>> too often, too many things were done intuitively. i thought insightful and probing analysis was necessary. there was one report where a couple of us were upset when they ask for it. we do $10 billion to $12 billion in sales per month. our capital budgets are huge. the development of a new ego engine -- ito-engine -- eco- engine was on its way. how many of you drive bmw's? that great engineering.

you would be glad to know that gm makes your transmission. that german engineering is made in detroit. [laughter] but do you have to make everything? that was the an f nine in gm culture. it was the gm way -- it was the anathema in gm culture. it was the gm way. >> when you produce a car now, your labor costs are still roughly the same? >> yes. they are the same. >> some of your premises jurors, have you talked with them about -- some of your predecessors, have you talked with them about mistakes made?

>> yes. in some respects, i think a fresh perspective and someone who has been in other industries and seen other issues -- as you know, we still look at a lot of turnaround's and recapitalization. i am not sure that i was totally with less -- totally witless. i still meet with a subset of the prior management. i want to know whether this thing. i do not have to necessarily accepted, but i need to know what outside informed auto executives think about what we're doing, tendered auto executives. some is very insightful for me. the more points of view i get,

the better i am able to make better decisions. yes, i have gone to their homes. i have played to be with them on occasion -- not literally, but from an auto perspective. >> what would you say you're a two or three biggest judges are? would you stay up at night worrying about the most? >> i tell everybody that i worry about everything. when i was on the floor of the -- we just ran like dogs for weeks. one of these reporters told me i looked like hell. thank you. that was just before the camera went on. [laughter] then i saw him in detroit when we rolled up the volvo. he said, "you look better, but you do not look great." [laughter] i worry about the culture.

i worry about our cost position going forward. i think management has to have integrity. i do not mean that we do not have integrity. but i just put out a memo to all of our people that there will not be in salary increase this year. if the sushi it -- if we see issues where we are not compatible, we can address it. the structural cost of a 2% or 3% increase in a company that is in a cyclical industry -- it is unbelievable how predictably cyclical this industry is over the last 100 years. up, down come up, down. before the great recession, we actually intellectualized and

said by more incentives in industries that will be impacted, but not as severely. in an up market, you look for cyclical companies. this is a cyclical company and i deny the deputy to be a manager anymore. -- and i do not get to be a portfolio manager anymore. we want to invest without counseling and ratcheting in our capital programs. we had $20 billion in debt before the bankruptcy. we have less than $4 billion in debt today. the pension liability is $10 billion today. we had $28 billion in cash on our balance sheet and we're looking at the pension liability now. we have to have a robust balance sheet. people look at me like i am from mars now, coming from a private equity firm where we bought predictable cash flows against

unpredictable cash flows and had a debt and we would pay the debt down. this is a different game. we're playing football, not rugby. it is kind of the same thing, but different. you have to ship the business model and intellectualize the problem much more than it was done before. if you look across this cost structure -- i want incentive pay. when i meet with the union every four weeks to six weeks, that may sound strange to some of my former friends. the head of the uaw and the gm vice president, i have invited them to board dinners and to the employee meeting that i

referenced before. i have them introduced. they are our business partners. i do not want a contentious relationship with the spirit -- with them. you have heard a lot of noise in the public forum about -- you guys going to go hard back at management? their prosperity is tied to this company's prosperity. they happen to have their representative between me and the average employee. but i have tried to breach that. i go to a plant a month. i tell you, it is so invigorating and affirming to walk through the plant and people are yelling at you. "hey, dan!" you cannot be trusted without giving trust. and you cannot have credibility. the immediate response is that i want you to think about this. and they say, "i have seen that

from ceos and management does not get a pay increase." they will not get a base pay increase this year. i do nothing that we can do that if we do not lead by example. it is about me. it is about the management team. it is about the relationship with the union. can we be trusted? i think we have to invest -- when i talk about product, will we have the right products? what do we want to be remembered for? i am probably a little thin skin having worked in private equity. i am not as tough as i used to be. [laughter] it was important that we have credibility in what we do. it extends into our products.

what do we want to be remembered as? for example, when i look back to the dumb things that management did coming out of post world war ii, we had an oligopoly. people bitch about the complaint about government involvement in general motors. in 1960, they said that they had too much market share and we should break them up. were they involved in the ?ompany didn'then of course they were. how do we want the company remembered? if you look back at 1960 and they were giving away posted- retirement health care which was corrosive to the cost structure. they give these job bank in perpetuity. it was such a burden on the company that it made us not

competitive. and you say, who did that? they did it because there was no competition after the war out of europe because it was bombed out. so was asia. we were roaming the globe on a trade perspective. and these guys just wanted a piece. before they agree with the labor contract that gm or chrysler negotiated as long as they did not get competitive advantage. they -- i have had people come to me and say, "well, what about the labor agreement from 2000 to 2025? -- two dozen 25 -- 2025?" i do not want to leave my predecessors -- and no one to

leave my successors with that question. if somebody looks back to 2015 and 2010 and i passed opportunity to not only have leading market share and a dynamic position in china, but i also tied up with the number one manufacturer in china from an economic point of view -- i have been to china and have met with the senior management at shanghai auto. that is a great partnership. and we went in 50/50 in india -- one in three people on the earth live in two countries -- india and china. we would be fools to pass this up. instead of committing the company to a bad strategy -- they put half a billion dollars into it. i know that sounds like a lot of money, but it is not that much in the grand scheme of things. i want that time it into china and into asia. in such -- in some respects, we

can be considered global motors and not general motors. >> how much stock is held by people outside the united states? >> 8%. >> your market share in the u.s. is roughly what? >> last year at this time, we were 17.5%. we are now up to 19%. >> and your market share in china is what? >> almost 30% or 40%. >> but that is -- almost 13% or 14% of. >> but that is almost what you're selling in the united states. >> yes. >> has anybody in the government called to thank you for getting $23 billion back in the coffers of the treasury? >> not all of it went to the government. the canadiens got a little bit. they own a very small amount. but yes. [laughter] >> were they fuses or just --?

[laughter] polite? >> i thought you were more effusive here today. i suppose, when i am gone, there will be. but they are not now. i have a job to do. >> let me ask you one last question before we have a couple from the audience. what was the best advice that somebody gave you when you became the ceo? was it a business college or somebody -- to give you the best advice? -- who gave you the best advice? >> probably not to take myself too seriously. this job -- if i had shown of leicester, you would have filled that table. it is overwhelming the public exposure that you get in this position. i was surprised at that. so i think it was due not take yourself too seriously. >> we have time for some questions.

speak up if you do not have a microphone. just speak up loudly. >> it used to be a status symbol to drive a gm car, not a german car. listening to you, i hope that those days will come back again and driving a gm car will make us all proud outside the u.s. but my question for you -- about six months ago, the ceo of ford talked about the sink and how they are introducing all this new technology to help the driver in the car. do you think that is a different jeter -- a differentiator or is it something to do with the

cost structure? >> it is the basic value proposition -- good car, a great quality, and is durable. that is why we have made huge progress. the average residual -- what is the car worth up to three years to five years? gm has increased anywhere from 500 basis points to 900 basis points in the last year. we're comfortable with their competition. -- we are comfortable with our competition. you cannot be good one year or two years. you have to do it over five years or 10 years or 15 years. on star, when i got there, it had not morphed yet. i had one of the senior nextel people go into one star. it was safety and security.

the people were crushed and i was like -- this is "i have fallen and i cannot get up" automotive equivalent. believe it or not, if you are driving a gm car with all-star -- with on star on it, i can tell you what your will pressures, your transmission food, the air in your car or your tires. -- your transmission fluid, the air in your car and your tires. i had a mercedes before this job. i kept having flat tire and there would not tell me which tired was. by the way, is it not warm in here? [laughter] i got up this morning and it was 32 degrees. [laughter] what we will do with on store --

you saw social media. we just loaded it into it. we do not want to create bad habits with distracted driving. i met with the secretary of transportation must make. you will be able to digitize and download -- for each gm car, you have a unique phone number. i did not know that before when to gm. if someone is running errands and you want to get ahold of her if she never turns on her cell phone in the car, i can call the car and it would texture. it would verbalize to her. hurt texting and we would formalize five basic questions that she could answer yes or no or "i cannot talk now ." we are working on focus groups so that we can bring it without distracting.

for example, we were driving out to annapolis. what restaurant do go to? as you know, we have gps. while the car is moving, you cannot punch it in for six reasons. all we have to do is turn on on store and say that you want to go to the same restaurant in annapolis. she was sick, i will download for you. -- she will say, i will download it to you. i think people will look at our cars are all five-star rating from six perspectives. quality, in terms of the way we do supply chain all-around the world, we have gone to global architectures and global platforms. so the cars that we build in china or germany or the united states are basically the same. we test like no one has done before.

the quality of the car has risen dramatically. so how do we differentiate? styling. i take an interest in all of our commercials. i look at every one of them. i want to look at every design of every car. there are certain things that a co should do and there are certain things that they should -- that a ceo should do and there are certain things that they should stay out of. >> in advertising, you mentioned that your predecessor was on tv all the time with ads. we we see you on tv with any ads or are you not sure yet? >> no, you will never see me on television. going to something i said before, i want to have a hand in them. i do not know how many saw the ads over thanksgiving -- we all fall down? [applause] that was a big risk for us. it reinforced the bankruptcy.

but you know everybody has troubles in their life. we had trouble as a company, as a family. to say we've made mistakes -- we failed. we appreciated it and we wanted to say thank you. i got letters and the mills that said, "-- and e-mails the said, "your humble." but you said thank you. why do the banks not say thank you? why did a id, who got $100 billion, not -- why did aig, who got $100 billion, not say thank you? i am very am bald and very interested. >> time for another question. -- i am very involved and very interested. >> time for another question. >> the culture for gm for years was the gm way.

inouye for a long time that you had more brands than you could sustain -- you knew for a long time that you had more brands then you could sustain. >> i talked to all the employees. the news was that we were in bankruptcy in 39 days. i do not think that we did irreparable damage to the brand. there is a segment of the population that use it as a bad storm that past. so we have to change. for example, we went from four models to eight models. i keep the front page, the cover of "fortune magazine" from the mid-1980's. and they had oldsmobile,

pontiac, chevrolet, and buick. there were exactly the same. i want brand identity. i want brand attributes. i want brand equity. now we have what i call swindling. when your car's look exactly the same -- my dad always said gm cars. when we were not doing so well, we had pontiacs and then you got an oldsmobile and then you to view it. what was the difference with the gm car? gm is not a brand. it is a holding company. chevrolet is a brand. buick is a brand. now these lines are broad enough so that we can talk about grand avenues associated with styling and reliable value. that is the understated elegance of the buick. before, with it -- before, there

were too closely bunched. we needed to intellectualize the marketing. to get your point, you say, well, how many engine types to we have? we have 18 engine types. maybe i am not a car guy, but i was an engineer once. what is the difference between a 1.4 liter engine and 1.5 liter engine. it is one-tenth of a leader. [laughter] i know, but why do we have a team dedicated to 1.4 and another to 1.5? then there is variants, whether it is terrible, gas, diesel -- whether it is turbo, gas, diesel. we have made it too complex. now we are going from 18 down to eight or nine. i know there are reporters in the crowd.

what do we do if oil goes to two hundredbarrel or dollars per barrel? last time, we were largely suv- crossover-driven. now we have what we call a t three have -- a three -- a t300. you have the volt and that is impressive over the next couple of years. -- and the lineup is impressive over the next couple of years. so what do we do if it is $120 next year? that is the question before the executive committee. i have a strong point of view on that and i do not want to influence it.

i do think we have a plan that is not in final form, but is giving prefer on how to reposition -- but is getting pretty firm, on how to reposition the company. it will boil down to not so much design and style, the top half of the car, but how do we drive the propulsion system? propulsion is the key to understanding billions of dollars. we have hydrogen cars that are really cool. if it is that clean, let me put my face down by the muffler, by the exhaust, and i did. and you could look at the guy thinking, oh, god. [laughter] its water. it is just water coming out. but the car costs $500,000.

[laughter] in the chemistry of the engine, you have a lot of platinum. platinum is more expensive than gold. the actual chemistry has to be worked out before we can develop these new propulsion systems. but electrification of the car is critical. we have the public -- we have the plug in-hybrid vehicle. we want them in every one of our models. we do not want the cadillac to be left. for example, the view across, which i think is the finest automobile for its money -- for la crosse, i buick bluecros think it is the finest automobile for its money. the government is looking at 60 plus miles per gallon for 2025.

how do we achieve that across the portfolio? bill mcgowan, the founder of mci, was a big man in my life and a great mentor for me. when he made me president, he said, do not try to look into the future. imagine yourself by five years and where you want your company to be and how to get there. this company takes so much investment and development to extend into three years or four years or five years increments -- you have to say, what will you do in 200025? -- in 2025? i do not think that they did in 1960 the things to seal the fate of my predecessors. there were good guys.

there were victims of structural cost -- they were good guys. they were victims of structural cost. >> i hope it was water coming out of the exhaust pipe. [laughter] i want to thank you on behalf of the economic club of washington. [applause] let me give you a gift. hold on. >> thank you. >> it is a map of the district of columbia. thank you all very much for coming out. [applause] 2

and >> next -- >> next is the white house coordinator for arms control. then secretary clinton and ehud barak. then president clinton and president obama meet with the press. >> although they claim that there was a search warrant, there was absolutely no evidence of any magistrate that had been asked for a search warrant. >> listen to the argument on c-

span radio. find a great holiday gifts for the c-span fan in your life at our c-span store. from books to dvd's to muds and umbrellas and more. it is all on c-span.org/shop. >> the obama administration favors sanctions against iran over their nuclear program. gary say more, the white house corridor for the weapons of mass destruction discusses the issue at a conference in washington, d.c. is organized by the foundation of the defense of democracies. this is about 40 minutes. [captioning performed by

national captioning institute] [captions copyright national cable satellite corp. 2010] >> we have conducted an extensive research on sanctions. i have to stop for a brief second and commend the obama administration. in the last 18 months, and we have seen an external effort by this administration and an international effort to put together a comprehensive iran sanctions package. by my count, there 32 countries that have passed sanctions against iran, representing about 1 billion people. this is an impressive international sanction coalition. certainly, ftd has been -- f vd

-- fdd has been working on this. it is worth emphasizing that, among bitter partisanship in this town, iran is a bipartisan issue. our guest is a tremendously successful government official. he is focused on a topic of concern to all of us. weapons of masss destruction and proliferation. he serves as the principal adviser to president obama in all these matters. he serves as the special assistant to the present senior

director for export controls during the clinton -- to the president senior director for export control string the clinton administration. i look forward to his remarks. thank you for attending. [applause] >> thank you very much, mark. thank you to all of you. best holiday wishes. i got the tail end of the last panel discussion, which thought was highs. -- which was high spirited. i think it is very appropriate that the foundation for the defense of democracy is has chosen for this year's form to focus on the iranian threat. to acquire's efforts a nuclear weapons capability poses one of the most serious international securities threats that this country faces.

president obama has stressed many times that we are determined to prevent iran from developing a nuclear weapon. we understand that, if iran were to acquire nuclear weapons, it would profoundly the stabilize the middle east and it would have serious consequences for our efforts worldwide to control the spread of nuclear weapons. i want to focus my remarks on the role of international sanctions in the president's strategy to prevent iran from acquiring nuclear weapons sanctions have three functions. first, in the broadest sense, sanctions against countries that violate the nonproliferation rules are essential to enforce the credibility and the credibility of the regime of

trees and institutions and norms that make up the international non-proliferation system. in the case of iran, they violated the npt, the ida said guards, in defiance of five security council resolutions that require them to fully repay cooperate about their nuclear activities and which requires them to stand -- to suspend their uranium productivity. this is the post a child for a country that is in violation of all of these instruments of the international non-proliferation regime. the higher price that iran pays for its violations and it's defined, the less likely it will be that other countries will be tempted to follow in iran's footsteps. conversely, if iran has been

seen as successfully define the security council, other countries are less likely to be by action from me security council. as president obama said, rules must be binding. words must mean something. this is important for countries in the middle east to fill most directly threatened by iran's aggressive behavior and their efforts to develop a nuclear weapons capability and who are most likely to respond by trying to develop nuclear weapons of their own. the sec and -- the second impact that sanctions have is -- under the security council resolutions, all countries are

legally required to "take all necessary means to prevent the supply, sale, or transfer, directly or indirectly, from their territories or by their nationals or using their flag vessels or aircraft of all items, materials, equipment, and goods and technology that could contribute to iran's nuclear- related activities." that is a pretty airtight legally binding requirement on countries to deny iran access to the central components. for the individuals and entities program, theyan's have been strictly targeted. the most recent resolution includes iranian investment in

industries across the current tended to blocked iran from investing in foreign mines or other deposits of natural uranium. these u.n. security council sanctions, combined with enforcement by the u.s. and its allies, have had a significant impact on iran possibly a program. with restrictive practices -- with restricted access to materials and finished components, that has contributed to iran's technical problems. it does help to limit both of the number and the reliability of the centrifuges that they're able to build and it has complicated their efforts to develop more advanced centrifuge machines. in addition, the 40 megawatt

heavy research reactor, which is a potential source of plutonium, has also been seriously delayed by iran possibility to acquire the essential components from foreign sources. the laying iran posner program is essential to -- delaying iran's program is essential. this takes me to the third world sanctions. to affect iran's calculation of the cost and benefits of continuing to pursue its nuclear weapons program. on the benefit side, president obama has offered to engage iran unconditionally on the basis of mutual interest and mutual respect and to improve u.s.- iranian relations as a plan complies with its international obligations. as the president said, "we want iran to take its rightful place

in the yocommunity of nations." of course, iran has failed to take advantage of that offer. as a consequence, we moved to increase the cost side of the ledger, including economic sanctions. frankly, iran's clear rejection of our offer of engagement, as well as present obama's personal involvement in building your -- as well as president obama's personal involvement in building our international coalition, it has enabled us to produce u.s. security council resolution 1929 in june of this year, which establishes the most comprehensive set of u.n. sanctions on iran to date. as you know, iran tried to block u.s. -- blog un g3 council action with diplomatic -- to block u.n.

council action with diplomatic maneuvering. we see the eu and other countries, from australia, canada, norway, japan, south korea, and others, who have adopted measures that go beyond the strict requirements of 1929. 1929 was always intended to provide a platform which would allow other countries to have the political basis to take additional measures. the eu, for example, has prohibited the opening of new outlets of iranian banks, the establishment of any new correspondent accounts by iranian banks, and the prevention of insurance or reinsurance to any iranian entity. in the u.s., the comprehensive iran sanctions and divestment act, which the president signed on july 1, has significantly amplified this effect by making it difficult for companies

doing business as iran tools to do business in the united states. there is no doubt that the sanctions have caused real economic dislocation inside iran, especially in the financial and the energy development sectors. iran is affectively unable to access financial services from most banks all around the world. it is increasingly unable to conduct transactions in dollars, the pound, or the euro. international companies, including in the energy sector, have recognized the risk of doing business in iran and are abandoning existing business opportunities and not taking advantage or not seeking new ones. this trend has been replicated across a broad range of industries. such companies who have made a strategic decision to limit their exposure in iran -- i

think this is particularly important in terms of iran possibility to attract foreign investment to modernize its energy infrastructure. these economic consequences or sanctions have been amplified by the iranian government's own mismanagement of their economy, which has led to high employment -- high unemployment and high inflation. together, sanctions and mismanagement are adding to a sense of political discontent among broad sections of the iranian public who, of course, have other grievances, including their dissatisfaction with the election. of course, it remains to be seen how high iran's pain threshold is and whether iran is ultimately prepared to comply with u.n. security council

demands to suspend its reprocessing and enrichment programs in exchange for suspension of sanctions measures as provided for in 1929. it may be that iran has decided to resume talks with the p five + one, the recent geneva meeting, because it believes that it can manipulate the appearance of negotiations to leaking -- to weaken existing sanctions. this will not work. in the wake of the geneva talks, we and our allies are determined to make increased pressure. we need to send a message to iran that sanctions will only increase as iran avoids serious negotiations and will not be lifted until our concerns are fully addressed. iran has the opportunity to be integrated into the international community or face further isolation. it has the chance to benefit technologically, financially,

and politically and not continue to be squeezed economically. iran can gain much by fulfilling its obligations or it can continue to pay an increasing price by continuing its pursuit of nuclear weapons. is around's, but it is -- the choice is iran's, but it is our responsibility to increase the risk. i will take questions. [applause] >> how would you qualify china? >> i think china is complying

with 1929. i think you may have noticed that there have been no big new oil or gas development contracts signed since 1929. i think chinese companies and the chinese government recognized that the objective of preventing iran from developing nuclear weapons is one that is in china's national interest. i think the chinese also recognize that, if their companies are seen as exploiting the restraint that other countries and companies are exercising, that will have consequences for u.s.-chinese relations and have direct economic consequences for the chinese companies. obviously, the extent to which we will make this strategy work will require international cooperation.

as the diplomatic process plays out, the challenge for us will be to keep the pressure up. i think we want to make sure, during the process of negotiations, that the iranians do not feel that the pressure is lessening. we will be working very hard with not only the chinese, but other countries, to make sure that we not only comply with 1929, but take additional measures in order to produce a successful outcome at the bargaining table. >> hillary? >> there are reports that iran could be supplying venezuela with missiles that could have some capability if used against the netscape.

i wonder how you think that changes the strategic environment, if you think that will go forward and what is being done to counter these efforts? >> i'm not sure that i can specifically comment on the question of missile sales to venezuela. and part, that is because i do not think i actually know what the situation is. under the various u.n. screening resolutions, iran is prohibited from selling arms to anybody, not just missiles, but small arms. we have a very intensive program in place to intercept and prevent arms sales from taking place. we'll continue to do that. >> david? >> there were some reports last week, some of which that came out of the state depart

documents about iran obtaining the v m-25 missiles from north korea. then there's a question on the part of the russians are others over whether they really obtained it. where have you come out on that? if they did obtain it, would it make any significant difference in the capabilities as we now understand them? >> we have been told not to comment in any of the documents or the information contained in the lead cables. i do want to make a general point about iran's missile program. i think it has moved forward with more success than its nuclear program. in large part, that is because of the substantial assistance they have received from north korea, going back almost 20 years now. i think one of the reasons why we have been successful in convincing the europeans and even russia that we need to move

ahead with the missile defense program in europe is because people recognize that the facts on the ground are very convincing. iran is developing liquid and solid fuels, intermediate-range systems. they are developing a very large scale production capability. in the face of that, i think we and our allies and working with our partners like russia, we have an obligation to put in a ineffective defense system pick -- put in an affective defense system. >> assuming the europeans, the chinese, and the russians are complying with all the sanctions, do you think that the iranians have the native talent to make these bombs effective?

>> that is a good question. iran, based on the technology that they have received in the mid-1980s, that technology can be used to produce nuclear weapons material. the basic technology for producing nuclear weapons is also very old technology, dating back to 1945, of course. in that sense, i think they have the basic knowledge. translating that into actual capability, of course, can take a long time. as i said, the iranians have been working on achieving a nuclear weapon's ability since the mid-1980s. i think we have been quite effective in slowing that down. i think we still have the

opportunities for slowing it down. but i do think, at the end of the day, there are many companies -- many countries in the world, including iran, who were absolutely determined to develop nuclear weapons and they probably have that within their capability. >> laura? >> since part of the strategy you describe involves using pressure to try to get iran to make concessions at the bargaining table, after the geneva meeting, can you evaluate how you see the negotiations and the bargaining table process of developing with iran? >> the geneva meeting was just a first meeting. i think one of my colleagues -- the had low expectations. as i said, the geneva meeting has not in any way changed their determination to maintain pressure. in my view, it makes it more important that we miserably

increase pressure, precisely because the geneva meeting did not produce what i consider to be any real progress on trying to resolve this issue. i think you will see the u.s. and its allies continued to take steps, even before the next round, which is expected to take place in late january. >> daniel? >> first of all, you talked about the importance of slowing down the iranians. given in recent days that people have come up with exactly how it has been affected and president ahmadinejad has acknowledged that they have been affected, has that been helpful? a simple yes or no. and -- [laughter] almost six years after the seals were broken, is there any

practical prospect for iran having a complete freeze of enrichment in its territory? >> on the first question, i am here it -- i'm glad to hear that they're having problems with their subterfuge machines. the u.s. and their allies are trying to make sure that we complicate matters for them. but i also think that their technical problems go beyond steps that outside countries are taking. i think iran has significant limitations in terms of the technology they're working with, the type of subterfuge machine that have is not very efficient or reliable. so there are some inherent technical limits. and i think that iran is a third world country. it has inherent limits in terms of their industrial infrastructure and their human talent. it is not something they could not overcome every long time, but this is not an events

industrial country. so there are limits to how quickly they can do things. as to the second question, i think what iran is prepared to do depends upon their cost- benefit analysis. i think that, at the cost and the risk and the threat is kind of, they will accept suspension. to me, it is simply a matter -- to the extent that we are able to bring pressure to bear on them so that they feel that the price, the cost, the risk of proceeding in defiance of the security council -- i think they will accept suspension. they have done it in the past. they did in 2003 and in 2005. >> we talk about the economic impact of sanctions. but one of the rules of strategic communication is to put your opponent in the wrong and keep them there. can you comment on the

political benefits or strategic communications benefits of sanctions? have you seen a sea change in attitudes, particularly in europe with respect to iran in the past 24 months? >> at the end of the bush administration, i think the united states made a genuine effort to try to engage iran diplomatically. and the iranians rejected that. but i think it was difficult for the bush administration to convince other countries that the real obstacle to diplomatic process these was around and not the united states. he has made it abundantly clear that the obstacle to a diplomatic solution is not the united states. it is iran. i think that has helped us tremendously to exploit that, take advantage that, to build international support for sanctions. i think we will be able -- i believe we will be able to maintain the upper hand.

as you will see this p five + one process work its way through, we will continue to make it clear that the country that is blocking agreement is iran and not the united states or its allies. as long as we can do that, we will be in a much stronger position to make for increasing economic pressure. >> you ruled out that the uranium ability reported on in north korea is in any way connected with iran? can you rule that out? can you tell us a little bit or give us some of your thoughts on this process of nuclear outsourcing that was going on with the syrian reactor facility, a discussion of what might be happening in venezuela and what have you? thank you. >> on the first question, i would say that we cannot

confirm what he saw. we're only going by what he said. confirming -- going by it being accurate, there is the north korean program appears to be more advanced and efficient than the one in iran, which has different technology appears to be having some pretty significant technical problems. that would suggest no connection. in response to your second question, i am very concerned about the risk of north korea transferring technology or even nuclear materials. we have examples in the past where they have done that. apparently, they have provided nuclear material to libya, certainly helping the syrians build a reactor that was destroyed by israel in 2007. in the future, one of the most important elements of our deployments with north korea and with the other countries in the six-party talks has to be to

ensure that north korea does not sell or transfer nuclear technology or materials to countries in the middle east. that fundamentally changes the pace of the nuclear clock that i talk about. in the case of iran, to the extent that it can be accelerated, we lose time for the strategy that we're pursuing, which will take months if it will be successful. >> do you have time for one question or two more questions? great. barbara? >> assuming that you were underwhelmed by what happened in geneva, can you give us more detail on your sanctions strategy going forward? are you looking toward better enforcement of the sanctions already on the books or are there new measures that you're contemplating pushing for even before the next round of talks take place? thank you.

.

they still seek nuclear-weapons capability. only full suspension will give

us confidence. even if they fully suspended at the known sites, based on their past behavior, we have grounds to believe that they would be doing something in secret somewhere else. even if they complied with the u.n. security council resolution that would not remove the need for an inspection system as well as continuing to carry out our own national means to make sure that today are not cheating. >> hello, what about security inspections and regards to iraq? >> the u.s. and russia -- and russia have various security

interests. on the issue of pressuring iran, to give up its nuclear problem, there has been good coordination. this is not perfect because we have different insists. countries will act in their own national interest. there is cooperation between moscow and washington on this issue. we would not have gotten the agreement. >> let's take one more question.

>> we might see the wisdom of using new types of tools to automatically hit the unknown. we don't even know where they are. if we can talk about doing things through virtual measures. >> i don't think it would be wise for me to try to construct an answer. all i will tell you is that the

history of iran's program and if you look at their options from a rational standpoint, from their perspective on what approach poses the least risk, speaking of covert capabilities is the safest way for them to try to develop a nuclear weapons capability. all of their enrichment plants started at secret facilities. i think that we should assume that in the future iran is going to try to proceed to build secret facilities. i think that our intelligence agencies have done a good job up to now of tracking those issues and i hope that we are able to do so in the future because that has given us tremendous leverage and hopefully in the future we

will be able to have a similar kind of advantage. >> thank you very much, we appreciate your time and effort. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> next, secretary of state clinton and the israeli prime minister on the middle east peace talks. then president obama and former president clinton meet with reporters. members of the congressional black caucus will talk about the tax cuts afterwards. >> the supreme court, c-span's latest book, is offered at a very special price, just $5 plus shipping and handling. that is a discount of more than 75% off of the cover price.

this is the first book to tell the story of the supreme court through the eyes of the justices themselves. "the supreme court," gives readers a modern and historical view of the supreme court with 16 pages of photographs detail in the history of the building. to order copies of "the supreme court," go to c-span.org/books. be sure to use the promotional code "cspan," at checkout. >> now, secretary of state hillary clinton talks about u.s.-israel relations and the way forward in the peace process. remarks comes days after the

u.s. dropped its efforts to halt settlement building. this is hosted by the brookings institution. >> >> we have the honor of hearing from hillary clinton and ehud barak.

let me start by introducing someone who is an inspiration not only to -- and i. but people in the u.s., israel, and did the entire world. as first lady and senator, hillary clinton led efforts to improve the health of children across the world and in america. you have given courage to many people around the world. now, you have your hand in middle east peace. that is the most difficult task of all and that is an understatement. we are proud that you are the secretary of state. i sometimes wonder when you have

time to brief. with god's help, you will soon be a grandmother. i can tell you that this is a game changer for the better. madam secretary, this is the first time that you have addressed us as secretary of state. for that as well as everything you do for our country and the world, and thank you. please join me in giving him a warm welcome to hillary rodham clinton. [applause] >> thank you very much for th. i appreciate the introduction.

nothing is imminent so far as i know. it is a great pleasure for me to be back here and part did this very important forum. i appreciate your introduction. i appreciate the french ship they you and cheryl had given to me and to my family. you have been friends for many years. he is unparalleled as a champion for peace. he represents the best qualities of israel and america. he is absolutely unstoppable. he is dedicated his energy and

support to many important causes and help so many people. he has no deeper passion than the one we are here discussing tonight, a strange thing u.s. /israeli relations and securing a just and lasting peace in the middle east but th. i think pam big bear -- i think pam. -- him. in particular, i thank you for bringing the crucial issues surrounding the middle east. i want to acknowledge all the colleagues from israel who are here. certainly coming you will hear from defense minister barak. there are other members of the issue of the government here.

i am delighted that prime minister fayad is here. he has accomplished a great amount in the short amount of time. yet brought strong leadership to the palestinian authority. >> you do not have to precede cables to know we are meeting during a difficult time in the pursuit of peace in the middle thet but them i under staind

frustrations of many feof your across the world. i want to focus tonight on the way forward. and have a resolution that since the conflict once and for all and what it will take to finally realize that the illicit but essential. i want to offer the deepest condolences of the american people for the lives lost in the recent fires in northern in israel. israelis are always among the first to lend a hand to an emergency strikes anywhere in the world. when burns, said the offer help. it was remarkable to watch.

turkey sent planes. egypt and jordan donated chemicals and equipment. the palestinian authority despite firefighters. the night his state was also part of the effort, deploying expert firefighters and thousands of gallons of chemicals and suppressants. it was testament to the deep and enduring bonds that unite our two countries and the partnership between our governments and people. the night is states will be there when israel is threatened. to israel'smmitment security and its future is rock- solid and unwavering. that will not change. from our first days in office,

the obama administration has reaffirmed his commitment for me and press -- commitment. for me and president obama, it is a deeply held personal conviction. over the last two years under president obama's leadership, united states has expanded our cooperation with israel we have focused in particular on helping israel meet the most consequential threats to its future. our security relationship has grown broader. we have not just work to maintain the military and, we have increased it to new advances like the iron dome, a

short range brought the defense system that will help protect israeli homes and cities. there are exchanges and joint exercises. for israel and for the region, there may be no greater strategic threat and the prospects of a nuclear arms in rahm. you just heard my husband speaking to that. let me restate the united states is determined to prevent iran from developing nuclear weapons. from our partners, we have implemented sanctions this fight is being felt in tehran. they have faced the tough choices as the theme for this forum for them.

we get stepped up efforts to block the transfer of dangerous weapons and financing. i ran and the proxy's are not the only threat to regional stability or to israel's long- term security. the conflict between israel and the palestinians and between israel and arab neighbors is a source of tension and an obstacle to prosperity and opportunity for all the people of the region. it denies the legitimate aspirations of the palestinian people. it poses a threat to israel's future security prevent it is at odds with the interest of the united states.

they have convinced some that this conflict can be waited out were largely ignored. this view is wrong and dangerous. the trends that results are in danger in the decision of a jewish and democratic state in the historic homeland. israel they should not have to choose between preserving both elements of their dream, that that day is approaching. at the same time, the evolving technology of war, especially the exchanging reach, means that adobe is increasingly difficult city guaranteed the security throughout the country without

implementing peace agreements that in these threat. there is growing support for violence ideology. it undermines the prosperity of the middle east. the united states look at these trends. we conclude that ending this conflict once and for all and achieving a comprehensive regional peace is important for safeguarding israelis future. we also look at our friends the

palestinians. we remembered the painful history of the people who never had the state of their own. we are renewed in our determination to help them finally realize there a legitimate aspiration. the lack of peace, the occupation that began in 1967, continue to deprive the people of dignity and self determination. did this is unacceptable. ultimately, it is unsustainable for bo. for all the people of the reading, it is in their interest to end this conflict and bring a lasting comprehensive peace to the middle east based on to state or to people. for two years, yet heard me emphasize that negotiations

between the parties is the only path that will succeed in securing their respective aspirations for them this remains true today. there is no alternative other than reaching mutual agreement. the stakes are too high comedy pain too deep, and the issues too complex for any other approach them. they had a long way to go and they have not yet made the difficult decisions that peace requires. like many of you, i regret that we have not gotten far their -- farther faster.

yesterday, i met with negotiator ourd underscored support. it is time to grapple with the core issues of the conflict. starting with my meetings this week, and this is exactly what we are dealing. we will also deepen our strong commitment supporting the state building at work with the palestinian authority and urged the state of the region to develop the content of the arab peace initiative and to work toward implementing his decision. over recent months, prime minister netanyahu and abbas have met face to face several times prepare a i have been

privileged to be present during their meetings. i am also had the chance to talk to each leader privately. these were meaningful talks that build new clarity about the gap that must be bridged. both sides decided to get there to pursue a framework agreement that would establish the compromises on of permanent status' issues and pave the way for a final peace treaty. reaching this goal one not be easy. the sides are real and persistent. the way to get there is by engaging in good faith with the full complexities of the core issues and by working to narrow the gaps between the two sides. by doing this, the parties can begin to rebuild confidence, it

demonstrates their seriousness, and hopefully find enough common ground on which to eventually launch direct nicosia asians and achieve that framework. the parties have indicated they want the united states can continue -- to continue our efforts. the united states cannot be a passive participant. we will force them to lay out there is used without delay with a real specificity. we will work to narrow the gap, asking the tough questions and expecting substantive answers. in the context of our private conversations, we will offer our own ideas in a bridging proposals were inappropriate.

we entered this with clear expectations of both parties. , me say a few words about some of the important aspect of these issues. on borders and security -- the land between the jordan river and the mediterranean is finance. -- finite and each side might know which parts belong to each. the messy love -- they must agree on a single line. the palestinian leaders must be able to show their people of that the occupation will be

over. israeli leaders must offer their people to recognize the borders that protect israel's security. they must be able to demonstrate that the compromises needed to make peace when not meet israel will merkel. -- vulnerable. it must deal effectively with new and a. emerging threat families and on both sides must go confident and live free from fear. on refugees, this is a difficult and emotional issue. there must be a just and permanent solution that meets thing means of both sides. on settlements, and this is an issue that must be dealt with by the parties along with the other final status issues. the position of the united

states has not changed and will not change. like every american administration for decades, we do not except the legitimacy of continued settlement activity. we believe the action is corrosive not only to peace efforts, but to israel's future itself. finally on jerusalem which is important for jews, muslims, and christians. there will be no peace without an agreement on this, the most sensitive of all the issues. the religious interested people of all faiths around the world must be respected and protected . we believe their good faith, the party sinn mutually agree on an outcome that realizes the

aspirations for both parties for jerusalem and safeguard its taxes for people around the world. these issues are woven to get there. considering a larger strategic picture makes it easier to lay the compromises that must be made on both sides. we are not moving forward in a backing. from day one, the obama administration has recognized the importance of making progress initially reenforcing tracks. negotiations between the parties in institutions as they prepare own state.ern their it is caught in some negotiators and helps create a climate for progress. even as we engage both sides with an eye toward eventually restarting direct negotiations,

legality and our support for the efforts. we recognize that a palestinian state achieved through negotiations is inevitable. i want to commend them for their leadership in this effort. under the palestinian authority, security has improved dramatically. services are being delivered. the economy is growing. it is true that much work remains. -- to reverse a long history of corruption and mismanagement. palestinians are crowded the progress they have a sheet. the world bank concluded that if they maintain the momentum in building institutions and delivering public services, it

is a "well-positioned for the establishment of a state at any point in the near future. the night did states is continuing our efforts to support this important work along with other international partners including the government of israel. to bring together key players to focus on solving challenges, we have launched an initiative, partners for a new beginning chaired by madeleine albright and walter isaacson. we are working with the authorities on a range of issues. i was pleased to announce the transfer of 1 senger $50 million in direct assistance to authorities. this began drilling new and much

needed wells. with recent israeli approval, we soon will begin several water in protection projects in gaza. these and other efforts to expand water treatment have already helped well about the palestinian families gain access to clean water the united states is working with the authority, israel and international partners to ease the situation in gaza and increase the flow of commercial goods. we are pleased with israel's recent decision to allow more exports from gaza. it will foster legitimate economic growth and there. this is an important and overdue

step. we look forward to seeing it implemented. we look forward to working with israel and the authority on further improvements while maintaining pressure on hamas. we recognize israel and renouncing violence and the fighting by past agreements. this is the only path to achieve palestinian dreams of independence. security forces did what bogart. where, and play with new security that contributes to the economic position as they continue to be more professional and capable,

even to israel to facilitate the efforts. we hope to see a curtailment of intrusions. four of the progress on the grounds, a stubborn truth remains. well economic and progress is important and necessary, it is not a substitute for political resolution. the aspirations of the palestinian people will never be satisfied. israel will never enjoy a recognized borders until there is a two-stage solution that ensures dignity and justice for all. this outcome is in the interest of israel's neighbors. the arab states have a pivotal role to play in ending the conflict. egypt and jordan have been viable partners for peace.

we will also continue our diplomacy across the region and with our partners. senator mitchell will be this week and ford jerusalem and then will visit another -- a lot of capitals. the arab states have an interest in a stable and secure region. they should take steps that show israelis, palestinians, and their own people that peace is possible and that there will be in tangible benefits if it is succeed. in make it easier for the palestinians to pursue a final agreement. their cooperation is necessary for any future peace between israel and syria. we continue to support the vision of the arab peace initiative, a vision of a better future for all the people. this proposal rests on the basic

bargain that peace between israel and her neighbors will bring normalization from all the arab states. it is time to advance this vision with actions and words. israel said -- should seize the opportunity while it is available. know how much the united states and other nations around the world work to see a resolution to this conflict, although the parties themselves will be able to achieve it. sometimes, i think both parties seem to think we can prepa. we cannot. even if we could, we would not because it is only a negotiated agreement between the parties that will be sustainable predella the parties themselves

have to wanted. the people of the region must have to decide to move beyond the path that cannot change and embrace the future they can shape to get their the -- they can shape. they have not been ready to take the necessary steps. going forward, they must take responsibility and make the difficult decisions that peace requires. this begins with a sincere effort to see the world from the other side eyes, to try to understand their perspective and position. palestinians must appreciate israel's legitimate concerns. israelis must accept the lead

tenant territorial aspirations of the palestinian people. ignoring the other side needs is self-defeating. to have a credible negotiating partner, each side must give the other the room to build a constituency for progress. part of this is recognizing that its trade the and palestinian leaders each have their own domestic considerations that neither side can afford to ignore. it takes two sides to agree on a deal and to size to implement a deal. both need credibility and standing with their own people to pull it off. this is also about how the leaders prepare their own people for compromise. demonizing the other side will only make it harder to bring each public around to an eventual agreement. by the same token, both sides

need to give the other credit when they take a hard step. as we grapple with the core issues, in each side will have to make difficult decisions. do they deserve credit when they do so. it is not just be the united states that acknowledges news that are made. to demonstrate their commitment to peace, prime minister netanyahu and prime minister -- president abbas should take the steps and focus on the four questions even in a time when we are not talking directly. to demonstrate their commitment to pace, leaders should stop trying to assign blame for the next failure in focus instead on what they need to do to make succeed preventts

unilateral efforts are not helpful and undermine trasust. the united states will not shy away from saying so. america is serious about peace. we know the road forward will not be easy. we are convinced that peace is necessary and possible we will be persistent and press forward. we will push the parties to grapple with the core issues. we will work with them to continue laying the foundation for a future palestinian state. we will redouble our diplomacy. when one way is lost, we will

seek another. we've won not lose hope. peace is worth the struggle. it is worth these setbacks and the heartache. a just and lasting peace will transform the region. israelis will be able to live in security and have confidence in their future. across the middle east, an advocate of peace and coexistence will be strengthened while old arguments will be drained of their venom and their extremists will be exposed and marginalized. we must keep our eyes trained on future and recognize it. this is what makes the compromises worth it for both sides.

we are now in the holiday season, a time for reflection and fellowship. the national christmas tree is lighting up the sky . jewish families have just completed the eight days of hanukkah. the festival of lights of every- even when the future but the market, there is light and hope to be found through perseverance and faith the bill might -- and thefaith. abraham is the father of all the faces of the holy land. he is a reminder that despite our differences, our history,

and our futures are deeply intertwined. today we should remember these stories. sometimes you'll be asked to watch difficult roads together. sometimes the roads will be lined with naysayers, second- guess sears and rejections. the with faith in our common mission, we can and will come through the darkness to get there. that is the only way toward peace. that is what i hope we will keep in mind as we make this journey, this difficult journey toward a destination that awaits. thank you. may god bless you. [applause]

thank you madam secretary for your very inspiring words. wife and the secretary or kissing so i will shut up. [laughter] i am proud to act reduce a former prime minister. for the past three years he has served as the deputy prime

minister and minister of defence. he has also served as chief of staff and is one of israel's most decorated soldiers. he fought in the battlefields and courageously has been fighting for peace, working very closely with this administration to move the peace process forward. process for thinking you -- thank you for giving us the opportunity. [applause] >> secretary clinton, the guests, and friends, good evening. last week, members of the jewish

people of the world came together in their homes to mark the holy day. candles were lit and the lights in the house were lit with the glow of hope. each year the candles of hanukkah signify struggle for the mutual freedom, celebrating the time of the spirit and of the idea of this hope. the world of the maccabees changed history. they built an independent, so bring jewish state. the victory brought hope to our people after years of exile.

we are fortunate to live in a generation that witnesses the miracle of israel's survival. isael's existed in it that strong and vibrant, the balding and striving towards the horizon. bearing in mind our painful history old as well as recent, we have an obligation to ensure our safety and strength. the united states is israel's leading strategic partner, strongest ally, and best friend. the u.s. is committed to preserving israel's character and jewish state. a sophisticated and fall full

america believes the middle east should be is essential, but not enough. america will demonstrate its determination to stand up to enemies of israel and the bar moderate neighbors. former prime minister understood and recognized the great importance of nurturing a strategic relationship with a major power. this, if you will, is one of the foundations of our nation's security doctrine. founders of this movement were people of both vision and stature. they left behind the old order with a single goal, to create a modern society in the historic land of their forefathers. they strove to create an open society that would be a

grisettes it society -- would be a progressive society. it would be jewish and democratic in the spirit of the declaration of independence up 18 -- of 1948. there would be a society where where young's -- israelis would be proud to associate. it would be a country that leads in science, technology, education, and culture. equality for all, human dignity, and quality of life. we can all be proud of the achievements the state of israel has accomplished until now. day by day, israelis are pushing the foothills and turning the

impossible into the possible. from construction of solar energy -- the start that nature is erupting. as 2011 approaches, we find ourselves at a critical juncture. we have a dialogue towards a political agreement with our neighbors. we cannot ignore the new realities of the world. wikileaks will deeply affect international dialogue.

in iran where the few threaten to destabilize its main elements of the current world order, nuclear proliferation -- faith in these new realities will require fall planning and combined action all leading members of the world community. i hope this cooperation will materialize. the center, the better. for the last 2000 years, three times each day jews have prayed and raised their eyes towards have been saying, "may heat make peace and bring peace on us." it is something that is not just talk about. it is prayed for. this is not a religion, but a means to realize a vision. there is a note back to him in

the region. without peace and without -- without peace, both israelis and palestinians will continue to perpetuate the cycle of violence and bloodshed. the alternatives are far worse. nature dictates the need for tough decisions. all of these alternatives is the immediate and clear danger of israel's right of self-defense. our security is undermined by a

loss at hezbollah. we must secure israel's safety and future in a tough environment. when we accomplish this, thanks to the military might of the idf and the unity of jewish people throughout jerusalem. we also need political wisdom. the world is changing in front of our eyes. it is no longer willing to accept even temporarily our continued war between two people. what is to be done? it is essential that israel will have a comprehensive strategy in which we take the initiative to advance israel's goals. i recount them one by one.

number one, first and foremost, maintaining our spatial relationship with the united states of america in order to strengthen our defense and ensure our qualitative means as well as protecting our posture in the world. number two, increasing cooperation and deepen common interest with the moderate leadership. creating a political horizon by continuing to isolate hamas. number four, established the foundation to beef up security. this will encompass all the coalition's, finalize all claimants, and bring an end to the conflict as a whole. number five, pro-active attempts

to peacefully remove soldiers. number six, building eight multi-layer interception system against rockets. this can significantly reduced the damage from future attacks and deter future aggression. number seven, last but not least, an event in nuclear iran. iran has become the world's alternate terror, arming, training, and financing. they are determined to reach nuclear weapons and determined to antagonize the jewish world. diplomacy should remain the first tool of choice.

it remains essential not to remove any options from the table. i would be happy to hear that president clinton shares with us and with president obama at the white house. what guides us in the peace process? the nature of the challenge is sharp, painful, and simple. 43 years ago in a world thrust upon us, we took over land and territories with great emotional significance for the jewish people. but another people was there. one that numbers 1 million and has its own plight. this requires decisions and answers. 11 million people live between the jordan and the

mediterranean. 7.5 million israelis and the rest are palestinians. there is only one political entity called israel controlling all this area, it will become inevitable either among a jewish state or a democratic one, it this palestinian bloc would vote it is a democratic state. if they will not vote, it is not a democratic state. sit by securing peace and security, we are not doing the palestinians a favor. we are simply working towards ensuring the future identity and success of israel. we are shaped by assets, not by sound bites and slogans.

a, at the dead of states for two people. -- two states for two people. see, holding the majors ultimate loss under israeli sovereignty and bring the isolating supplements back home. d, solving the refugee problem within the palestinian state. e, we will discuss with reference to western jews and the jewish suburbs which are not heavily populated. agreed upon solutions in the holy basin. f, signing a new agreement that

declares an end to the conflict and fidelity of future claims. g, this must be based on strict security arrangements. it is a tough neighborhood. it is not for the week. -- it is not for the weak. the palestinians must knowledge that they have no chance of defeating or weakening israel. our experience dictates the security arrangements must include compelling elements. preventing rockets and missiles from entering the west bank. providing effective operational answers for future potential

unconventional attacks from our narrow eastern border. having spent most of my adult life fighting for israel in uniform, i allowed myself to state loud and clear that there is no contradiction professional or otherwise between the two state solution and the security of israel. on the contrary, the two states for two people is the key condition for enabling israel to continue developing the tools for a modern society. the pessimists fills difficulty in every opportunity. the optimist sees opportunity in every difficulty. i am aware of the difficulty, but i am also optimistic and

believe it can be done. this critical hour may also be the finest hour for the people on both sides. despite good faith efforts, together with demonstrations, we were unable to launch the second moratorium in 90 days. that should not keep us from losing sight of what needs to be done. we must find a way to renew negotiations with the palestinian leadership headed by president abbas and prime minister fayed. we need to overcome suspicions on all sides. in israel, we have to go beyond egos, expand the government if needed, and brace ourselves for the immediate task of moving decisively forward. i believe that the coming few

weeks can enable us to find a way to make it better. millions of eyes in the middle east and around the world are looking at us, expecting us to do just this. i acknowledge thisati am doing everything in my power to ensure that this opportunity will not be missed. we must leave up to -- we must live up to our responsibilities to provide leadership and not lose touch with reality. paraphrasing president kennedy, [unintelligible] it is the one most consistent with our character and courage. i pledge to you that we will continue to struggle for israel's security by working

determinedly to achieve peace. the lord will give its people strength. amen. thank you very much. shabot and shalom. [applause] >> next, president obama and former president clinton meet with reporters. after that, members of the congressional black caucus talk about the tax cuts. then, the ceo of general motors talks about the challenges facing the company. tomorrow on washington journal, chris edwards talks about a line

by line analysis of the new budget on the cake that website. mitchell ceasar discusses the future of the democratic party. kevin mccormally of kissinger's finance will offer tax advice for 2010. washington journal live at 7:00 a.m. eastern on c-span. >> in london, students riot over higher tuitions, residents worry about program cuts, and politicians debate the debt crisis. this month, q and a will have interviews from london. sunday, matthew parris, a former member of parliament.

>> former president bill clinton spoke with reporters at the white house today in defense of the tax cut agreement between president obama and congressional republicans. he urged the senate to ratify the s.t.a.r.t. missile treaty. this is about 35 minutes. >> obviously there is a big debate going on about taxes and about the need to grow the economy and create jobs. just about every day this week, i have been making an argument as to why the agreement that we struck to provide billions of dollars of payroll tax cuts that can immediately help rejuvenate the economy, as well as tax cuts for middle-class

families, insurance for people who desperately need it, credits for college, job tax credits, and a range of business and investment credits are so important to keep the recovery moving. i just had a terrific meeting with the former president, bill clinton. we just happened to have this is a topic of conversation. i thought given the fact that he presided over as good an economy as we have seen in our lifetimes that it might be useful for him to share some of his thoughts. i am going to let him speak very briefly and then i actually have to go over to one more christmas party. he may decide he wants to take some questions, but i want to make sure that you work with them directly. >> thank you very much, mr.

president. first of all, i feel awkward being here and now you're going to leave me all by myself? [laughter] let me say a couple of things. first of all, i still spend about an hour a day try to study this economy. i am not running for anything. i do not have a political agenda. i am try to find al what to do. i have reviewed this agreement that the president reached with republican leaders. i want to make full disclosure. i make quite a bit of money now so the position the republicans have urged will personally benefit made. on its own, i would not support

it because i do not think that my tax cut is the most economically efficient way to get the economy going again, but i do not want to be in the dark about the fact that i will receive a continuation of the tax relief. however, the agreement taken as a whole is, i believe, the best bipartisan agreement we can reach to help a large number of americans and to maximize the chances that the economic recovery will accelerate and create more jobs and minimize the chances that it will slip back, which is what has happened in other financial collapses like japan is facing. it is something we have to avoid in america. why do i say this? first of all, clearly the extension of unemployment, which gives people a percentage of the income they were previously making, that money will be spent and it will bolster the economy for the next couple of years. secondly, the conversion of the "make work pay" tax credit that

was passed before which goes to 95% of the american people, it will give according to all of the economic analysis of the single most effective tax cut you can do to support economic activity. this will actually create a fair number of jobs. i expected to lower the unemployment rate and keep us going. thirdly, something i have not seen much about in the reports, this agreement will help america over the the long-term because it continues the credits for manufacturing jobs and energy coming into america. in the less two years, there have been 30 high-powered

battery factories being built in america. we will probably be at 40% by 2014. this is an important thing. it is a huge multiplier to create new jobs. in my opinion, this is a good bill and i hope my fellow democrats will support it. i thank the republican leaders for agreeing to include things that were important to the president. there is never a perfect bipartisan bill in the eyes of the partisan. we all see this differently. but i really believe this will be a significant netplus for the country. i believe a lot of people are breathing a sigh of relief that there has been an agreement on something. do not minimize the impact of the unemployment relief end of the payroll tax relief.

and of the continuation for the incentive to grow jobs which will trigger more credit coming out of the banks. ultimately, the long-term answer is to get the money that banks have in cash reserves back into the economy again. the $1.80 trillion in corporate treasuries not now being invested out there in the economy again. i think this is a netplus. i think the people that benefit most should pay most. that has always been my position. that is for reasons of fairness in rebuilding the middle class. i think this is a much, much better agreement that would be reached were we to wait till january. i think it will have a much more positive and that of the economy. for whatever is worth, that is

what i think. i would like to say one other thing on another subject, just to be recorded on record. they do not need my support on this because there is good republican support including the first president bush. i think the s.t.a.r.t. agreement is extremely important to our national security. it does not a radical agreement. boris yeltsin and i agreed in principle of the same terms. we did not proceed because it could not be ratified. i am not sure the senate would have ratified it then, but i think they will now with enough encouragement. the cooperation that we will get from the russians and the signal that will be sent to the world on non-proliferation, we know there are things going on

that threaten nuclear proliferation. it is very important. when people full with these weapons, they are expensive to build, expensive to maintain, and expensive to secure the material that goes into making the weapons. this is something that is profoundly important. this should be way beyond party. i hope it will be ratified. >> first of all, a lot of democrats on capitol hill say this is a bad bill that president obama could have gotten more. >> i do not believe that is true. in january, they will be in the majority.

this would dramatically reduce their incentive to extend unemployment benefits to support the conversion of the "make work pay" tax credits president obama enacted into the payroll taxes. i read all these economic studies. every single unbiased economic study shows the best thing you can do if you're going to take the tax cut passed to grow the economy is to give payroll tax credits. i just got back from a trip to asia. hong kong had a stimulus. i guess we are not supposed to use this word. you know what they did? they gave almost a% of the low- income working people two months free rent. they gave money to seniors. the most important thing they did was payroll tax relief for one year. all the people who study this believe is the number-one thing. i do not think they could get a

better deal by waiting. the other thing nobody is talking about -- i get out there now and i do a lot of interviews. these tax credits have made us competitive again. i did not see a single story crediting senator reid's election and the two plants that were built in nevada. both companies are owned by chinese interests who felt they would compete with us in the future. i do not believe there is a better deal out there. >> units in the republican congress taking office in january. what was your advice to president obama today about how to deal with the congressman in

the opposition party? >> i have a general rule that whatever he asked me about my advice and whatever i say should become public only if he decides to make it public. they can say whatever he wants to say. >> here is what i will say -- i have been keeping the first lady waiting for about 30 minutes. i am going to take off. >> i do not want to make her mad. please give. >> you are in good hands. >> thank you. go ahead. >> mr. president, is there anything else that can be done, in your opinion, to listen up the credit markets that have been so tight? if people cannot get their hands on capital, how can they be the entrepreneurs they want to be? this is something the republicans have all all along.

what is the next step? >> we are not talking about risk. that is what the financial regulation bill tries to stop. it charges the federal regulators if the wall street banks -- we know they have to have more leverage than the traditional community banks. that is true in arkansas or any place else. let's start with the community banks. if they all money conservatively -- if they loan money conservatively -- they can loan $10 for every dollar they have in the bank. if they have $2 trillion uncommitted to loans, even though some may have more mortgage issues -- most of that mortgage debt has been unloaded to fannie mae or freddie mac. i do not like the securities, but they happen. what i believe is going on is, first of all, the business community has not come forward

as aggressively. this will preserve all the small business incentives that were enacted by the congress in the previous two years. there are 16 new measures to give incentives to businesses to take loans. it appears to me that the community banks, at least, are somewhat uncertain about how the financial reform bill, which i supported, applies to them and what the cost of compliance might be. the two big things that bill did was require regulators to monitor every month the big banks that caused a meltdown and then it set up an orderly bankruptcy mechanism and the band's future bailouts. -- and a banned future bailouts.

that bill actually said that if this happens again, the shareholders and executives have to eat it. there are a whole lot of other things, credit cards and other matters to deal with. i think it is really important just to do an aggressive, one under% information branch. i would go so far as to do it bank by bank by bank by bank so that everyone knows exactly what they have to do, exactly how much it cost, and how quickly this can be resolved. then it is important to make sure the committee banks and their borrowers understand where the small businesses of america are and where the manufacturers are with the various loan guarantees and credits and deductions that are available under these walls. we too often assume that when a law passes, people know it passes and they know what is in it. that may not be true in this case because there has been so much activity and much debate about it -- it was a debate

that occurred in the course of the campaign -- in my opinion, that is what needs to be done over the next two or three months. we have to get this country out of this mess. the money is there. $2 trillion in the bank is $2.30 trillion in loans. i also believe the same thing with big companies. we should analyze the situation of every company that has $1 billion in cash. we should ask them to be honest with us about what it would take to get them back in the investment business. these companies clearly have a preference for reinvesting in america or they would have put this money somewhere else. they have not. it is an amazing thing -- $1.80 trillion in corporate treasuries. it has been since 1964 that

that they had this kind of cash balances relative to their value. those are the things i think we have to do now. i cannot answer your question except that the bankers i talked to in arkansas, in small places that i visit around where i live in new york, they all say they know they need to wrap up the activity. we have to get the green light about how we will comply with these walls. you may be able to use our program to do it. we may be able to work to this stuff with people. i just think they do not know yet. >> some of your fellow democrats are saying that the president did not fight hard enough for his work principles, that he caved in politically. some say he should be a one- term president. has the damage, not only his own political aspirations, but has it that the party down? >> i do not believe so.

i respectfully disagree about that. look, a lot of them are hurting now. i get it. i did 133 events for them. i believe the congress in the last two years and did a far better job than the american people thought they did -- at least the american people who voted in the midterm. i went to extraordinary efforts to try to explain what i thought had been done in a way i thought was most favorable to them, but we had an election. the results or what they are. the numbers will only get worse in january in terms of negotiating. if unemployment is dropping like a rock, maybe you could have this so-called mexican stand off and the voters will hold someone responsible for raising taxes.

that is not the circumstance we face. the united states has suffered a severe financial collapse. these things take longer to get over the normal recessions. we must first make sure we keep getting over it. we do not want to slip back down and panic. in order to make it happen, we have to go beyond direct investments whether they are stimulus projects or tax cuts to private growth. to get there, we have to achieve a high level of growth that traders' confidence. i personally believe this is a good deal and the best he could have gotten under the circumstances. i just disagree. i understand why people are writing this news, but i disagree. >> if you made a number of very effective calls for the health care plan last year.

i've been asked to make any calls to democratic members of the tax bill? there are a lot of comparisons being made between the 1994 in the 2008 elections. do you think those are analogous to the current situation? >> all of you will be under enormous pressure to build a story line. there are some parallels. i will let you do that. i am out of politics now. i care about my country and i want to get this economy going again. i believe that it is necessary for these parties to work together. for example, the story line is how well we work with republicans at all of that, but we played political kabuki for a year. we had two governments shutdowns.

people just did not feel it yet in 1994. we cannot afford that. we have got to pull together and both sides will have to eat some things they do not like because we cannot afford to have the kind of impasse that we had last time over a long period of time. we do not want to slip back into recession. we have to keep this thing going at an accelerated pace. i think this is the best available option. >> in fairness, the sec as the election was over, i did my foundation trip to asia. i just got back from the west coast. i flew overnight to get here today. i have to leave again tonight. if i were asked to, i would be happy to talk to anyone, but i have not been asked. the president did not have a

chance to, in fairness. he knew that hillary and i were appearing before the forum tonight. >> i had the feeling you're having a good time giving advice and not governing. >> i had quite a good time governing. [laughter] i am happy to be here if the bullets are fired they will not hit me unless they ricochet. i am happy to be here because i think the president made a good decision and because i want my country to do well. after the '94 election, the american people in their infinite wisdom put us both in the same vote. it is either row or sink. i want us to row. i had a long talk with the prime minister today.

he, first of all, has done a remarkable job of being a loyal prime minister but not being involved in the political imbroglio that has been going on. there is a decision made to review the vote in its entirety and have some outside observers, in due are credible and knowledgeable. they will announced how they propose to do that. today was a pretty calm day. they expect the region to be pretty calm. we are going to have our commission meeting next week. we may moved it to the dominican republic, but i think the best thing we can do for the people of haiti is to prove that there is patients on the commission and that the donors are still committed to the long- term reconstruction projects whoever gets elected president.

the best thing they can do is -- everyone understands they had to carry out this election under difficult circumstances, even getting the identification cards to everybody proved difficult, but what i can say is it appears they are going to try to have a recount procedure which they hope will require more support from across the political spectrum. meanwhile, we want the commission to keep working. the world bank has released about $70 billion of the $90 billion in project we approved. the government will be hiring more people immediately for those projects. we will approve a lot more projects on the 14th. that is my focus now. >> do you think your appearance here today will help sway votes for the administration among house democrats? the reason i ask you that is because a lot of them are sort

of antsy about the presidents of triangulation. they are still smarting over that. that may not put them in the direction you want them to be pushed. >> idle." that obama, you ought to go back and read a lecture that franklin roosevelt gave in 1926 before he was the vice- presidential nominee. they discussed the dilemma of the progressive movement in american politics. you know, i have an enormous amount of respect for the democrats in the house and i have already told you that some of our best people lost. i get where they are coming from. i can only tell you that my economic analysis here, given

all of the alternatives that i can't imagine actually becoming law, this is the best economic results for america. i think it is a an enormous release for america to think that both parties might vote for something, anything, that they both agree on. there is no way you can have a compromise without having something in a bill that you do not like. i do not know if i can influence anybody. if i could, i will go some places. all i can tell you is what i think. >> your credibility of the deficit, what you think about the concerns about the short- term and long-term deficits? >> i do not think i did a good enough job this election season. i am not sure we did. the difference between now and

when i became president, when we immediately went after the deficit is quite simple. when i became president, it was after 12 years in which the cumulative debt of the country had risen from $1 trillion to $4 trillion. it was the first time in american history where we had a run structural deficits. that is of any size. we were having to pay too much for money. it was costing us a lot to borrow money in the public sector, taking 14 cents of every dollar of the debt at the time, and it was crowding out the opportunity of the private structure to borrow money. that sparked the recession that we had in the early '90s. this time there was the collapse of a financial system that took interest rates to zero.

people say the interest rates went up on bonds in the last couple of days. is it because of the economy growing? that does not bother me. we have to get out of a deflation. the biggest problem we have now is deflation. we had for surpluses when i was president. that is what i'd like. i like balanced budgets and surpluses. if i were in office now, i would have done what the president has done. you have to put the brakes on a contracting economy and then you have to somehow hold it together until growth resumes. when growth resumes, you have to have interest rates higher than zero.

you should be encouraged interest rates are creeping up again. that needs to be a competition for money. it is a good sign for the economy. we will have to take action to eliminate the structural deficit again. i think it was a mistake to go back to a structural deficit. if we did not have to borrow money from our trade partners, we would have more economic freedom and economic security. i want to see what comes out of this, but i expect to support some vigorous actions to eliminate the deficit and get us back in balance. >> there are enormous issues of importance from education to energy and the deficit.

this is still a very divided country. do you think the american people what the president to compromise with the opposing party? is that a message that democrats will have to accept? >> yes, but i also believe that it is a message that republicans will have to accept. keep in mind, the interesting thing was that a lot of the hard-core conservatives think the republicans gave too much. there is a column in the post today. it was written by a brilliant man. they said they got the tax cuts, but most of them were targeted at the middle class working people, the unemployment benefits were extended, with some of them did not want to do, and the american people supported them in the vote. there are some conservatives

that do not believe in this economic theory i just advanced to you, who believe that democrats got more out of this than the republicans did. i think that is healthy, too. everybody has got to get a little. i think the one thing that always happens when you have divided government is that people no longer seek principled compromise as a witness. this system was set up to promote principled compromise. it is the ethical thing to do. in a democracy where no one is a dictator, we would all be at each other's throat all the time and would be in a state of constant paralysis if once power on that. after the fights are over, we will be able to find principled compromise is on those areas as

well. to me, that is worth doing. but the economy first. we cannot go back into recession. we have to keep falling out of this mess we are again. this is a good for step, those on the substantive merits and on the psychological relief it gives to the american people in general and the small businesspeople, community bankers, and others who can start doing things to get better in particular. >> thank you, mr. president. >> that concludes monday's briefing. [laughter] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> leaders of the congressional black caucus said today that a vast majority of its membership opposes president obama's agreement with republicans. speaking to reporters at a news conference, barbara lee of california said our membership rejects continuing tax cuts for the wealthiest earners and richest estates. they do support cuts for middle and low-income workers as well as an extension of unemployment benefits. >> good morning. i represent the ninth congressional district of california, also chair of the congressional black caucus. i stand here with my colleagues from the congressional black caucus this morning to reiterate a message that i delivered during the democratic caucus meeting with vice president joe biden. the overwhelming majority of the congressional black caucus members are opposed to the current tax plan.

we will have a specific proposal that we will be presenting today that congressman bobby scott, donna christiansen, and our task force had been working on. they have been putting this together of the past couple of years. congressman scott and congresswoman christiansen will speak in just a minute. before they come to the podium, let me say that the vast majority of our members are opposed to the estate tax provision and to extending the bush-era tax cuts to the wealthiest 2% of americans. our members want to support responsible, very clearly defined positions, which is why we really do support extending -- and we voted for this and will continue to vote for this -- extending unemployment benefits and provisions to create jobs. we understand there are tough choices that will need to be made next year. we are extremely concerned that the cuts that could be made should this package passed will

disproportionately hurt the poor and low-income communities and further erode the safety net. we do not want to create a situation today that will exacerbate the conditions for americans who are already hurting. that would be unfair and would be unwise. i would like to ask congressman bobby scott to come forward, a member of the house budget committee. he also heads our task force which has been formulating this proposal. thank you again congressman scott for your leadership. >> thank you, chairman lee and congresswoman christiansen. it is a pleasure to be here. congresswoman lee has asked me to get a consensus among our members so that we can proceed with the president's proposed test that compromise with congressional republicans. we are an ideological diversity group. we have a lot of different ideas about what we should be doing. i, for one, believe we should

let all of the tax cuts expire because i worry about draconian spending cuts to vital programs congress will make next year. after speaking with my colleagues, i can tell you an overwhelming portion of the caucus is against the proposal as it stands. it begins as a nonstarter, particularly the offensive estate tax. this provision cost more than $60 billion over two years, yet the republicans would support the $60 billion for the estate tax relief, but we cannot afford $50 billion to extend unemployment insurance or $14 billion to provide are struggling to seniors who are going another year without a cost-of-living adjustment. they even opposed the perfunctory cost-of-living adjustment for federal employees. we cannot afford that, but we

can apparently of for $60 billion for the wealthiest 2% of americans. the congressional black caucus reach consensus on three areas we believe we can unite behind. first, we support the extension of emergency unemployment insurance benefits. we believe we should extend benefits for those that are exhausting the benefits they have. second, we insist on guarantees that no plan will deprive social security of necessary revenue. we believe the idea of a payroll tax or an equivalent payment to a taxpayer, such as a rebate check, is a good way to get money into the hands of working americans. finally, we have to kick the proverbial can down the road in addressing the deficit and the inequities in the tax code. we support the bush-era tax cuts for the middle to low income americans.

we hope this will allow our recovery to truly accelerate and help communities affected by the recession. the coast of all of these proposals is approximately half of the president's proposal and will create virtually the same number of jobs. i believe if we properly extend any of the bush era of tax cuts, which eventually will have to pay for those tax cuts. if you look at the recommendations, we know what $3.80 trillion in tax cuts will cost and what we will have to do for that. that is the cost of extending all the bush-era of tax cuts. they oppose cuts to medicare, social security, elimination of the home-mortgage deduction,

across the board tax cuts on everything, including $100 billion cuts to the military budget. one day we may get serious about dealing with the deficit. these are the kinds of cuts we will have to make in order to find a $3.80 trillion in deficit reductions. i recognize we are in a recovery. if we adopt this plan, we will have more resources to deal with job creation. finally, we have a choice. if we do a tax cut, somebody will eventually have to pay for it. you cannot give everybody a task that like oprah winfrey or santa claus. eventually, somebody will have to pay for it. we have to make these decisions right at the same time. what we are suggesting is that we let many of these tax cuts

expire and then deal with the tough choices next year. >> congresswoman christiansen. >> thank you, chairman lee and bobby scott. our desire to get rid of the bush tax cuts did not just art now. we were never for them in the first place. anybody who follows those tax cuts could see how they would grow. we are forced to cut spending south on the kind of programs that our communities, african- americans -- this gives our republican colleagues another chance to play "gotcha."

when the 2012 elections oral or around and the tax cuts to expire, democrats will be accused of raising taxes. .otcha there are many equity decisions that the congressional black caucus along with our hispanic and asian colleagues tried to improve. community health worker grants, committee transportation grants, and others we are not about to let go of. we are not going to give up the opportunity to improve the schools, colleges, and our student's educational achievement. we are not going to give up programs that put our young people on the path to college instead of prison.

we are not going to let them stop our efforts for equitable treatment for the territories. we are not going to let them drop the pathway out of poverty that we are committed to creating. we are not going to let this country be less than it can be. we are not against the wealthy in our country. we represent everybody in our community. the best kept secret is that the so-called middle income tax credit goes to everyone but the first $250,000 of income, including the millionaires. i do not -- i do not know what the fuss is about. what has happened and is continuing to happen is the gap between the rich and the four has widened. that is all lonely bed for the people of the four side -- that is not only bad for the people

on the poor side of the situation. we are advocating for what the president at all of us have advocated for all along. that can only happen when there is equal opportunity for all who live here. it will not happen if we borrow and spend all of that money on unnecessary giveaways to those who do not need it, will not spend it, it will not create jobs with it. we look forward to working with the president and all of our colleagues to come up with a plan that is fire and equitable for all of the american people, when the stimulates the economy, creates jobs, and will stimulate our economy for the future. >> the congressman from new jersey. >> let me commend the chair person of the congressional black caucus.

we are simply here to say that we want a fair deal. the was the new deal with roosevelt, and there was a fair deal under truman. the new deal is not necessarily fair. we see this deal as not being fair. as a matter of fact, a leader of the tea party only question how we would pay for the extended unemployment benefits as if the other costs were not important. we have to really have a vision of what is going to be best for this nation. when the bush tax cuts were enacted, at that time that was the seventh priority of the american people. they were not asking for it. they felt they did not beat it. 10 years later, the situation is

the same. interestingly enough, i have received calls from my very diverse district from the wealthy as part of the district. believe it or not, they are saying they do not be deep cuts. they do not really want them. they are concerned about america. so, we have political leaders bolstering a plan on people, the wealthiest, who are really not asking for it. we had 10 years of the bush tax cuts. we have the highest unemployment we have had sustainable in our nation in its history continuing. that excludes the great depression. if the tax cuts create employment and jobs and we have had 10 years of it, how then do

we say we have to extend them because if it is about stimulating jobs, it failed in this past decade. i, once again, strongly support the congressional black caucus' proposal. we have the president and the administration and republican leadership will listen and we can come up with a fair deal. >> thank you very much. we will open it up for a few questions. >> [inaudible] >> we, members of the

congressional black caucus, do not see this as a personal issue at all. secondly, part of why we are here today is to talk about how we fix this. we want to move forward and turn the economy around and not create a deeper hole in terms of the deficit. >> the senate is already moving forward on this. are they going to vote on this on monday? can you stop it at this point? >> let me tell you, you know what happened yesterday in our democratic caucus meeting. the majority of the democratic caucus sent a very strong message that we do not intend to take up this tax proposal as it has been presented. right here and then we will go back.

>> do you feel the president told the house democrats out? for three years, the white house and the senate [unintelligible] >> i leave the politics to all of those. we have a situation where we have to make an economic choice. if we let the tax cuts expire, when they will have to pay for them. extend all the tax cuts -- we can see what it cost to pay for these tax cuts. one of the reasons democrats have traditionally supported payouts is to make these decisions at the same time.

we said it the health care plan passes, how will we pay for it? i am willing to pay the taxes. republicans have historically done this a sequentially. how would you like a tax cut? i will. how would you like a prescription drug benefit? at some point, we would get serious about the deficit and start making choices. because of choices that will have to be made are painful. usa what erskine and bowles have done. you heard from others that the programs that we have an interest in -- medicare, social security, education, health care -- are in jeopardy if we spent all of the money without any recognition to help it will be paid for.

i think people underestimate the size of this plan. this two-year compromise is estimated at $990 billion per year. that is large. that is larger than a stimulus package. it is more than the first tenure cost of the health care plan. it is nine under $40 billion. this is $990 billion. -- it is $940 billion. this is a $990 billion. >> [inaudible] >> the relationship will continue to be very strong. we are working with the president's and the best interest of our country. we have been working on each and every issue. when you look at the record,

you'll see that our members supported 99.9% of the president's agenda. in addition to that, we have worked with the president where there are areas we disagree. we were to try to reach consensus on both areas. >> there is a version of the bill that looks like the president's compromise. [inaudible] is that something you talk about? >> we are going to look at what takes place and determine our strategy as it evolves. there are a variety of legislative strategies and options we are considering. at this point, we do not know exactly how this will play out. >> yesterday, someone talked about [inaudible]

>> again, there has been no discussion about how these things will be paid for. it is oprah winfrey and santa claus. everybody gets a tax cut. how are we going to pay for it? the republican long-term budget that was put on the floor last year included eight repeal of medicare. they replaced it with a voucher that does not keep up with medical inflation. it will go down to about 50% of what medicare actually costs. that will let medicare whether on the blind. that is one way the republicans -- most of the republicans voted for that budget. his budget included an effective repeal of medicare. that is how they intend to pay

for these things. i think a lot of people may decide they are against the tax cuts. you are asking these questions, "how would you like a tax cut," without the next question, "a hell are you going to pay for its -- "how are you going to pay for it." the hundred dollars billion in defense spending will end up somewhere else. that is another hundred billion that has to come from somewhere else. how are we going to pay for it? >> vice president biden [inaudible] >> we would like to see that.

i am sure the president would use the same message we delivered to vice president biden. >> is this a bad deal for african-americans? >> we have only seen half the bill. we have seen all of these tax cuts that are very popular. everybody likes a tax cut. hell are they paid for? are you going to repeal health care? are you going to cut back on education? how are you going to pay for it. erskine-bowles and gives you the idea to come up with the money. we are on track if the proposal passes --

the idea that you will extend them into a presidential year and then cut them -- we have already established the