what are the chances, in your judgment, for resuming negotiations not just for the sake of process but resuming negotiations that actually could become serious and may even lead to an agreement? how would you characterize the current status? >> we have always been honest. i said earlier that we are different. we are not the condo. we are not iraq. we are not somalia. we're not better. we are different. what refilled to recognize as palestinians and israelis -- what we fail to recognize is that the state of mind in the

last 20-something years is what life is all about between palestinians and israelis. it is not a far distance. what is it that we are trying to make? is it merely a two-state solution? do they trust us? do they recognize us? do we trust them? 17 years of negotiations and only 18 months of negotiations about permanent issues. we did not waste one single minute. this was a mandatory course for the palestinians and israelis. today, -- no, i remember 1978.

they wrote an article calling for a dialogue. today but when i ran for reelection and my party lost, i ran on the campaign of two states and peace. i got 68% of the vote. there is a major change. a 75% of palestinians believe the only solution is a two-state solution. deep inside of their hearts and minds they know. >> the prefer real bottom line is where are we now? >> -- the proverbial bottom line is where are we now? >> i am getting to it.

i do not think palestinians and need negotiators anymore. it is time for a decision. it is time for the end game. we have turned over every possible stone. we know what it takes. we know the parameters. we know where the fights will take place. we know the solution to east jerusalem. what kind of body should of the guide us, and divide us? we know there will be an agreed a solution to the initiative. we know what constitution we will have. we know the limitation on arms that we will have. limitations on armaments, there is no such thing on limitations

on a person's dignity. the moment that israelis realize the fact, they are happy. unfortunately, we are at this stage now. >> you wrote in "the washington post" recently that international law needs to be respected. >> absolutely. >> that would confirm the fact that israelis needed to impose a comprehensive settlement freeze. if the israelis do not respect international law, what should the united states to do about it? >> look. i am going to be fair to senator mitchell. i am going to be fair to president obama and secretary clinton. i think these people have done a marvelous job. they have done everything to bring palestinians and israelis to these decisions and continue

to do so. i saw this morning that senator mitchell had made a comment. have no doubt that americans will not make the decisions for us and the israelis. americans may provide you four elements, but the decision making is between the israelis and the palestinians. today we have leadership in palestine that is willing to deliver. we have come to decisions on a jerusalem, and settlements, refugees, water, etc. do we have someone in the israel who is willing to engage in decisions? that is the question. if not this year, next year, in

10 years' time, there will be a two-state solution. we will not convert. christians will not convert to judaism. walked me through the year 200013 from jericho to your form -- 2030 from jericho. you have the opportunity. you have the choice. we are now in a defining moment. it is time for decisions and not negotiations. the americans know that. the israelis know that. as much as we have choices to make, mr. netanyahu has traces to make. >> that question is a good one and there are three possibilities with respect to

the is really part minister. he is serious. he is not serious. or, alternatively, there is a certain amount of conflict within himself about his own decision recommitment. >> there is a fourth option. we have a palestinian authority established in 1993 as a vehicle to take palestinians from occupation to independence. and had a legal jurisdiction, and economic jurisdiction, a social jurisdiction. netanyahu came to office and everything was taken away and we have no jurisdiction whatsoever. there is no combined power. why do i not maintain the status

quo? as much as you and i, we have our options with facilitating, he can do the same. why can we not maintain this? the palestinians are doing a good job keeping security, building institutions, and then they are building institutions and covering what ever their society needs. he has to call a lieutenant in view army in jerusalem to cross. he may really believe that he can [no audio] as much as he is weighing his options, we are weighing our options. the status quo cannot and will

not be maintained. >> before we turn to the role of the u.s., i have one history question for you. there are no rewind button unfortunately. if you asked me what i would have changed in the last 20 years to produce a different outcome, i would offer you the following observation. if i could change any two things, it would be that ravine would not have been assassinated. and it would be that george w. bush, and this is not a political statement george h. w. bush would have defeated bill clinton in 1992. had those two things applied, it is my view we would have had won agreement. now, whether that would have

been between israelis and palestinians, have -- but he had lived in your view? >> i do not know. to be fair, you'll be concerned with security 300 years today. he realized the difference between a tough negotiator and a learned initiative. there is someone who looks at the country's interest 300 years from today and for the 6:00 p.m. news that evening. i cannot answer the question. >> the next three questions all involve america. you watched the united states for 30 years.

if you had to identify a consequential strength and weakness in our negotiations -- our approach to negotiations, what would they be? >> in the beginning of the 21st century, your borders were canada, mexico, and the two oceans. your borders today include iran, pakistan, afghanistan. you have the soldiers in iran, iraq, and afghanistan. you need to get them home. now when you talk about a palestinian state, it is not that you will go one morning and

your conscience was aching. in my opinion, the most cognizant american national interest is you have men and women being brought home in wheelchairs' and coffins every day. you do not need anyone to protect your interests. that is the truth. americans must know that we have had 799 movements. we have a very good religion. we're supposed to go to a mosque to worship god, not to use him. they become like the churches in medieval times. we knew use god, you have blood shed. you can never defeat these forces.

there are two things you need to do as americans. the first is peace between palestinians and the israelis. it is a two-state solution. the second thing is democracy in the arab world. anyone who says arabs do not want democracy is wrong. since the year 1683, these have not been defined. there were muslim soldiers in europe and ever since that time, you have never forgiven us. the relationship is guided with suspicion, fear, and anyone who

has their mind in the middle east is [unintelligible] it is time to define this relationship. it is in the interests. i've the end of the day, these superpowers have the interests as much as we have power. we have to defy the growth and maturity of these interests. i believe the u.s. has, since 1956, followed that policy of what i call what is possible. see what he can do, what he cannot do, and they never asked me. i am the one they need to be for

speeding. i asked the american administration if a change in the religion of the middle east, with a bigger picture in the middle east, with what is going on in lebanon, iraq, afghanistan, sudan, yemen, gaza would take a good picture to shift the policy. >> our greatest strength is the proximity to the region and the urgency. our greatest weakness is the proximity to the israelis? >> i did not say that. israel is part of your political life. >> yes. >> it is my word against any israeli, and there is an impact of the republicans working -- [laughter]

president clinton was the most pro-is really president. -- pro-israeli president. it is in your interest. you define your own interest, all right? i was 12 years old when the occupation came to my home town of jericho. i was 55 -- i am 55 now. i and now a grandfather. i want to do it for me and for them, not for israel. i won the two-state solution for them. i want them to really have the same thing. that is what is in this for me. is that too much to ask? i could care less if someone in the congress was israel or palestine, because i am divided.

we ask people in the region, and jews, moslems, christians, who were against me. someone here needs a wake-up call. someone needs to get out of the box. you cannot do anything inside the box you kept me in since 1993. i am suffocating. i will not continue there. >> that brings me to my second to last question. remember that we have a track record of doing effective diplomacy. there was a time when america actually did effective diplomacy. when our relationship with the israelis, however special it was, was not transformed into one that was exclusive, what is it that you want 20 months in from this president?

>> it is time for the and the game. >> does that mean an american plan? bridging proposals? additional pressure on israel? what does that mean exactly? specifically. >> we have a choice -- you know, people here tell me that i have a ph.d. in negotiations and peacemaking. wiry surprised that when you said with israelis and in the first two, three, four meetings that is opening positions. we have been in the opening positions for 19 years. and is over. and is over. we know what it takes to make the decisions required. we know it. we know it is not a fair agreement. we know that you cannot deceive the region without an end game.

you have asked me almost 10 questions. i am an observer of the un. if i were to take an application and go to the security council and say that i need a member to apply for membership for palestine to live in peace and security within the state of israel and i submit this application. you are a permanent member there. >> we would veto it. >> why? >> two reasons. actually, three reasons. you can order them in any way that you want. that may be too far. we have invested the and believed in the pragmatic value of negotiations. now, good, bad, naive, simple,

nonetheless it is a fundamental american conception. we either fix it pragmatically. -- we are a pragmatic thinking people. that would be a socially fundamental the trail of the american commitment to negotiations. second, we would say to you, and you know these talking points because you have heard them many times, we have dealt with the unilateral declaration of independence, but we would still say to you that you open the door to this application process to a set of is really -- to a set of is really a counter- proposals which would reflect their own interests in response to yours. i am glad i do not have to do this anymore, but we would argue. >> these are the same arguments.

>> and finally, there is the reality, even though i would not put it as the first factor as a willful, determined president will trump political interests every time. a willful american president, nixon, carter, bush 41, every time there will be battles but willful presidents who are smart, capable, who have opportunity will trump domestic political interests and lobbies every single time. still, presidents function within the year reign of domestic politics. presidents, particularly this one without the headaches that he faces like a jobless recovery, reduction of the deficit, the new congressional

mass, will choose his fights and very carefully. now, if you were to tell me that president obama fight for me on in the game and fight for me on borders, security, permanent status agreement, bridges gaps between israelis and palestinians in a high profile summit that was well preferred -- well prepared with a chance to reach an agreement? that's, mr. erakat, i will fight for as the president, but i will not for -- i will not fight for a freeze on settlements, fight for your right to become a member of the u.n., and i will not fight for a security resolution which embodies your desired aspirations even though i share those aspirations. >> table your parameters for

peace. >> find. the ark of these parameters may well lead to whenever it is that you want, but as i said to a very distinguished gentleman earlier this afternoon, do not pray for anything that you really do not want. you have seen american proposals in the past. you have seen that. do you want them? >> let me chickens are the what you said. i am suffocating in this box. -- let me talk about what you just said. i appreciate what you just said. this has to do how the region will get out of this through democracy. why could we not talk about borders? is that too much for politics or is that about me? ok.

>> i have answered your question. >> secondly, you cannot recognize me because you tell me i am not a state. so when i asked you what is kosovo or these in sudan for the last year and a half? compare ourselves to saddam. -- sudan. fine, fine. what do i do? that is good. i told you i could not survive the status quo. so, i will not accept the american proposals because there will be six or seven lines about

a two-state resolution, if you are not going to allow me to go to the security council -- you are a brilliant academic. in 1922, palestine was on the league of nations. there were 18 other provinces. in 1945, the u.n. took over the they divinations -- the league of nations. all of them except for palestine were accepted. we disappeared. what is the status of palestine? if i do not see this authority is leading to a two-state solution, if i am not allowed to define my borders, that does not

mean anything because i know my borders. then i am afraid that you are pushing me to the point where we will for a politely tell mr. netanyahu that plan b is to resume the occupation. this palestinian authority was not, will not, and will never be an agent of is really occupation -- agent of israeli occupation. the authority we created [unintelligible] if he thinks he can maintain himself as a source of that authority israel is a country with 5000 tanks, a nuclear weapon, a congress, senate, worldwide support, but they have

three options. the first is my option with two- states. the second the is it today in the west bank between the river jordan and my home town of jericho toward tel aviv is 86 kilometers. if they maintain they should've -- should rename my hometown in hebrew, talk to me about it. "you eagle palestinian, you will undermine israel." today, november 4th, 2010, there

are roads in the west bank i cannot years as a palestinian. such diseases as this are underneath the rest -- are scanned. you are a scholar. psychologically economically, sometimes because your skin is darker or lighter, and that is what they're using it for -- the pretext of security. watch out. occupation corrupt. the whole region now is going down the drain. i believe we can salvage of this. i believe we do not need to reinvent but just the two-state solution. we need decisions. the u.s. but the parameters on a peace 10 years ago. it will allow us to be on the

security council. they did not want to recognize me. they want to keep me in the box. they do not want to give me a fair agreement. i am supposed to be in the box. i am supposed to be a servant of the occupation. forget it. you know my granddaughter. the title of my book will be "i did not miss an opportunity." >> saeb, i do not work for the administration. i have been critical of their poyou can afford to be criticalf anyone. >> i would just say on their behalf that i would not pre- judge what it is that they are or are not prepared to do. you have plenty of time to go to the united nations, should your predictions proved to be

accurate. i would ask my tends question, but i think in the interest of time, if, in fact, we invite you back next year around this time, will we be having the same conversation? in the interest of time, and thank you saeb, your responses were forthright, candid, and i appreciated. let us go to the questions. could you please identify yourself? judith. [unintelligible] >> i remember very well in 1978 when you wrote that article. in the good old days when you could drive in west jerusalem. i do not think that netanyahu was genuinely [unintelligible]

under the current circumstances, he is not going to be able to do a settlement freeze as important as it is. settlements have always been the symbol of israel's intentions about the land and this is a real-estate conflict. every brick that is put down tells the arab world, the palestinians, and the rest of the world that israel does not intend to give up that land. in my view, israel as a country, as an existential issue, none of their leaders have truly embraced the idea that they have to give up the land. nevertheless, you have an american president who has a lot of problems, staffing included, and we will not going to that,

and maybe what you needed to ask for this year that is in my mind absolutely doable considering what is being kept in the safe is a map. palestinians can build settlements and israel will know. once there is a map that will be accepted by the entire world and you can discuss how you implement and worked out all of the other issues. >> what about a map? i understand during negotiations that they became very serious, these negotiations, even though some are denying that in effect that they were. what about a map? >> judith, that is what i am saying. we needed to agree on a map of. this is my map. i will show you something have never shown any one before.

he says he offered a great offer. 100% of the west bank. i did not deny this. but i asked the prime minister why the short circuit of the memory when it comes to my response to you? they responded with this map, judith. it is a 1967 map with a swap of 1.9% of land. in his formulas to deal with jerusalem, security, water, refugees.

now, he chose to say, "i do not recall saeb erakat offering me that." we came on december 18th to washington and we've had this map along with the supposition with president bush and others. they were so honest and transferred to the obama administration. this is what i am telling you. we offered. i am asking mr. netanyahu to stop settlements and work on the borders now. he knows where the borders are. i know where the palestine borders are. then we can work on the other issues. nothing is agreed until everything is agreed.

there cannot be in agreement, for me, without jerusalem. there cannot be in agreement without the end of the conflict, refugees. this is on the package. it is a package. they do not want to do that. they do not want to have been in the game. they do not want proximity talks. they did not wish to talk about settlements. they want to maintain the status quo. they want to keep this authority by name but avoided any jurisdiction in the future. this will not be maintained. this will not be maintained. i know president toss -- habbas. the palestinian can make such offers. he has made up his decision that we can maintain the status quo.

he told mr. netanyahu no. >> if i could bring the discussion back to the specifics of this round of negotiations, the palestinian authority has taken a lot of heat for wasting nine months of the first 10 months during the moratorium. irrespective of what you might think about whether the moratorium was serious and what was actually offered, what was provided, how do you defend against the charge that those nine months were wasted because the plo was not willing to come to the table? as a corollary question, supposing we get a two month

extension of the moratorium, will the palestinians come back to the table? if you do come back to the table, what do you think you can do in two months that would be an accomplishment that would, in fact, take the negotiations somewhere beyond those two months? >> howard, good to see you. we appreciate very much what you did as the director of usaid. this chart shows the moratorium in our figures and israeli figures. when we reached the 10 month end of the moratorium, this would be an increase of almost 17% in israel and an increase of 16%. they have constructed 3452 units under the moratorium.

they admitted to 900. okay? we went through proximity talks and we offered our position. they said no. they said they wanted to -- they would not discuss anything without direct negotiations. we had them the whole month of september. yet they were not reciprocated when we asked them about an end game. since september 26th until october 21st, they introduced 544 housing units on the west bank, 212 housing units. they want to get to 1611 housing

units that will get him to a specific number by december 2014. they may come to us in one or two weeks and talk about the moratorium. close your eyes to what is happening on the ground and let's talk. i am losing my land to the settlement and i am losing my credibility. this time, i cannot do anything about losing my land, but why should i lose my credibility? why? those in the west bank, jerusalem, and gaza are five fold with settlements building. if you ask mr. netanyahu if he is genuine about in and game with the settlements to stop

them for just three months and then he can build in his borders, whenever they may be, he is seeking things to make me take the blame. like when he says "in a jewish state to go -- state." i do not wind -- know why they asked me this. it says the state of israel. it does not say the hebramite historical people of whatever. he is looking for a wave for us to be blamed. even if we say anything like convening these councils, he is

going to understand very soon that maintaining the status quo will not be sustained, maintained, and is not an option. then he will have to take the israelis to plan b. in accordance with the geneva conventions article 43-78, i would urge mr. netanyahu to start studying them. >> second row? >> on your question about the two-state solution, in terms of being precise and giving some clarity, the united states and israel, as well as the palestinians, once a two-state solution. how you perceive that two-state solution?

one is a palestinian state, two a state agreed upon by the united states in terms of its composition, a jewish state, a gem -- a democratic state to ensure the viability and progress of the palestinian minority in that state? can you elaborate on your rationale or feelings? specifically netanyahu indicated that if you recognize us as a jewish state for purposes for ending -- >> ending what? an incitement? >> if you can expand on what you have against what has been agreed upon by the majority of

of observers, nation states, that is very critical to the xenophobic power such as israel that is worried about 206 and a 209 about what happens when they withdraw from areas of conflict? thank you. >> israel withdrawing from areas. i went to mr. sharon's office in 2005. i told them not to the lateral steps. we withdrew unilaterally and you will withdraw from gaza unilaterally. he withdrew them in a yoon out -- a unilateral fashion. they understand it now that unilateralism does not pay.

on the agreements pay like between jordan and egypt. secondly, incitement, school books, there are a lot of things that are being circulated with finger-pointing at me and so on. i have a choice. i can engage and italian that so far and the palestinian authority -- i can engage and tell you that the books they accuse us of having were used between 1967 until 1993. many of it is still ongoing. we began changing our textbooks and we have put palestinian text

looks for the first and third grade. as far as logistics' are concerned, when israel was declared independent and says the government has been informed that a jewish state has been proclaimed in palestine. this has been requested by the present government thereof. it is a de facto authority and the new jewish state. this was in 1948. i will leave and if anyone wants to see it. when they applied for the u.n., they applied as the state of

israel. i asked -- they recognize the state of israel. we have a choice. they want to go in front of the general assembly and changed their name to associated with religion. i have exchanged a letter recognition with israel and that was done in the 1993. as a told you, we recognize them as a jewish state. some people speak about liturgy , 1.5 million people. you know what? i will not, i do not -- the state of israel was recognized by us. period. >> this is a question of both of you.

mr. erakat, looking back what do you think were the opportunities that the palestinians missed in your opinion? and i'm interested to see whether he would agree with you. thank you. >> that is a good question naturally. >> what were the missed opportunity is -- opportunities? >> as critical i have been at times during the realities that exist on the ground, on both sides, on -- i think there's no precedent for people negotiating their way out of an occupation. there are trying to create and build the institutions at the same time. the conventional response to your question when the camp david in july 2000. the narrative argues that a huge

opportunity was missed by the palestinians. the story is more complex than that. far more complex than that. we never should have gone to any some of the purported the conflict ending. saeb will tell you, as i respond to your point, he will tell you why my answer is wrong. mr. arafat, the last palestinian leader to have both the capacity and the authority, and the moral legitimacy to deliver a unified palestinian policy one gun, one authority, one negotiating position, in my judgment, missed an opportunity not because he would refuse to accept what was put on the table. no palestinian leader ever could have accepted that. after all, barack and error

fought -- arafat met on the same real estate. while they were thinking about rabin, he was thinking much more about saddat. the transgression and amassed opportunity, as saeb will tell you as soon as i am done, is that the transgressions is that i will not accept what the israelis and the americans wanted to accept. i will offer you on each of the issues of alternative, and negotiating a comeback. had that happened in a way that was more authoritative and had we not been so frustrated by

the "palestinian refusal," maybe july, august, september with a determined american president who spoke last night at the middle east institute and has written in "the new york times" and who cares more but this issue than all of his predecessors might have been able to create a framework for negotiation which could preempt what transpired at the end of september. rather than playing the blame game, we may have found ourselves in a different position. saeb, we have had this discussion before, so please? missed opportunities. you need to explain to the group why i am wrong. >> he is wrong. really. first of all, i came before camp

david and i told them, my friend madeleine and my other colleagues, i do not do something and expect white smoke. palestinians and israelis are not ready. he did not have anything in mind to make an agreement. i was asking them to give us three, four, five, six weeks to prepare better. these are the words that i had used. that has passed. we go to camp david and we are talking. they say that he offered arafat an offer that he could not reject. can you please circulate the paper that you offered us? can anyone show me?

can anyone show me the offer that was offered to mr. arafat in can david? is there an offer in writing put to us? >> yoon know the answer to that. >> there was not. the offer was made to me, personally, on december 23rd in the white house with president clinton, who i agree with you, he brought palestinians and israelis closer to coat -- closer to peace more than anyone in the history of this conflict. i give him credit. you say that arafat was the last palestinian president with legitimacy and i think you are wrong. the president we have now is not less legitimate or less courageous that arafat. the second mistake you made is when you said we missed an opportunity. i remember on the eve of the

24th of july, i was asked by president clinton to come to his office. you know what? he asked me to draft the communique. i did in good faith. we had a serious negotiations, positive negotiations, we have turned over many stones, we have made offers and counteroffers. we will continue the negotiations as soon as we get back home. i was asked by president clinton and other colleagues, i remember coming to washington and giving a press conference, and then all the sudden i hear president clinton saying they offered mr. arafat a big offer

and he said no. he invited me to have dinner with him in tel aviv. i told him no one has brought us closer together more than he did. why did i say that? you know we did not have -- we had an offer at camp david. he dictated it to me. he said to take it back. that is the truth. arafat came here on january 2nd and he said, "mr. president, i appreciate your offer, and i have some questions and clarifications." we had from december 23rd until january 20th, okay?

with president bush, we also had an agreement to come in january 3, 2009. why is it the president of the united states only one to do it during these times? this is a truth that i know. i was there. i was the drafter. i did the drafting, the papers, and so on. i do not recall that he offered an agreement. all i know is that for five days he refused to open the door to his room. i do not think the blame game

will serve anyone. now, my offer is we have a president who is ready for the two-state solution. rehab an agreement of the accord that was offered -- we have an agreement. the question is, do we have a partner with israel to engage? >> hopefully in the next several months we will find out. thank you very much. i think all of you for coming. -- i thank all of you for coming. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> this is the first in a form of a dialogue between aaron david miller and other colleagues with statements from the region. please come back. thank you.

>> how are you? good to see. >> thank you everyone. thank you. goodbye. >> how are you?

>> tomorrow on "washington journal," and look at how the newly elected congress will work with president obama. we will hear from gial russell chaddon and susan page from usa today. we will speak with scott keeter and stuart rothernberg on his potential challengers will be in 2012. "washington journal" live at 7:00 a.m. eastern on c-span. monday on c-span2, the national oil commission is holding a two

day hearing on the cause of the rig explosion. a look a preliminary findings on the bp blowout. watch live coverage starting at 9:00 a.m. eastern on c-span2. >> saturdays, a landmark supreme court cases on c-span radio. >> they call this a voluntary bible reading. there is nothing voluntary. >> nationwide on channel 42 and on- line at c-span radio.org iraqhis is a look at th relations.

this one our portion is part of the world affairs council national conference. >> i think i will get started while they are getting their microphones on. please continue to enjoy your lunch. i am the former vice chairman of the world affairs council of america and the world affairs council of greater hampton roads. i am glad to have you all here with us today. it is an honor for me to be introducing such a distinguished panel for today's keynote luncheon address. the issue at hand is u.s.-iraq relations, what next? that is a key element of our conference theme, in u.s. foreign policy into the next decade. let me start with ambassador

marc grossman, the moderator for this discussion. he has been introduced to all of you at least five times since the conference began. i am going to begin by thanking him on behalf of all of us here today for his service as chairman of our organization for the past two years. i also want to thank him for his involvement in organizing this year's conference and for putting in all the time and energy at our members meeting on wednesday and throughout the two days of discussion. i am willing to bet -- and give him a round of applause. [applause] i am willing to bet that in spite of his day job as vice chairman of the cohen group and a very distinguished foreign service career, this is one of

his most challenging assignment yet. [laughter] thank you for taking this on and making it such a great success. we could not have two better discussions than with ambassador crocker and general odierno. he along with david petraeus wrote the book on conflict in the arena. they're working relationships were unparalleled. their success has become the how-to guide for similar future ventures. ambassador ryan crocker is also a household name for many of you here. despite a most distinguished foreign service career in which he never failed to follow his own mantra of making the hard choices in going to the hard places, and along with his current position as the dean and

executive professor of the george bush school of government and public service at texas a&m university, he has always found time to visit councils around the country, in addressing many of you here today. we not only appreciate your outstanding service to our country. we're also very grateful for your service to our organization. thank you. [applause] general odierno is also no stranger to making hard choices and going to hard places, having recently returned from serving as commanding general of multinational forces in iraq and taking on the relatively calmer position as the commander of joint forces in virginia. we hope that you will also become part of the world affairs council family, beginning with your home council in hampton

roads, va. you can take that either as an invitation or a warning. please join me in giving our illustrious penalty very warm welcome. [applause] >> i appreciate it. am i on? thank you very much. ria ined to join mali thanking them for their service to the united states in america. sitting here with them is a great honor for me. general odierno has a meeting with the secretary of defense later this afternoon. the three of us thought we would dispense with opening statements and move to questions.

we wanted to leave plenty of time for you to have the benefit of asking questions of them. i would be interested in following the ideas that m aria set out about talking to the future of iraq. there is the larger question of strategy we were talking about this morning and the fight against extremism and terrorism. we've heard so much about pakistan. we ought to talk a little bit about that. one of the most interesting things for me in having these people sit here is that they were at the vanguard of help civilians and military people worked together. i would then like to take some time to see what lessons they take from the work they did together.

we will move as quickly as we can to your questions. that is a very important part of this event. i want to stick with the issue of the future of u.s.-iraq relations. that is that the fundamental question about the future of iraq. what happens next in iraq? >> it is important to understand how important iraq is to the future and what a key place it is in the middle east and the role that he can play in bringing increased security inside the middle east and to the united states. iraq is in a very strategic location inside the middle east. it is a mixture of many different groups of people.

it has iran on the right. to the east, it has many sunni arab states. it has a large kurdish population in the northern part .f airaq it represents many people in the middle east. iraq itself becomes an extremely important place for our future on top of that, there is the fact that they have started to move towards a democratic process. they are interested in having an open economic environment inside the country. once this starts to take hold, it will be a great representation for the middle east. in my mind, it could then create an atmosphere of more stability and an example for other nations. as we look to the future of iraq, let me first talk from a

security perspective. there is still violence in iraq, it is much different than it was just three years ago. three years ago, we have a widespread insurgency throughout the country that was spread north to south and east to west. today, we basically have three groups, three different categories of security issues within iraq. one is that you still have a very small group involved with what i would consider to be an insurgency. they're trying to disrupt iraq. they want to see the government failed. it would like to see someone else take power. that group is extremely small. second, you have al qaeda in iraq. they are now conducting terrorist operations. they can no longer conduct broad spread insurgency operations.

they are conducting terror attacks, although less than they used to. they're still conducting terror attacks against the people of iraq. they do not want the democratic process or the state of the and rap to become stable. they would much rather it fail so that they can take advantage of that to move forward the idea of creating a base for terrorism. i believe they have failed in their attempt to do this, but they will not stop. the important thing is that we have now created a security force that is capable of dealing with this for the most part. we can talk more about that later with questions. my position is that iraq is now about politics and economic issues. we still have a ways to go to resolve some of the political

issues. we still have some ways to go on economic issues. that is important as we look to the future. >> i would like to see what a pleasure it is to be here today. it is a pleasure to be with my friend and comrade, ray odierno. it is the first time we have been together since iraq. i would like to say that you clean up real nice. [laughter] the second thing i would like to do is move to my prepared statement. [laughter] it actually has to do not with me but with you. i am delighted to be at the annual gathering. i have worked with world affairs council to run the country for many years and have enormous

regard for the organizations. i have also worked with the national organization that we represent today, the world affairs council of america. there are some great councils around this country, but speaking from the policy side, as great as those parts are, the sum that they represent is far greater. i had the opportunity to reach back to the national level to ask for a leadership mission to come to iraq during the transition between bush and obama. a number of you participated in that mission and are here today. it made a difference. i think there are other leadership missions that need to take place. i would like to see a leadership mission to afghanistan. i would like to see leadership mission to iran.

i would like to see another leadership mission to iraq. we have turned the page. i would like to see you get out there and make an assessment before we decide we're closing the book. from a policy perspective, that only really works if there is a national organization. i commend you, marc grossman, and all the people who have worked to put this together today. [applause] iraq going forward, i would agree with virtually everything general odierno said. i see the glass as distinctly more full than empty. he went through a number of positive points. let me tell you what my worry is. for all the progress that iraq

has seen over the last few years, the challenges remain immense. sectarian tension between shia and sunni is excited. ethnic tensions have increased. those tensions light on the rickety foundation of unresolved, institutional, and constitutional issues, states' rights issues, the authority of versusonal government revers the federal government. general odierno and his forces have done heroic work in conjunction with the regional and federal government to keep the peace along the green line. this is a holding action. the hard decisions still lie in front of the iraqis. general odierno has painted a

picture of what iraq can be. it is an enormous strategic asset for the region and the world. in the last half century, it has defined itself in the opposite manner, as an adversary, a problem, an enemy. we now have the opportunity to see a different set of relationships move forward. we have an architecture for that, the agreements are negotiated during my time as ambassador, both the security agreement and the strategic framework agreement that defines our relationships in all aspects. there has to be content to these agreements. in addition to all the unresolved issues in iraq, here is my biggest worry. in america as we look at other issues overseas like afghanistan and pakistan that take our

attention, as we look at our domestic issues like our economy, that we're not thinking about turning the page as president obama said. we are thinking about closing the book in iraq, that is over and it is time to move on. goodbye, good luck. if our thinking and resources as the new congress moved into office does go along these lines, i think the chances for long-term strategic success built on the great work that general odierno and his troops and a lot of brave civilians of already put into this will diminish sharply. american interests and the iraqi people will pay. >> those are interesting and good answers, but they are from an american perspective. put yourself in the shoes of the iraqis.

if there were some sitting here that have national responsibility and ordinary citizens worried about the future of the country, what would they say? >> this is an imperfect business as we all know. it is particularly imperfect in developing societies like iraq. i was struck by two polls conducted right after the october 31 remissioning. the cbs poll found that more than 70% of americans were done. it was time to get out. it had been too long, cost too much, to many other things to do. a poll conducted the same week in iraq have the same percentage, 70% of iraqis. but it is 70% of iraqi is that thought it would be a terrible mistake for them if the u.s.

decided to go home. ray has more recent experience. what i encountered talking to the iraqis in government and in the margins is a range of views on america. sometimes he percentage was really grateful for everything we had done from day one. -- some tiny percentage was really grateful for everything we had done from day one. there was a vast middle range that thought we have screwed up to greater or lesser degrees. almost all of them said that we needed to stay until it was fixed because if we leave, it will get even worse. partly anecdotal and partly based on surveying, partly based on the votes in favor of the strategic framework agreement that binds us together as allies. iraqis in many cases may not

like us, but i think in most cases they feel that our role going forward is essential for their security and stability. >> i do not disagree at all. we have to be careful of confusing liking versus meeting. -- needing. it is hard for a country to like somebody that invaded them, overthrew the government, state for a very long time -- no matter the problems they had with saddam hussein. east of a foreign country and military with in your own country. -- you still have a foreign country and military within your own country. the want to see themselves to control of their own country. but they understand -- i believe the iraqis believe they have the potential to be a leader in the middle east.

they believe they have the educational systems and educated to be able to do that. i think they believe they have the national resources to do that, but they need significant help. those resources and the infrastructure associated with it have been so ignored since probably 1980. most people do not realize that iraq has been at war since 1980. then you have sanctions. then you had the overthrow of saddam hussein in 2003. we underestimated the impact the sanctions had on the people of iraq. i am not so sure they had an effect on saddam hussein and the government. they had a significant impact on the people. doctors were not able to update

based on the english medical technology given in english. the infrastructure had not been updated in 20 or 30 years. the electrical infrastructure had not been updated. i called it societal devastation. we underestimated the societal devastation we got into iraq. that is partly why it has taken so long. we did not understand what would come out of that. part of that was the insurgency, part of that was other people trying to take control. the iraqis believe the united states could really fix the problem if they wanted to. they think we have chosen not to fix it. we have explained to them time and time again that we have done everything we can to help them to fix their problems. they are now taking more control. they are now sovereign nation based on the agreement negotiated and signed in december of 2008.

we're now trying to build their capabilities so they can move forward. the people of iraq believe they need our help to do that. there is still mistrust between elements inside of iraq. they have not built up trust between each other yet. we act as an honest broker, somebody who is there to help them to work through their issues. it is not to solve their problems for them, but to be there to create the environment for them to solve their own problems. that is the role we have to play moving forward. >> i would like to stay with iraq for a moment and turn to the questions of diplomacy and civilian and military working together. you two pioneered a way of working together. you think about president obama's national-security strategy focused on the whole of government. you think about the lesson we

learned with the bush administration about the whole of government. it is not as the state department or the military. is the civilian side of the united states government working with the military. as you think forward with the african command working together, civilians and military together, what lessons would you give to those who have now have the responsibility and ask how to do it? >> as i go around and talk to my military audiences in the leadership schools and everything else, the first thing i say to everyone is that there will never be a conflict again were if there is a pure military solution treated i just cannot see that happening anytime, anywhere.

the reason is because of the complexity of the world we live in today. it may be the information age. it may be what people now expect because they have instantaneous access to information. they ask for people to help them solve their problems. the military cannot do that by itself. no matter where we go, we're going to have to have the civilian component that either goes in with us or very close behind us to solve the problems that we have to solve. i think the lesson learned here is that we do not have the expertise to do that. we can do some things when the environment does not allow civilian agencies to operate because of the level of violence. we can do some minor things. our whole way of moving forward is to set up an environment where civilian leadership can come in and take over those

things. they have the expertise. they have the ability to reach out and bring the expertise in to help us solve the problems. the lessons learned that i have come out of this with comes down to a brigade commander level or even battalion commander lovell. that is unity of effort. in the military, we always talk about unity of command. that means everybody wants you to tell them what to do and supposedly they do it. unity of effort is very different. unity of effort means -- we had this diagram i used to draw. in one place in northern iraq, we have the department of homeland security working there. we had other governmental security agencies working there. we had the state department working there. we had usaid working with the state department. we have non-governmental agencies. we have the united nations.

we have foreign military units working in there. i had a brigade commander responsible there. you have to build relationships you have to understand what they are trying to achieve and how you can assist each other in moving forward towards the broad goal you are trying to achieve. we used to ignore many of these organizations. we did not pay any attention to them. it caused problems. it made it more difficult than it had to be. it is about gaining unity of effort and realizing from the general level down to the lieutenant colonel level -- i found sometimes the lieutenant- colonels did a better job than the generals. they did it for survival. we have to teach this. we have to be the example. we have to lay this out so that we have a strong team and

understand the unity of effort. that is why we worked with the state department starting with ryan when he was over there and attempting to carry it forward. it is very important. it is not just the state department. the u.n. plays a major role in iraq. we want them to play a bigger role. you have to talk with them, build relationships, understand what they are trying to achieve. try to build a synergy. that is probably the number-one lesson learned that i learned. >> two brief comments. purely military and purely diplomatic policies. it is now one bit messy political military world, certainly in iraq and in afghanistan. you have to have that unity of effort. it starts at the top with both

david petraeus and ray odierno. it was the old american revolution mantra to hang together or hang separately. any chance of success was going to come out of the unity of effort. everything we did, we basically did together. we had joint strategic teams. we had joint campaign plan implementation task forces. we had joint working groups. with general odierno, members of his staff for members of my staff. my closest morning meetings always had a representative of general odierno in the office. there could not be any daylight between us. if you can get that going at the four-star level, if you can push

that down. it is not without pain, but you can do it. the first part of the answer is that you just get it done on the spot. the harder problem and one that we still have not mastered is institutionalizing this. there is no manual for whole governmental organization and approach. the state department came up with an office called the coordinator for reconstruction and stabilization. it is supposed to coordinate the civilian efforts worldwide. it is still a shell. i found as ambassador that i had to go through speed dial to various cabinet level secretaries saying that i badly needed 25 assistant u.s. attorneys.

there is not a mechanism to compel the whole government approach. it is left to commanders, military and civilian. i hope we can move ahead as the government and find ways to better impose and coordinate that. to pick up on his last point, it is not just zero of government. it is whole of international effort. in iraq, we brought the united nations into coordinated operations. they work off of our provincial reconstruction team basis. we housed them. we secured them. you moved them. they could not have done this on their own. they made a crucial difference as we move into the elections. it is an internationalist ancient -- internationalization of the

effort. >> if i could add to that, ryan and i would need three or four times a week in the morning. that sounds like a minor thing. but you do not understand how much was going on every single day inside of iraq. ryan would be working on significant political issues. i would be working on significant military issues. they overlapped. if it was not for us sitting down and talking through, we would have disconnects. we wouldn't -- we would end up working against each other. it was key for the senior leaders to sit down. when we did the surge, we imbedded state department teams with our brigades. we found that we gained this synergy. they were working together

because they were sharing everything they were doing together. we had a meeting talking about very serious issues every single day. that can make a huge difference. there is no way i could have known everything he was doing. there was no way he to know everything we were doing every day. it was important that we sat down to discuss it. i was fortunate because i got to spend about 18 months as a military adviser to secretary powell and secretary rice. i got to understand the state department a little bit. the military is overwhelming. we go into iraq and have 175,000 people. i have these huge staffs that can do incredible things. then you have the state department that has a very small staff. we wanted to do all these things together. we had 40 people for every one of theirs, maybe 100.

[laughter] what we have to do is that i started in betting -- embedding people inside the embassy. it served me better. we learned what was going on. we had a better idea of how to support. we brought the synergy together. it is about leadership. this is always about leadership trade if the leaders are not willing to do this, it will not happen. -- this is about leadership. if the leaders are not willing to do this, it will not happen. it must be codified. in afghanistan, they are doing the same thing. we did it in iraq. even in pakistan, we have military forces doing some humanitarian things. all around the world, they have to be tightly knotted with the

ambassador. if you do not do that, you will not have the unity of effort. >> i invite you to pose questions. we have a few minutes before the panel ends. i would be grateful for questions and comments. >> i think everyone in this room is familiar with the middle east. we have watched all in many countries the people will experiment with islamic government. if the u.s. is indeed closing the book and stepping away to allow the iraqi people to determine their fate, and considering what we know about the influence of iran, can you envision the possibility of an islamic state emerging after the united states leaves? what do you see is the factors that would contribute or not

contribute to that? how do you think the american people will feel having basically created another islamic state? >> my first dram -- theory on the middle east is that it is complicated. you just ask one complicated question. there is little likelihood of an islamic state emerging in iraq because the iraq muslims are divided into sunnis and shia. they would not be able to agree at all on a common theocratic approach to government as what happened in the case of iran. another dimension is the relationship between iran and iraq. the vast majority of iranians are shia.

a substantial majority of iraqis are shia, yet those countries fought a vicious eight-year war to defend their histories, borders, nationalities, ethnicities against the other. the common bond did nothing to ameliorate probably the most vicious ground campaign we've seen since the trench warfare of world war i. that does not mean that iran is not a problem in iraq. the iranians had a couple bad years in iraq. when i got there in the beginning of 2007, they were sponsoring militias that were hugely destructive. because of the surge, we started

a virtuous circle where sunnis turned against al qaeda. shias noticed that they were fighting a common interest -- enemy. the iraqi government turned against the militias and defeated them. it was a bad couple of years for iran. do you know what the iranians are saying now? they are saying that you are american friends are going home soon and we're still going to be here. we're always going to be here because we have always been here. that is why i urge the government, congress, and people that as we turn the page in increasing iraqi responsibility and increasing civilian support will that we not close the book. believe me, there are others out there, al qaeda, the syrians,

all set to march through the remaining chapters without us. it will not be a pretty story. >> you have to delineate between what i ran once -- iran wants and what is going on. iran wants to have significant influence over iraq. there would probably like to seek an islamic state established at some time. there's also something we have not talked about. there is also this religious choral quarr -- religious quarrel about the head of shia islam. what i iran and iraq want are different things.

every poll, as i have watched the iraqis vote over the last several years, they want to have iraqi is in charge and have the democratic process. their participation has been tremendous. i worry that they could lose confidence in the democratic process, especially as it continues to go through the long stalemate in forming the government. i worry more about that and what that could lead to. it is not that i believe that i ran could have a wave of influence. there are factions that will, but iraqis as a whole will not allow that to happen. that is why it is important. i always worry that in december of 2011 when our u.s. forces leave, that we will lose interest in iran.

to me, that is the issue of the future. we cannot lose interest. it goes back to the strategic framework agreement. it talks about economic relationships, cultural exchanges, medical exchanges. these all play a key piece for us in sustaining a relationship that also allows the iraqis to continue to build a more stable government. that allows them to stand up against countries like iran and others that want to come in and dominate and have too much influence inside of iraq. the next three to five years are the most critical. it has to do with how we react to that. there will be a lot of discussion about how much money we spend on iraq because they are an oil nation and should be spending their own money. we know that they will not reap the benefits of the oil until 2013 or 2014. they have to rebuild the

infrastructure to get it out of the ground. until that time, we have to be there to assist them on political and economic issues. to me, that is the way to stop what you describe happening. i do not think that will ever happen. i never say never to anything. >> we have a short question and two short answers. >> many of the current capacity building efforts are keyed on the timeline of when the u.s. military begins to go home. that is in part because there is this habit of ensuring that nobody goes outside the green zone without a lot of military escorts. at some point, that is not going to be possible. the capacity building will have to be longer-term trad.

how do we square that with the operational piece of sustaining capacity when we may not be able to provide military support that we presently do? >> the plan is -- it is a misnomer to think that everyone is in the green zone. there are people all over the country inside of iraq. there are going to be other outposts of the state department. they will continue to support capacity building within iraq. they work with military escorts. over time, we have advised them to start to let the iraqis provide the escorts. i have enough confidence in the iraqi military that they will be able to do that with some u.s. oversight.

they have to start moving in that direction. that will allow us to do the capacity building. the one thing i have changed my view on overtime is that i believe there is a time when our large military presence becomes counterproductive. i think we're close to that time. it is starting to become counterproductive. as the iraqis see their security forces start to improve, they do not understand why you need to be thousand u.s. forces on the ground. that is why the plan to slowly go down as they increase capacity. that is why we just have trainers and advisers with them. the rockies have been doing security since the beginning of 2010. -- the iraqis have been doing security since the beginning of 2010. we have slowly drawn down our forces. they have done pretty well.

we have not seen security get worse. we still have violence. we have not seen get worse. we have to continue that. >> one last question. >> i really like the unity of effort that you talked about. i wondered if you could speak to whether that is in basis in top u.s. military command or are you fairly unique? >> we learned this. the last stage of conflict before iraq was desert storm. we went in and did our job. we left. everything was great. it went well. this was more complex. we realized this is the only way to succeed. we have realized that in effe afghanistan.

my worry is that it is not codified. i worry that we will lose over time what we have learned and will repeat mistakes of the past. it is my responsibility and that of others to ensure we do not do that. >> in my foreign service career, i have had a long and very productive relationship with my military counterparts. i will give you a couple of examples. i was ambassador to kuwait when saddam hussein looked like he was going to invade again. there was a swift response from the administration in 1994. the central command and i spent the next three years working together to set in place security agreements and a security architecture in kuwait with bases, robust exercises, and so forth. that was to guarantee that it

could never happen again. civil-military cooperation in kuwait was the number-one item in my portfolio. in pakistan in 2005, the great earthquake that killed 80,000 pakistanis in two minutes led to the largest and longest airborne humanitarian relief effort by the united states since the berlin effort. that was a completely coordinated civil-military operation. i chaired meetings for months out of my office bringing everyone together for a total unity of effort approach. it can be done and is being done around the world. if you are smart enough to get where the three of us have gotten am lucky enough, if you have learned how important that

sort of thing is. it still needs to be codified. >> you are off the hook. the good news is we have a lot of officers in the state department and military who have experienced this at the lowest levels. they understand the importance of this. that will bode well for us in future. i did not get to make an opening statement so i wanted to make a closing statement. >> with the increase in the number of women in the state department and now military, you have the opportunity to get a lot of right brain thinking into that. iraq?that get into a r when and how? >> it is a great point.

[laughter] i am serious. the foreign service, state department has worked three hard to get a foreign service that looks like america, particularly in gender balance. i am pleased that three of my last four bosses have been women. we have an award. it is going to sound boastful and it is. in 2009, secretary clinton created the ryan crocker award for outstanding achievement in diplomacy. that means to go to really awful places and if you come back alive, we will present something to you. [laughter] it has been given twice.

it was given last year to a provincial reconstruction team leader in eastern afghanistan who spent 18 months out there. she lost two of her people to ied attacks. she negotiated agreements between the military and tribes and then between tribes and the government of kabul. she left three teenagers at home to do that. the second award was just presented to ann patterson, our outgoing ambassador to pakistan. for those of you who have daughters out there that really want to see combat, and do not send them to ray. send them to us. [laughter] [applause]

>> join me now and thinking of our panelists for their service to the united states and for the panel today. thank you very much. -- join me now in thinanking our panelists for their service to the united states and for the panel today. [applause] [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> coming up, a couple programs on the economy. first, president obama on the unemployment report. then, chairman bernanke on the program to aid the economy. sunday morning, watch election night speeches and reactions here on c-span.

now, president obama on october unemployment numbers that remained at 9.6%. that is the same rate as in august and september. he mentions an increase of 151,000 jobs in october. according to the labor department, that is the biggest increase in private-sector jobs in five months. top numbers were in education and health care. >> good morning. we're in a tough fight to get the economy growing faster so that businesses can open and expand, so that people can find good jobs so that we to repair the terrible damage done by the worst recession in our lifetimes. today, we received some encouraging news. based on today's jobs report, we

have now seen private sector job growth for 10 straight months. that means that since january, the private sector has added 1.1 million jobs. we have seen over a million jobs added to the american economy. in october, the private sector has added 159,000 jobs. we learned that businesses added more than 100,000 jobs in both august and september as well. we have now seen four months of private sector job growth above one of the thousand. it is the first time we've seen this kind of increase in over four years. that is not good enough. the unemployment rate is still unacceptably high. we have a lot of work to do. this recession caused a great deal of hardship. it put millions of people out of work. to repair this damage and create

jobs to meet a large need, we need to accelerate our economic growth so that we are producing jobs at a faster pace. an encouraging jobs report does not make a difference if you are still one of the millions of people looking for work. i will not be satisfied until everybody who is looking for a job can find one. we have got to keep fighting for every job, for every new business, for every opportunity to get the economy moving. just as we passed a small business jobs bill based on ideas of both parties and the private sector, i am open to any idea, any proposal, any way we can get the economy growing faster so that people who need work can find it faster. this includes tax breaks for small businesses like deferring taxes on new equipment so that they have an incentive to expand and hire, as well as tax cuts to

make it cheaper for entrepreneurs to start companies. this includes building a new infrastructure so that our economy can run faster and smarter. that includes promoting research and innovation and creating incentives and growth sectors like the green energy economy. it certainly includes keeping tax rates low for middle-class families and extending unemployment benefits to help those hardest hit by the downturn by generating more demand in the economy. it is also clear that one of the keys to creating jobs is through open markets to american goods made by american workers. our economy depends not just on consuming things, but also on being the maker of things. for every $1 billion increase in exports, thousands of jobs are supported at home. i have set a goal of doubling america's exports over the next

five years. that is why on the trip i am about to take, i will be talking about opening up additional markets in places like india so that american businesses can sell more products abroad to create more jobs here at home. this is a reminder that the most important competition we face in this new century will not be between democrats and republicans. it is a competition with countries around the world on who will lead the global economy. our success or failure in the race will depend on whether we can come together as a nation. our future depends on putting politics aside to solve problems, to worry about the next generation instead of the next election. we cannot spend the next two years mired in gridlock. other countries like china are not standing still. we cannot stand still either. we have got to move forward. i am confident that if we can do that, we can work together.

the country will not only recover, it will prosper. i am looking forward to helping drive the markets open, help american businesses to put people back to work here at home during the course of this trip. thank you very much. [inaudible] >>, a look at the economy continues with german ben bernanke on the financial crisis over the last three years. he also talks about the decision to buy additional bonds over the next eight months to stimulate the economy. it is hosted by jacksonville university in jacksonville, florida. this is about 45 minutes. stimulate the economy. >> i do not want to spend all the time talking at each. i bet i've talked to -- i thought i would talk for a few

minutes and then i will be happy to take questions after that. the federal reserve has two brunn functions. the first one is to promote financial stability. that is what the federal reserve was founded four. there is a crisis in 19 07. -- 1907. leaders got together to figure how to structure this instability. there is another crisis in 1914. it the fedders is being created at that time -- there was another crisis in 1914. the fed was just being created at that time. the fed did not do is stop during the great depression. i will talk more about that. one of the major features of the

great depression was a near collapse of the banking system which led to a collapse of the money supply. the federal reserve has basically two tied it kills the we can use to maintain stability. -- two types of skills that we can use to maintain stability. if you think about what a baby does, they take short-term money and invest it in long-term liquid assets. there is a problem and that transformation. it depositors to lose confidence in the bank, they will demand their cash. if the bank only has long-term assets, it and not able to pay off the depositors and it will sell.

with a lender can do is provide cash, taking the long-term assets. it allows the bank to essentially make liquid the assets and pay off the depositors to stop the run. we know from several hundred years of monetary theory that the way to stop the panic is to lend freely to institutions that are temporarily liquid. the other told the fed has -- tool the ban has is that it is a regulator. there are earnings, liquidity of bank holding companies. in trying to insure that things are safe and sound, we tried to prevent financial crisis.

the other main task that the fed has is the macroeconomics task. congress has given the fed a dull mandate -- duel mandate, maximum employment and price stability. that means keeping inflation low and stable. you are all familiar with monetary policy. they will be able to manipulate the short-term interest-rate. that helps the fed keeps the economy on an even keel so that we have neither too much inflation nor too little. those are the two broad tasks

that the federal reserve does. in the last three years, we have been faced with extraordinary event and have tested both sides of that mandate to extreme degrees. on the financial stability side, we used all our tools. when the crisis began in august of 2007, some of the first problems were liquidity problems in the banking system. this is what we learned about in studying a book called "lombard street." they can provide the telecast to their creditors. we created an auction facility that will provide large amounts of cash and allow banks to become more liquid and more stable.

the problem was that the crisis morphed into a much broader phenomenon. entire1930's, the financial system was made for the banks. if you stop the depositors from running, you stop to the panic. -- you stopped the panic. one of our most significant runs we had in 2008 to place on money-market mutual funds. they are mutual funds with very liquid shares that their depositors put in. they invested in short-term safe assets. following the collapse of in 2008, theys who in 2008 lost money on commercial paper that it held.

suddenly come if it cannot pay of the depositors -- suddenly, and they could not pay off the depositors. that created a new run. they are major suppliers of cash to corporations. the commercial paper market rose up. the fact that our modern system has all kinds of institutions that have been quite futures and more illiquid assets meant that this iran problem -- run problem began in other contexts. the same thing happened with aig or they were funding on a short-term basis and they had a liquid -- illiquid assets.

it was a panic generated by the withdrawal of cash to gi. we went through a whole series of programs to try to get the markets working again. for money market mutual funds, we were able to lend to them so they could pay off their depositors. it is supplemented where the treasury ensure the deposits. in the commercial paper market, the allow corporations to meet their financing needs. they need the cash to pay off their creditors.

we expanded it to a wide variety of institutions. working with the treasury and other banks, we helped to stop the panic of 2008. we need to know when to make loans to provide the lenders to stop the panic. i mentioned the other part of our tool kit for dealing with financial instability, our supervisory tool kit. we were examining what was going on at other financial institutions and trying to figure out where there were problems. a very important example was in the spring of 2009 when we and the other agencies did a stress test. we took all the biggest banks

and we did a simultaneous and evaluation of all their assets and losses and we publish that information for the public. it had a great effect. investors had the information they needed about the health of the banks. any problems or taking care of. the other banks found they could go to the stock market and raise new capital. they were able to do that. we are able to help stabilize the banking system. going forward, the fed has even more expand its supervisory powers in part because of the result of the new legislation. we will be looking at a number of other kind of institutions including non-banking institutions if they are deemed "systemically critical."

we have broader authority is going forward. we are working with our counterparts in switzerland to set of new capital standards. the more painful, the saker they will be due the more they have, if the state bird they will be -- the more they have, the state for they will be. the other part of our general assignment as the macroeconomic part. when the crisis led to a deep recession, and the financial crisis in 2008 led to a very sharp global recession that lasted to 2009.

they tried to provide support for the u.s. economy. we cut interest rates sharply. we kept them before the height of the crisis. -- cut them before the height of the crisis. before december 2008, we have cut the federal fund rate than we used to target financial institutions to almost zero. with that interest-rate almost at zero, some people might say the fed to go home. there is nothing else they can do. we took additional steps. we developed a new type of policy that involves buying long-term securities such as

mortgage-backed securities guaranteed by fannie mae and freddie mac for treasury securities, government debt. we purchased those from the market and brought them in. we provided more support to the financial markets. we did some very big step along those lines in march of 2009. at that time, the economy was in bad shape. i do believe this actions did help. they brought down interest rates. shortly after, we saw the to recover.in even though we were at zero, we had an additional tool that lets as provide further support for the -- that let us provide further support for the economy. even the economy is no longer in

a recession in the sense that it is expanding, it is not growing very fast. as a result, the unemployment rate is coming down very slowly. when it the mandate is maximum unemployment -- one of the mandate is to provide maximum employment. we are showing in sufficient stimulus. to provide additional stimulus, the federal market committee voted to increase to buy additional securities in the open market with the goal of reducing interest rates, providing more stimulus, and we hope to treat a faster recovery

and inflation rate consistent with long-term stability. we will review bacthat. it has been an interesting three years. we are doing what central banks are supposed to do. the nature of the crisis means we have had to use a whole lot of approaches that have not been used before by the federal reserve. that is very important. let me just got there. that is a quick overview -- let me stop there. that was a quick overview.

that me see if anyone has any questions. >> thank you for coming. you have mentioned that the federal reserve sees an extended time of low inflation which could threaten the economy. i see commodity prices skyrocketing. a feeling that commodities such as cotton and sugar -- you look at commodities such as cotton and sugar, it seems like producers are eating most of the price increase. i think that could be trickling down to the consumer next year. do you see any possibilities to

that threat for low inflation? do you think there is a possibility of higher inflation next year? >> er right. the one exception to the general observation that is coming down is that globally traded commodities like energy and food have been going up pretty sharply. the supply and demand is determined on a global level. a emerging-market occurring quite quickly. the demand is pretty strong. that will be a contributor to inflation in the year west it will affect -- inflation for the year in the u.s. it will affect it. there is a lot of slack in the economy and excess supply. it is very difficult for producers to push through to the consumer.

most of the costs the producers have our labor costs. productivity has been growing strongly. the cost of labor per unit of production is actually falling in some cases. you have higher energy and material cost. you put that together and you do not expect to see very much inflation to final goods and services. inflation is going to stay quite low going into next year. commodity prices are an issue. i think it'll take at least some

further growth and a reduction in slack before we start to see any kind of inflation pressure. then we will have to be sure to modify our amount of stimulus to make sure we maintain stable prices in the long term. canybody else? >> good afternoon. my question lies with what you did with the "washington post." your answering the people about the six and a billion dollar purchase of securities. your company -- $600 billion purchase of securities. you said your company was confident. how will you do it? >> what the purchases do -- if you think of the balance sheet, on the asset side of the dollar

sheet we get the dollar security. on the liabilities side, to balance that, we create reserves in the banking system. what these reserves are are essentially deposits at commercial banks go with the fed. the amount of cash in circulation is not changing. banks are holding more reserves with the fed. the question arises of what happened when the economy is growing more quickly and it is time to pull back the monetary policy accommodations. there are several tools that we have. the first one is that the main thing we need to do when it is time to do it is raise interest

rates. that is what we always do. even though there is a large amount of excess reserves, can we raise interest rates? the answer is yes. we have been giving the authority by congress to pay interest to the banks. if we wanted to raise the short- 2% -- they would have no incentive to take them elsewhere. by raising that interest-rate, we could essentially raise short-term interest rates throughout the system. that is basically what the fed does one ever it tightened monetary policy. -- whenever it tightened monetary policy. and have a large amount of reserves, it could be that some

will leak out even those we have raised the interest rates that we pay. we also have developed a number of tools to drain or immobilize the reserves of the cannot go out into the economy. one way we do that by treating time deposits. inurbane he can have a regular -- creating time deposits. in the bank, he can have a regular deposit. they can hold reserves with us for three months or longer. by doing that, we freeze freezer so they can not do it. one way is to do by replacing reserves with other types of financing. we can borrow from money market mutual funds. we have a variety of ways of

draining those reserves. finally, if we wanted to do additional training, we could sell the assets that we owe. if we sell the assets, that will tighten policy in a few ways the . when you sell assets, it distinguishes the reserve. assets and liabilities will both come down to get there. we have the these three broad tools. we pay on raisers in order to tighten financial conditions. tools we have to immobilize them and sell assets. we have plenty of tools. we have done plenty of work to make sure they are tested.

we have tested them successfully. we are comfortable that we will be able to do it when the time comes. >> thank you. the university of florida. my question has to do with the decision to buy $600 billion in securities. there have been some complaints from developing nations, particularly in south america and south korea, that this decision might create some sort of influx of foreign capital that could inflate assets of bubbles. my question is not about your opinion on that and how the open market committee factors things like that into their decision making process. do they take those things into account when they are deciding to buy its assets? how big do these things factor into the decision making process? >> the first goal the we have is

to meet our mandate to get price and maximum employment and gi. a strong u.s. economy is critical for the global recovery. in that respect, it is very important that we do achieve a successful recovery in the u.s. with respect -- in the u.s. with respect to the dollar, that is where the fundamentals come from. we are certainly aware that the dollar does play a special role in the global economy in the international financial markets. there must be someone else with

a question. there we go. >> mr. chairman, i am curious how you think the results of the midterm elections will affect fiscal and monetary policy in the next six months. >> the federal reserve is totally non-partisan. we work with both parties. we work with the administration and the congress. we do not make political predictions. our basic goal is to do what we can to support the economy, to create employment opportunities and price stability. we want to work with the administration to get as much help and the policy and growth as we can for the rest of the government. we are nonpartisan. we were equally with all members of congress and the administration.

? >> my question is not on the second round a quantitative easing. i want to know about what you are facing. when he bailed out aig, you are facing opposition. -- when he bailed out aig, you were facing opposition. why did you did it? what is your reaction? >> we took the action. i do not know where you get the idea that our advisers were against it. they were not. you know, when the lessons i've learned -- before i became chairman, alan is a professor. one of my major interest was economic history. i read a lot on the great depression. i took to lessons from the great depression.

one is that monetary policy needs to be supportive of the economy. it was incredibly tight in the 1930's. the the other lesson was that broad based financial crisis is destructive to the broader economy. this has been learned over and over again in many other contexts. it is important to try to prevent a systemically important and critically interconnected firm from collapsing in the middle of a broad panic me. the whole system was under a lot of pressure. we are doing our best to prevent a disorderly collapse of a financial firm. there is no doubt in our mind that we needed to do what we could. the tools were very limited.

a very important development in the newdodd/frank reform -- willank reform let us do it in a way it did not leave this in that kind of situation. that is critically important. in 2008, we did not have such tools. it applied only to banks and not aig or other non-banking firms. we did not have good tools. the only till we had -- tool we had was to lend money. aig was facing a run. catches flowing out. cash was flowing out -- cash was

flowing out. to stop that you wind against capital. this is one of the largest insurance companies that had attached to it in one relatively small division that was making very dangerous that the bill -- dangerous thabets. it was an ongoing viable enterprise. the company itself the become collateral for a loan. we have the act in place at that time. we knew that if the company

collapsed on top of the lehman collapse that very likely the financial system would collapse. then we would have faced a much worse economic situation. we did it because we knew if we let the company collapsed that the danger to the world economy was an enormous burden o. we did it. that is unwinding. the federal reserve will get that loan repaid. we succeeded in avoiding the financial meltdown. it is somewhat of an unpleasant experience.

you asked about the bonus issue. it was a bad judgment on the the management. when i learned about that, there is legal action we could take. i was told there was not. it is a relatively small amounts of money. it created a lot of resentment and anger among the public. that is understandable. in that respect, it was a bad event. after that happened, the treasury began to formalize its management and compensation for other companies that have received help. that has not been the fed's problem for quite some time.

>> hello. how do you think the high level of growth in china will affect the future? how will it affect the fed policy in the future? >> emerging-market are growing very quickly. that has a number of attacks. one is that it raises commodity prices. that is an issue. it serves as an engine of growth in demand for the global economy. having growth in emerging market is basically a good thing. at a fundamental level, 20 years ago we were talking about developing countries and billions of people in serious poverty.

it is brought many people from abject poverty into a decent living standard. in that respect, it is very positive but bil. more generally, it is good for the global economy. another country does well it does not mean we are worse off. the better global economy, the better opportunities we have to trade and invest. there are a lot of issues. a well functioning chinese economy is good for the united states. if it strengthens, we take that into account.

our focus is under development in the united states. this factors and to our analysis this is how we make -- analysis. this is how we make our policy decisions. >> i was wondering how the new legislation will in fact how the fed deals with acid bubble's going forward? >> there is a very important philosophical change in our regulatory system. prior to the legislation, individual agencies focused on just those market for which they

were responsible. the banking industry's but at the banks. the trading commission looked at the changes. insurance regulators look to the insurance companies. there are a couple problems with that approach that became evident. the consistency of regulation as very and even. while some -- of any eveuneven. some were falling between the cracks. this is a much broader and bent been a single institution prevent it requires great complex interaction.

there is nobody looking at the system as a whole. subprime mortgages were a problem for a wide variety of institutions. they are looking at it for a system wide perspective. a very important element d dodd/frank is to create a macro prudential approach. it is try to look at the system as a whole. there a number of ways that can happen. when it the most basic is that the legislation creates a new council. it will have the major agencies including the fed and treasury. it will meet regularly and tried

to talk to each other and identify the problems like a housing bubble. by comparing notes and working together, we should be better able to identify the problems. we cannot guarantee that we can see everything that will happen. it is very important that legislation takes a lot of steps to strengthen the system. i mentioned the basel capital rules. it is a two-pronged approach. the federal reserve is doing is within our own approach to the get the system as a whole and identify risks that are emerging. on the other side we want to do

everything we can to strengthen the system so it can withstand better than it did the past few years. >> university of north florida. my question is about your 2002 speech and making sure deflation does not happen here. you stated japan's economy faced significant barriers to growth. you mentioned included massive financial problems and the banking sector and a large overhang of government debt. in a policy makers reluctant to use fiscal policy. he felt the u.s. did not share the problems. do you still kill the way? -- feel that way? >> i think japan has a number of strengths. it is still a very rich economy.

one of the main problems that japan has is demographics. japan is getting older. to the extent it has worked for us and is on the brink of shrinking. that is one major problem that japan has the we do not have. it is close to 200%. thatis offset by the fact the zero most of their own debt. in the u.s., the ratio of debt to gdp is much less that has been rising produced the get me.

in addition, we have some long- term issues that we need to address. i'm glad you read my speeches. i am impressed. recently, i've given some testimonies that address the need that we have. i think everyone understands that we need to do with our alarm term fiscal issues. we are not yet to the 200% level. we need to take action to bring our long-term fiscal and balances into better alignment. otherwise, it could lead to very severe problems. >> thank you give as yet seen the commodity prices rise, it seems a lot of people move into gold because of fears of

possible over inflation. it seems a lot of these investors still quantitative easing may be too over inflation. is there anything to minimize this over inflation? >> absolutely. we are absolutely committed to keeping inflation low and stable. we have the tools and wind and tighten -- and unwind as the time comes. there is the question that we will be able to manage that. it is important to understand that inflation expectations remain really quite low. one example would be the

inflation rate evens, the different between the yield on regular nominal treasury bond and inflation indexed bonds. it is an indication of the amount of inflation that investors expect over the next five or 10 years. that is still below 2%. investors think that inflation will stay low. if you look at the surveys for consumers and businesses, you do not see any contradictions. with a pet owners to try to predicted overlong times -- we also look at business owners who try to predict it over a long amount of time. if that in both directions.

they also protect against further declining inflation. it is important for the fed to keep inflation expectations will anchored in stable. i think a are stable. we will work to keep them there. >> good afternoon. my question regards the housing market. what kind of timeline to you think the united states is looking at in order for the housing market to recover where property owners and start to see some appreciation in the property? >> that is very difficult to know. right now, construction is

basically lower than any time since world war ii, even during times of our population is lower than it is today. we have a growing population. we have households being formed. you would expect to see house prices normalizing. the problem is that we still have some steps to go before we get there. we still have a lot of foreclosures in the process. that takes time for the market to adjust to that. when you have a lot of foreclosed homes, that makes it more difficult for new construction to be marketed. we do have some important problems before we can get out of the current problems in the housing market. eventually, we will. we have to. our population is growing but

from natural increase and immigration and the 1e places for people to be housed. >> i know we want this session to keep going on and on. we have to put an end to this. i am sure everyone agrees with me that this class is so special. it is a wonderful opportunity and experience for all of us. let's think chairman bernanke for coming over here and being with us. >> tomorrow, the head of the bureau of ocean energy and management. he talks about the future of our oceans. >> i cannot put a percentage on it, but i think what we have all learned is that the percentage is not real.

there have been over for fells and holes dug in the gulf just in deep water -- four thousand holes dug in the gulf, just in deep water. i think what people did not recognize was that even though it might only happen once, it could have enormous consequences. that is why we are all legitimately concerned about driving down the risk that it could happen again. is it possible it could happen again? absolutely. when you have an known reservoirs and advanced technology, and another thing is you have human beings involved, there is a chance that something could go bad. i think what we will learn, and are already learning to some extent, is that perhaps deepwater horizon was a perfect storm of both mechanical and human error. >> you can see the entire

interview on "newsmakers," tomorrow at 10:00 a.m. and 6:00 p.m. eastern here on c-span. monday on c-span-[applause] n2, they look at the preliminary findings on the bp well blowout. a look at the possible congressional repeal of the health care law. this is from this morning's washington journal. it is about 45 minutes. host: ron, the topic of health care. what did it mean to you for republicans getting back the house of representatives? guest: well, this election was clearly about jobs and the

economy. i looked at a lot of the pre-election surveys, and what those surveys tell me is that the american public does not want to repeal health care reform. they want to give it a chance. now, there's some who want to build on it and strengthen the it. you know, but i think if you look at the various areas, there's still a lot of confusion out there about what's in the legislation, how it's going to affect people's lives. one of the things that's happening is that at some of the early provisions get implemented, a lot of people are now beginning to sort out fact from fix. when young adults are able to get coverages on their parents' policy up to age 26. children cannot be denied coverage due to preexisting conditions. small businesses are getting tax credits. lifetime limits in terms of what insurance companies will

pay out if you have something like cancer or a heart attack. those lifetime caps are being eliminated. people, when they get denials of claims from insurance companies, they now have a right to an external appeal. so there are a lot of things in this legislation that people are starting to get now. so i think the confusion that has existed, hopefully that's going to dissipate over time. and as people get these benefits, their families will know about it, their friends will know about it, neighbors will know about it. i think support for this legislation is going to grow. host: so when you hear political rhetoric, especially from republicans, the newly minted republicans in the house, that talk about repeal, how do you treat it? guest: it's not going to happen. i know there are going to be

motions to be considered and they may pass the house of representatives. but there are three reasons they're not going to become law. number one, the senate has 53 democrats. and they're not going to pass a repeal. number two, the president is going to take out his veto pen or whatever gets to his desk. but third, i don't think the american public is going to want to see this legislation repealed. they want to give it a chance. so i think that the likelihood of seeing a repeal is slim to none. host: one of the people running to head the committee is joe barton. one of the things he talked about should he become chairman is the desire to see the health care law overturned. i want to have you listen to what he has to say and get your reaction. >> first and foremost is repealing the new health care law that most people

generically call obama care. most of that will come through the energy and commerce committee. not all. some is ways and means and other committees. but the lion's share is energy and commerce. so my first priority would be to repeal that. and follow up very quickly with a replace and reform package that really addresses the health care needs of america. i think we have to do more than just repeal. go back to status quo. i think we also have to replace and improve is system so that every american has access to qualified health care. host: he talks priority. and uses that word as guest: congressman barton and a number of his colleagues so far in this debate on health care they've only said one word throughout this process and that's no. i guess now there's a second word and that's repeal.

i didn't hear anything from senator -- congressman barton in terms of what he would like to replace. what would he like to put in its place? and that's one of the problems that republicans who want to try to repeal the legislation have. they really don't have a program. i don't think that congressman barton is going to get further than possibly the floor of the house on a repeal vote. you know, senator mcconnell actually in his speech before the heritage foundation said what he thinks the real stakes are. and he said his number one priority is he wants to beat barack obama in 2012. that's what this is all about. this is not about repealing the health reform legislation. because anybody who is a political realist knows that's not going to happen.

so we're going to see a lot of heat, a lot of rhetoric. there may be some motions passed on the floor of the house. host: so if repeal doesn't happen, there are ways to dismantle portions of it, slow down portions of it through legislation? guest: i think what you may see happen that will be more significant is that a number of the opponents of health reform, they're going to try to what they call starve the beef. they want to make sure that there isn't money in the departments of health and human services and other departments. and even the states to implement this legislation and. and now much of the money that's need sd actually embodied in the affordable care act. but i think there will be some fights with respect to appropriations. we may even see riders attached

to some of the appropriations bills. i don't know whether this is going to lead to the same kind of budget crisis we had in 19 t 5. i think that the republican leadership would be wise to avoid that. it did not help very much in 1995 when president clinton pretty much came out on top of that after. so i think at the end of the day and when you get to 2012 this legislation is going to state instact. and the real effort now is the hard work that is being done by department of of health and human services, social security administration, the i want nal revenue service to make sthaur this law is implemented. and one last thing. the rubber hits the road at the state level. the states are going to need help. and republican governors, even if they're ideologically

opposed to the legislation, they know that their states are going to benefit. there are lots of resources that are coming to their state. so i think ultimately what's needed is that the states need the where withal to implement this legislation as effectively as possible. host: our numbers are on the bottom of your screen and you can e-mail or twitter. go ahead, what do you see as a future for efforts being made on medicare, medicaid under a split party system? guest: let's focus on medicaid. there was a lot of mythology with respect to what's in this legislation. you have the opponents of

health care saying there's going to be a $500 billion cutback in the medicare program and it's an attempt to scare seniors to make them feel they're going to lose benefits, they could be paying more. and quite the opposite is true. first, let's talk about what the benefits are in this legislation for seniors. seniors many of whom take multiple medsance, they fall in this big coverage gap that we you've mistically call the do nut hole. that is going to come to an end. now, already those people who have fall into the do nut hole this year received $250 checks to help them pay for their prescription drugs. come january 1, their prescriptions are going to have a 50% discount. so that's going to be very helpful. ultimately, in 2020 there will be no do nut hole whatsoever. so the first thing seniors get out of this legislation is that this big gap in coverage which

has been getting wider with each passing year is going to come to an end. second, seniors are now going to get pr ventive care services and the opportunity to have a mdcal checkup each year at no cost whatsoever. no deductibles, no co payments, no out-of-pocket costs. so now we can make this a health care system rather than a sickness care system. that's number two. number three, there are seniors who will have multiple disabilities. and unfortunately, for many, many years the way people with multiple disabilities, we send them to a nursing home. that's not where seniors want to go. seniors want to stay in the home, in the community. this legislation provides many more opportunities for seniors who do have some disabilities to stay in the home and to stay in the community. and one last thing that's very

important. a lot of us have been worried that the medicare program that part a trust nund might go belly up. and in fact, it was supposed to run out of resources in the year 2017. as a result of this legislation, the trust fubbed was extended by 12 years. so seniors can be assured that the care that they've come to expect will not be taken away. now, this $500 billion thrift that the opponents of health reform keep on talking about really haven't been leveling with seniors. what is contained in this? it is really trying to squeeze out some of the waste in the medicare program. let me give you a few examples by what i mean by waste. the term waste is often just bandied about. host: i do one to get some caults so how about one prime

example? guest: anybody in these private insurance plans known as medicare advantage, those plans are receiving huge windful payments over the next ten years. the winfall payment is about $135 billion. those are going to come to an end. that goes to the bottom line of insurance companies. you'll see insurance companies said this week that they did pretty well and in the last quarterly earnings. that's a good part. well, that windfall is not something that medicare should be paying. host: let's take some calls. go ahead. caller: i'm just curious what this guy is talking about. we can't afford this. and there's just no way to sit there and pay for all these and

keep the budget straight. this is lunesy. guest: i'm really glad he asked that question because it's a very important question. the -- what you'd have to do is not look at what the democrats are saying or what the republicans are saying. let's look at the congressional budget office, which is the nonpartisan arm of the congress. what the budget office is telling us is that in the first ten years this legislation is actually going to reduce the deficit by approximately $130 billion. . . the net result is that it is

going to reduce the deficit by a significant amount. >> are there conditions to that? things that have to happen to make sure that it happens? guest: the legislation has to be implemented properly. obviously, a the kind of waste was talking about, like the windfall to the insurance companies, there are other windfalls that will happen. the prescription drug companies will be provided $80 million in rebates from the medicare program. hospitals are going to be paid differently. they are now going to be paid in order to promote quality, not quantity of services. so, to the extent that a hospital employee discharges somebody and that person gets readmitted, that is going to be very costly. there is going to be closer examination about whether people were treated properly.

one other set of things that i think is very important, the insurance companies are now going to be more careful in examining in two respects. number one, if an insurance company wants to increase its premiums, those premiums requests, those increases are now going to be scrutinized by state insurance commissions. money has been given to the state insurance commissions to scrutinize the requests to determine if they are unreasonable. if they are unreasonable, those insurance companies have to go back to the drawing board. the second efficiency is depth -- is that, there is something called medical loss ratio is. what that means is, how much of your premium dollar is spent on really providing health services to people? this legislation requires that for small plans and individuals,

at least $0.80 on the dollar has to be spent on providing health care services for people, not for ceo compensation, not for administration, not for marketing and advertising and not for profit. plans, it has to be 85 cents on the dollar, so that is going to create a lot of deficiencies. >> do you believe medicare users -- >> what we are seeing disappear, the answer to that is no. there is nothing in respect to the services that are mandated under the medicare program that requires and the insurance company to reduce benefits. i cannot say what insurance companies are going to do. if they want more money to their bottom line, it is possible they may want to reduce services, but

there is nothing in this legislation that requires them to do that. >> myrtl host: marco beach, south carolina. caller: this whole health care plan was put up to the people as being affordable. i have asked this question on this program twice, as well as my congressman and my senators, and i never got a reply. now, i make $42,000 a year. but what does my premium going to cost the monthly since it was affordable? into adon't go off tangent. i want to know what it will cost monthly. i like to remain on the line to let you answer that question. guest: first of all, for your

situation, if you want to purchase coverage on your own, here is what is going to happen. there is going to be a new marketplace that is going to relate a wide variety of plans. by the way, they are all private plans it. these are not government plans. these are private plans. you are going to be making the choice as to which planned you want to get into. because you said you and your wife have an annual income of $42,000, you fall within that group of people who are going to receive it tax credit subsidies to help you pay for the premiums that you are: to have to pay your insurance company. i cannot tell you, since i don't know which insurance companies you are going to be selecting,

what that insurance company is " to be charging you. that is one of the choices you are going to make. you are going to look at the benefits provided and then you are going to make that decision. each of these different plans is going to have very different premiums. but for somebody with your income, you oracle to receive a tax credit subsidy to help you make that payment. what do i mean by a tax credit subsidy? this tax credit subsidy is going to be provided you -- is go to be provided to you at the same time that you need to pay your premiums. this tax credit subsidy is provided on a sliding scale, which means the the lower your income, the higher your tax

credit is going to be. so the ultimate cost to you is go to a largely depend on a decision he will make on which private insurance company you are going to select, and then the tax credit is going to be calculated. >> you say it is affordable i have no idea what you are talking about when it comes to affordable. they may be charging me twice as much a month than what i am paying now. if i take the least amount of coverage, which cannot cover a whole lot, it is going to be vastly more expensive. you top this as being affordable. >> there are other things in this legislation that relate to your question. there is not only a tax credit that you will be receiving to help you pay the premium -- and again, you are going to select the insurance plan.

you are going to see for the first time there is going to be a website that you can code to that is going to provide information about each and every plant. you do not have that possibility right now. you have to go to an insurance agent to find out that information. what you do know that you are calling to receive that you do not receive today, you will receive a tax credit to help pay for it in terms of the premium, and there is going to be an outside limit of how much you have to pay out-of-pocket. host:idaho, bonnie on our democrat line. caller: my question is, we have so many folks that are unable to afford health care. i live in the state of idaho and work in the state of washington.

the difference between the two states is incredible. there are a lot of things that are not available in idaho that are available in washington state. va benefits -- will that be considered as credible insurance? also, federally funded clinics through the federal government's -- are those going to be available to more people? there is one where i live in idaho, and those clinics serving the less fortunate people who do not have insurance, but they are so crowded it is hard to get in. guest: with respect to coverage, somebody who has that probably should continue it.

that is not going to change. her last question related to these community health centers. these health centers do really important work, and one of the things in the legislation that is already going into the fact is substantial amounts of additional money have not been provided to community health centers. this will allow those community health centers to serve more people, and in addition to that, it will allow more centers to be established in the communities that need them. host: columbia, south carolina. caller: i want to be the first person to tell your guest no. you want control of the government, the health-care system by the government. i know what you are after. you want bureaucrats in washington to tell me what i

cannot have it. i want to say no to that. the whole shem you are pulling is to make demands on our private health care system, and that they are going to go away so the government can say we are here for you. i know in washington, d.c., the bureaucrats redistribute money for education in d.c. and get the worst showing from it. that is the same lottery you are going to use for the universal health care plan. you redistribute $500 million for medicare to medicaid for people who have already worked for decades. you are shipping money to people that are unproductive. that is the same scenario we are going to face. i know that you guys are moving that way and want nothing more. you can give all of the plans you want up there. you never answer the question of how much it would cost him

because you folks do not know and you want to control his health care. guest: jim is a perfect example of someone who has bought into all the different myths of this legislation. what is going to be established is a new marketplace of private plans. let me repeat -- private plans. these are not going to be government plans. these private plans are going to be offering their services and their products, and then you choose which of these you want to enter. what the government is going to do is provide a web site that will describe all the of these different private plans, what it costs, what services they provide, and what kinds of networks they have in terms of care that you receive, and then you are going to make that

decision. this is not going to be decided by either the federal government or the state government. what the federal government will do is provide subsidies for people who have incomes below 400% of the federal poverty level. what does that mean? for a family of four, that means a family that has income below $88,200. that is obviously going to go up as the cost of living goes up. middle-class families for the first time are going to be receiving help to pay for the premiums. unfortunately, jim has bought hoch, line, and sickert this notion that this will be -- jim has bought hook, line, and sinker this notion that this will be a government-run plan.

those on the left meant that. unfortunately, those on the right even though they want is a victory from their perspective, and it is only private sector plans that will be in this marketplace, they still talk about government takeovers. host: our guest, ron pollack. st. louis, missouri. caller: wouldn't the open enrollment period begin? the second question is, would i be able to take my current health care with me under the new government regulations?

thank you. guest: what kind of a plan to you have? caller: it is a collective bargaining agreement, ge neral, the best way i can explain it. guest: you are getting coverage to the workplace and you will be able to retain that. the idea was not to push people out of the coverage that they have, particularly if they like it. you will be able to retain that. for those people who don't have those kinds of possibilities, their employer does not provide health-care coverage, or the costs are so high that they are unaffordable, they are going to be able to go into this marketplace that i described, and in terms of the enrollment period, don't yet know the precise date for the enrollment period.

you are right in saying that many of the key facets go into effect on january 1, 2014. i am presuming that the enrollment period for that january period will actually start before january, a privately in the latter part of 2013. host: james martin from 60 plus association will be our guest later. angela, good morning. caller: i have a couple of questions. first off, i live in the state of massachusetts. it i think the government is trying to model its health-care after our state. it is too costly. we have a $2 billion deficit. if one does not want to join, one gets penalized $2,000.

this model that the government has patterned after our state, it is not going to work. host: if it has become too costly, why is that? caller: because too many people -- more people would rather pay the fines and go on national health. it has become too expensive. we have a lot of people that cannot afford it said it would rather pay the $2,000 and opt out of it. that is the model that the government is using, which is not good for our country. yesterday's news show that aarp are raising rates 18% on people. what does that message sent to these people who are enrolled in aarp? guest: i think most people would be very happy to have the

protection that people do have in massachusetts. massachusetts is first in the nation in terms of covering people. she was saying that a lot of people want to opt out of the system. massachusetts, by far, has a higher percentage of people with health care coverage than any state in the country. no state comes close to massachusetts. she may not want to opt into coverage, but her neighbors have chosen. i think the coverage now is 97%. no state comes close to that. i cannot speak to aarp's premiums. host: "it is the hospital costs that are out of control." guest: clearly, costs are what

is driving us. the out-of-pocket costs that people bear just to pay premiums over the last decade rose four times faster than wages. this is really significant. where these things tie in together, what the previous caller asked about people with or without coverage and costs, for those of us who do have health insurance who pay for insurance or the employer pays for health insurance, a significant part of our premiums is devoted to actually paying for the costs of those people who do not have health care coverage. if somebody is uninsured and they unfortunately get into an accident or have a major emergency, the hospital passed to treat them. if the hospital cannot get payment from that individual,

they have to make up for those costs. how do they do that? they shift the costs on to all of us that have insurance, and that translates into a higher premium. two years ago, the average premium surcharge to pay for these uncompensated health care costs was over $1,000. as we get more and more people with coverage, those of us who already have coverage, which are going to see that part of our premiums come down. host: if all lot impacts insurance companies, is there a correlation between the impact companies will have and the services that doctors and hospitals will provide? guest: yes, there is no question that that is right. there often are intramural skirmishes between the insurance companies and doctors and

hospitals. the costs are for the services we receive. it is in all of our interests to make sure the cost of these services are as efficient as possible. my hope is that we do a whole lot better in according to eric. there are a bunch of models out there like the mayo clinic and so on that try to work with a team approach. this legislation is designed to encourage that approach. when you have that approach, you are less likely to have with full services provided to you. when i go to one doctor and that doctor does not know what another doctor has done, he may prescribe something that is duplicated or something that actually negates the other s ervices. hopefully with the incentives

provided, we will have more of that prepared host: we have about eight more minutes with our guest. merrill beach, south carolina. caller: i think it has a lot of great services and can help a lot of people out. host: meridian, mississippi, line.n our democrat's caller: i want to let people know how good this health care bill is going to be. my husband got cancer about a year ago, a terrible type of cancer, and he was fired from work within six weeks. his health insurance dropped after 18 months of cobra.

all of you people out there who are lucky enough to get health care, the minute you get sick, you are going to be the first ones who run to an emergency room and one free care. with this limit, it is going to be subsidized so you are going to do well off of it. you are all fighting against your own best interests when you really do not look at the background of this plan and what it will do for you. your people -- the people on medicare are complaining about the money being taken out of medicare. that is for waste, fraud, and abuse, and you are actually getting more which are medicare by getting free checkups and well cared visits. you are all fighting against a president that is trying to get this all going, which is

supposed to help save medicaid and medicare so future generations can have it. if sometime in your life that you have a sick child or sick husband or anybody in your family and you don't have health care, you don't know how hard it is to get the appropriate help. they will ask you for $1,000 or $2,000, and you might get service and they might send you on your wit to somebody else -- >host: we will have to leave it there. guest: she raised something about somebody losing a job, and i think she alluded to cobra coverage. there is a very important point there that is worth developing. if somebody loses their job, the safety net right now is cobra coverage.

the average cobra premium monthly is 1100 e. $11. the average unemployment insurance check is $1,333. that means that a person who wants to get coverage has to spend about 83% of their unemployment insurance check in order to get coverage. that is unaffordable. we need more systematic help. that is why this tax credit is going to be very careful -- helpful for people in the middle class who have incomes below $88,000. one last and i think is worth citing -- one last thing i think is worth saying, you hear people saying keep the government out of my medicare program. people like medicare.

medicaid is run by the federal government and it has served us very well. here we are going to have a more private system, but the federal government is going to provide a helping hand with respect to tax credits. host: baltimore, md., you are next. caller: i just wanted to make a couple of comments. i don't think anybody wants health care to be free. they want people to work. they don't want to make them rich. they don't want to be made to have health care. i think you should be able to buy into a government system. older people say they don't want it to go back to a chop shop and work in the union. i get both sides. i think it needs to be more simple.

sorry, i get so nervous. host: we will leave it there. darren is on our republican line. caller: the first statement i have is, you mentioned earlier this is not a government-run system. this is a private system yet it is mandatory. private systems are not mandatory. 70% of the people roughly do not want it. this is a government by the people, for the people. you try to force us into a shows -- into a socialist system, not a capitalist system, which is what we want. the government is overriding the people's well, the choice of the people, and that is unconstitutional in reality. if this system is so great and they have put together such an awesome system, such a

wonderful health care program, why do congressmen and senators and the dictator and office not have to fall under the exact same laws and rules of this system since it is so great to everyone? guest: i am glad he raised that point because the legislation does require members of congress to participate in these exchanges. actually, this system we are talking about where you have a new marketplace, which is called an exchange, this was a republican concept. this is what governor romney proposed. prior to that, this was proposed by a number of key members in the congress by the republican side of the aisle. they wanted a system like the federal employee health benefit system, where there is a wide number of plants and then members of congress and people in the federal government select from those. that is now with the american

public is going to receive. we are going to make sure, actually, that the american public now gets the benefits of what members of congress have been receiving. host: what about the lawsuits that still remain from virginia and it on the other states that have filed lawsuits on this issue? guest: the there are about two dozen lawsuits. we are signatories to one of the so-called briefs in those cases. one case has already been decided with finality, and that was in michigan. the judge found that the law is constitutional. the judges in virginia and in florida, they have not issued a final ruling. i will say it is unclear where they will come out. i sat in the courtroom in

virginia and then listened to the hearing. i don't know where that will come out. the judge in virginia said he would make his ruling prior to the end of the year. in florida, there will be a hearing that will take place on the 16. host: are the result sitting in a virginia court room and the others? guest: in florida, there were two different parts of the lawsuit. one was on this individual responsibility provision, and one was on the medicaid expansion. the judge did not seem to by the medicaid expansion challenge. he seemed to be more sympathetic about people being required to purchase coverage. there was another case in virginia. this lawsuit was filed by liberty university. the judge in that case seemed to

>> from this morning's "washington journal," and that president obama's approach to foreign policy and his trip to asia. journal" continues. host: as a result of the election this week, does this impact foreign-policy decisions by the president? guest: it probably will to some degree. i think it is difficult where the republicans will want to take things when they get into especially the house of representatives. i think there may be an effect on afghan policy. as we all know, the president has called for the beginning of a reduction of u.s. forces in afghanistan by next july. there is a great deal of debate

about whether that can really be done, if the mission continues to be to defeat the al-qaeda, to deny them presence in afghanistan. there will certainly have to be progress with the taliban insurgency. also, there probably is going to be in little bit of pressure on the president regarding israel and palestinians it. these talks have began -- have gone nowhere, essentially. they have not broken down completely, but the united states has been trying to keep pressure on the israelis in regards to their settlement policy and the west bank and east jerusalem. the uted states under president obama has been pushing the israelis to hold back on settlement policy, something the palestinians are demanding.

i think there is going to be if the bit of a push for him to be -- to draw back a little bit on that from the republicans when they take control in the house of representatives it printed on russia, -- in the house of presentatives. on russia, the president hoped to have that tified by the senate. it takes 67 votes, as you know. they are going to try it in the lame-duck president word this morning, i just saw, senator bob corker from tennessee is now suggesting even though he voted on this private lee in the committee is wanting to push it back until the next session of congress. senator dick lugar, who will be the chairman of the senate foreign relations committee --

won't be, i am sorry. he will continue to be the minority figure their. he is for the treaty, but he has been talking about maybe we should wait. i think there is a question even if it will get to the floor during this lame-duck session. it would probably have a better chance of being ratified that it does in the next session of congress. what is really important here beyond the treaty itself -- the russians have made it pretty clear that oba's desire to reset relations, which have become very bad in the last years of the bush administration, hang on this treaty. the rsians are saying this is somethinyou have to show us, and it should be noted that the russian duma recently reversed itself on calling for a vote on the duma on this treaty because

it has to be ratified their as well, saying they will wait to see what the americans do. host: my guest will be with us until 9:15. the telephone numbers are on the bottom of your screen. is the e-s [an.orspan.org mail. there is an announcement today that there is a trade deal coming out of the president's asia trip. some of the political undertos of what is going on? guest: there are many things to say about that. this was a trip that was planned after having much of i

postponed a couple of times because of domestic problems and issues facing the president. it was planned before the election took place, timed for after this midterm election. having said that, it gives the president after this significant backstay for his democrats in the congressional elections a chance to be abroad, to be standing as the president, theerson in control of american relations with the rest of the world, and perform that job and t show himself as still the leader of the country that is the only superpower, the largest economy, and so forth and so on. as he goesnto this trip, he has had meetings already in mumbai, india, to date. i think there is a chinese

drapery that hangs over much of the visit. the indians are concerned about the chinese it. they are in competition with them economically. there is a degree of competition geopolitically because they are in the same partf the world. the chinese have become much more assertives of late, said the president is there not only to try to cement growing economic relations with the indians, but also to provide them with assurance that the americans are standing with them. i have read where the united states and india has more joint military exercises than any other u.s. partner in the world, which was surprising to me, but it also shows the importance that the united states places in india. he is going to be moving on to

indochina, a place where he lived for a time during his youth. they are building democracy in that country. there are still concerns about the military and how it operates there. there is still a great deal of corruption. the president will be talking about that. it is a visit wh the president is saying i and here, i am paying homage to my country, my boyhood home. he will be meeting with the chinese leader. the south koreans are still very concerned about the north, as is the united states and the rest of the world, the nuclear program. again, the chinese will be a big presence in these discussions before he goes on to japan. then there is thether summit of the asia-pacific countries, the southeast asia countries.

also, after a difficult period of u.s.-japanese relations, he will be patching up a new political structure in that country. so, a huge agenda host: do leaders in pakistan show concern? guest: they will be showing concern because one of the great problems the united states has had in afghanistan has been that pakistan traditionally and almost wrote lee looks towards india as an enemy. it is very difficult for the pakistanis to about face and start looking to the west end toward afghanistan, where the united states is frankly having a great deal of difficulty especially along the border areas. there has been a traditional link between the pakistan

military forces and the taliban. the pakistanis are going to be saying wait a minute. the president is visiting india while he is trying to get our support for fighting the taliban and al-qaeda along our western border and in afghanistan, so there is this greatension there. as far as the indians are concerned, the united states has been pouring huge amounts of money into the pakistani armed forces it. when these two countries clashed, it is always militarily. host: over the last few days, there has been a lot of storie about the cost of this trip. guest: the president is spending the night in the taj mahal hotel in mumbia where is that terrorist attack took more than 140 lives.

there is certainly a great cost just in securing the president in that structure. then you spread them out into mumbai and more largely offshore, it has to be a huge cost, but i have no idea what it is host: the first call for you is from cleveland, ohio. caller: i wondered what your thoughts were about partaking in the u.s. caucusver there about human rights violations against the united states about the treatment of women that w are getting criticized by iran and mexico. what are your thoughts on that guest: i am not quite sure what you are referring to. it is not necessarilya matter of international relations, also is it slops over into the

relationship with mexico. i think there is a list -- i think there is still a great deal of debate about that issue in the united states. on both sides of the issue, there are strong arguments. with these two sides are going to have to come together and reach some sort of solution because it has become a problem that the tracks from states like arizona and all of the border states from focusing on more major problems. if they can get this one salt, they will be in a much better position. the iranian complaints about the u.s. treatment of women, i think, is probably very typical of the i iranians trying to perhaps change the subject a little bit and turning the argument around on the united states. host: vancouver, washington, the

republican line. caller: do you know if the [unintelligible] has any way of knowing about the convention and if you will bring it up to south america or anything like that? my daughter was taken down there by my ex-wife. i have been going through this for years now. i realize to do not work for the state department or anything. does he have any plans to visit south america? guest: nothing that i know of it. he is certainly going to have to do that during the course of his presidency because it is enormously important to the united states, and it is increasingly important especially economically.

we have countries like brazil moving into the no. 4 spot in terms of the world's largest economies. host: falls church, va., on our independence line. caller: i was going to ask a generic question initially, and then maybe focus it. i know the u.s. congress once sworn in gets the visit by the special interests, covering many areas of the world. the most influential of being the american and israeli political action committee. part of the paralysis that sort of, you know, made up the situation in the middle east is because the congress is so the holding to eipac aipac througho.

do you think they have a general interest in seeing the palestinians have their own state as is dictated by our foreign policy? guest: i would hesitate. in fact, i will not speak to the wishes of that organization. i would recall, for you, that dennis ross, who is a very important figure in the u.s. middle east foreign policy establishment, recently spoke to that organization and he very carefully but did not pull any punches outlined what the obama administration is trying to do. he talked about the necessity -- the necessity of there being some sort of give on both sides and mentioned this whole issue of doing sentiments in the west bank and east jerusalem.

obviously, apec is an enormously powerful force because it influences in congress and throughout the united states. i think that, at heart, it is an organization that also knows it has to deal within the united states politic system and also has to understand that some sort of commentary between these two forces and agreement will at some time come and is necessary, and that is necessary not only for the desires of the palestinians, but the long range security of israel. host: are there any future meetings planned? guest: i think there are meetings going on right along, and what is encouraging, there are a lot of meetings going on

in the middle east between the players. this is not something that is only between the israelis and palestinians. it is something that affects the larger mdle east. we have seen a lot of egyptian involvement in the meetings with the egyptians. some other gulf states, jordan -- as that begins mixing it up, there is a far gater chance that there is going to be some kind of movement. the central issue is still held are the israelis and palestinians going to find -- give from both sides, come together, and start dealing with these issues? the question basically is, what happens to the border between the israelis and palestinians of the west bank? if that can be solved, i think most problems fall in place.

host: letter on, the president will travel to jakarta on tuesday and will make an address on wednesday. it in an op ed in the new york times, the president spoke about the economic gains from this trap. what hurdles does he have to cross to open up exports to these countries? guest: he is pushing the indians hard as he is on every stop for an easier time for american industry and businesses to get u.s. products into those countries. he just is preparing to announce a deal with boeing that boeing and finally struck to sell transport planes, a big amount of money. ge is talking about having gotten a deal with the indians for electricity generation equipment.

he is going to be going into korea where there is a pending free-tra treaty that he wants to see past buts bng held up because many of the united states think koreans are not allowing enough u.s. goods in. the same thing with the japanese. overlying this, of course, is currency. the big probl for many in the u.s. congress, going back to that issue, is the concern over the way the chinese manipulate their currency. what they do is keep the value of their currency artificially low. what that does is make chinese goods less expensive for americans to buy, and american goods more expensive for the chinese to buy. so there is a great deal of pressure that has been going

back and forth especially from the americans to get the chinese to raise the value of the currency. they are doing it very slowly and probably not going to do it to the levels that anybody would like. there is a similar problem with the koreans, and the japanese. host: the republican line. caller: the economic plans that the president has today, what this trip basically would do for us -- i think you basically answer that to some extend. another thing, what with the president do or what could the president do on the fair tax act? with that not help our world

trade now and is that possible? basically it is going to help -- i know there is a lot of criticism about this trip. but everyone has to realize that is necessary for his duties. so, your comment on any type of fair tax act that might help. i guess they're trading and the marking up of their currency, would it not be true that if we could lower our taxes on our corporations that they could compete worldwide and not have to negotiate? guest: let me step back a bit and say, yes, you are right regaless of criticism about the cost of this trip. the president has the obligation

to represent the united states and workn its interest aoad. we have to remember after the president had a flurry of overseas activity in the early days of his presidency, he has now in the meantime spent an enormous time on health care, financial reform regulations, and then this election. a lot of what has been going on between the united states and the rest of the world, it is in process. secretary clinton has been promoting u.s. interes, but the president has not beenble to focus on. it is presidential focus that brings u.s. focus andorld focus to these international relations, these very iortant international relations, not only geopolitically, but

economically, especially now when the u.s. economy is hurting so bad. as to tes, i am far from an expert on that. i think the problems that the u.s. industry faces, more than taxation, is the health industry and many other countries around the world recve in terms of subsidy from their governments to promote exports. i am sure you could say if we lower taxes on u.s. industry that would be an equal subsidy, but i don't think the two measurep. i think the united states will be fighting an uphill battle on that front no matter what happens. caller: good morning. how are you? associated press? do you have time for a small debate? guest: i will leave that to my

host. caller: how much of foreign policy is done without any american money? host: what do you mean by that, caller? caller: we have a world based economy, is that correct? guest: that is ctainly correct. caller: how much of foreign policy in any matter would the united states achieve with american money? guest: i still don't understand your question. caller: foreign policy and money, period. host: we will leave it there, caller. caller: sector for taking my call.

-- thank you for taking my call. how long will the press continue to allow the republicans in gross whatever the president does, especially in foreign policy? right now, they are engrossing what it will take for the president to have this visit, talking aut one-tenth of the navy has to escort him. but they probably and gross anything he does in a muslim country, being that his father was muslim. they engrossed and lied about the health policy, and the press allowed these and grossm's go through without challenge. how long are you going to do that? guest: i think there ia great misunderstanding in what you are saying. there are portions of the media

that promote one point of view or another point of view. then there are journalists like self who are required to look at the points of view of all of the major players on any particular issue and report what those people are saying about those issues, bringing into that the context and the fax of that debate. it is my job -- it is not my job as a journalist to decide who is right and wrong, but to present the view and offer the available facts a rticular issue. then it is up to you to make your own mind. obviously, from the tone of your question, you have a point of view. but it is not our job in the media to say that the point of view that is opposite yours or

contrary to yours is wrong. it is our job to present the arguments, present the facts, and allow the citizens of the united states to make up their minds. that is the function of the press. as i said, there is a great confusion abroad in the united states about many media outlets that do promote one point of view or another point of view, t they are not doing urnalism. they are promoting points of view. host: how about foreign policy going forward having to deal alongside with terrorism? guest: a huge amount. this brings into focus the need for our foreign policy to be much more directed toward what is causing terrorism, where it is, and how foreign-policy can help to alleviate that, if

possible. the situation in yemen is a nightmare, i think, for foreign- policy professionals in this administration, out of this administration, because what you see popping up is not somalia necessary, and it opens the lead for another way for terrorists who wa to attack the united states to operate quite freely. there are many terrists in yemen, as i understand it, but because of the nature of the country they operate pretty much at will. host: your organizaon is reporting that a judge in yemen has ordered the arrest a terrorist after america putting pressuren them to put pressure on terrorists.

guest: it is among the united states, as they work overseas, would do the same way. they were out to capturer kill him. there is a great deal of debate because he is a u.s. citizen about th constitutionality and morality of doing such a thing. the u.s. government putting out an order to, perhaps, kill a u.s. citizen. he operates very freely in yemen and is heavily into the internet. he has had contact with a man who d the shooting in fort hood, or who is alleged to have donehat shooting, and is supposedly tied up with the young man tried to blow up the plan going into detroit last christmas. i do not pretend to be able to make a comment for decision upon new brightness or wrongness of

this, but certainly we can see the focus of the u.s. government in yemen. the people in yemen are saying the same thing suggesting they are bound to u.s. pressure to get tougher. host: does the president indicate more involvement in this issue? guest: i think there's a great deal of involvement that we do not know about. there's a considerable use of the cia drones over yemen. i think the united states would rather do anything than get involved on e ground, and yet it is another hostile environment. host: naples, fla., for steve hurst who is a white house correspondent for the associated press. caller: thank you very much and good morning. i have not read about an issue that i think may be important with respect to the president's

travels which is how does our dollar affected to the country is going to? guest: the dollar has been somewhat lower lately which helps u.s. exports. what that means is that people in india, for example, are able to purchase u.s. products at a lower price because the exchange rate means you can get more rupe per dollar. that helps the united states economy greatly. something to think about in all of this, and i am not an ecomist, but there is some talk that the recent action by the federal reserve to purchase several billion dollars in u.s. securities is something that is

also forecast to lower the value of the dollar which, again, with help of the u.s. economy but it is causing some concerns abroad that it may also cause inflation in places like brazil and these other booming economies. host: the fnt page of "the financial times" talks about the g-20 meeting coming up. the governor of the global imbalances. what does this mean for the president? guest: he will have a tough talk when he sits down with hu jintao. i think the meeting will be in the seal when he is there for the g-20. there forl when he's the g-20. the chinese know thain order to sustain their economy going

forward that they will have to turn away, if they can come from an export driven economy to one where people consume things. as they begin moving more towards a consumer economy, as more and more people in china have the money to purchase goods, t united states wants to be in on that gigantic market. the problem the united states has in getting into the gigantic market is the fact that the chinese have kept their currency artificially low. that means it is easy for them to export and sell things, but it is hard for importers, like the united states, to get their goods into the marketplace because they are more extensive than the chinese counterpart. that is the argumen in its essence. the united states will be trying to solve that yet again. the chinese have let their currencies rise slightly. one question you could ask the

administration is, "how tough do you want to get"? there is a point where the united states could impose a tax on the exchange of currencies that would help the united states currency. it would bring money into the treasury. do they want to get that stuff with the chinese? and they are now the second- largest economy and that they hold all of this american debt. i do not know. that is a decision that needs to be looked at by this administration and congress. host: 10 more minutes. new york is next. good morning to robert on our independent line. caller: lately i have been hearing a lot about jobs and how we will become more competitive with places like india and china for middle class jobs. i am wondering if the president will be addressing how we will compete more so we are not --

companies, even thoug they are investing over there, will not be losing a lot of jobs over here, these middle-class, white collar jobs to countries overseas? guest: the president is on his bully pulpit right now telling americans that they have to get behind him in an effort to prevent the american companies that are going this so called "outsourcing." you hire people in india to run these call centers. you end up talking to someone in mind why -- mumbai. that could have been done here in the u.s., but it is being done in india and because they can do it for a much lower rate. there is a possibility that the united states could impose a tax of some sort on u.s. companies

that ship these jobs overseas. is that likely to happen in a republican controlled house? prably not. what he has to do is use his bully pulpit. there is some word from the chairman of ge, immelt, who indicated that ge is beginning to understand that perhaps u.s. industries and corporations ve gone a bit too far in outsourcing and moving jobs and production overseas. they might b willing to dw back a bit. perhaps the president is winning a bid using his bully pulpit, but this is economics. and simple. if you can get something done more cheaply and you are a corp.

looking at your bottom line wanting your stock price to go up, what do you do? you try to save money. it becomes a matter of political philosophy, and i guess you might say patriotism, wheer a president can convin those compans to begin drawing back from that kind of policies. who knows? host: to form governments look at these elections and it think the president is weaker? guest: i think we will see him politically weakened at home. now, what they have to understand is that at the same time while he may be in a dicey political situation at home, he is still the guy when it comes to dealing with the world abroad. the congress can have effects on the way he deals with the the world abroad, but he is still the one who directs policy, lays

out policy, and can take enormous initiatives. we have not talked about a run, for example. -- we have not talked about iran, for example. i think we will feel pressure to get tougher on i ran a. what can he do? on the one hand, the use of military force. on the other hand is a capitulation and acknowledgement that they will become a nuclear power. there are steps in between those two then points. the president will be the one who decides where he will come down in that spectrum of possibilities. the iranians should take note that the outcome of this election will affect where he comes down. host: jacksonville, fla., on our

republican line. caller: you have almost answered my question today. i wondered why the president has to go. the't we used to send secretary of state or the secretary of treated to deal with all of these problems? then the president could settle the things back home. i amust a very curious to know why we have suddenly come to this business of sding our very topan there who is really not knowledgeable in these things and has to take all of these people with him. guest: these top people tell him what is going on. believe me. we have a president right now who is well versed in foreign affairs and world events. the very point of a president -- and there is a long history of

this, it is to signal the importance of the u.s. plays in various relationships between the united states and india, for example. you will recall that the first state visit under president obama was the indian prime minister. this is an important relationship. obama going there takes time and it costs a lot of money and it becomes a distraction internally, but it signals to the indians have won four in the u.s. believes the relationship is with them. host: the trip will continue on until the 14th. on november 11th, the psident will attend the g-20 summit in south korea. the following day will be the news conference at the g-20 closing. he will be in japan on november 13th. this is a long trip in comparison to others?

guest: a very long foreign trip. it is more or less dictated by the fact that the president had to cancel the couple of times especially with indonesia. he is spending more time with india, for example, that he has spent in any foreign country so far in his presidency. this signals to the indians just how important this is. the president of the united statesoes not travel hours and hours and hours a plane to take him away from what are difficult domestic problems right now to spend three days in a foreign country unless he wants to signal to that country just how important he views, and the united states vws, their relationship. this is also dictated by the g- 20 summit which is something he would not want to mess and the

meeting in japan. these are important meetings and these are lining up together right now. it just happens they come after the election. a just so happens, also, that the news, as it affects the president, shifts away from domestic politics toward foreign affairs. as these trips are ranged, deals are made, agreements are made, and the leaders announced tm. this looks good for president obama and the presidency and leaders of the other countries. everyone benefits. host: michigan, how one on our democratic line. caller: on one them to get out of afghanistan and iraq. -- i wanted them to get out of there. president bush should have gone out of there. host: any elements of iraq

policy to be dictated? guest: no. in iraq, the die has been cast. that does not mean the guy can be broken, but we pulled out combat troops earlier this year and there are about 55,000 other troops in support still there which will be out by the end of this yr. president obama and everyone the united states, i am sure, once that to happen. that is an agreement made with the iraqi government. they could still come back and say things are really too dicey for you to go home. this could fall apart, although i doubt it. things may get very dicey in iraq before the u.s. is finally out of there. host: last call from our

republican from ohio. caller: i have many consumer -- i have been a consumer of your company's products. i wish was more available to the public so we could pay attention to what you guys find out. let me make a few quick points. i think the guy that was confusing to you was basically trying to say how much foreign policy would there be without the u.s. foreign-aid helping to take care of a disaster? it ends up competing against the system which is another thing. that is when you got confused about. in reference to the sending jobs overseas, specifically the service sector, a new company came on line a few days ago which is basically providing

6000 new jobs. these people answered the telephone and they are here in the united states. even when you talk to someone in the philippines, you do not understand. we just do not get it. my big deal has to do with the human being a total failure -- with thenited nations. a total failure. kudos to the lady about the secretary of state's drawbaugh. i think hillary is not getting a fair shake. she could do a lot more. that lady has a lot of capital she can years overseas. guest: you walked up and down the waterfront quite a ways. 82 foreign countries -- on a debt to foreign countries, there

is this idea that the u.s. gives away a lot ofoney in foreign aid which is simply not true. it is a little bit more than 1% of the budget. countries like japan and the terms of a percentage of their budget give a far more than the united states. that is an argument that its turnaround a great deal. it is, in my opinion, far less in terms of what it should be with helping fellow human beings abroad. hillary clinton has done a bit of service. i think she gets a great deal of the coverage for what she is doing. she has dived into a very tough job at a very tough moment for a president who she fought mightily against in the lead up to the race for the presidency. i cannot think of everything else you said.

>> tomorrow on "washington journal," a look and how the newly elected congress will work with president obama. we will hear from bill russell chaddock and susan page of "usa today." then stuart rothenberg on the reelection campaign of president obama and who his potential challengers will be in 2012. "washington journal," live at 7:00 a.m. eastern here on c- span. following in the midterm elections, president obama call for compromise between democrats and republicans in addressing issues facing the nation, including the extension of the bush era tax cuts for

middle-class americans. then newly elected senator marco rubio of florida gives the republican weekly address and talks about his party's principles and a legislative priorities for the new congress. >> this week, americans all across the country made their voices heard. your mission -- your message was clear. you are fed up with partisan politics and you want results. i do, too. i congratulate this week's winners -- republicans, democrats, and independent, but now the campaign season is over. it is time to focus on our shared responsibilities, to work together and deliver those results, speed up the recovery, creating jobs, and strengthening the middle class so the american dream goes like it is back within reach. that is why i have been asked to sit down soon with leaders of both parties so we can have of both parties so we can have a