york put together a police on police task force. are people all over new york state lobbied for independent believes prosecutors to look at police shooting cases. it wasn't in the recommendations because brother mohammad is right. you cannot expect prosecutors to work with police officers every single day to prosecute police officers aggressively. .

>> i]m am optimistic. to not necessarily separate rate -- celebrate but realize this is on the horizon. been here. [applause] -- thank you. >> i should mention that congressman conyers did vote on this. it to it's like to sign a post card to your member of congress asking them to co-on jabil, please take one ensign it outside. now i am going to pass it on -- it is interesting because the congressman has been working many years to pass legislation and racial profiling put in

arizona. and as we talk a lot of times about the loss of citizenship rights, we also need to talk about the human rights protections of the constitution's in this country. jennifer will discuss a little bit about what is happening across the country. >> good morning, everyone. i want to make mr. conyers for bringing us all together to talk about these very important issues. i have been asked to talk about racial profiling in the context of emigrants. there have been many waves of american history in which there have been anti-democrat laws and policies, but that the federal and state and city level. starting about five years ago, there has been a more recent

wave, and states and cities across the country started proposing and enacting laws that were essentially designed to make life very hard for emigrants and to try to drive them out. in the last five years the state legislators have enacted reject proposed thousands of anti- immigrant laws. -- who have proposed thousands of anti-democrat loss. one of those mentioned here was the pennsylvania law, which is a law that prohibited undocumented immigrants from granting and restricted employment as well. there have been similar laws all across the country in places like farmers branch, texas. riverside, new jersey. in arizona, which is a very active state in this regard, is not the first and will not be

the last. several years ago arizona passed a law restricting employments of emigrants, and obviously i should step back for a second and remind everyone that there are federal laws that regulate all of this. if this is basically states coming in and saying we do not in the federal government is doing enough on this issue, so we will do it ourselves. to the arizona law, that was enacted most recently, is a lot that people have recognized and would encourage racial profiling against immigrants. it would have required mandatory detention of anyone who could not prove their lawful immigration status to a police officer and the state of arizona and would have allowed the arrest without a warrant of anyone who the police

determined is deportable immigrants. i have been practicing immigration law for six years. i am a graduate from an ivy league law school and undergrad, and i cannot tell you half of the time what that immigration status of a particular individual person is, and that is because it is a really complicated thing. the federal judges have compared that i.n.a. to the irs code in terms of complexity. asking police officers to make a determination based on very limited information based on whether a person is here or not here unlawfully is a and a difficult task. -- is a very difficult task. police officers are trying to figure this out by looking at

people. it is not something you can figure out by looking at people. under the federal immigration system what is supposed to happen to determine whether you are to be deported or not is to get a hearing before an immigration judge. four police officers to be making these determinations is really difficult, and that is why racial profiling happens in all of this. i mentioned the housing and employment laws. what these laws are doing are making it difficult to impossible for immigrants to live, or live not in fear anyway. because it makes your immigration status and corn for everything, whether it is renting or walking on the streets. when you have a situation like that, basically you have a

situation in which the law enforcement is looking at everyone to figure out if they are undocumented or not. civil rights advocates across the country recognize immediately that 1070 was very dangerous and what caused racial profiling. the cdc and a congressional progressive caucus wrote a letter calling on the attorney general to intervene and file a lawsuit against the state of arizona, and we're very grateful for speaking out on this issue. the aclu and several other civil rights organizations filed a lawsuit against the law, and a

few weeks later is the attorney general did step forward in the united states filed its own lawsuit to, and thankfully the court struck most of the provisions that i mentioned earlier. although this was a dispute initial victories, this will be a long-fought battle. many people think this will go all the way up to the supreme court. it is really important that we all continue to support these efforts. in particular, the president and the attorney general have received a lot of criticism for stepping forward to fight the arizona law. it is really important that we all support the president and the attorney general's efforts. i also wanted to assess quickly that these are not the only manifestation of the racial

profiling problems. one of the things basing immigrants is that in 48 states undocumented immigrants cannot get a driver's license. when you live in the city, that does not sound like a big deal but that means when you live in a city without driving, people cannot go to the grocery store to buy groceries for their kids. they cannot go to school, church -- or if they do every single day they live in fear that they will be stopped by a police officer that will racially profile them under arrest them for things that other people do not get arrested for. what is happening is that undocumented immigrants are being arrested for things like playing their music too loud. these are all things that you usually get a citation for.

instead immigrants are being arrested and put into jail for those things. and there are number of programs that deputize local police to do civil immigration enforcement. what that means is local police have an incentive to stop people who look foreign and they are arresting people for civil offenses. being undocumented is not a crime. the only crime is entering illegally. that is a misdemeanor. local police are arresting people for other things like playing their music too loud because that is the way to get them in the jail and get them into the immigration system. the last thing i will say since

i am running at a time is that what happens in the situation in addition to all the other harms is that immigrants are living in fear and are afraid of the police. they will not report crimes and the witnesses to crimes. people are afraid to report domestic violence incidents because there have been situations in which the domestic violence victim is arrested because the police think that person is undocumented. we all suffer when that happens. in conclusion, it is really important that we all work together to stop this kind of racial profiling against immigrants and against all people of color. thank you. [applause] i think it is clear we all recognize these types of enforcement programs, types of practices really do focus on the most formidable communities. they go into low-income

communities which are ron noble communities. >> thank you. thank you for having me here today. for bringing us all together. this is a crucial issue, and i am so glad we're talking about it. one thing i want to focus on is the impact this has on women of color. there are different issues related to gender often in terms of differences in how people are treated over the course of misdemeanor arrests and what kind of an impact those arrests have on their lives. what i will start with this to tell you a little bit about the opportunities, and we are fairly new organization that has been around for about five years. we are little unusual. we are an organization that largely focuses on how we bring together communications about

important social justice issues with law and advocacy. we analyze legal research, policy research, a lot of communication research like media content and public opinion analyses. these are really in for resources for advocates. we translate that into tools that advocates and policy makers can use that actually make sense. road maps to the law that people can understand how we get from one place to another and ultimately advocating for policies that promote opportunities. i want to talk about the impact on women of color. i really want to talk about the fact that over the past 20 years we have become a society that really thinks about the criminal

justice system as the first responders to any number of social justice concerns. i really want you to think about that. the people who are resting you, the people who are prosecuting you are also more and more to charged with getting you into the hands of social services. -- the people who are arresting you, the people who are prosecuting you, are also the people more and more who are in charge with getting you into social services. this is something that we talked about a lot, the fact that we do not have enough of an emphasis on good jobs and community investment but instead we arrest and incarcerate people. i want to give you a couple of different examples starting with gender-based violence.

i have worked with trafficking in the last decade. in that area we have seen fbi irragents are resting those they believed who are traffic over and over. i have clients to a been arrested two to three times in the criminal justice system. this is under the notion that's by arresting people we're corn to identify them as victims of trafficking and we will provide them with the services they need. i've had numerous police officers say to me i do not understand why she will not cooperate, we're trying to help her. i say maybe you should not arrest her. that is a traumatic experience. i do not know how many clients i

have had disappeared because we're trying to get them that police are forcing them to cooperate in an investigation when they were not ready. that is one example. i also want to look at the issue of domestic violence. the domestic violence movement 2040 years ago was doing the right thing by getting the criminal justice system involved in making sure they were arrested and there were or corporate boundaries place, but at the same time we have moved so far to the other side where rest is often mandatory. -- the domestic violence movement 20 or 30 years ago was doing the right thing by getting the criminal justice system involves. now we have picked people who ae victims of domestic violence being arrested for another reason. if people have as mental health

issue, police are also involved. they received no services. despite -- i have heard from prosecutors say they believe they're getting the help they need. we did a study on sex offenders and found that one out of 30 women had been given any sort of program or level of assistance that she was promised. the level of assistance that she was promised and given was at two-hour help class. that is not a way to invest in people to make sure there could be the chances and opportunities they need. substance abuse. we have had this great movement in terms of the drug courts. you are not necessarily going to be given the biggest sentence you could get, but there is a

lot of mandated services. when you put services and combined them into the court system, you are now eligible for arrests should you not show up for appearance, should do not show up for a meeting with a counselor or case worker. these are all things that are very difficult, especially when you're dealing with addiction issues. obviously the consequences will be greater than if you just accepted a guilty plea in the first place. and we're seeing really negative consequences over time. in the emigration context, people with very low criminal convictions are finding themselves eligible to be removed from the country under the immigration law. we saw that over the years with clients who were involved.

of course you have the racial profiling that we see with arizona law and other related enforcement programs. i want to really highlight that the recession, which has been such a crisis in this country, it does provide an opportunity to reform the criminal justice system. for the first time states are seeing that they do not have the money that they need to keep incarcerating people. i think that we really need to continue to talk about rehabilitation opportunity, good jobs in a way that makes sense to the majority of the american public, which is this and is open to this and understands that at some point you do not help people by arresting them,

you are actually harming them. the last thing that i want to say about gender and the criminal-justice system is that women are often very much of subjects to whether it is groping, having their photos taken rather in custody, physical and technical -- physical and sexual abuse wall they are in custody. it is something i have seen over and over. finally i want to make a comment on transgender women. i have worked with many women over the years to because they did not have a normal gender identity worth literally arrested for walking down the street on a prostitution charge opposite. a lot of my clients were emigrant transgender women and suddenly they were placed into jail and immigrant detention

center where they were very much in danger of sexual abuse. but i want to make a note about rights-based solutions. there is a way that addresses human dignity and protect us from the harm of surveillance and arrests. and number of legislative proposals we have talked about it into that category, but also we are a country that has ratified the race discrimination, which are actually has a legal framework in which discriminatory intent is now required, but seeing that there is an impact on communities of color, that that constitutes discrimination. in the u.s. just released a report where the government critiqued the u.s. state of human-rights and the number of

advocates also submitted chatter reports. there are ways to use human rights as a process and a legal handle to protect our rights. i want to make a final comment and then i will be quiet. i want to talk about all wall that was recently passed and signed by the governor in new york state, which is a law that we worked on for the past three or four years at placating the convictions of people who happen traffic into prostitution. region who have been traffic to and to- -- who had been trafficked into prostitution. i have clients over the years to have to put contact information down so that i could try to help them get higher. now new york state is the first state in the country that has passed a law and which a victim

of trafficking can happve these dictated from their record. >> i told you we had a power house panel. i know we have a short amount of time for discussion, but just to recap some of the sort of things yet talked about is how do we transition from a country that invest in the criminal justice system and the mineral policy -- population to a community that invest in new and invest in communities. how can we looked at differently the impact on crime when entire community is still targeted? undocumented immigrants who feel

alienated, afraid of law enforcement and how does that create entire areas which are hotbeds of crime because no one will call the police and participate with them. how do we address some of the financial incentives that pushed these false? when of the things we know are true are their private corporations that make a lot of money off of criminalizing people, but i do not think anyone would be surprised that the corrections corp. of america and others like them actually help push through laws like three strikes in california, understanding that as these go through, it is a boon for the industry and bottom line. and how do we get to the impact on communities when we take young and able promising people of the workforce and print them with a scarlet letter and make them second-class citizens? how do we rehabilitate anyone unless we will have a system that puts people in jail and never lets them out, how to read

reintegrate people pick? like i said, had removed from this entire enforcement perspective to one that invests and develops? there is the international processes, which are pointed out, things that happened at international levels. the rights working group, organization has information outside. we have voices from communities across america will release the report on the 27th of the september. we also heard about the racial

profiling act to help end racial profiling. and our youth and opportunities , democracy recreation act. i just wanted to make sure we had a quick plug for all of those things in the ways we can get involved in shifting the framework. >> i did not know if we have a microphone. >> you guys are wonderful panel. i hope you all integrate everything together, because each one will feed off of each one, but the other problem is going around our country and it is young black men killing young black men, women, and children.

it is to the point where the community is coming together and everyone there refuse to listen to are now working together. instead of using the anti-terror risists funds for the law enforcement, i think they need to use those monies to fund initiatives and programs to help communities to target the individuals who would not listen to anyone and put a face on a terrorist in set up criminalizing of whole community because of the way they wear their pants. >> i am going to turn that to the panel, but i want to take a

quick minute to recognize congressman conyers u.s. join us. -- who has joined us. [applause] he has certainly carry the weight for us on these issues. if anyone on the panel wants to respond, -- >> we will leave the last couple of this event to go live to an event with lindsay gramm of south carolina. he has just returned from afghanistan serving as legal adviser. he will talk about the war in counterterrorism strategy. this is live coverage on c-span from the american enterprise institute. >> he has served the state of south carolina in the u.s. senate since 2003. it was called to active duty in the first gulf war and continues to serve in the reserve. he recently returned from

reserve duty in afghanistan. and i hope he will talk to us a little bit about that as well. he is one of the most articulate national security advisers in the united states and and has been outspoken in support of our troops, their mission, and the importance of understanding what is at stake in the war on terror. he has condemned the news on practice of setting arbitrary deadlines for troop drawdowns in said it would be a mistake to leave iraq while maintaining a military presence. earlier this year it redkey introduced a reform act. to talk about that bill, afghanistan, and anything else he would like to talk about, let me welcome senator lindsay gramm. and [applause] >> this is the worst design room i have ever been in.

that is saying all lot. can you see me? i really appreciate it. is it me or the lunch? without food, i would have been worried. if you came here to figure out how all green paid in south carolina or a good thing to dabble in witchcraft, how many houses charlie rangel actually owns, whether obama was born in america, or whether the dream act will have harry reid in the upcoming election, you come to the wrong place. we're going to talk for about 35 minutes, and at that point in time pull me off of this place because i believe in the geneva convention and one of them is that if a politician talks over 35 minutes, you violate the rights of the audience. the fact that you came here says

a lot of value. i think it is good. you could be playing golf or making money but you decided to come here and have a discussion with me and others about our national security, and we're how many days before the election? i am not good at math, that is why i am in the senate. we are in the finish line now. we're at war listening to the political discourse. has there been a serious exchange between any candidates of all what we should be doing with iran? had you seen one commercial about whether or not our afghan strategy is good or bad? we're within days of a major political shift in washington, and you would never know this

nation is involved in two wars and a looming threat spaces all that could change the course of humanity in mankind. i say that knowing that everyone in america cares about our troops in every candidates for office is patriotic, but what i do not understand is how in the world did this happen? how did america get ourselves into two wars? where are we going on the war on terror? nine years after 9/11 and no one seems to want to talk about it. i would argue it would take a dramatic event for that to change unfortunately. i hope and pray it will not require an attack on the country before we talk about the things that we should have been acting on a long time ago when it comes to our national security.

is the july which role did by president obama a fatal flaw in the afghan strategy? from my point of view, additional troops were needed in afghanistan, and without them it would have been impossible to change the momentum that had been lost to the taliban. i applaud president obama for doing something that was exceedingly unpopular with his base. that is to leave our troops. we have a limited voluntary military and the resources were dedicated to iraq, and then afghanistan became in many ways the forgotten war. as we evaluate the performance

of the commanders, i would say one thing, they held it to the other with wire and that tape. -- and duct tape. now for the first time i believe we have the amount of resources in right strategy that could lead to success, and that is very difficult for america to hear, six or 78 years after the war started. all of that time has gone by and really we're just beginning to get it right. i am sorry to tell you that, but i believe it. this new strategy that involves new troops has a decent chance at success. the outcome by no means a certain period -- by no means is certains.

the parties are pretty solid about where we should go and how we should get there. the two-paea party has done a lt of good, i think, by focusing on out of control spending and washington and the fact that we have gone too far and overreached, but when we talk about foreign policy, i do not hear much coming from either party or the tea party. now ron paul has been consistent. he believes we should get out of afghanistan and withdraw from iraqiy plans stop being involved in an list worst -- i think that was the phrase he used a couple of days ago. what about the rest of us? there is a big middle there. what about the rest of us? my view is i do not want to be

involved in endless wars anymore than they do, but i do insist that we win wars that we cannot afford to lose. now, the left and some of the libertarian friends believe we cannot afford this war and they are ready to leave. what happens if we leave? and doesn't really matter? all of you are smart and can answer that question probably better than i can. i can tell you what i think -- if we lose in afghanistan, whenever that may be, it will matter. what is losing? i think losing would be allowing the taliban to come back in power in portions or all of the country. i have one simple thought reaching the taliban running anything is not a good idea. particularly if you happen to be a young woman.

and you believe in religious freedom and tolerance. what does it really matter? their places -- there are places on the planner or women are treated horribly and we do not have one true. i would argue that within a decade of 9/11, our efforts in afghanistan result in having to do a deal with the taliban where there are back in power. on september 12, 2001, how many of us in washington would ever envisioned a negotiating with the taliban so that we could come home from afghanistan? ladies and gentlemen, if we leave afghanistan in a chaotic

state, with the taliban has much say in control, it will be just a matter of time before the forces had gathered before 9/11 and gather again in that same country. i would argue there is even more at stake since 9/11. and hal in the world are we going to persuade regimes to do the right things when it comes to our national security interest if we lose to the taliban? do you believe iran is watching? i do. to my libertarians and democratic friends, who say this is an endless war and need to

leave, i ask one simple question, what happens when we leave? to my brothers and sisters, and what is our plan b? plan before the left is to leave. -- plan b for the left is to leave. i know what we cannot allow to happen. the july 2011 withdraw date, ladies and gentlemen, i think is a mistake. and isn't fatal? i do not know. and i envisioned a scenario that summer where some parts of afghanistan can be turned over to afghan control transition without compromising the overall war efforts.

i cannot envision next july and afghanistan that does not need an enormous amount of american military support. i have heard from people on the ground in the region and afghanistan that the july withdrawal date is confusing. and do not misunderstand what it means. the president said we're going to begin to leave next july, on the question is how many people will leave and at what pace? i do believe that is a mistake, but it is a policy we are having to live with. i did not come here just to talk about afghanistan. i am going to ask a question to try to keep you awake if nothing else. how many people believe the attack on our country on 9/11 was an act of war? how many people believe that was a crime? man-made disaster?

doesn't matter if you treated as a crime first as an act ovs. an? yes, it does. we're going back to the law enforcement model, not just here but throughout the alliance that we have enlisted to help fight the enemy. who is the enemy? and how you engage them? does it matter if you resort to a law-enforcement model? i think that matters greatly. ladies and gentlemen the difference between fighting a crime in the war is -- fighting a crime or a war is enormous. here is the state of play in

america in september, 2010. the cia is out of the interrogation business on the war on terror. i said that boldly and prove me wrong. the cia after the debacle we have had after guantanamo bay, waterboarding, you name it, is now in a position by executive order, they cannot use the tools congress authorized in the detainee act to interrogate prisoners. they have been disallowed by the obama administration. that makes us less safe. to my friends on the right, there has to be something other than waterboarding.

there has to be some middle ground between the army field manual and waterboarding. the army field manual was never written to be the end all american integrity risch -- interrogation. it was written for the army. those in the army to capture prisoners on the battlefield need to have some guidance as to what to deao with those prisoners so they do not get court-martialed. it was never meant to be the exclusive techniques available to the country to be able to interrogate a prisoner who was involved in the war on terror. that is where we are at. i would ask you if you are a cia agent, but you should not raise your hand. put yourself in the shoes of the director. what do you do? how you go forward?

what do you tell your agent? to those that advocate wordock bindi -- waterboarding, is it a violation of the geneva convention? yes. ask any military lawyer if waterboarding violates the articles that are written to protect any prisoners from abuse. this is not even an honest debate on the military side. doesn't violate the war crimes act that i helped write -- does it violate the war crimes act that i helped write? yes, it does. can we be safe without engaging in waterboarding qwe? yes, we can, but has to be something other than the army field manual. another question or thought -- should the united states abandon the geneva convention now that

it applies to the war on terror? it now applies because the supreme court has ruled so. to those that keep advocating techniques like waterboarding, had the conviction to say that we intend by our actions to withdraw this nation from the geneva convention. because that is exactly is what you will have done. i do not believe that is the right course to take. what i believe is that the world needs to come together and have another look at the geneva convention. the geneva convention has served the world well even though the worst among us will never comply with that. the truth of the matter is that the geneva conventions between nation states that basically said the falling, you catch my

pilots and i will treat them well, i catch your pilots, we will treat them well. we will leave civilians alone and when the war is over, we will swap prisoners. that is not the war we're in. the war we are in and false intense -- intelligence gathering, not combating the civilized states. nine years after 9/11, we do not have the ability to effectively interrogate an enemy prisoner. i know that is not as exciting about talking about delaware, but i think it is important. we do not have one side. maybe we should have or look at that. we're a nation without a prison

in a war. guantanamo bay has not had a new prisoner in years, and is not likely to be used when it comes to future captures. what does it mean to be a nation without a prison? what happens if we caption someone tomorrow? where do we put them and what to do with them? do we have to use the law enforcement model? to we have to take them to federal court? do we have to put them in an american federal prison because we're not using guantanamo day? can we take them to afghanistan and how long can we do that before it brings the afghan government down? not very exciting, is it? unless you are a special forces operative in your face with the choice of capturing someone or killing them. we have basically put ourselves out of the detention business as well as the interrogation

business because the parties cannot find a way forward. i happen to be in the middle on this issue where you always get run over. now i know why the road is littered with dead animals in the middle of the road. i happen to believe that on balance, closing guantanamo bay would be good for america in terms of the ideological struggle we are facing. we are not in a war with the nation state. we do not have the capital to conquer and an air force to shoot down or nab to think. we have an ideologically rigid we have an ideology to compete. -- we have an ideology to compete. it means we need to adjust our policy when it makes sense. president bush got it made sense. senator mccain who was running for president thought it made sense.

and senator obama thought it made sense. president obama thought it made sense, but the one thing that did make sense is to announce we will close guantanamo bay without a plan to do it. -- the one thing that did not make sense is to announce that we will close guantanamo bay without a plan in place to do it. there were not sharing in south carolina because they did not know what it meant. i still do not know what it means. i will not support closing guantanamo bay unless you can do it safely. right now we have been punting. we just keep printing on the hard, difficult issues around in guantanamo bay and the war on terror and general. i will talk a bit more about that in the minutes. nine years after 9/11 we have had two attacks that failed, and

where did they come from? where did those attacks that failed in america come from? they came from home grown terrorism. the war has shifted. what do we do nine years after 9/11 when thomas tries to blow up an airplane over detroit -- when someone tries to blow up an airplane over to tory? we read the miranda rights within 50 minutes. what did we do with the times square bomber? we read the miranda rights. nine years later we have not figured this out. we cannot rely on the fact that the parents of the christmas day bomber were not with the fbi to which it worked with the fbi to get him to talk. -- which cannot rely on the fact that the parents of the christmas day bomber work with the fbi to get him to talk.

we are fighting a war, not a crime. this is not cannot akhandahar c. the rmodel we are relying on, it makes us less safe. and when it captured terrorists, the one thing you want to know is what is coming next, where did you train, who was involved? our laws are such that our intelligence community cannot do their job. i know that as boring. but i think it is important. seoo , this has meant a wall -- congress has been a wall,

democrats are free to talk, other than that things are going great. iraq. remember iraq? it is now in the classified ads section. remember the iraq fattah harry reid said was loss? i do. iraq can teach us a lot in terms of how to get it right and what not to do. is it a part of the war on terror? how many people believe going into iraq was a sensible thing on the war on terror? how many people believe it was a blendunder? we can have that debate. people who are smart and choose

to come here on a pretty day, you can figure that out, but i would argue it is now part of the war on terror and could have a huge impact one way or another. and it is not over. we're in said the 10, and have not scored. the one thing i can tell you about the war anin iraq is the aversion to nation building made as irrational in terms of how to secure the country. it cannot come out of a conservative let that we were there to build up institutions. the idea of nation-building was some left idea, some liberal ideas, and if we increased it, that would be a cardinal sin the -- and if we increased item that would be a cardinal sin. the only way when you try to replace a nation state in the

grips of state to be successful is to leave behind institutions that work for the people and not against them. and that is hard. oh, my god is that hard. we finally understood how to get that right in iraq, but before we understood, a lot of people died and a lot of people were seriously injured. for that, i will be for ever sat ever saddened, but in 2007 bleewe changed strategies and a focus on securing the people and improving institutions. it focused on the idea you need more troops living with the forces were trying to help. in need to build a rule of law system where the judges can administer justice without being killed. -- you need to build a rule of

law system where the judges can administer justice without being killed. as a reservist serving in iraq, i went to a camp in 2007 where there are 18,000 sudanese in the desert that had been captured by courses and had not seen a human being and surprisingly they were not being turned around. it was about to blow up. they had a right. along comes a general, doug stone, who was a marine. he took that prison and instituted educational program so that every prisoner would be educated to the fifth grade level. he brought in people to teach people what the qur'an says once they could read it.

the 26,000 people that were held in the desert have gone back to the sunni province with a 2% recidivism rate. i do not know if that was a nation building, but that was smart. we are not doing that in afghanistan. in iraq the iraqi legal system allowed national security detention were you could grab someone and parked them for awhile because they were a security threat without a full- blown trial and during the confinement time you try to rehabilitate them, if that was possible, and you understood the difference between it reconcilable and irreconcilable and had a strategy. it worked. we're about to wind down in iraq. i support reducing our forces to

50,000. but i do not support breaking our ties with the iraqi people when it comes to a military presence. i am hopeful the administration will negotiate post-2011, an agreement that will allow not only training troops but enough presence militarily to prevent a conflict between the kurds and sunni-arabs along the boundary. and our troop presence has made a big difference there. it is a comforting presence, and at least a paradea brigade or t would be smart to secure the presence we have had paria. i appreciate the efforts of the

vice-president, but is now time where the president, in my view, to personally get involved and form a new government. long story short is that we did not understand how important institutions were to providing security to the people you are trying to liberate. our initial mistakes anin iraq -- wouldn't be a shame within the last minutes of the game we had an aversion at the end as we did in the beginning o? our national security presence, interest will not be judged by the daily left completely in iraq about what we left behind.

afghanistan, the troops are beginning to provide security that was never known, but we have no law and afghanistan, ladies and gentlemen, that will allow our american soldiers with afghan help to detain someone being a national security threat. if it were not for the ability to have 28,000 people from anbar taken out of the province, we would have never been successful with the surge in iraq. right now we have the space for 2800 people. you will never convince me that 2000 people are the only people that need to be taken out of these villages. we need a detention system that will allow us to sustain people that are creating problems so that the counterinsurgency will work in afghanistan. it is one thing to liberate a village. if the people who cacause a

problem for the village are not removed from the village, the local villages will never come on our side. the roles of natao where law enforcement rules. ladies and gentlemen, nato -- we need to look hard and long at this. it has cold war capability with law-enforcement mentality. that will not be a formula for success for the war on terror. . .

21 nations are members of both and there really is not any discussion between the two organizations. the same thing is happening in our country. i hope our friends that nato will reevaluate the role they will play and will play in the future when it comes to the war on terror. national caveat some have crippled the mission need to be replaced by nato. if you are not willing to go to the you war with a fighting

mentality, do not go. we are not trying to convict them. we are trying to defeat them. bachman in a drug said the sanctions are helping. congress has given tools this administration that these could be crippling. how many people believe that sanctions will deter the iranian regime from getting a nuclear weapon? how many people believe they will not? if they do not, what will we do next? i am with you. if the russians and the chinese keep back pedaling, they will never be successful. we are 40-something days before an election and not one person is talking about how the america or the world changes if

the iranian government gets a nuclear weapon. that is just stunning. it will change the course of history. every arab state will be less than enthusiastic about the iranians having a nuclear weapon. why do we not have an ambassador at large for the gulf states? they, together, can form a buffer and could be a good ally. we talked to them one by one and let them fight amongst themselves. why do we not have an ambassador to the gulf states like we do to nato? we can get to the heart of the terrorism problem. why do we not have a responsibility instead of a apology? why do we save -- why do we not say they are the problem? why do we not ask the arab world to give as much to the

palestinians as we do? because it would really matter. is anyone talking about that? no. in conclusion, talking does not win a war. i will introduce legislation to reform our procedures. honor our law, every enemy combatant as their day in court where the judge will determine whether or not they support the finding that you are a member of out qaeda. we have a case before us where the judge let the guy go because they could not prove they were a member of al qaeda but they could prove they were during 9/11. my statute would change that. it would put the burden on the detainee to prove they were no longer a member.

these small things are simple. a small standard for all judges to use. they are crying out for help. those hearing these cases are very much worried they have no legislative guidance and they are having to do this on their around and making it out as they go. habeas reform is a national security imperative and i think it is a justice imperative. i propose that if the high value interrogation team is assigned a case where we believe a person is involved in an act of terrorism here in the united states that within a couple days they ought to be able to go to a federal judge and say we have probable cause this was an act of terrorism. allow them to go forward without miranda warnings and give them time to gather evidence.

i will argue forcefully that if we continue to read miranda rights we will [inaudible] we need to allow the cia to get involved. there are things that we should do that need to be done. we have 48 people in guantanamo bay to have been there for years. they have been determined to be an enemy combatant with no process as to an annual review. the converse should work with the administration to come up with some rules concerning consignment and detention. i do everything in my power to make sure khalid sheik muhammad

never sees the inside of a federal court. when you told someone 67 years in the court, and -- six or seven years in the court, you introduce them to the federal court. to hold them with years -- for years without trial, then all the sudden you give them the rights that come with the constitution in a federal court. i have no problem with the christmas day bomber, the times square bomber. in federal court. that is a good used. i have no problem with al qaeda being charged with locked up. you say you have the same rights of an american citizen because then you destroy the theory that is essential to be in war that you could be an enemy combatant. if they are not enemy combatants, then who the hell

is? what is a federal judge do with a speedy trial? we are at war and we need a hybrid were you makes the systems. i know that an enemy combatant decision could be a life sentence. i am willing to provide more process than we provided in any other war. i do not want mine country to go down the road that makes you more like the enemy and not less. there is a way to move this nation forward but it has to be bipartisan and it needs to happen quickly. we are about to run out of time. if we do not and this in iraq, if they do not change on the corruption friends in afghanistan by september of next

year, i worry greatly for the security of my country, the family -- my family, and the world. this is uneven at best and this new change in strategy for where you fight local corruption and leave karzai alone, i really worry about that. we will never win the war in afghanistan until we prove the afghan people that the culture of impunity is gone or at least on the way out. the talent and is half the problem and corruption is the other half -- the taliban is half the problem. i know that is boring to talk about, but it could be determining the outcome. thank you for listening. thank you for coming. we are 40-something days away from the election. you would never know it between

the political exchange of those seeking office. we vote on the defense authorization bill coming up. the issues we are talking about of whether or not they should expand abortion services in military hospitals, whether or not we should repeal the do not ask, do not tell policy, and whether or not we should put the dream after giving young illegal immigrants legal status on the defense bill. if you follow the debate on the floor of the united states senate tomorrow, on the defense authorization bill, you believe the biggest national security threat facing america is what to do about gays in the military, the dream at, and abortion. very sad. very unacceptable. thank you very much.

[applause] >> i think everyone is familiar with our rules. the senator has agreed to take questions. i will call on you. wait for a microphone. identify yourself and put york short statement in the form of a question. the gentleman right here has his hands of. >> i think you so much for your presentation. i am from the center for democracy and human rights here in washington dc. >> you had your hands full. >> we need your hand -- we need your help, senator.

saudi arabia initiated a charitable foundation, and i am quoting, "whose objective is to support the construction of mosques and islamic centers and support muslims all over the world." i assume that means non-moslem come -- non-muslim countries. they said there are about 150 members of al qaeda and the same hour aniline of [unintelligible] this is a war on extremism. you served in the army.

i served in the ira. -- the army. [unintelligible] army engaged in a war with the religious totalitarianism darks >> about funding the mosques, i have been to iraq and afghanistan and derive the mideast many times. we are not at war with islam. president obama is the right to make that statement. president bush was right. as we debate the location of the mosque in new york, while a lot of us believe it should be moved, i fear we will allow our

enemies to drive wedges between people who could live together peacefully and say flav. while i would like to see reform, i know that, particularly in the gulf arab states, there are many people we can live with and do business with. i have known many patriots in iraq and afghanistan have been killed trying to bring the rule of law. many of the judges i got to me as a colonel have been killed in iraq. several of my friends have been killed in afghanistan. do we need this many people to fight 450? know. we need to make sure afghanistan does not fall into the hands of people who are sympathetic and will align with allocated. because then the number becomes a lot bigger. the reason there is only 450 is

because we have killed a lot of them. i forgot to mention this, but could do -- should reconsider going across the border into afghanistan? it is a bigger threat to the future of afghanistan as anyone is. within 30 kilometers of the afghan-pakistan border, they are headquartered there. i would like to see some effort by the u.s., pakistan, and afghanistan to go across them -- across the border. to our allies, thank you, but with friends like this you do not need enemies. obviously, the pakistan these are looking at the july 2011 had not -- deadline in a different way. this shows a greater cooperation than we have seen in

a long time. how do we win this war? if the people from the pakistan side, the allocated networks, really cannot be controlled. safe havens have to be dealt with in order for us to be successful. i hope congress will pass benchmarks with better governance but also on pakistan. hold them accountable. we are there in large numbers in iraq and afghanistan because to erase nation states that were in the plate -- the hands of thuggish people that were aligned with terrorist organizations to represent a threat to our country and the world at large is a very labor- intensive effort. how many times did you hear from 2003 until 2006 that we are

down to a few dead enders? the truth is we do not know how many are there with any great certainty. at the end of the day, if afghanistan is not secured, then everything we worked for is going to go back in the wrong direction. 98,000 troops, in my view, are a must and the native presence should grow because we are trying to build a nation state that will not go back into the hands of the caliban. that is different than fighting for hundred people very good question. >> senator gramm, thank you for thai -- taking the time and effort to focus on national security with their bureaucratic dinosaurs in the department the executive branch during the we

need all the leadership we can get. the question is on what appears to be in the key element to the rise of power which is law and order in the courts of justice. >> how did they come back in afghanistan? that is a question someone needs to talk about that does not fit in a 32nd sound bite. the way they came back from near extinction is poor governance and a lack of security. as the director of resources from afghanistan to iraq, the security environment deteriorated. the rules of engagement nato had to operate with allow people to go in and out of jail. what to capture a bad guy, or an

alleged bad guys, you should turn them over or release them so the detention policies allows people who are disruptive to never be isolated from the population. they went back to the villages to create an intimidating environment. the tribal system that had administered justice was eventually replaced by a taliban-type of system and they put a clerk in charge. as we clear the the village out of their presence, we will never build unless you can have some sense of governance and justice. the big issue in afghanistan is where does formal justice began an informal justice and? i would argue we do not have a coherent policy yet, but we are getting there.

good example. they were able to provide remedies to people's problems that seem less corrupt than the afghan government where there was no government. the have a foothold there and they are intimidating. we need to provide justice, something other than the caliban way. i believe they wanted justice system not run and it does not all need to come out of kabul. i do not care who gets the goat. if you can do it through tribal justice, that is fine with me. i do care if it is to resolve a rate case. there needs to be some understanding by us and the afghan government of where formal and informal justice lies. if we did not get that piece of

the justice right, we will go right back. there is a big dispute over who owns the land. there is a way to do land litigation without having a trained lawyer or judge. general petraeus understands this. it is time intensive. here is where we need to let our afghan friends know. be more open-minded to tribal, informal justice, but we cannot come as a nation, turnover these rate in murder cases to a system that i think is stuck in the 12th century. that is how we build. you drive the bad guys out. you put them in prison. you give them judicial hearings, not under a criminal justice

model, but under a lot of war. you teach them about the qaran. that is what needs to happen to hold than build. how do you do that if they're safe haven is in pakistan? >> it seems as though you do not think sanctions will work. there seems to be two alternatives. one is working toward a regime change and the other is through the use of military force to prevent them from going nuclear. what are your thoughts? >> sanction and aid can work together. the right amount of aid to the

right people at the right time can prevent people from going the wrong way. i believe in and all of the approach -- all of the above approach to terrorism. you do not send 150,000 people to fight 450 people. he need that many people to turn a stayed around. the sanctions we need have not -- have not been used in force. i hope congress will have hearings about the .dministration's game plan they are deep. there you want to make them fight? deal with refined petroleum. one-third of the petroleum goes -- comes in from china. hit them where they are the weakest. i think they would be welcome to intervention. i believe sanctions and eight

can empower the right people in iran and deter the wrong people. they need to be used. that gets us to plan the. how do you get sanctions to work if they believe they would -- that we would never use military force? how do you get any when you are trying to persuade to change their thought process if they believe the upside and the downside to not come together? if you are the prime minister of israel, how long do you wait darks -- how long do you weigh? everybody in the room i could see raised their hand.

when they say today they do not want to make a weapon, we believe they are lying. ok. when secretary clinton, excuse me, says she thinks the sanctions are working, she may be right. they have not been used fully yet. there are tools available that were not available one month ago. let's see what happens. if they fail, here's what i believe should be militarily available. if you use military force against them coming have opened the -- opened pandora's box. nobody knows. i think if they get a nuclear weapon you have emptied pandora's box. that is why we are here at lunch. at least we are talking about.

i cannot get anyone else to talk to me. thank you for coming. if we use military force, it should be us and not the israelis. if they are forced into attacking, in my view, you will unite people that would normally be the other way because [unintelligible] the military capability is impressive but it is not what we have. their biggest airplane is an f- 15. it is a complicated than ever, but from their point of view, it is better than doing nothing. from my point of view, if we engage in military operations as the last resort, the united states should have a goal of changing the regime, not by

invading the country, but by launching a military strike from land and sea. we make sure they have no ship that can flow and no plane that can fly and the restaurant -- and the revolutionary guard ceases to be ineffective organization. if you have to use military force, i think the goal should not be only to neuter their nuclear program but destroy the regime to fight back against troops in the region. that, ladies and gentlemen, is no small matter to contemplate. that is a very serious escalating step. if you all believe as you have said, sanctions will not work, i am here to tell you that i have no belief containment will work.

if those are my two options, i would rather do it before. one last question. >> when you said dennis kucinich and ron paul agree. i will complete the sentence that it is the average american and we should all agree. that me asking the question. you gave us an interesting speech today. i guess this is the new republican party. maybe you are running for president. >> no, no. >> will you start another patriot act which will be the

new american system? >> this is a good way to end. the patriot act is due to what? in due to expire. we had an extension that by the end of the year, the patriot act expires. have you seen one ad? the patriot act is going to expire, by the way here it is. has anyone asked one candidate running for office that question? to my friends in the media, i know witchcraft is intriguing, but c'mon. we need to get our candidates to of the daily charge to step up to the plate. not only do i think it needs to be reauthorize, but we need to

add to it because the biggest threat beyond this is its cyber terrorism. we have separate bills in the congress that would give them the authority to deal with cyber terrorism. how many people think cyber terrorism is a real problem? they could put us out of business. the chinese play with us every day. when they came up with the ability to shut down wall street? everyone would like that to a certain extent unless you have money there. i think the patriot act needs to be reauthorize and we need to add new tools. having said that, i hope i have left one impression with you, that i do believe in our values. i am not a fan of getting out of

the geneva convention. i have been a military lawyer all our life -- all my life. it becomes about our values and not theirs. we have to adjust to the fact that we are at war. this country has overreached at times. this is what happens when good people who are afraid, that is what happens. good people who are afraid can do some not so good things. i want to make good decisions about miranda warnings. by one judicial checks and balances. i want to give the -- i one judicial review. i like checks and balances. they need to be in place even when you are at war. i believe that our military commission system is one of the

best in the world. we got 86 votes. i have been a military lawyer all of my life. the same man and women who administer justice in the military commissions will be the same ones who try our own troops and court-martials. i would end with this one thought. the civil liberties which make us different than our enemies need to be cherished, but we also need to understand that in a free and open society that they exploit that freedom and openness. this is a thinking enemy without a downgrade. they use young boys and girls as shields in afghanistan. now is the time to understand

the difference between fighting crime and fighting a war. my goal is to be at war with our enemies but also still be an american. thank you very much. [laughter] >> thank you very much, senator. i think we will let the senator take off and we will take a few minutes to talk a little bit about this. if i could invite everyone to be seated.

ladies and gentleman, those still left in the room should come on up. we are trying to do something very different. normally we would sit up here and give a presentation on we just heard. we would take a few minutes and talk amongst ourselves in a sunday talk show fashion about some of the issues that the senator raised today. that is what i will do. i will call up some colleagues. do not yell at us. i will do my best to call on people if you have something to say. i that the senator had a lot of interesting things to say. he likes being barack -- a provocative. there were a few striking

elements among the things suggested. the first was the withdrawal date for afghanistan. is that a fatal flaw? >> not fatal, but serious. even if things go as well as can be imagined for our own forces in the region, i know there are planning for that but they need guidance. nobody wants to be the last person to bugout before the americans bought out or be there after the americans. also, for the enemy. since the president's speech, it

was the first docking for internationally in the region and afghanistan. the biggest fear of those on our side in afghanistan is what happened and i think that question is debilitating but not fatal. >> has he locked himself into a box? we will be ramping up the presidential election. will the president need to stick to the headline? >> general petraeus, when he was doing the rounds on tv talk shows, he raised varian directly -- he raised it very directly that he would make the best recommendation about whether there should be troop withdrawal or a drawdown at all. what i was surprised by is that

the white house set out people sang the general mess spoke and the july deadline really is what it is. one of the things that has always struck me is about fighting wars. i guess the obama administration would say there are two wars going on. we are training people in yemen and africa. how can you suggest this is a law enforcement approach to the war on terror? this is just name-calling. what are the rights of this situation? >> i think the obama administration is schizophrenic.

they are criminals and not the enemy combatants. >> we had to vote on that today. >> at the same time, they captured a terrorist -- and it was not a homegrown terrorists. it was a plot on christmas day to blow up an airliner over a major american city that would have killed the people not only in the plane but on the ground. it was the biggest threat we had to 9/11. they read him his rick -- read his miranda rights. i think they are schizophrenic. their policy when it comes to terrorism -- we have no detention policy. they are not interrogating anyone. they have been given no one to interrogate. they reported there has not been one high-level detention since president obama came to

office. killing them is better than leaving them out there, but it is very dangerous and there put in a position where you choose between capture or kill, you kill. that is a very dangerous position to be in. >> one thing i thought was very interesting about the speech is that senator gramm focused on the tension. particularly in the washington, we tend to be upset by the question of interrogations. the have been during intelligence value, but some of them have fahey value. detaining the bad guys and getting them off the street and even allowing for some of the abuses, say, of the early years in iraq is a critical tool in

the counterinsurgency efforts both in iraq and afghanistan. we are shying away from given the ability among my staff to give substantial numbers of bad guys off the streets. as much as interrogation is important, detaining insurgents, taking them out of the equation as a tool to creating domestic security is critical. i was very pleased to see the senator stressed that because it gets swept under the car but a lot. >> i think the senator was also talking about the tension here. on that point, i think he has a good case to be made which is instead of reading people the miranda rights right off the bat, most of our allies, for

example, when they detain someone, he or she is indicated in terrorism and they have detention laws that allow them to interrogate the suspect for sometimes days on end. those are some of our closest allies like the united kingdom, spain, france, and others. the miranda rights are not written in the constitution. it is something they sat down by establishing different criteria for suspected terrorists here in the united states. >> i do want to come back to something that still does not make much sense to me. without having a big fight about waterboarding, i question how it is that we set in place and effective interrogation set

of methods that are codified and out there for people that actually end up being effective, do not end up being a liability to the individual during the interrogation. it does seem like a very nice goal to set out there, but i question how you can have something that is going to work especially since we have taken off the table the things everyone has agreed are unacceptable in one view or another. >> i think not only is it doable, but we handed it over to the obama administration that did not include waterboarding. how many people think barack obama and did waterboarding? the director of the c.i.a. under the bushes ministration and it. the program we handed over to the obama administration was specifically designed because he wanted a program that could be done by a democratic or

republican president. the techniques included the mild sleep deprivation, a liquid diet, and the tummy slap. the reason it worked is because they did not know that was it. when barack obama and released the documents, he took the techniques that no one would consider torture off the table, but he released all of those documents and gave the enemy the secret to defeating them. there is a very limited field of techniques between waterboarding and reading them their miranda rights that could be effective that would have strong bipartisan support. they threw them all out the window. >> and dies? go ahead.

come on over. identify yourself. >> i am which human rights first. there is still a broad range of techniques in the army field manual that are allowed to be used on high-value detainee's including various kinds of sleep deprivation in a lot of fear techniques which allow a broad range of interrogation techniques. >> you support those? >> we do not think coercion is generally effective and it tends to produce false confessions which is not what we are interested in. we actually want to intelligence. intelligence can be done, and it has not been done effectively by the fbi and cia without those techniques, so i am not sure

what you mean when they are available -- have all been thrown out. >> the army field manual is available on-line. those techniques are quite limited in the field manual. those techniques are when to be able to use against dave prisoner of war with full geneva conventions with -- which terrorists are not. they know what the techniques are. if you do not want to use physical coercion, you need to use psychological coercion. part of them is not knowing what they will face. if you give them all the techniques online. they announced the solution. you change the executive order to say "unless otherwise authorized by the president," or you do a blank page which would

restore some of the mystery behind what they will face which would make it much more effective. >> i would just say that the senate to's point that there could be space between where the army field manual and and were torture begins is worth thinking for much more intelligently. the purpose is to give instruction to large-scale military formation. i think what mark is trying to get that is when you are talking about intelligence and senior enemy operatives who have been captured who traditionally would be ham -- handled by intelligence agency interrogators. particularly in, they are doing any interrogation that all. there is clearly a loophole that we are not doing anything. whenever techniques are going to anysed, if we're not doing

interrogations', then we are not getting any antel. when we stumble across such a catcher, it is never intended that the army field manual should be the operative set of guidelines for the circumstance. that is not the purpose of the army field manual. >> and a very large signal was sent to the bureaucracy of and that you did not even want to think about going down certain roads. even if there is a possibility under the army field manual for more arduous injured asian techniques, the political signal is that there's no way we will stand behind you if this goes wrong. >> someone back there had a comment as well. >> i wanted to ask you about pakistan. >> there is a lot of talk about [unintelligible]

the senator does not distinguish between al qaeda and teh tali -- the taliban. >> "taliban" is such a catch-all phrase to begin with. when senator graham talked abou t [no audio] i think they are interested in return to power even if they have tried to present a more moderate face, i would not put the fate of the people in their not-so-tender

hands. i think we will look at them in the long run. >> keep in mind, terrorists around the world have all pledged to mullah omar. he is the top of the pyramid. bin laden defers to him. this is the group that harvard out qaeda in afghanistan to attack us. the senator makes a good point that if after 9/11 had said to people negotiating, you would be shocked. >> to make a more abstract point, the model used when talking about reconciliation, is the example of northern ireland. the argument being the talks

that wound up breaking the peace, it nevertheless it has been -- supposedly there is a recognizable position and give them together in a way. there is a lot more available from british archives that show the reason they conceded to talk was because they were beaten on the battlefield. there were been very decisively to the point where they had no alternative and they knew that. we are nowhere near that in afghanistan. that does not mean there cannot be talks, but in terms of getting to the talent than -- the taliban, until we are further down the road sick more successfully, the talks are pointless. >> two things i want to head

then wave your hand. one was about nato. there were an interesting few points about nato. if you're not willing to go to war with a war-fighting mentality, do not go. i thought that was pretty tough. >> yes, it is unfair. we wanted to move out of afghanistan. we handed things over to nato. afghanistan was not in the bad situation yet. a lot of them moved into afghanistan. crap started to happen. they were not prepared for it. you would want them to change, but the holding action that the senator talk about would have never been possible.

were they the best? could they have done more? yes. were they critical to make it possible we won at the end? yes. >> at the same time, remember all of the criticism of the administration after 9/11, we turned it down the natives' support. we wanted to go it alone. all of a sudden, we turned to nato and said, "we want you to fight," and they did not have the capability at the time. the alternative is we get criticized of being unilateral. we cannot win no matter when we give. [laughter] >> i would say in iraq first strategy is possibly the correct strategy because they are more strategically important in the long run. if you are serious about the

war, do not send the bundesfare first. they were not prepared. there would be in the guard of securing a larger -- . it was a choice we made. to blame data for their short -- it is not like we are not part of nato, for crying out loud. cracks the also wound up handing over certain parts. to their credit, they moved to try to change the capabilities. they went from moving from a force that was not useful into

being a real fighting force. >> it is not as though we turned over a dominant position. it is not like we had heavily occupied and was turning over a stabilize the region. >> the last thing, unless you think of anything else. i wanted to talk about this. senator asserted that half of the problem in afghanistan is corruption. i know this is a huge problem. there is a perception issue in the congress. is there corruption in afghanistan? there is no question about that. is it half the problem? i do not think it is a pretext, but i think he wants to leave a

solid, serious country behind. i think it is a pretext for not standing up. am i wrong? >> what is the fundamental issue? it is true the number-one complaint of afghans is the corruption. >> it is the number-one complaint and nigerians, somalia, people in chicago. [laughter] >> yes, but what makes a difference is that it undermines. it is a top down national approach. they go up than down according to the fashion of the season.

the fact is that there is a question about what you can get with a gun at your back in afghanistan. and there is the ability of the caliban not simply to decide who gets the go but to slit the throats of those who disagree with the decision is a critical factor. >> the issue i have with corruption, which is obviously a problem, is that it challenges the legitimacy of a duly elected government. it may not have been a perfect election, but karzai has been elected now twice. having this immense focus on corruption takes away the legitimacy which i think rightfully belongs to him. it is a little bit of a game we

played where we told karzai we will give you a central government and we want tumbled to be in charge -- kabul to be in charge. if you are going to tie a government together, the old fashion way is through corruption. we build the scheme that karzai is exploiting. so shocked thate this is a position we find ourselves in. >> his talk with the notable absence of the national security discussion in our body politic. we are about to have midterm elections and a change in the range of the house of represent is and maybe the senate. it will be a real challenge to see if a different problem -- if a different party is ready to step up to see if they have

enough leadership to actually change some of the things we talked about today. that will be the challenge before them. thank you, guys, for staying around. i am very grateful to you. if you like it, if you did not like it, i would be grateful if you would send us an e-mail. i am always interested in the opinions of our audience. thank you all very much. thank you to my colleagues for doing this. by. -- bye. [applause] [captions copyright national cable satellite corp. 2010] [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute]

>> as this event comes to a close, coming up, and discussion on the effectiveness of -- of sanctions on i ran. our live coverage starts at 3:00 p.m. eastern here on c-span. >> c-span's local content vehicles are traveling the country as we look at some of the most closely contested house races leading up to this november midterm election. ♪ ♪

>> we have two candidates, as you well know. i want to recognize them. [applause] [inaudible] [inaudible] >> we don't have all the amenities of a large state -- >> he is one of only two democrats serving in south

carolina. this will be a huge pickup opportunity for republicans, which explains why they devoted so much attention to this race. he is one of nancy pelosi's key people and one of the top democrats on the armed services committee. it has been a high-profile congressmen. it would be a blow to the democrats to lose him. he has been in congress for 28 years. he is the longest serving congressman in the south carolina, chairman of the budget committee and second ranking democrat on the armed services committee. he has a reputation as the budget do root in the house. he helped president clinton passed the balanced budget amendment and 1997.

he won pretty handily in the last several elections. his most serious challenge came in 1994. he won by four points against a well-known businessman who challenged him again two years later. spratt prefer -- >> we went to a lunch in bishopville. i spoke to 65 people at a republican club. i did not think there were 65 republicans in lee county. >> this year senator mulvaney decided to challenge him.

he attended a town hall meeting on healthcare last summer and saw the level of concern people saul about health care reform and decided he needed to challenge the congressman to explain his vote on healthcare. he lives and in the inland -- in indianland. he attended georgetown university and got a law degree from university of north carolina. he decided to go into business. he moved to the state senate where he is serving now and is involved in his run for congress. he wanted to keep it focused on three issues, one was health care reform and another was the

stimulus package. he wanted to run a simple campaign based on his opposition to those three initiatives. he helped pass health care reform through the budget committee and has had to defend his vote. if that the district stretches across 15 counties. it is divided into three regions. you have charlotte suburbs in the northern half of the district, the midlands region and pd river area which is much more rural. he likes to call it a three ring

circus because you have to keep projects going and all districts. the fit districts has been hard hit by the downturn. this region once relied on the textile industry. they began fading away in the 1980's. many parts of the district are trying to make the transition away from the textile economy. south carolina is one of the most conservative states in the country. the fifth district is considered more moderate, but it still leans conservative. john spratt has been an anomaly for south carolina. even able to maintain a brand as being independent-minded,

very conscious of spending discipline. that will be tested in this race. a lot of people are upset about health care reform, the stimulus package and reckless government spending. we covered several tea party rallies. we have not seen this level of emotion and engagement. that is what congressman spratt has to contend with. >> be local content vehicles are traveling the country visiting communities as we look at some of the most closely contested house races. for more information on what the vehicles are up to, visit our web site at c-span.org.

a quick reminder we will have a discussion on the effectiveness of sanctions on iran. coverage will begin at 3:00 p.m. eastern, but the house will dabble in for a brief session coming up -- will gavel in. host: a proposed crackdown on the epa is fuelling resistance from business groups, republicans to say it will be a drag on the of economy and some democrats engaged in battles. the epa administrator is proposing to -- a primary ingredient in smog. compared with 75 parts per

billion currently. the epa says that could save 12,000 lives and 100 billion in the 2020 because of health care costs. it has the support of the american medical association, which is consistent with the recommendations of a panel of clean air experts. the epa says a standard of 60 parts per billion could cost businesses $90 billion annually. it would include new emission controls, higher electricity prices, but costlier funnels and more frequent auto inspections.

there is a chart showing if you look at 2006 air quality levels, of the 667 counties, 96% would violate the most stringent standards. this morning we want to hear from all of you. do you support this idea of new smog rules? if you oppose it, the numbers are on the screen. you can join this conversation on our twitter page. send us an e-mail as well.

while we wait for phone calls a little bit more from this article. many businesses are up set for reopening a settled issue. in 2008 the bush administration tightened ozone -- a spokesman for the secretary says standards set does not protect public health and the administrator is determined to set a standard that protects all americans. republicans have said this is a throat to -- threat to economic growth. union county, south carolina.

what do you think about these smog rules? caller: it is time we start putting the health of people above the money because it is never a good time for any support to come for these changes we need to clean up our environment. we just need to fix our environment. host: turn your television down for us while we are talking. in the article it refers to south carolina officials who have put on hold plans for a new traffic intersection because of these new rules. it says the officials concluded

the proposal was more than double the cost by requiring it to be built in a clover leaf shape so as to reduce traffic jams. it will limit growth. what do you think about that? caller: i think these are excuses that they come up with to get out of the changes that need to be made. they can make these changes and we need to start now. in the long run if will not hurt our economy, it will help it. host: do you think it is ok to

put potential jobs on hold because of this epa ruling? it looks like in south carolina they would not build this intersection because of this new role. those are potential jobs. what do you make of that? caller: i do think jobs are the most important thing. i think the people who oppose this are coming up with convenient excuses. this state seems to be very conservative and opposed to changes. this is mostly a republican opposition on this. i just read between the lines. this is -- it is a political way

of putting this so people will oppose it. i don't know it will hold back jobs. host: you said it is republicans opposing this. there are some democrats who also don't like this idea. the west virginia gov. for the u.s. senate seat held by robert byrd accused u p eight -- accused epa of adding an unnecessary -- he has been closing his lead in a recent polls. arizona, steve you oppose this idea why? caller: all this is is cap and trade. i don't think they will get it through the congress. now the epa has the power to do

this. and will be a mess. all of us will pay higher utility bills. the fuel prices will go up. we have democrats and all of these people talking about host: have do you respond to saying this will say $10,000 a year? save the u.s. $100 billion annually in health-care costs? caller: they do not have proof. there are a lot of studies out there saying that that is just a bunch of malarkey. reassigned his right now but said that if we shut everything down we would have to live like the tribes of south america.

for 30 years it would only change the temperature of this country's 0.1% centigrade. this is ridiculous. all of this global warming stuff is destroying this country. we need jobs. china is making everything and we are buying it from china. we do not have manufacturing jobs because of this. host: we will move over to bob, who supports this idea in columbus, ohio caller: i support it. i never saw anything so ridiculous as changing the cloverleaf of the road. why nudges drive cars that do not pollute? -- why not just drive cars that

cannot police? i do not particularly care to believe some other businesses fell heir. i grew up in cleveland and they damaged the lake, using it as a sewer. host: what is difference between columbus and cleveland? caller: 2.5 hours. host: when it comes to their quality? caller: we are fouling the air everywhere. if the air came over from china , we would have to try to stop that. talking about centigrade? who talks like that? he is just reading straight from something. host: going to cleveland, donald

is opposed to this. good morning. caller: it seems to me that much of the conversation has been regarding just the surface of this issue. what i mean by that is what i have read, documents out of different think tanks, like the deindustrialization of america from the 1970's, showing a clear move in that direction. if you look at the evidence, it is clear that that action has taken place. second, i would like to point out that i do not understand how the smog levels are so dangerous when in fact much of the industry of the united states has been moved. it seems as though the epa is

actually a body that is working very much against the united states and in league with the united nations. maybe this sounds crazy to you, but look around, our jobs are gone, the economy is wasting away, and they're still trying to put things under this new green religion. global warming, they walk around saying that the science is sound but 40,000 meteorologist and scientists were signing petitions to show that the science was absolutely based on collaborate. but the media has spun it as the science that is in. american people that want to do the right thing. host: a little bit more from "the wall street journal" this morning.

host: it goes on to say the obama administration is showing signs of concerned about the new rule. instead of adopting a new standard by late august, the epa announced she would not reach a decision until late october. north dakota, do you support this idea? caller: yes, i support it but only for washington, d.c. host: 18 dakotas out of it -- why leave dakotas out of it. caller: we don't have smog here.

do it by the state. there is a lot of pollution in washington. host: do it more in the urban areas and not those like north dakota? caller: exactly, think with an open mind. we have a beautiful state up here. we don't have all these high- paying jobs. i cannot support this electric stuff. host: what are your electric bills like in north dakota? north dakota is one of those states that has done pretty well during this recession because of its energy sector. what are your electric bills on average? caller: i have electric heat. the only way i can afford it is

-- this is a cold area. not at $2 a gallon. you go all this sort -- all this route and the government needs more money. think outside the box sometimes. that is what these politicians need to do. host: we will go on to new jersey. go ahead, frank. caller: i oppose this idea for the fact that all this scientific information is out. it is nothing but bonn. -- nothing but bunk.

the earth goes through these warming cycles. as far back as we can go about the ozone, the ozone has been on this planet for millions of years. i don't know where they get this idea about the cause. -- about the cars. all the new cars hardly make any emissions. the gentleman who called before me said it right. there is no industry anywhere here. all the jobs are gone. the cars get lower emissions. why are they saying we need to lower the standard harder to meet when it will only cause a hardship on people like us? i don't get it. why are they trying to destroy the country here?

host: one of our viewer says cap and trade is -- allows the derivatives stand to continue. christie's supports this idea. caller: i support it because i feel that the world needs to be a better environment for everyone and water to be fresh. our businesses have gone overseas so that they don't have to have epa, so they don't have to pay costs, but they are polluting the world over there which is growing over us. we need to make it a global thing. host: we will continue talking about the proposed smog rules,

but first some more campaign news. gop tops democrats as records smashed. the overall republican candidates have the edge taking on $49 million more than democrats. that is a reversal from two years ago. the flood of money will fuel an onslaught of tv commercials as the gop tries to capture many seats. roughly 75% of political advertising occurred in the last 30 days of the campaign. it will be a coast-to-coast politics on your tv this fall. outside groups have spent $99 million on tv ads with pro-

republican messages compared to $63 million for the democratic party. we will be talking about independent groups and how much they are spending and rules that regulate disclosure. in other political news, "usa today" says conservatives see all the talent in rubio. marco rubio has 46% versus charlie crist. that is the florida senate race. some see nancy pelosi as a liability. it says that the -- democrats trying to distance themselves from pelosi is getting louder.

at least four house democrats are running ads stating their opposition to our agenda. interest groups. also this morning there are a couple stories with a different headlines about what republicans will do if they take over. the only way the gop can deal a mortal blow is by taking back the white house in 2013.

it says that there had mine is that the gop plan to replace health care is unclear. the wall street journal headline says gop aims to be road winehouse agenda. the repeal of the health care law will be a top priority. we are talking about the epa's proposed smog rules. they will decide on those new rules by the end of october. some democrats are raising concerns about the -- the new rule could save 12,000 lives and save the government the cost of

$100 billion annually because of those health care costs related to small. you oppose this idea why? caller: i oppose it because i cannot afford for energy to go any higher. social security check and they are supposed to give us a stimulus to help us pay, but i never get it. i have a hard time paying the electric. host: indiana, do you support the rules? caller: there are so many people with chronic disease and it is hard for them to breed. i saw that earlier this year where china at that smog over there. >> you can watch this or any part of "washington journal" any

time on our web site. the house is about to gavel in. now to live coverage of the u.s. house here on c-span. with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.] the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's room, washington, d.c., september 20, 2010. i hereby appoint the honorable donna f. edwards to act as

speaker pro tempore on this day. signed, nancy pelosi, speaker of the house of representatives. the speaker pro tempore: the prayer will be offered by our chaplain, father coughlin. kelly: -- the -- chaplain coughlin: they ring truths in the hearts of your people through the ages. they are especially helpful and full of hope for people who are anxious or angry today. you tell your people, "i will judge you, each one, according to his or her way." turn and be converted from all your crimes, anything that may be the case and cause of guilt for you. cast often, distance yourself from all the crimes you have

committed and seek for yourselves a new heart and a new spirit. why should you think of dying? i take no pleasure in the death of anyone who dies, says the lord god. return to me and live. thank you, lord, for always being there for us, especially when we are most in need of your sustaining power and grace . amen. the speaker pro tempore: the chair has examined the journal of the last day's proceedings and announces to the house her approval thereof. pursuant to clause 1 of rule 1 the journal stands approved. the pledge of allegiance will be led by the gentleman from texas, congress hinojosa. mr. -- congressman hinojosa.

mr. hinojosa: i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the speaker pro tempore: the chair lays before the house the following enrolled bill. the clerk: senate 3656, an act to amend the agricultural marketing act of 1946, to improve the reporting on sales of livestock and dairy products and for other purposes. the speaker pro tempore: for what purpose does the gentleman from texas rise? mr. hinojosa: madam speaker, i ask unanimous consent that when the house adjourns today it adjourn to meet at 2:00 p.m. on wednesday, september 22. the speaker pro tempore: without objection. for what purpose does the gentleman from texas rise? mr. hinojosa: madam speaker, i

ask unanimous consent that the gentleman from georgia, mr. price, may be recognized only on the legislative day of thursday, september 23, 2010, to offer the resolution that he noticed on thursday, september 16, 2010, without further notice under clause 9-a-1 of rule 9. the speaker pro tempore: without objection. for what purpose does the gentleman from texas rise? mr. hinojosa: madam speaker, i now move that the house do now adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion is agreed to.

accordingly, the house stands >> pro-forma in the house today, no legislative business. members are back at 2:00 eastern on wednesday with about 40 bills on the calendar this week as well as the small business lending bill approved by the scent -- approved by the senate. the senate gaveled in and they are in morning business right now. they are resuming the fiscal year 2011 defense spending bill. you can watch that on our companion network, c-span2. join us in about 25 minutes for a discussion on the effectiveness of sanctions in iran hosted by the center for strategic and international studies. that is at 3:00 eastern. we will have that life for you here on c-span. trust ussumers don't and we do something to violate their trust, they will not come

back. >> "the communicators" looks at privacy and internet technology. that is tonight at 8:00 on c- span2. >> a look now at retirement and health care for seniors from launching a new group called the alliance for retirement prosperity. the goal of the new group, repealing obama care and what you call obama care and preventing the rationing of healthcare reform and medicare and medicaid. let's just begin with this new healthcare law and its impact on medicare and talk about each of the different provisions and what you oppose about it. so if you look at how the healthcare law impacts medicare, it would increase medicare payroll tax on upper income americans. why do you oppose that idea? guest: it's not only the increase in the tax rates. in fact, it's primarily the two types of cuts, devastating cuts, that will appear on the program. first there's the direct cuts

that are going to come out of the medicare advantage program. but even more important than that is, down the road, fairly quickly, there will be price controls and squeezing the reimbursement rates on doctors and hospitals. the medicare actuary estimates that once all of those are implemented, we're talking about a trillion dollars in cuts over the first decade and $5 trillion in cuts over the first two decades. host: the keyser foundation says that private medicare advantage plans will be reduced by $132 billion over 10 years. some healthcare medicare payments reduced by $40 billion by 2019. guest: well, that's strictly looking at the medicare advantage part. those are the direct payments. the larger result dab and that's part of what -- and the lamminger result -- and that's part of what is zrep active -- they don't understand how devastating the cuts are going to be in terms of the price controls. whenever the government tries to control price controls,

rationing vols invariably. that's an employer val fact. that's what's going to happen here. and so if you take the totality of obama care, if it is implemented the way it is written, it will literally put old people out in the cold, and many of them into an early grave. host: why do you say that, because doctors and hospitals won't see these patients? guest: well, absolutely. we've already seen evidence of this in medicaid. medicaid is broken already. we've seen it in medicare. doctors are not taking as many new patients. they're going to, again, the actuary of medicare, and c.b.o., in fact, has estimated that they will cut reimbursement rates by some 30% in medicare over the next few years. you will just simply see a kind of passive resistance by providers. they wouldn't take on new patients. there will be long delays. there will be procedures that won't be delivered. and that's really the insidious way that this is going to devastate medicare. and it will affect seniors in

ways that are just unimaginable. host: it says the hospital medicare payments would be cut by $22 billion by 2019. it would gradually cloles the medicare prescription drug coverage gap, the so-called doughnut hole. do you agree? guest: well, that is one of several what i call bread crumbs that the administration dropped in front of seniors to divert their attention, sort of a game of watch the brdee. on the one hand, they're giving them new benefits such as this to make an already unsustainable program even less sustainable. they give them free diagnostics. and what's that? that's intended to buy seniors in and to divert their attention from what's going on over here on the other hand, which are these devastating cuts for price controls and rationing. host: the other provision here, eliminate co-pays and deductibles for many preventive medicare services. guest: well, and again, one of the big problems in the entire healthcare system is that we have the system upside-down. we do not have the kinds of

co-pays that give people an incentive to watch how they spend. and because it is a huge entitlement program -- that is the way the whole third-party system operates and what obama care will do is they will simply exacerbate those problems. far from leading to a reduction in costs. what it will lead to is upward pressure on costs, which will then be followed by government edict and rationing to try to get that under control. host: let's go to the first few provisions that we talked about, because you talked about medicare advantage, which is a plan that seniors can buy into to get more coverage. you talked about reducing medicare payments for doctors and hospitals and how you think that will negatively impact seniors' ability to have quality care. some people might listen to you and this idea that you're forming this group to be the conservative alternative to the aarp and say, you want to be a party -- aarp version for the

wealthy. guest: well, in fact, we're exactly the opposite of aarp. let me just talk for a mnlt about the way aarp works and how aarp is going to benefit from obama care. what happened is aarp bought into the huge cuts, and they cut a deal basically with the white house. they would support the cuts, because the way the cuts will be implemented is, as you say, to cut medicare advantage. medicare advantage was an insurance product that about 1/4 of all medicare patients are in now. they like it. but aarp didn't do very well. and all of the movement toward medicare advantage cut into their traditional market for medicare supplemental. and so what will happen is, under the guise of cost savings, it's the old story, the new government plan will drive out aarp's main competitor and create -- and contrary to what the president said, if you like your health plan, you can keep it. clearly that's not the case for seniors. and so there will be probably

half of those currently in medicare advantage who will find themselves drven out of the program. and, of course, what they will do immediately is they will go back to some form of traditional medicare supplement. it's simply a way that aarp feathered its own corporate nest. host: what about responding to criticism that some might have of your new group? it looks like you're putting your message to wealthy americans who may tend to be more conservative. guest: absolutely not. in fact, if you look at the aarp model, what they do currently -- you have to understand the way the model works. they make enormous profits, by the way. they had sales and insurance products of $600 million last year. so it's a fortune 500 company, sort of disguised as a nonprofit, with a very cozy relationship that they got from the clinton administration. they got a special tax exemption from the i.r.s. they pay no income taxes at all, zero income taxes. and what they do is they go out and they'll find a single carrier or single vendor, and they will force that vendor to

pay them huge endorsement fees, and then aarp will put the aarp stamp -- because they are a monopoly. that's really the reason we have this market. they will put the endorsement on, and they pad all of that into their price, and so it doesn't offer seniors a good teal. i'm going to get to your question. let me just get there. host: sure. guest: so what happens is seniors -- and one of the reasons seniors are so disaffected with aarp, they're wise to them now. they're tired of their hard-earned moneys being spent on their left agenda, but they're also sick and tired of seeing that they can get a better deal if they go out and look very hard. and what we're going to do is make it easier for them to find that deal. we're going to take the aarp monopoly pay to play, one size fits all endorsement for one product, we're going to turn it its head. we're building a real-time shopping model for seniors to come in. they won't have to simply take the one endorsement product. they can search and find the product that suits them best, and then our vendors will

compete with each other for our members' business. and so -- host: if week go to your website, they would be able to -- guest: they can see that now. let me ask for indulgence. we have been so swamped and the response has been so gratifying, but on saturday, they literally broke our server, so many people were coming. so please be patient with us. we're trying to put our servers in the cloud that my technical people tell me is important, and we hope we will have that up. but back to your point about a program for the rich, we're conserve tives. we're going to promote a conservative philosophy as an alternative to the aarp liberal philosophy, and that means we believe in markets and bring market pressures to bear. host: you will have the business plan and the same tax incentives? guest: oh, absolutely not. not the same taxes. let me be very clear about this. we are a for profit business.

this is the marvel of the market. aarp is for profit. they mack a very big profit. the difference is they don't pay taxes. we will pay taxes. and so after we earn whatever we manage to earn, our first obligation will be to pay the federal government and state government taxes. we will pay those taxes. now, we will fight like bulldogs to change that tax law, because we think that it's an abomination, no pun intended. i've been using that word for many years t. really is. so we're going to fight to change that and other laws that we think are not good for seniors. but in the meantime, we will pay taxes. and if we do this right, as all good for-profit businesses do, what will happen is, we will give our customers a better deal, the alliance will sell itself, because people will know they're getting wider choice, better products, lower prices, bigger discounts, and they will gladly pay a lower price for a better product. we will be able to pay our taxes and still have enough left over to pay our investors a pair return. that's the way the market

rorks. host: let's get to phone calls here. we have a special line set aside for those 50 and older. that's 202-628-0184. first phone call, bethlehem, pennsylvania. steven on the line for those 50 and older. go ahead, steven. caller: good morning. my question to mr. hunter is this, there is so much going on with the healthcare systems and the competitiveness that you talk about has to be examined. i am a medicare advantage person myself at this moment and enjoy whatever i receive from the health benefits that i consider a reasonable cost. your point about advantage healthcare plans being sabotaged through a new healthcare bill is probably on the mark. host: we got to let you go there. the dog barking in the background is a little bit distracting. what do you hear? guest: well, i was waiting for the question. it sounded like he is satisfied

with medicare advantage, and he realizes that he's going to be looking around for something new, probably a medicare supplemental that aarp offers. host: next phone call. wells, maine, joseph, independent line. go ahead. caller: good morning, mr. had notter. i have a question. i have a brother-in-law that's on the state of maine medicare. guest: yes, sir. caller: not medicare, but maine care they call it. guest: ok. caller: and he received a check from aarp for $600 and some directly to him. why didn't that go to the state or back to the federal government? guest: well, i wish i could answer that for you. i'm not an expert on the various -- certainly not the state-run systems. i will look into that. i'll have one of our experts look at that. but you say that he's getting a $600 check from the state. that's very interesting. i've never encountered that before. what you might want to do is go to our website,

wethealliance.com, we may be able to help include or call the telephone number on the website, and we have specialists that we can route you to. a apologize. i don't have the answer. host: your association plans to lobby congress. guest: absolutely. host: there is a piece in the paper this morning, several different headlines on this, that the g.o.p. aims to erode white house agenda. and the plan so far is for them to go at this bill, this law, on its fringes, not to have money for different programs to remove funding, lower financeding, etc. what do you make of that agenda? guest: well, members of congress have their own con streants and their own strategy. i spent many years on capitol hill, so i appreciate what they're doing. but we're not going to be subtle about this. we're going right at the program. we believe the program should be repealed. it must be repealed before it begins to take effect, because once it gets its tentacles into the system, it will be very, very difficult to dislodge. host: you don't think this is

enough? guest: absolutely not. we need to repeal this. what we need to do is obama care is exactly when they did when mr. rostenkowski was still chairman of the ways and means committee and passed long-term healthcare back in the 1980's that seniors rose up and rebelled against. we need to send a very clear message to both parties that we don't want this law to go into effect. we need to repeal it. we need to go back and start from scratch. and by the way, i know there's a lot of talk by republicans about their slogan now is repeal and replace. the problem is they don't have anything to replace this with, and that's just fine with me, frankly, because the system as it exists has problems, but there was no you are general simple the administration jammed this thing down the american people's throat under a false sense of urgency. we need to repeal it. and then step back and figure out what you're next step is. we don't need to have some new social scheme coming out of the republican think tanks. that's the last thing we need.

host: today in "the wall street journal," obama's tax healthcare law and election push, parts that have law go into effect this week, and kathleen sebelius, the h.h.s. secretary, sat down with c-span this past weekend for "news makers," talked with one of the reporters. janet quotes her in this story, if you want to see that full interview, go to our website, c-span.org. california, jeff, democratic line. good morning. caller: good morning. there's so many things that he said that i need to address, so i'll just try to keep it simple. as a conservative, or republican, it's always about the process. host: profits. caller: the profit. to start a business. now, people who have profit as their motive should be in the field of healthcare. host: ok.

lawrence hunter? guest: that is the usual liberal complaint. first, i must set something straight. am a republican. i spent many years as a cog in the republican machinery. but the alliance is not republican. and if the gentleman would just check on my history, some of my worst critics are republicans, because i've given the republicans a hard time -- the republican party a hard time. so we are not partisan. we don't have a pact. we don't support candidates. and we will criticize whomever. host: it does sound like you want to be the conservative alternative to aarp, because they're liberal. guest: absolutely. but we do not believe conservative and republican are sin ominous, no more than we believe the word democrat and liberal are sin ominous. and what we're trying to do is i think the people of this country are beginning to rise up. it's a slow boil now. you're seeing it in a variety of different manifestations, the tea party being one of them. you can see when you read the paper, your viewers know this,

the republican party has huge if she you'res within it. host: so was that part of the motivation here, you saw an opportunity, you're tapping into that anti-obama sentiment out there? guest: it's not only anti-obama, it's anti-government sentiment. it is this feeling that the system has gotten so overbearing that people want more freedom. they want more choice. they want more flexibility. and i spent -- and i'm going to get back to your viewer's question. i'm not going to forget that. but before that, i want to go -- i spent almost a year out on the road during the obama care debate. i was going to small towns across the country i did not even know existed. and what i saw is i saw people turning out at events, town hall events, rallies that were being put on where i was speaking, and people know something is wrong. and they're rebeling against it as americans always do. and one of the things i heard over and over and over again was that aarp is nothing but an

extension of the white house. it's nothing but an extension of the democratic party. and people kept asking me, isn't there an alternative to aarp? and, unfortunately, at that time, i had to say no, it's a monopoly. there have been efforts over the years to try to provide an alternative. but the reason in the past it never worked is precisely because lack of a profit motive, ok? aarp pretends to be nonprofit. it has a huge profit. the conservative movement has always tried to fight that with nonprofits. we decided, we're going to do this the old-fashioned way. we believe in markets. profit motive is what gives entrepreneurs and investors the incentive to go out and create something, and it's then the competition for profits that gives customers good deals, better choice, good profits. host: so the alliance for retirement prosperity, you launched last week. you have a $5 million budget.

as many as three million age 15 and over are invited to join. 20 strategists, ability to lobby congress, and you have an annual fee of $16. let me talk about your $5 million budget. where did you get the money forethat? guest: yeah, this is interesting. it's like the game of telephone that your kids play. the $5 million figure is the amount of money it took to put this thing together and get it launched. we don't know how much money we're going to need to market the thing, but one thing we've recognized is the response has been so great that we will be able to raise whatever money, if we have to go back out for a second capital raise, we know we will be able to raise enough money to do the marketing that we need. because it's now very, very clear to us, as i said earlier, the alliance will sell itself. so the question is, how much money do we need to get the word out? it's very spnssive, as you know, to get the word out, and so it's a question -- the $5 million was spent building -- we've been at this for a year. it's been spent building the infrastructure. it's a very complicated

arrangement to give people the ability to join an organization , to be able to shop all lines of insurance in real time, to be able to track discounts. this is another big difference. not only do we offer discounts on big national brands, more, by the way, than aarp does, but we also have a discouldn't program that allows you to go in, put in your zip code, and find out what local merchants are offering discounts. host: who are your investors? you went around, you got some capital. guest: we did it the old-fashioned way. we went out and did a private placement offering, and i'm proud to say our investors are small business people who, leak us, tend to be conservative, and they're tired of the direction the country has been going in. and for them, it's an investment because they believe they will get a fair return. but they also understand they will get a much larger return than just their financial return. we will finally bill something to compete with the unions and

aarp on the conservative side. host: so if people went to wethealliance dodd tot, would they find a list of your investors? guest: just like apple, i.b.m., our offering is regulated by the s.e.c. we have privacy issues -- i'm proud to say i'm an investor. you go to the website, you will be able to see the management and their investors. but we don't disclose the name of our private -- but i can tell you you wouldn't recognize the names anyway. you know, they're not the big names. they're small business people, and we're very proud to have them. host: back to phone calls. west chester, new york. matt, republican line. thanks for waiting. matt? host: hi, good morning. my mother is on advantage, and she has chemotherapy right now. she's just barely making it. she's a retired nurse. she's not wealthy. but i want to know, how is she supposed to pay the bills if under obama care they're really cutting her advantage, and i'm a middle class guy, too. i want to know, the aarp says we don't have to worry about

this. if they do immigration reform, do we have to foot the bill for people that are giving amnesty under part of the obama administration's plan? host: i think he's talking about the healthcare bill. guest: yes. it's not clear to me yet what kind of immigration changes may occur, but we can make some educated guesses based upon what we know is going to happen from the plan. one of the things that has so disturbed me about the plan is they're going to expand, i think by $25 million, my number could be wrong, but a very large number, the number of young people they're going to bring into medicaid. and so what that's going to do is it's going to -- and that's the reason they've cut medicare as much because they want to pay for this influx of younger people to medicaid by cutting medicare. now, back to your point. if some kind of new immigration plan does happen to open the doors to more individuals than currently would happen, my guess is they would come in through medicaid and they would

put that program under even more stress, and so the cuts to medicare would be even greater. that's the dynamic they've set up. host: akron, ohio. jim on the line for those 50 and older. go ahead, jim. caller: yes. i'm over 50, so i remember the time when we didn't have medicare at all, and medicare has been a wonderful program for our seniors. early also that people like yourself saw that big pot of money out there and wanted a cut, and so you came up with this private insurance medicare advantage thing. but to get people enrolled in that, they said to get the insurance companies interested, they got to have 115% of the cost of what was normally paid for medicare. and so that enticed the insurance companies, which could do a much better job at lower cost and still were paying 115% of the rate for a standard medicare patient to this insurance company so

people like you can get rich. and also, you're just a straw man for the republican party, because once the elections are over, i imagine this little alliance program disappears. host: mr. hunter? guest: well, so much to address there. let me go back and say i'm not a prison man for the republican party. some of my biggest critics happen to be republicans. we are nonpartisan. we don't -- we will not have a p.a.c. we don't support candidates. we are equal opportunity critics. your viewer sounded pretty informed. it sounded like he was probably reading off a list of talking points. all i can say about medicare advantage is it's very popular and people have voted with their feet. as i say, a quarter of medicare recipients are currently in it. it's a very popular program. it seemed to be working quite well. now, let me just say something about medicare. i know it's popular today to cast personal aspirations on people and question their motivation.

the alliance believes that medicare and all the entitlement programs are unsustainable as they're currently configured. but people have worked their whole lives believing that those programs are going to be there for them. they have paid taxes on the basis of, i'll pay taxes today to provide for today's seniors, if, when i retire, somebody else pays taxes to pay for me. and so these programs are unsustainable. they're broken. they need to be fixed. and one of the things we are going to work very hard to do is to fix those programs. but you don't fix the programs by taking a hatchet to them. and it's ironic that -- this president, i must say, is a master at watch the birdie. and he attacks, attacks, attacks with the same accusations that he is doing, on the other hand. so he accuses -- and harry reid, for example, accused the republicans of wanting to gut medicare.

well, they've already gutted medicare and obama care. i don't say that because harry reid is a democrat. i say that because they're simply making untrue statements, all the while they're over here trying to cut medicare. so these programs, we will fight to the bitter end to prevent any political party from cutting these programs out from under current retirees and baby boomers who are soon to retear. but we will work at the same time to reform these programs for younger people, because tomorrow's retirees will have nothing to turn to. they will pay taxes their whole life. these programs will collapse. host: does that include raising the age for social security? guest: absolutely not. that's a great idea if you're a bureaucrat i can pencil pusher white house never worked a hard day of labor in their lives. i'm afraid you're going to see the obama debt commission come with this idea. there again, all the while saying republicans are going to destroy social security while they're talking about shoving the retirement age up above 70.

many people, by the time they have worked on construction sites and factory jobs their whole lives, are ready to retire by 65. but this brings up another very important point. if you think about it, any grand social program that dictates a single year for retirement, you know it's one size fits all. why should the federal government determine when it's time for somebody to retire? part of the reforms of social security and medicare should be to embed the mechanism of choice. give people the choice. let them decide when they're going to retire, and make the program such that it is not a handout. it's a program whereby, throughout their entire working career, they can prefinanced their own retoorment, and so they can decide when it's time to retire. host: david in indiana. independent line. go ahead. caller: hi. can you hear me?

host: we can. you're on the air. caller: great. this guy is good on his feet. i got to say, i'm not speaking with any talking points here, but i am a union member for 33 years. i'm not sure what world that you live in, but in my world, in 1998, we would pay just about $300 for really good health insurance. in your statement that there is nothing that needs to be done with the healthcare system is just wrong, because today, a retiree is going to pay just under $1,400 for that. i would say that's a rather large increase. so my question -- that's just a comment. my question is real simple. i want to know what my subsidy as an american taxpayer is today for every medicare advantage person that's signed on to that program. guest: before i go to that specific question, let me just say that i did not say -- and if your viewers interpreted

what i said was we don't need to do something about the healthcare system, that's just flat out wrong. something is wrong, and i'm going to go in a minute to what we believe is wrong. what i said is there's no urgency. the system is not ready to collapse. it's important. we need to address it. .

guest: the primary reason for that is that over the years government has become more and more involved in health care. they have become more involved in regulating. state legislators, have become more involved. one of the big drivers in insurance are all the mandates that states have put on insurance policies. now we are seeing it down on the federal level. it will drop -- drive insurance levels even higher. do you want a high deductible? do you want catastrophic coverage? give people a choice. that is what people are clamoring for. they want choice. host: kristie on the democratic line in florida, good morning. caller: from a nurses perspective, i have worked in the medical environment and a

lot of people have changed over to medicare advantage. what they're not telling people is they are getting out of their medicare for some cheap medicine, but once they have a stroke or something and, they are not paying for any kind of care for them afterwards. these advantage programs are not paying for them to go to any type of nursing home or we have center. -- rehab center. our problem is that too many of them are coming to it and nobody is asking doctors or nurses anymore. please, read your >> live coverage begins now on c-span.

>> the address today is time after what i would call a "summer of sanctions." we are debating the tools we have to a fact i ran's nuclear calculus. nuclear calculus. it is a to do to start that the obama administration and secretary geithner asked him to stay on in this capacity that he served for the bush and ministration. in this role, stewart has been a trailblazer overseeing regulatory sanctions hurting him at the center of most of the major national kick -- national security challenges from terrorism, proliferation, sanctions by the ron and north korea. -- iran and north korea.

he served as the associate principal director for the deputy attorney general on all things counter-terrorism. before that, he was a partner in a washington law firm and an alumni of the core of distinguished clerks for judge silberman. he is what we call a two-time offender graduating from harvard college and harvard law school. not a bad club to be a part of. we are privileged to have him here today. he is a dedicated public servant who was -- his words, deeds, and more is known for the impact of his work. more important is the true gentleman. i count him as a close friend.

i am honored to host him here today. we will hear from stewart. his remarks will be posted immediately on wwww.csis.org. with that, i would like to welcome undersecretary stuart levey. [applause] >> thank you for that introduction. thank you for coming. it is an honor and a privilege to be here at csis. this is my first visit here, but if i had non that i ever get that type of the introduction, i might had come sooner. i want to offer special thanks for coordinating today's event.

when he served on the national security council and was running our counter-terrorism operations, his innovative thinking and leadership for a driving force behind many of our critical national security strategies. before that, he was at the treasury department as the first assistant secretary for financing crimes. he was my partner in 2004 when we created the office of terrorism and financial intelligence. i think it is fair to send that he was perhaps the visionary behind the creation of that office. if there is truth in what he had to say, is that he taught me so much when i was there. i am here today to address is skepticism that we encountered

when we were at the treasury department in 2004-2005 which is that foreign policy officials often question the effectiveness of sanctions. what i would like to explain today is how sanctions can be effective by which i mean they can create leverage for our foreign policy goals. i would like to lay out how that is what is happening right now in the context of the ron -- iran. this audience is already well versed in the challenges we face in trying to prevent them from supporting terrorism. as we know, they've failed to respond meaningfully to the office of engagement and has continued to defy multiple

security council resolutions. while the offer of engagement still stands, they have therefore been forced to put additional pressures on iran. the choice is between integration with the international community, fulfilling international obligations, and further obligations. when this and illustration embarked on a policy of engagement, we recognized that they were pursuing the finance. this involved in developing a dynamic that would is a lateiran -- isolate iran from the international and commercial systems. as secretary clinton said, they

are not an end to themselves. they are the building blocks of leverage. by isolating them financially and commercially while capitalizing, we can capitalize. the strategy we are implementing can and will create leverage. there are three principal reasons why this is working. first, because the strategy we designed targets and we have been able to attract committed precipitation -- participation. second, this coalition now has the tools they need to impose more sanctions. the administration worked diligently with our partners

during the negotiation of security council resolution 29 to make sure measures were taken around the world. third, this comes at a time when iran is ball rolled -- is of all marble because of their narrow political flexibility. it is not just my prediction that it can have significant impact, but it has begun to do so. the measures u.s. and others are implementing are causing strains. we believe their leadership is caught off guard by the speed, intensity, and scope of the measures misjudging the strength of the community's will. the contrast between 2005 and today is [unintelligible] iran had access to financial services from the world boxing

most tedious -- world's most prestigious bank. today, they are unable to create major transactions in dollars or euros. this is no longer limited. almost daily, we receive reports of firms around the world deciding to pull out of business deals with them. dozens of companies have announced they have curtailed or eliminated business ties with iran. iran is increasingly unable to secure financing and technology to modernize their aging in -- energy infrastructure. because of new sanctions legislation, they are having great difficulty importing

refined petroleum. they have found international insurance companies are refusing to cover their ships and shipments. they're struggling to mitigate the sanctions. they're turning increasingly to the military vanguard that has long been involved in their terrorism and missile programs. this is likely to exacerbate their isolation as companies around the world are beginning to shine all business. we are already receiving reports that the regime is quite worried about the impact of these measures, especially on their banking system. as pressure increases, so has criticism for failing to prepare adequately for and national sanctions and underestimating their effect. even while pressure is mounting,

the strategy is beginning to give us the leverage we seek. i like to tell you about how we designed the strategy we are following. as we planned to pressure them, we decided to use in target -- and target illicit actions. this is more effective than anbar go -- embargo. other governments are more inclined to take complementary actions. it is difficult for any government to oppose such actions. even more significant, the private sector has great incentive to participate. the often acted beyond their

strict legal requirements in order to avoid. designations by the department of foreign assets control apply to assets under their jurisdiction. we have found that many banks and businesses all over the world cut off their his dealings with designated targets giving our unilateral action of a multilateral effect. that is self-perpetuating as more banks cut off the targets. the reputation of risk increases for those who don. this creates a ripple effect to amplify sanctions. once the private sector cut soft those targets, governments often find it easier to do the same. the result is a mutually reinforcing cycle of government and private sector action that isolates the actors from the legitimate system. this puts tremendous pressure on

the targets and promotes the financial system. banks are at the heart of the strategy for two reasons. there are the lifeline of international commerce. it becomes difficult to perform transactions on a scale that a country like iran needs. getting a bank to cut off an actor, the rest of the commercial sector is affected. financial institutions have regulatory obligations and a cultural commitment to maintaining the financial system with the established concepts such as it did diligence and understanding the nature of their transactions. while not all banks have on blemished reports from their responsibility for overseeing the financial system. we have been able to develop a

dialogue all over the world about the particular threats they face. they are able to engage with us about mitigating that risk. that makes the private sector portion of our strategy worked. prior experience also told us to expect that they would engage in deceptive than dishonest conduct to get around whenever sanctions were imposed. resigned to create a sanctions program that makes them more to our vantage. it is a common practice to conceal involvement in the transactions by stripping their names from transactional document. non-sanctioned banks have stepped in to further stop sanctions of other banks. this is a case [inaudible]

this had previously been designated by the u.n. and the united states. it was set up for transactions and would carry out transactions in a way that banks would not know that they were involved. as a result, they designated post the bank for helping [inaudible] the vague sanctions. the deception is not limited to banks. in the shipping industry, the national maritime carriers, which we designated for proliferation in 2008, has employed companies, renamed their ships, and changed the ownership of their vessels. this catalog of deception has now been exposed. to date, there have been 28

front companies and have identified more than 100 ships and has been the property of that company and their friends. the more we expose their evasion practices and we have taken action against those who have cooperated with iran including several major european banks, the more we do that the more the private sector has become wary of conducting business with any iranian entity or those acting on their behalf. and as those in the private sector are unable to distinguish between their legitimate and illegitimate transactions, the often cut them off entirely. in this way, this is further increasing isolation. beyond the design of our strategy, the second factor working in our favor is that more countries around the world are willing to take strong actions.

the most important development is the u.n. security resolution 1929. resolution 1929 contains a range of strong provisions. this calls upon member states to prevent of financial services which include banking, insurance, and reinsurance. they could contribute to their nuclear or missile program. the language of these provisions provides a legal basis for countries to take very strong measures. given the strong public record regarding their illicit conduct, virtually all transactions or services involving them could contribute to their nuclear missile programs. we pushed hard for these provisions his they feed into the broader strategies that i

outlined before. we also worked extensively with our allies, both before and after the negotiation of 1929 to set of follow up actions to robustly in, the resolution. what we have seen so far is exactly that. the sanctions imposed by the eu include restrictions on their energy, financial, trade, and transportation sectors. the financial measures adopted by the eu are particularly forceful. transactions of more than 40,000 euros generally cannot of course absent authorization. the eu even for have been the establishment of new corresponding bank accounts by iranian banks. they banned the provision of insurance or reinsurance to the government or any iranian entity. they also first the assets of more than 100 entities and individuals including most major

state-on iranian banks. austria, canada, japan, south korea, norway have all taken a similar the robust approach. under the leadership of those countries it is crucial that others who follow will now look to their precedent. there's a strong and growing international consensus to hold them accountable for their actions. meanwhile, the united states has taken several actions of our own this summer, as indicated, adding substantially to its sanctions program that was already the most rigorous in the world. since the adoption of 1929, we have targeted more than 50 additional entities. bank said, -- banks, irgc officers. we identified several which have

names that obscure the affiliation thus aiding companies around the world. congress gave us another powerful tool by passing the comprehensive iran sanctions act. it forces a stark choice. if you conduct certain business with them, you cannot do business with the united states. it contains significant sanctions on companies that assist iran in acquiring refined petroleum products. and also requires the treasury to prohibit or impose strict provisions on any foreign bank that facilitate significant transactions or significant

financial services to either the irgc or any of the banks the united states have sanctioned for participation in their weapons of mass destruction proliferation or international terrorism. as of this month, there are 17 banks as we recently designated an iranian-owned bank in germany which was one of their few remaining assets of access to the european financial system. this provision is already proving to be very powerful. the possibility of being shot out of the u.s. financial system has compelled financial institutions that had all -- that had not yet already cut off these banks to rethink those decisions. shortly after it became law, and i received an urgent message from a bank executive about their significant dealings with iran.

he wanted to let me know that they resolve to seize all for the business with iran and institutions immediately. i can tell you that his bank is not alone. this brings me to the third reason why these measures are working. the song comes at a time when they are vulnerable to pressure. and in the economic sphere, they are having trouble getting foreign investment, particularly western. despite the fact that they sit on one of the world's largest oil and gas reserves, their production has stagnated. their medium-term production capacity depends on their ability to attract foreign investment. the oil minister stated publicly in the late 2009 that they were not attracting the investment and needed to prevent a decline in production. even before the recent round of sanctions, their investment

environment was gramm. now because of the new sanctions and because of the unwillingness of banks and insurance companies along with major energy companies to undertake projects their, their investment landscape is even more bleak. as a result, they're losing access to the much-needed technology they need and will only face continued stagnation which could have long-term political and economic consequences as they struggle to create jobs for its disproportionately young population. unemployment is clearly -- currently over 14% even according to unreliable government estimates. their parliament has claimed it as high -- is as high as 22%. this poses a particular challenge since people under the age of 30 account for three out of every four on avoid iranians. -- on lymphoid iranians. it's an ability to create sufficient jobs is an example of the economic mismanagement.

they continue to suffer from high inflation. while reliable numbers are hard to come by, we believe the current rate is significantly higher than the official iranian claim of about 9%. in addition, the iranian banking system is unhealthy even aside from its devastating effect of sanctions. just a couple of years ago, the leadership forced iranian banks to make loans at interest rates significantly lower than the inflation rate from the resignation of two central bank governors. state-owned banks also made excessive credit available to politically connected elites who then often failed to repay those loans. as a result of such for lending decisions, the iranian banking sector suffers from a very high rate of non-performing loans, approximately 20% of their total assets. in addition to undermining confidence, such practices feed in to the reception that their banking system is rife with

official corruption and cronyism. because of the leadership, they are fully positioned to respond to sanctions. as did leadership tries to formulate a response, they are faced with unappealing choice is. for example, because they are encountering difficulties in acquiring gasoline, the government is seeking to find ways to reduce its demand for gasoline. one obvious that would be to reduce the subsidies that make the price of the pump 42 cents per gallon. they announced they would reduce subsidies on gasoline and other items by but $20 billion. the subsidy cuts were delayed last week once again, most likely because of concerns about public backlash. the name of a body claimed this may and in severe political disputes. when they raised gasoline prices and instituted monthly rations in 2007, writes for a cut across the country.

because of concern about anchoring the populace, their leadership is unable to take the steps to mitigate sanctions thereby making our measures even more effective. because of all the pressures they face, the iranian government is increasingly turning to the irgc for key economic progress. this trend mashes purposely with our conduct-based strategy since it is hard to imagine a better sanctions target than them. we have sanctioned them since 2007 because it actively supports terrorism and has been involved in leave iranian proliferation activities. they also led the crackdown in protesters after the june 2009 election. they have turned over major projects often tercel source contract. these include major metro contract from international airports, and a large and the

structure products. they have turned to them to try and develop their oil and gas industry. for example, because they cannot find a suitable form partners to develop phases of this gas field come and give the opportunity to their major engineering firm. they lack the capability to develop the project, which is sort of obvious, because they have the capability it would have been handled that way in the first place. they sought to find a suitable form partners. however, after they were designated by the united states and by the european union and finally by the united nations, they were forced to withdraw from the product. using this to fill the investment gap will only make matters worse. as we have seen time and time again, including in the previous example, responsible businesses are unable to deal with any

entity affiliated with the irg c. they have now is in the most of the companies but as well as their senior officials for a clearer frazier. the eu and united states has designated them in their entirety. they're going control over large segments over the [unintelligible] the reliance on the irgc will impact sanctions and exacerbate the existing tensions between the government and the people of irna. because of the way we design our strategy in the have the broad coalition of tools to use and because iran is vulnerable, the strategy is working to provide the leverage we need. in the and, you do not have to take my word for it.

last week, the former president publicly warned leaders to "take the sanctions seriously and not as a joke." diyala says said, "we have never had such intensified sanctions and they are getting more intensified every day. whenever we find a loophole, they, the western powers, will get." the goal is not to harm the people, but rather it is to influence the calculation of their leaders. until they agree to abide by international obligations, on the board president's thoughts will only continue. thank you very much. [laughter] -- [applause] >> wii now open the floor for questions and answers. we have people with microphones,

i believe. ok. identify yourself if you have an affiliation. cut quickly to the question. i know we often want to comment and have a windup, but it to the question quickly. with that, let me ask the first question, stuart. thank you for the comprehensive address. we often hear about the role of china and russia as commercial financial of outlets for countries like iran or north korea. just today there was a raiders peace about the role of turkish banks. -- there was a reuters piece about turkish banks.

>> as i think it is obvious from what i said, we need to make this a global effort. in that regard, we are already on her to do that. it is not just passing a u.n. security council recommendation that it is getting the private sector dynamic working. we have been traveling around the world, the treasury department, state department traveling together, to do just that. we have visited turkey already. we have engaged with them on exactly these issues. one thing we are finding, which i think is dramatic, is that because of the environment with respect to iran, the private sector is reacting very positively. in turkey, it is no exception that the private sector is quite aware of the risks they face

with respect to dealings with iran. financial institutions are quite aware of the risks they face under the law. they know if they're going to do significant business with these designated entities, especially the iranian state on the banks, that they could find themselves where they have no access to the united states which is making the conversations, i say, go in a certain direction. >> the most recent security council resolution mandated an extra committee to the get the questions of how to better enforce the u.n. sanctions. i and the standing committee made them before. what issues would you like to see the group love that? what would be your rise to that group on the things the u.s.

government would be eager to cooperate with them on? >> there are probably lots of issues that my colleagues in the government will help me identify in addition to what i can think of off of the top of my head. we have seen, in the context of another resolution with north korea, a very effective group that was identifying violations of the security council resolution and reports back to the council. and gives us, and other countries, the ability to take action. the more that sort of work, and in addition to the other things that can do, that is one thing i think is quite effective because the security council resolution needs to be implemented. it is important there be some consequence for violation. and experts committee can be one

tool that can be effective in helping that come about. by the way, i think you are right that this committee is being formed and i know we are really the process of getting that set apple. yes? >> thank you. norman bailey, and two of world politics. i want to congratulate you, secretary, for the excellent work queue in the department are doing. i am asking lead a situation which can be illustrated where i iranian banks have been sanctioned but venezuelan banks that are used as condiments for the iranian banks have not been sanctioned. -- are used as conduits for the iranian banks. i was wondering if you're looking at other countries? >> that is a terrific example of what they do and an excellent question. what is new in this statute is

that financial institutions that do business with banks that we have already sanctioned, and as he indicated, there is a bank in venezuela we have indicated for. subsidiary of the export bank of miron -- iran. other banks that do business with them stand the risk of being cut off by the u.s. financial system. that is something we will be the king and going forward. we have an obligation to issue regulations under the new law which we did in august. we are now in the position to do exactly what you have mentioned. >> please come up to the microphone. >> i am with the erasure group. with the press reports that they are having trouble selling their oil and getting insurance on ships, can you corroborate that?

is it a goal of the u.s. to deny them their ability to sell oil? in other words, are we working on a back door oil blockade? >> i have seen similar reports. there have been some complications in terms of inability to obtain letters of credit and other services that have complicated this issue for iran. that is directly part of what i was talking about. it is not part of the policy we are pursuing to try and prevent them from selling their oil. it is our policy to try and make sure that whatever transactions they engage in are scrutinized very carefully. this is to make sure there is no illicit aspect to any of those transactions.

that has made the insurance companies and financial institutions resisted doing this business at all because they are worried about being caught up in this deceptive conduct that they have made a practice and in -- of engaging in. >> i am with the national foreign trade council. you mentioned the eu sanctions and their robustness. i note in the e restrictive master -- measures there is an exemption for humanitarian trade. there is a statutory exemption continuing for humanitarian trade which is licensed under the office of foreign assets control. are there similar explicit exemptions on the financial sanctions? >> excellent question and i think it is important to point this out.

not just as a matter of the use sanctions, but as policy, we are not trying to cut off humanitarian trade. as the questioner points out, it is even permitted and specially licensed under u.s. sanctions which are already the toughest sanctions in the world. we have humanitarian exemptions. it probably will not surprising that as i travel around the world, this is one thing people want to talk about. they want to talk about how we will be able to make sure medicine, food, and so forth continue to get into irna. -- iran. most have led to being set up with this can happen. that is consistent with our policy.

>> i am from the carnegie endowment. in the past, a lot of trade has gone through dubai. how satisfied are you with actions taken in by? is there anything else you would like to see them do? >> i have been discussing this issue with the united arab emirates for a few years even. i had a really detailed dialogue with them on this issue. i think the uae has now indicated publicly their concerns about the possibility of a nuclear armed iran and taking the issue quite seriously. i'd think all indications of how right now are and that we will see substantial cooperation and we will be very -- and they will

be very advantageous to the global effort. the uae, on the one hand as i think you know, they have a great deal of historical ties with familial, cultural, and trade ties with iran and therefore they have a shoes to grapple with in respect to how to adjust to the new sanctions and especially the sanctions that are and posed by our congress. -- imposed by our congress. i think they are taking very strong steps to ensure they are acting consistently with the global trend. they also, of course, want to be seen as a global financial and commercial center. making sure they are protecting themselves against the kind of illicit conduct i have mentioned is important also for

their long-term business interest. i think that is something the authorities in the uae are recognizing increasingly. >> over here. >> thank you. i am from the human rights watch. i went to commend your office for taking the song. it is obviously a huge undertaking. in light of that, i wanted to know, do you feel you have the needed resources, financially and the manpower, to really do this well and comprehensively? as a follow-up, how does that affect your ability to implement similar sanctions in the other countries less profile than iran, like burma? >> that is the nicest question one can get. we do have the ability, i think, to do more than one thing at

once and beyond the resources to do it. every organization prioritizes, but i do think we are able to get to all of the things that are important to our foreign policy in terms of enforcing our sanctions. you are right to point out that we do the things we talked about with iran but we have a wide variety of other responsibilities including import sanctions programs with burma. i do think we feel that we are able to get the job done. >> thank you. i am from "the turkish daily." i would like to ask you but the turkish government's position on the sanctions. they said they are fine with it and will apply, but not the

unilateral sanctions. recently, the turkish prime minister stated that the trade with iran might triple the amount it is today. are you concerned about the turkish position? >> one has to look at those kinds of statements and a look at them of some concern. as i indicated in response earlier, the private sector in turkey, i think, will look at things and make decisions for themselves about what business they want to handle. thus far, i think they are reacting in a way that is consistent with the rest of the global consensus in terms with being quite wary about business with iran. i think it is important to note what you said in a your

question. while turkey did not support the council resolutions, the have indicated they will implement the resolution. of course, that is an obligation of all u.n. security council members. i think there are steps that can and will be taken to ensure that kind of implementation is ongoing. we have already had our first set of conversations with the turkish government after the security council resolution. someone from my office was in turkey meeting with officials and discussing the implementations of the resolution and the implications of our laws for the private sector in the turkey. >> good afternoon. i am for it -- i am with the persian news network. i have spoken with some small-

business owners in the united states and their concern is that sanctions target people like them and their ability to put food on their table with their families rather than the government or military. what would you say to those people? >> it is always a challenge when you are designing a sanctions program. you want to have an effect on the particular target, here being the iranian government and the institutions engaged in illicit conduct. we try to shape our sanctions to have that effect. we do the best we can. inevitably, there are some unintended consequences. by continuing to focus sanctions on the targets that engage in illicit activities we have to mitigate that as much as possible. similarly, by focusing on those targets we hope those that are

inadvertently inconvenienced by this measures understand that it is the conduct of the government that is causing the inconvenience to them. it is never an entirely private enterprise. i think we're much better off by having a sanctions program that is designed that way which does focus on institutions like the irgc. i think it is much more -- it is easier for those who are inadvertently inconvenienced to accept that when the sanctions are structured that way. >> i am from the woodrow wilson center. there is overwhelming evidence that the sanctions are hurting. and this is an almost unique regime in the sense that it can

absorber payne gained almost welcomes being under siege. in the end, the sanctions will not hurt the right people sufficiently to make them change their mind on the nuclear question. >> i think that is a very important question and one which no one knows for sure the outcome. i do think represent -- i do think that the hypothesis is that there is no way to impose pressure in a way that they would never make a change or start down the path of making changes. i guess one has to question that. we do question that. we think history has shown that there are ways to effect the calculations and that we can create a cost-benefit analysis

that can make a change. that is the intention we are pursuing by increasing pressure. >> i am from the center of naval analysis. mr. levey, i question about in formal banking. elicit iranian entities may be relying on networks to pass money. any intent to monitor these activities with our partners? >> two things. on the one hand, of course we are looking at all ways in which transactions are occurring. if we get information about illicit activities that are handled outside of the formal banking systems or other entities, we try to follow-up on those.

the second point is that iran may be able to do certain transactions that way, but it is not a replacement for what they are losing by not having access to the global financial system and the formal banking system. on the one hand, of course we will follow up on that. on the other hand, if it is happening is not -- it does not render the effort effective. -- ineffective. >> let me ask a question from a purely financial perspective which is often the elucidated in these discussions. at the same time the policies work -- the sanctions were intensified, they were up 40% through the end of august.

they managed an international bond. iranian officials are making a major presentation at a capital markets conference. presumably, some of this interaction is non-governmental and purely commercially related and economic policy oriented. we want to encourage that. is there a danger that intensified sanctions are to lot side and it will deliver a fact of this type of activity? -- sanctions are lopsided. >> there are several types of activity. what i hear in your question is that there are lots of statements being made about things happening with then -- within iran with the sale of bonds. one has to be cautious about accepting that which is said. sometimes it is true and

sometimes it is not. we have seen, for example, lots of deals announced to develop projects within iran and nothing ever comes of them. it is not clear there's always substance behind them. >> i am with the national foreign trade council. the ratcheting of the sanctions program against iran has been a continued effort to engage them in discussion of the nuclear program and other matters. can you tell us a bit about how these two things are calibrated within the administration? how the character and the stick need each other and deal with each other? -- how the carrot and the stick need each other? >> as i think people know,

president obama came in office and made the offer of engagement. he made it without pre- conditions and so forth. iran did not take the offer or respond meaningfully. it is our policy and it remains our policy then there is not a contradiction between engagement and pressure. we can do both at the same time. they could have had engagements at the beginning of the administration under conditions that were less pressurized, but there is no indication now that we are withdrawing his offer of engagement. rather, i think the secretary of state made it very clear in comments just today that it is still very much our desire to have that kind of engagement even while we're taking steps to hold iran accountable for their

international obligations. >> i am from the korean national trade association. the distinctions are not going to the fact -- effect iran only but others including career and businesses. how long do you predict the sanctions will stay in place? under what circumstances would you consider the sanctions to be lifted? thank you. >> i should first express appreciation. i know secretary geithner and secretary clinton already talked in public about when correa adopted their implementation of the u.n. security council resolution 1929 which were quite robust measures. i think it applies than they were robust measures taken in a situation where there is ongoing

trade between south korea and iran and therefore there is a sacrifice. the fire were to give you an actual time limit, i think that would lose my credibility. there is no way i can answer that question by giving you, "it will take this long." one thing i could say is that one has to think about the cost of the alternative. there is no doubt that everything i described today is costly. all of these kinds of measures are costly in a financial sense. but, compared to what? they are not costly necessary compared to the implications of a nuclear-arms iran.

that may of solace for those particular businesses, but, in terms of making policy, we have to look at those. >> it is good to see you both. my question relates to this statement you made. this has proven to be a better way to build a broader coalition and to target a country. i am not disagreeing with your statement, but the united states does have a trade embargo that targets the entire country of iran, as you mentioned. it is a very broad trade in

cargo, perhaps one of the broadest that we maintain. i wondered, the implementation of the statement seems to me that it is difficult to build a broad government coalition for a trade embargo that targets an entire country. if that is the case, what is the plan of the u.s. government to try to build such a coalition? if there is not an intention to do that, perhaps it would be helpful to articulate the rationale for maintaining an embargo despite the difficulty of building such a broad coalition. >> that is a good question, peter. you're right. the implication of my statement was that it is more difficult to have a broad country-based embargo.

it is difficult to build a coalition with governments because, unless they agree with you on both the political path you're pursuing and the urgency of the problem and the sacrifices you're making them to make. and the private sector is less likely to go along with you because those measures cannot help them to elicit -- do not help them to find illicit activities they should stay away from appeared they made here to it because they may be scared to be caught not adhering to it. but they have no incentive to amplify the measures. so they do not. they will go along with it, but they will not amplify. having said that, the trade embargo that you're referring to has been in place for a long time.

without making policy from the podium, which is not usually a good way to keep your job, one would have to imagine a situation where we are going around the world asking for sacrifice, asking for sacrifice, asking for sacrifice from other countries. the suggestion would be, meanwhile lifting a trade embargo so that our government can go in and take opportunities that we are asking others to give up. that is not likely to be tenable. i do not think anyone has ever seriously considered that, at the same time that we are increasing pressure on iran, we would lift our general program on iran. >> peter, we will move to a new question. >> i have a big money question

and a small money question for you. as a understand it, the purpose of the sanctions, as you have explained it, is to squeeze the resources available for iran's weapons programs. therefore, it is to convince them to see it is a good idea to live up to their international obligations. the measures you put in place have been far more effective than anything that has been done over the past 40 years. but there is still an lot of money coming in from all oil export revenues. that is a lot of money to play with for a regime that would want to devote funds for illicit trade to get the materials and componentry necessary for their weapons development. are you tracking these revenues?

is there a way to see if there is this type of diversion? what you're concerned about is the revenues over the near term, not the investments made that will support the continued level of production over the medium term after they might have been able to attract this. the small one is a technical question. >> ok. >> contract sanctity provisions in the year of sanctions, does that provide a big loophole for continued european trade with iran? >> i get quarrel with your first question. as i said to another questioner, it is not our attempt to cut off iran's ability to sell its oil. that may be a byproduct of what is happening because they are unable to get financial- services or insurance or

whatever. so it is not the case that what we're trying to do is squeeze their resources necessarily, but rather to isolate them financially and commercially, especially the entities that are involved in illicit activity, which is a slightly different thing. one has to be realistic in this situation where a country has the kind of resources that iran has and we have allies like one of the prior questioners mentioned that are dependent or realigned on receiving those resources. -- the pennant or reliant -- dependent or reliant on receiving those resources. what is it that other countries are conceiving we willing to do? i think we had to design

something that does not try to eliminate iran possibility to receive revenue for its oil. but, as you pointed out in your question, if they are unable to develop the infrastructure for the long term, if they are unable to continue their developing -- continue developing their oil fields for capacity, then that starts to create tension within iran because their leadership realizes that, in the long run, this will not work in terms of their economy and their young population realizes, look, our leadership is failing us. our leadership is feeling is because they are unable to trade opportunities for us in the future. that is happening in iran. we are seeing young people leaving, especially educated young people. it is a slightly different

intention dictated by what is realistic. i do think you're correct. various -- there is an ndu contract. it would be more draconian to cut it off in some way, but also more unfair because it would be a sunken cost in investment. i do not think it dramatically undermines the effectiveness of the sanctions. >> i think that will be it. i would ask you to stay seated so that undersecretary levy can believe. in thinking me an store levy -- thanking store

levy -- thanking stuart levy. [applause] >> thank you for joining us.

>> if consumers do not trust us and we do something to violate their trust, they will not come back. >> this is a long look into consumer policy. that is tonight on c-span 2.

>> c-span is local contact vehicles traveling the country -- local content of vehicles are traveling the country. [drumming] >> we have two candidates that you very well know. i would recognize them and ask them to introduce themselves. [applause] >> there is one thing i want to observe.

we do not have all the amenities of a large city like charlotte, but i tell you what we have in abundance. >> congressman spread is only one of two democrats in congress serving from south carolina. this would be a huge pick up opportunity for republicans, which would explain why they devoted so much attention to the budget committee. keys one of nancy pelosi i's persons in the house. he certainly has been a high- profile congressmen. he would be a concern -- it would be a considerable blow to democrats to lose him. he is serving his 14th term. he is the longest serving congressman in south carolina. he is chairman of the budget committee. he is the second ranking democrat on the armed services

committee. one of his signature achievements was helping president clinton bouse the budget in 1997. he is now serving with president obama. he won handily in the last several elections. his biggest challenge came in 1994, which was the year that gingrich led a revolution. he later challenged him again in 1996. sprat won that race. spratt had a serious challenge in 2006 from a state rep. he won with 57% of the vote and has not had a serious challenger. >> it was a republican lunch. i spoke to 65 people. i began by saying i did not

think there were 65 republicans in lee county. [laughter] and someone said, there are not. [laughter] nick small laney -- mick maulvaney attended a town hall meeting on health care and saw the level of concern people have their about health care reform. he decided he needed to run for congress and challenge congressman spratt to explain his view on health care. he is 42 years old. he lives in the northern section of the district in a suburb of charlotte. he has an interesting background. he attended georgetown university. he has a law degree from the university of north carolina at chapel hill. he practiced law for the new couple of years and then decided to go into business. he moved to the state senate

where he is serving now. he is involved in this run for congress. maulvaney gotmall vein involved, he tried to keep it simple. he wanted to run a simple campaign based on his opposition to three initiatives. healthcare has emerged as the most high-profile issue. the senator contends that this district not want the health care reform that was delivered and passed in congress. congressman spratt voted in favor of health care reform. he has had to defend his vote every step of the way. the fifth district steps across 14 counties. it is divided into three regions. you have the charlotte suburbs in the northern half of the

district, which includes york and lancaster county's. you have the middle region, which is closer to columbia in the center of the state. then you have the river area, which is much more rural and agricultural. congressman spratt like to call it a three-ring circus. you need to keep projects and initiatives going in each of the three parts of the district in order to satisfy the constituents. the fifth district has been hard hit by the economic downturn. this region once relied on the textile industry. textile mills were a huge employer. textiles began fading away in the 1980's and 1990's. now they're almost completely gone. many parts of the district are trying to make the transition away from the textile-based economy. this economic downturn did not make things easier. south carolina is one of the most conservative states in the country. the fifth district is considered more moderate than the rest of

south carolina. but this district is still conservative. john spratt is some of it -- is somewhat of an anomaly for south carolina. he has been able to maintain a brand as being independent- minded and being very conscious of the budget, be very conscious of spending discipline. that will be tested in this race. a lot of people in the district are upset about health care reform. they are upset about the bank bailouts. they are upset about the stimulus package, which is what they think of as reckless government spending. there have been a couple of tea party rallies outside of district.n spratt's >> c-span local content vehicles are traveling the country, visiting communities and congressional districts as we

look as some of the most closely contested house races leading into this november's midterm elections. for more information with the local content vehicles are up to this season, visit our website, c-span.org/lcv. >> now secretary tim geithner testified about a first to -- about his efforts to get china to raise the value of its currency. this is a 90-minute ways and means hearincommittee hearing.

>> will look forward to your testimony on this vital issue. we have a copy of your prepared testimony. thank you for submitting it in advance according to our rules. that does not always happen. proceed as you would like. mr. kemp and i have agreed to waive our opening statements because of the importance of this because all the people who have been able to make it here our colleagues and wanted to participate. why do not get right into it with your remarks and your full

statement it will be printed in the record? >> it is a pleasure to be here before you to talk about china. i will talk about the opportunities and the challenges we face and look forward to our discussion in this hearing. we have significant economic interest in our relationship with china. u.s. companies across the country and industries from high technology to culture are playing a major role in supplying china's economic needs. u.s. exports to china are growing very rapidly, much more rapidly than our exports to the rest of the world, and supporting a growing number of american jobs. the goods we sell in china have risen in value, about 36% so far this year. that is one reason why manufacturing has been so much stronger than other parts of the american economy in the early stages of this recovery. we also face substantial challenges in this relationship

with china. i want to focus my open in remarks on two priories. first, on the exchange rate, china took the very important step on june 19 of this year when it announced it would renew the reform of its exchange rate regime and allow the cit -- allow the exchange rate to move higher in response to market forces. in the roughly three months since that announcement, however, the chinese have allowed their currency to appreciate as the dollar by only 1.5%. the currency is actually depreciating compared to the average of its trading partners. since september 2, it has appreciated and it has been welcomed as a meaningful change over time. however, in the time since the original announcement, china had

continued to intervene in exchange markets on a very substantial scale to limit upward pressure of market forces on its currency. it is the judgement of the imf that, in the view of the very limited movement in the chinese currency, the rapid pace of productivity and income gains in china relative to its trading partners, the size of its current account surplus, and the substantial level of ongoing integration in the exchange market that the chinese currency is significantly undervalued. we share that assessment. we are concerned, as are many of china's trading partners, that the rate of appreciation has been too slow and limited. we will take china's action into account as we prepare the next four exchange rate report. we are examining the important question of what makes of tools available to the interstates and multilateral approaches might encourage the chinese authorities to move more quickly. the two key factors worth

highlighting are the pace and extent of appreciation in the exchange rate and the level of ongoing intervention in exchange markets. as the chinese exchange rate moves closer to a level that reflects underlying economic fundamentals, the level of intervention should decline. continued heavy intervention would support the judgment that the currency remains undervalued. on a point of history during the last time that they allow the currency to go higher, it appreciated 20% against the dollar and 30% on a real trade- weighted basis. another challenge with faces that china has combined a pursuit for a growth strategy for its domestic industries. we are committed to finding ways to leveling the playing field. it is a matter of fairness that

american firms should have the same rights enjoyed by chinese companies. china pursues a range of industrial policies to promote what it calls indigenous innovation, but policies that potentially discriminate against u.s. homes in products, services, and technology. the government plays a large role in its economy. china has yet to sign on to disciplines in the wto in the agreement for government procurement. even with recent improvements in chinese law designed to protect intellectual property, piracy is still widespread. we are very concerned about the negative impact of these policies on our economic interests and we're pursuing a carefully designed targeted strategy to try to address these problems.

last year, we won two wto cases against china. we took action in 2009, the first action never under section 421, to address one particular area. our anti-dumping and accountability areas offer protection. there are two new wto cases against china. we are also exploring ways to encourage a more substantial and

permanent in intellectual property protection in china. we are pursuing these objectives at the highest level of the u.s. government. we have seen some progress, not just in the rapid rise in exports, as i mentioned. we very much welcomed the recent assurances by the chinese government, including the president's statement this week that china will commit to -- we would like to see that applied more consistently in practice in china. this is the basic premise of the multilateral trading system from which china has benefited so greatly. we welcome your attention to these issues and we will work closely with this committee and with your colleagues in both houses of congress to best protect our economic interests in this important strategic relationship. we need a more balanced economic relationship with china. this is imperative for us and it

is important for china as well. thank you very much. >> thank you. i will take my five minutes and i will limit myself to that. according to the roster, we will do what we often will do. we will go to 41 after -- we will go 2 for 1. at the heart of what i read here is regarding this issue. it is the judgment of the imf that the renminbi is significantly undervalued. we, the treasury, and the administration share that assessment. we are concerned, as are many of china's trading partners, the the pace of appreciation has

been too slow and the extent of appreciation to limited. we will take china's actions into account as we prepare the next foreign exchange report. what makes of tools available to the u.s. and in a multilateral approach might help authorities to move more quickly? these pages are not numbered. i guess it is on pace no. 3. they are numbered. later on, on page six, you say the administration is using all tools available to ensure that american firms and workers can trade in compete fairly with china. so the question is, whether there are now enough tools that are available.

my judgment is that there are not. i just want to bring this home, if i might. i read from a new york times story from last week regarding a new technology. "being a player in the solar industry five years ago, china is on track to produce more than half of the world solar panels this year. more than 95% of them will be exported to countries like u.s. and germany who offer generous subsidies for consumers who buy solar panels. by contrast, the chinese government has relatively modest solar panel subsidies for its citizens. they are exported." then they say, "china is also on track to make nearly half of the world's wind turbines this year. meanwhile, china's imports,

virtually no wind turbines or solar panels." the currency issue is not the only one. when these american companies -- these are new technologies -- start with a 15, 20, 25, 30, 35? the ranges in that arena. this issue of currency becomes not theoretical, but real in terms of jobs in america. i just want to say i was in michigan at a large solar plant, not in my district. i think it was closer to yours, mr. kemp.

i do not remember exactly. the manager is essentially said that, if steps are not taken -- and this is a huge plant -- new technology -- it was invented in this country -- if steps are not taken, in five years, they will be out of business and all solar panels installed in the u.s. will come from china. i mention this because it is true of so many products, including the new technologies. this is no longer an academic issue, a theoretical issue. so this committee, right away, needs to take into consideration whether or not there are the tools available to make sure that this situation is rectified. if not, i think the prediction will be true of that, in the

coming years, we will lose any chance to compete. riging currency rigs to the playing field. it is not the only factor. there are other trade practices that this committee have considered -- has considered. the currency is one of them. this committee has the obligation to see if there are adequate tools to straighten out what is an unfair advantage that works against the workers and businesses in this country. >> thank you very much, mr. chairman. i would agree that the currency is not the only issue. mr. secretary, do not think there is any disagreement in congress that china's currency is misaligned. and for weeks, your scheduled to submit the biannual report on

china's currency practices. the last one was three months late. i hope you can assure us today that this report will be issued in a timely manner in october. >> do you want me to respond to that? >> just briefly, yes. do you believe that the report can be issued in a timely manner? >> absolutely in a timely manner. >> thank you. before the senate banking this morning, you set out two tests that any legislation must meet. it must be consistent with our international obligations and effective and result in more benefit than harm. i agree. the proposal to -- recently, the commerce

department to determine that the chinese currency regime does not meet the test set out in u.s. statute. those that are based on wto tests, i would like to insert that commerce's decision in the record, that memo into the record. we heard a lot about -- >> without objection. i do not think it says that exactly. >> well let's put it in the record and they can read for themselves and determine that. i would appreciate your comments on whether that complies with our wto obligations. >> that is not my judgment to make and i am not in a position to give you a little assessment. that is really a judgment that the lawyers at ustr would may. they are looking at that basic question. another have been a lot of concerns expressed about the

potential wto consistency by many people, but we will take a careful look at that. >> i would be interested in your thoughts on it once you get a chance to look at it. as you know, this is their fourth hearing on china this year. it is very frustrating to have that answer -- i realize, but we do not have ron kirk or the secretary of commerce here. we have never had the trade representative here. we have never had the secretary of commerce before this committee to ask those questions. you're the only administration official to last. if you would take that question back and try to get an answer on that, i think it would help us in our deliberations on whether that is the right direction to go in or not. obviously, the stakes are high. if we make a mistake and we find we have not complied with our wto obligations, mr. secretary, what avenues to the chinese have available to them? >> i believe that any approach we adopt that is inconsistent

with our own obligations would be ineffective. it would be no incentive for china to change. that is a necessary condition. it has to be both consistent with our obligations and it has to be effective. we have to be confident that, if we deploy it, it will have more benefits than risks to loss of economic advantage. that will be very difficult balance to strike. i suspect that we will have a hard thing to agree on. but we have to be careful on how we approach this to get it right. we do know one approach that will end up leaving us with no more effective tools then we have today. >> also, the chinese would have action they could take, could they not if it were found to not comply with our wto obligations? what would they have available? >> that is one reason why we are

-- i will not go into any detail on it -- but we face the risk no matter what. china will continue to put enormous pressure on u.s. companies not to support these measures. channel continued to find ways to retaliate, even when we're taking actions we think are perfectly consistent with our obligations. we will not let that the taurus. -- we will not let that deter us. >> it would make it difficult for employers in the u.s. and their workers. >> of course. china could take action under

the wto completely unrelated to the underlying case. that is why it is important to get the balance right. we all make it clear that we will do things consistent with that. >> thank you. i see my time has expired. thank you, mr. secretary. >> mr. mcdermott. >> thank you, mr. chairman. mr. geithner, in our deliberations, we listened yesterday from all across the spectrum tell us a bunch of different ways we could go. you're the one that is the primary director of that. we're pleased to have you here. i would like to hear you discuss the prospects of going alone or going multilaterally through the wto. it seems to me you can write a report on the 15th of october to declare that china is a currency

manipulator and move ahead with bringing a suit in the wto. that is one way to go. or you could do as we have tried to do to marshal some kind of international support for this. i would like to know your ideas about that. secondly, do you need us to push you? the constitution says that the congress writes the laws and you implement them. in a transparent way, when we say we want a country that operates by the rule of law and if the law says that, then someone should be accountable to that. it does not liklook like we're using the law so we could. maybe you need us to strengthen your position or force your position, if you will. i would like to hear your thoughts on this.

>> congressman, i think it is very important that china hear from the congress, from republicans and from democrats, about how strong their concerns are about the impact on u.s. economic interest about many of the practices we have been discussing today. it is important for them to understand that this is a serious issue for the american people and we are serious about it. is not sufficient for them to hear it simply from me or from the president of human states. there is it -- president of the united states. you raise the important question of what is the right mix of multilateral or u.s. actions. my own view on these things, and i am talking more broadly about the trade challenges we face in the relationship, we have to use all of these devices.

many of the things we're concerned with are also concerns of china's other trading partners as well. it might be more likely to have impact on their behavior if we make this more international. >> let me stop you right there. if we file a suit with the wto, with the european union and other countries -- would the european union and other countries, developing countries, join in that suit, do you think? or would they let us walk the plank all by ourselves and see what happens? >> it is a very good question. it is very hard to know. our experience so far has been mixed. there are occasions in which other countries have been willing to stand up in public and expressed concern about them and do so directly with the chinese in private as well. as you implied, often, they like this to carry the principal burden of that.

we have to figure out a way to make it more compelling to them to join us more visibly rather than just draft in our wake. >> one of the things that i think troubles all of us is that, if we are the ones who are seen as the bad guy, the enforcer, the rest of the world can say, well, you do not want to deal with those guys. why do not deal with us? suddenly, we are at a -- i am interested in the way you think you could draw them in to support our efforts rather than allow them to stand out and we be the bad cops and they can be the good cop. >> i am not going to claim dramatic success for these two examples. one is to make sure that, in the halls of the imf, the international monetary fund, we make sure that the imf is providing sensible judgment

about the level of hunter valuation and its applications for growth around the world. that -- level of undervaluation and its implications for growth around the world. it is necessary to make sure that these basic questions are at the center of attention. that helps us in that it makes it easier for countries to say what they think and draw a broader response to these questions. we are seeing strong growth in the rest of the world that would benefit american workers is not just about china. in these discussions, we're talking to the europeans and the japanese, not just china and emerging markets, to make sure they are expanding opportunities for trade. as they grow in the future, more

of that growth comes from domestic demand and is less export-dependent. those are examples of how to use a multilateral approach. >> who sets the agenda at the g- 20? >> the tradition is that the hope -- the tradition is the host of the meeting. we always play a central role in setting the agenda. >> thank you. >> mr. neal, it is short term. >> thank you. mr. secretary, you can sense the frustration that people feel. i do want to recount for the record that nicholas brady was the first secretary of the treasury. -- the for secretary of the treasury dealing with china. i think we recognize the opportunity for more exports from the united states to china to help drive our economy.

along the same lines, one of the frequent complaint we hear is the force of partnering, which also has the impact of driving down opportunity to nurture those markets. that is particularly prevalent in financial services, as you know. would you care to offer some insight on that? >> want to reinforce the basic problem. in many ways, china has pursued a strategy that has this is a feature to it. if you want to come cell in our market, we want you to come produce here. we want you to come establish a joint venture with chinese companies. we want you to transfer your technology to our companies. and once you are established and serving our customers, we want you to export to the united states and served your customers in the united states as well. that pattern of behavior, we find that untenable. and we are invested in a long

effort. you have talked about some of the earliest efforts to change that approach. just to put it in perspective, again, we export tens and tens of billions of dollars of manufacturing products, not just soybeans and agriculture, that matter lot to americans and american jobs. that is growing rapidly. we are making huge gains from this relationship, but we are left with a pattern and practice that we find unacceptable and we want to alter that pattern of behavior. >> there is a fundamental thought that managing this appreciation is the most important bilateral on earth. your perseverance is recognized and your record is steadfast. the point that i want to raise in this discussion and debate is that, even with the best efforts to have made in previous demonstrations, democrat and republican, the truth is that to

cheer 1% rise in currency appreciation is hardly a staple of progress. >> you did i hear me say that and i would never claim on the exchange rate. 1.5% is too small to make a material difference. it is our objective to make sure we translate that -- that we see that translated into a much more substantial sustained gain overtime. i think that is a reasonable thing for us to expect. but you will never hear me over- claim over the province we have seen. even with those challenges, this is a hugely important, hugely productive set of export opportunities for american companies as well as in

services, high-tech, and agriculture. if we can make a level playing field, it would be dramatically better for us. if we will grow in the future to benefit the middle class and the income of united states, it will have to come from export growth not only to china but to other countries around the world. >> thank you. >> mr. chairman, thank you for calling this hearing. i agree that china's currency policy and the impact on american manufacturing is an important issue for this committee to consider. i suspect, if you actually talk to many of the american companies that create american manufacturing jobs, these legitimate concerns about china's would take a backseat to an issue that has been neglected by this committee. the threat of major attacks

increases in the near future. tax relief in 2001 and 2003 is set to expire at the end of this year. unfortunately, the ways and means committee has yet to hold a single hearing on the impact of this looming tax increase. mr. secretary, you and other administration officials have repeatedly stated that you support a tax increase on some $700 billion by allowing vital tax relief to expire. this tax increase would fall on the income of successful small businesses that are creating jobs as well as on capital formation of large employers, including manufacturers. i am very concerned that, if

this massive tax hike goes into affect, it will stand in the way of economic recovery and result in a loss of even more jobs. in addition to the $700 billion tax increase, several administration officials, including one of the president's top economic advisers, paul volcker, has suggested that the united states should impose a brand new value-added tax on goods and services at every level of production. in most countries that have it, it functions as a hidden tax with the cost built into the final retail price so consumers have no idea how much tax they are paying. this lack of transparency means that it is politically easy for the government to raise the vat

rate to pay for new spending initiatives. imposing one, especially on top of existing income-tax, would represent a huge tax increase on american manufacturers. in addition, much of the cost would be passed along to consumers with the burden falling mostly on senior citizens and middle-class families. president obama has repeatedly pledged not to raise taxes on families making less than two hundred $50,000 per year -- less than $250,000 per year. >> no member of the president's economic team has proposed that we established a vat. but me just say something about

what we believe is a policy for the country and i will explain where we disagree. you are right to point out that, by far and away the most important thing we can do is to strengthen the middle class and strengthen incentives for companies to invest in the united states. the most important thing to do is to give americans the certainty today that the tax cuts that go to 90% of americans and 90% of small businesses are extended, that we keep -- back to 98% of americans and 98% of small businesses are extended. we would like to give the american economy and people today certainty that that will be along of the land going forward. if we ask them to live with uncertainty any longer, it would be bad for recovery. we also proposed a series of

incentives for businesses which had broad bipartisan support. 100% expensive for businesses so that whenever they buy for expansion next year will be included. we think it would be very good for long-term growth, very good for incentives to increase investment in the united states. where we disagree is really just on two things. one is that we want the middle class tax cuts promised now. we do not want to wait. the other thing we disagree on is that we do not believe it is good policy for the country or responsible policy for the country to leave the place those tax cuts for the top 2% of american's parent to do that would require us to go out and borrow $700 billion that our

children will have to repay to sustain tax cuts for 2% of the richest americans with, when president bush put those taxes in law or only passed because congress permitted them to expire on schedule. we think it would be irresponsible for the country to have two or $700 billion to do that. we think it is better for us to join together quickly and as the middle class tax cuts and put in place incentives for business investment that republicans have supported so actively in the past. if we strengthen the middle class, it will make the recovery stronger. >> does that also to say that the administration opposes the vat. >> as i said, there is no one in the administration who has

proposed putting in a vat. >> thank you for being here. as much as i would like to engage in this conversation about whether we should hold tax cuts for middle class hostage to give tax cuts to the wealthiest 2% above and beyond what the middle class would get in this proposal, let me focus on china. china is a very important trading port and. it is a very important country in the world. they have proven that remarkably so. breathtaking changes are occurring. we should applaud them for the way they have done it. they are doing with americans have been doing for so many decades. they will nibble at the heels of everyone who is ahead of them and they should and they will. it is up to us to make sure that we keep them at a distance from where we have been for a long time. i recognize that the secretary

of the treasury must do everything possible to make sure you place our country in its best position, whether it is with china or anyone else. we appreciate your testimony. i think some of us want to give you some wind underneath your wings. the reality is that china, as good as they are at competing, they are not letting us compete for contracts when it comes to their government contracts. they are not protecting our intellectual property, our movies, are dvd's, our music as well as they agreed they would. and we know there are other things they're doing, including the wages that are paid to some of their workers, which could be improved. they are a developing nation and i hope they develop well. but we have a right to protect what is ours. in this case, some people say that, because of the

undervaluation of the chinese currency, we have perhaps lost 1 million or more american jobs. we have now for close to a decade that china has been undervaluing its currency. i do not blame the chinese. more power to them. but shame on us if we do not recognize that they are simply trying to compete and they want to get to the finish line before anyone else. we need to stay ahead simply because we know how to be ahead and get ahead. mr. secretary, i think it is important for us to give you some wind under your wings. you may not be able to tell us whether or not you, this administration, or the president would support legislation. what has been done has not been enough, whether by this administration in its short year and eight months or by previous administrations. it is time.

there are too many americans who have lost their jobs. we have more people who are unemployed in america today than we have americans working in the manufacturing industry of america today. that is not right. i believe we have to negotiate from a position of strength. that is why we are hoping that the administration will recognize that. this legislation is the people's reaction to what is going on with china. this legislation is the representatives of the people trying to speak not just to you and the president, but to the chinese government. hopefully the chinese people will recognize what we're trying to say. words do indeed have meaning. i do not believe we're trying to say that we're trying to kick them. i do not believe we are trying to say that we do not want them to ever have an opportunity to compete or be what america has become. i simply think we're trying to say that, when we