think we have made an assumption in washington that the i iranians are somewhat similar that they needed the ball no matter what. they will accept any cost. i viewed the decision making process as well as their own view as their role in the region to be more complex. reading one of the key objectives that they have is to be recognized as a leader in the region. inning still have to get accepted and be granted that role. that is not something they can achieve by overwhelming them with force. iran was in that position in the mid-1970's.

it is treated as the united states. it did not give the acceptance and legitimacy from the arab place. it is a very venomous rhetoric. they believe they are destined to be a key country in the region because of their history. it is essentially based on their conventional superiority. that is part of the reason why they have more than the 3000 years to defend their bid. if iran those nuclear with a bomb, it risks the very scenario

you pointed out. that another state that is not even 1/3 of the territory would buy or build a bomb. in that situation, iran will have eliminated the conventional superiority it has in itself on parity with the other states. that is a mistake. that is them balanced against many other factors including their perception of threats, particularly from the united states the de -- the united states. >> any comment? >> i agree with the closing statement. iran's nuclear-weapons program

is aimed not so much at regional power but at great powers like the united states. if you look at their behavior, and they are not modest about claiming weapons advancements. this is not a modest place they are seeking to hide what they have done. >> a lot of important points made today. let's hope that trust can be built. thank you but so much for coming today. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> in a moment, of yesterday's funeral for alaskan senator ted stevens. speakers include vice president joe biden. topics on this morning's "washington journal"include

government spending and substance abuse. later this morning, and congressional hearing on the bp gulf of mexico oil spill. live coverage of 11:30 a.m. eastern. >> congressional budget office director will give an update this morning on the federal funds it -- federal budget. he also take questions from reporters. live coverage begins of2 11:00 a.m. eastern on of. >> after nixon lost the 1962 california governors race, the owners offered the former vice president the job as commissioner of baseball. nixon was flattered. he declined. he told the owners, "do not tell pat. she would kill me for turning you down." >> whether it is a baseball and

the presidency or the cia and the korean war, find all of its online anytime at the c-span video library. it is washington your way. watch what you want, when you want it. >> now the funeral service for senator ted stevens in alaska. he died in a plane crash last week in his own state. this is a one hour portion potable -- portion. >> as we began, my dear friends, i suggest we pause for just a moment to be mindful in our thoughts and prayers of those who died along with the senator in the accident and for those

who are recovering now. and their families. i have only one point i would like to make concerning senator ted stevens and that is to say that senator stevens was a man of god. there are certain circles it would find it rather surprising, if not difficult, to put god and a politician in the same sentence. however, think aut it. what each of our senators and congressional delegation are challenged to is to love those

in the serves -- who they served. ceainly,f we think of the words of st. john the baptist, excuse me, st. john the apostle, who wrote one of the several of the letters of the new testament. he said a pattern for linking the love of god with the love of neighbor. he put it very simply and very straight. if you cannot love your neighbor, you cannot love god. the two are inseparable. the two are mutually demanded. if we could borrow a line from

one of the ancient broadway plays, they both go together. you cannot have one without the other. that is where the life of senator stevens, i think, takes a very special note. he understood that. not only that, he lived it because he realized that his work in the sense was not going to be measured by appropriations and deaths -- appropriation and deaths. -- gifts. rather, whe