uncertainty out there about our long term ending undercuts our ability to influence the actors to get them to do what we want them to do. >> while must be be there even two years from now? who and understand the specifics strategic advantage for the united states to be there, taking into account the enormous economic difficulties that this country faces and the preoccupation that the administration has with dealing with america before deals with afghanistan? thee've much outlined different strategic context right now for the united states. the long-term debt the u.s. is facing, that will not go away. in may becoming the over -- and may become the overriding strategic influence in this country. 25,000 troops there is about 25% of the cost to are paying today in terms of the military effort. 100,000 americans, says one --

around $25 billion a year. we think we can achieve the same objectives by 2014 with a force of one quarter that size. that force is important and it cannot be at tiny force, 10,000 or less, because it will not have sufficient capability to do the job. our vital interests are what drives us. we have a vital interest to keep pressure on al qaeda to prevent them from attacking the united states. we did that from afghanistan as well as with our friends in pakistan. if we took those networks out of afghanistan, we would lose that understanding of what is going on with al qaeda, even inside of the pakistan. and we have a critical interest to help pakistan remain a critical -- as stable country and stay in control of its territory. that improves over time. if we are not there, we lose all that leverage. >> david, preoccupation with what the general just said, i suspect that if you are as most

people at the white house, what are you thinking about today? the answer would not be president karzai. it would be economics, jobs, the president's political future, how do we build him up -- not the commitment that the united states has as outlined by the general very eloquently. how do you deal with the real world and the super imposition of the responsibility in afghanistan? >> is hard to know how people in the white house would answer that question. when you walk into those doors of the west wing and as which direction you pilaf -- peel off -- the nsc people are thinking very hard about afghanistan and pakistan. they are also thinking about iran and north korea and the middle east peace talks and so forth. one of the dangers in these kinds of conversations that we have is that there is a

temptation to think that american foreign policy these days starts and ends with afghanistan and pakistan. this administration recognized that there was the cost that the u.s. paid in the previous administration when iraq became such an overwhelming issue that it occupied the mind share -- a lion share of the administration. these two issues of where the economy is and what is going on in afghanistan and how much we're spending their, blood and treasure, are not unrelated. at the moment that we're spending very heavily for a world where many americans do not fully understand right now what the objective is, the question of how long you can keep 100,000 troops there is very right. general barno mentioned a number of 25,000 troops and at the number you will need to keep

their in order to keep pressure on al qaeda in pakistan. and to keep the intelligence operations running and so forth. that number is probably right in the ballpark of what may be needed. it is also the number that was there when president obama came into office. 25,000-30,000 is right where they were. did -- that did not prove sufficient to stop the gain the momentum by the taliban. i think the question the president is going to reach in 2011 next summer when his first deadline comes out is this one -- if you kept troops and for 2014 at a significantly higher level than that 25,000-30,000, even if you are coming down, does that added margin of troops to bring about a significantly different result in those two or three years

thing you would get if you brought those numbers down to defeat general barno number very quickly? that will be a very different calculation to make -- and we would argue that they should occur in -- that should not occur today, but 2014. >> the question is of numbers and sometimes gets us into funny positions of have understanding. 25,000-30,000 troops at the time the a bimah -- obama administration took office we have afghan forces one-third of what we had in iraq, although iraq is a smaller country with an easy operating environment -- easier operating environment would be a sure risk for failure. can you build up the afghan forces to a level where they can handle a significant share of the war? and therefore you could go down

to this level general barno is talking about. i think the answer is a strong maybe. the fact is, the tw no -- two numbers are playing different expectations. you're not debating the same issue. one of the problems at the white house is going to face and i hope that they are, goes back to what you can predict what you condition expectations to be. if we come out of this review with a political sense that the white house is pushing for a rapid movement on numbers down, then i think you will absolutely destroyed any credibility for policy announced that the nato summit of pushing the data up to 2014. that transfer of the date 2014 is only useful in terms of how

it conditions afghan and pakistani thinking, and taliban thinking i might add, if we were to leave. if you come out of the route -- to review with the idea the we keep the numbers moving down quickly because we're going broke, then what you get in countries where people have been at war for 30 years, whether survival depends on taking the most dire view of the likely future and acting on it to protect themselves, steal more because you're going to have to run, look out for your room survival, do not risk other plans. the white house has to look at these realities that you're talking about. we cannot afford to do things forever. it also has to decide whether it has a serious policy of 2014. if it called that policy into question in this discussion, then it needs to realize that it does not have a serious policy,

whatever it says about it. >> very good point. yes, sir. >> i like to ask each of the three a slightly different question that might shed more light on the discussion of the intervention. if you were a senior taliban , i assume and correct me if you disagree, i s and you cannot drive out u.s. and coalition forces by force of military arms. that is not on. but you do seem to think that you can get about. how're you going to do it and specifically i like to know if you have the same view, will be the primary tactics that you think would be most effective in -- to get the u.s. and coalition force out. that would appear on the question on whether we are addressing those tactics successfully. >> general barno. >> that is a great question. we probably have not done and that effective job of thinking

about were talking about and ultimately defeating the taliban strategy. i think that strategy is run out the clock. it as a fourth quarter game, they're going to control the football and a plan to be the last man on the field with a score in their favor. in redskins bring football. but that is a very sound strategy and it is one that they view july 2011 as actually helpful in the sense that they could put that calendar date up there for their forces. that date has moved ahead 3.5 years. that football game has three additional quarters and it. if you're taking that ideological blows i think they have taken, that a serious. they have to adapt to these new timeline and that will take some hard work on their part. i'm not sure they will be successful. the tactics they would uses drive up coalition casualties. the way that they do that and we see that tragically again this week is to suicide attacks,

roadside bombs, explosions were they do not have to expose their forces to the capabilities of the coalition forces. but you'll probably see some spectacular attacks that garner attention in places we thought to be secure. that would be affected. >> i think general barno is right. you'll see many more asymmetric attacks, and i will make it all the harder for the president to conclude whether that dealt that i described it is working. if you keep 100,000 troops are near 100,000 troops in, as general barno describe, if you can almost calculate out what the casualty difference is going to be. he has to go into the 2012 campaign making the argument that he managed to get the united states on a down tract in

iraq very quickly and he can do the same in afghanistan. any has to do this, as ambassador newman pointed out, without undercutting the commitments made at nato about the 2014 date. the more the allies see us on the way out, the harder it is going to be to get them to stick around. that is the essential dilemma that he is caught in right now. >> there are some changes in the allies that we have not paid much attention to. the canadiens are leaving -- they're taking about 1400 troops. they just decided last month at the nato summit to put 900 of those back in as trainers. that is a significant give of numbers for the canadiens, a significant political decision to which we have paid no attention to.

on the next question, remember my question of tactics for the taliban. it is a political objective, not a military objective, and not directly responsive to tactics. tactics that caused more casualties does help. but ultimately it is a question of waiting us out, not a question of a military price. you could see a change. right now the taliban, which we uses a broad cover term 3.5 insurgents, also have a tactic of preventing the projection of afghan authority pretty much anywhere that they can help it. that is very important to them. if you begin to see more capable afghan forces on the battlefield, particularly the army, then i suspect you will see taliban tactics increasingly shift to try to destroy that army. the army is the real game changer.

if you begin to see and afghan army of which even if it does not win looks like it is not going to lose, then the whole taliban timeline comes apart. then the negotiating platform looks different. it does not mean that russia often say -- capable afghan forces are game changer in this situation. they cannot be produced overnight. if they begin to emerge, and then you will see a variety of adaptations to deal with them. >> thank you for your presentations. ambassador neumann made a very valid point. [unintelligible] >> turn the microphone around. >> thank you.

[unintelligible] it depends importantly on what you have in mind that you would like have happened after 2014. we're 9,000 miles away, the united states. my question is -- countries contiguous often have at least a great and possibly greater interest -- recalling history, the great game, china and north korea, what they have all ruled the play -- they ought to have a role to play in our diplomacy between now and 2014, and beyond that? given the stakes, these nuclear powers, the center of terrorism,

you think that each of them would. china is showing evidence of wanting to build a pipeline from iran. there are a lot of reasons one can imagine these great powers should have a great interest in a role to play. and i welcome your thoughts on whether we ought to be talking to them and toward what great game how come here -- if tom pickering has time, it would be great to hear from him to. >> yes, we should be talking to them. yes, then partially had a role. their greatest ability has been when the neighbors have been taking a hands-off. yes, we should be talking about that. that said, two points. one, all to believe what you neighbors to do is have a stance of neutrality. i think you can only have a functioning neutrality when you

have a government of some strength inside kabul, inside afghanistan. you cannot get a working agreement to neutralize in a political vacuum. everyone striving for power will seek support from outside, and if any of them find it, it produces -- reduces the rest of them coming in to support their plans. what is happening now is that all the outside powers are driven as much by their peers as by their desires. pakistan fears and afghan government dominated by ended. ndf pairs strategic development for the development of terrorist groups in pakistan. the iranians have a variety of years. getting them to agreement is likely to be a long-term proposition. we should be definitely working on it. recognize that it is related to what happens inside, but do not expected to be a silver bullet to solve our problems, although

it might be part of the long- term solution that is out. >> mr. embassador, could it not be argued that karzai, taking the contrary position that he has been taking over the last couple of years, and especially months, it is in effect creating a self-image as a strong national afghan leader, and i am the guy you have to talk to? >> i think he is unquestionably seeking to create that image. i doubt he believes any of his much larger and more powerful neighbors have yet come to believe it. >> raymond, a former member of the nsc staff and now in georgetown. i am glad the word iran came up. the country around. i am wondering whether or not there's this idea that iran played a politically stabilizing role in helping to form the

u.s.-led government in afghanistan, with the idea that iran's playing a constructive role now? i think they are planning a stabilizing role with the development of explosive devices context does matter. iran may have done something positive in the past, but it is- now and i suspect it will continue to be negative. the obama administration is more likely to take a harder stance with respect to troop levels in afghanistan if it is the test that iran continues to play a destructive role in afghanistan. >> plays both roles. simultaneously. that is a matter of some political art. it has contributed rather significantly in that it is building a rail line which is

very helpful. it is but a fair amount of money into it. particular the period before this, going before general barno was there, but what we've seen more recently in the shipment of arms -- it's interesting to me. there certainly arms that come from for rent and after certain point, some one must believe that come in with iranian acquiescence. but it is far less than what they shipped into iraq, because i spent 16 months in baghdad before went off to kabul, so i had personal experience with this. why do they didn't not do a great deal more, and part of what you are seeing is their suspicions of us. i think there is a reciprocal there. i cannot prove it, but what i think they are doing is keeping ties warm with people they may need if they come to blows with us.

i think it was a mistake when we cut off ties and talks when i first went to afghanistan. i was authorized as was my predecessor to talk with the iranians there. i had one meeting and was told to close it down. all pressure was on the nuclear subject. i think it was a mistake because they raise their suspicions of us. you have one of these places where you have a lot of signaling going back and forth. i think that frankly one does not understand what the other is signaling. more discussion. i think you have very different kinds of issues, is all but i would say. >> it raises an important. as you said, iraq was helpful at the start and made some noises that they wanted to be even more helpful, which the bush administration was not quite sure how to handle.

it got caught between two conflicting priorities within the administration. today is to say, there are arms in, butd, ied's going they played important strategic role for the iranians. if the pressure from the united states on the nuclear issue turns out either with more economic sanctions or more covert actions or ultimately with some kind of military action, a remote possibility as i think that is, having the american troops in afghanistan there is a useful form of deterrents to the iranians. it is one place -- one less place that they could strike back in an asymmetrical ways. it used to be our troops in iraq. now as our troops in afghanistan.

>> thanks, martin, very much. i wanted to pick up on the point that but raise. i agree very much with what ron has said. i think the absence of diplomatic activity has in fact continue to drive us in the direction of military activity. and almost everyone sees military activity as absolutely so -- essential but not a solution. to some extent, i am of the view that any solution you have a purely military or otherwise is when they have enormous political implications. so why not have diplomatic activities and see if you can help shape those? otherwise they will be shipped for you by someone else. i am working on a study, the results of yet -- of which are not yet clear, but in the region, the people closest to the problem, if the taliban, karzai, pakistanis told us that

they would like to engage in a diplomatic effort of some time. they have positions which are in no way congruent. perhaps they could be made congruent around a simple theory that all insurrection movements one way or another often settle in conditions of statement, which is where the military is so important, for political role in a government-funded one some way or another. some turn out to be bad and some reasonably acceptable. there is no guarantee. my question is to go to a higher level of strategy. we are engaged in pakistan very much because we are in afghanistan. general barno, i do not mean to stretch this too far, but i think you said just basically, the most important reason we are in afghanistan is because of pakistan. i think that is entirely right. it makes a lot of sense. the real question is, do we have a strategy in pakistan of

any kind, and should we if we do not? >> i think we have bilateral strategies with each country. there is a follow-on report this spring working on it as to what a u.s. regional strategy should be for this extremely important part of the world that is not going to go back into the corners of the broom closet. i do not think there is a feature outcome in which the u.s. does not have a role like the 1990's. this time the fires around the peripheries of afghanistan are rather nuclear armed or the high price of about -- the high probability of a proxy war breaking out in the absence of u.s. influence there. the u.s. has to look at this as a regional strategy. i grinned with david, talking with the neighbors and iran is an important part of that. my personal experience out there is that the neighbors can be helpful and prevent the worst

outcomes, but they cannot solve the problem. there is not a solution that puts everyone in the table and comes up with a document that solves this. i think we continue the dialogue could be extremely realistic the u.s. is going to remaining days there for a long time because we have vital interests at stake, and most of them are in pakistan. in john glenn. thank you very much. a follow-up on what seems to be no solely military solution in the region. i like to come back to mr. newman's observation. it took a long time for the debate to go. what is it that we need on that side of the equation to succeed in afghanistan and had we made that case to date to a sedate, where scores a margin mr. ambassador, given a shot.

>> i think that we need two things. one is to keep a certain flow of money. the other is to be realistic, starting with ourselves, about how fast you can do social and economic change. we have a considerable problem of excessive expectations, and we had a first of all in afghanistan where people believed as the taliban died, that everything was going to be great in the country. we also have that here, doing a lot of discussion on this panel and in the review, is the strategy working. as though we were completely oblivious to the time was the texas from decision to funding to moving money to the field and start in the project -- we think it is realistic for the springfield interchange to take tenures are more and we do not

understand why we haven't modernized one of the most primitive countries and the world. we have some bas are lapses and our thinking. -- bizarre lapses in our thinking. you store the recognition of time being needed. and then we need to look hard at what we're doing. we're plowing a lot of money in. i don't think we need quite as much money as we are plowing in. in some cases, we are paying afghanistan did things that afghans would do themselves -- afghans to do things that afghans would do themselves. what we're doing may reinforce the growth of our response of -- we need to make sure that what we're doing reinforces the growth of responsible government. we have attention. we want to go really fast and we want to be really careful. you like to do both at the same time. some expectation of this, and at the same time, it would help if

the money was not constrained by our calendar. i'm going into great detail for your question, but it is not one that you answer successfully on the simple, broad strategic policy-level. you have to answer on a level of a lot of people impatient with execution. >> is absolutely right. we can have unrealistic expectations on how long it takes to change things in afghanistan. there is also a political part to why we're here. united states has been at war and a gun at -- in afghanistan for nine years and a couple of months now. when you go back and as the military or people involved in counterinsurgency strategy about that, they say, yes, but you cannot count the first eight. because we were not going at the right way. [laughter] we thought nine years one year the time. how many times have we heard that? the american public it's about

as tolerant of that as you get with hearing of the springfield interchange having to be rebuilt now, because it has been under way so long that it is old even before it is open. we are now on the situation where if you took the 2014 deadline seriously, you are describing a 14 year long war for the american people. or at 13-year-old with no reception that events. and no assumption that you can show a truly significant change in the strategic position on the ground other than the fact that afghanistan is no longer safe haven for a tax to be launched on the united states. then you have to back off and say, at new safe havens come up? yemen, somalia, and u.s. the question, why do we have 100,000 troops in a place that we're

trying to prevent from becoming a safe haven where pakistan, where we cannot the troops, or yemen and somalia, where we are very limited in the forces we can put an end, we do not have those kind of numbers? finland and the situation which you try to rationalize something that is essentially historic in nature. >> you sort of answer that question. we will have bobolink and from the nixon center. it seems to me that most americans are not aware that the goal posts are in the process of being moved in 2014. i am asking this to david sanger. what kind of reaction will there be when this bonds on people, or when this becomes explicit, in the hill, in the white house itself, what do you see this --

are we going have a political fight about this? jerry and i suspect we will have a political fight about it. to some degree it has what has made this easier for president obama. the announcement at nato was muted and a little bit confused. that is not necessarily mean that it was all over the place. it was not. it was deliberately not made for tv. he did not see the president's standing up and say i am moving 2011 to 2014. that was quite deliver. on top of that coming head the economic crisis has really dominated both newsprint in airwaves -- and airwaves. the result is that people are much more likely to have heard the minutia about the tax debate right now than the question how the timeline has changed. that will alter as you get

closer to the presidential election. >> public to move the politics from washington to kabul and to the neighbors. despite the recent embarrassment, there are continuing reports of ongoing contacts between karzai and various taliban or other representatives. potential reintegration comer reconciliation efforts. at the same time, among the neighbors themselves, there are various bilateral, trilateral, multi lateral gatherings or conversations going on about a regional approach to afghanistan. including possibly, in listing their support -- in listing their support for those reconciliation efforts that are

afghan-led. maybe it is a question best for ambassador neumann, but they proceed all the panelists -- i would appreciate all the panelists' thoughts. >> we will start with the ambassador. >> on this combination of negotiations cover regional engagement, we should be talking now. we should understand and nothing is going to be fast. one of the worst things we can do is to approach these two issues, a regional solution and a negotiation, as though they offer an alternative. we understand the reality -- we need to understand the reality that the israeli prime minister rabin said, by as though there were no negotiations, and negotiate as if there were no war. the negotiations and such words as algeria and france, the

united states with britain that and along a low -- in a long ago insurgency, it numbers in years. three years is a minimum expectation of when you dig going on negotiations and get a solution to most of these wars. yes, talked -- but understand in both the regional question and the issue of negotiations that the u.s. is a central player. people take positions on how they understand we are acting. so if we act as though we are desperate, like walking into the carpet bazaar and wanting it today and what is your best price? this will be a very expensive carpet. we approach the negotiations that would. if you want to negotiate how would surrender quickly, you can do that. if you want to negotiate anything more substantively, then you have to radiate the

sense that you're going to stay, that you're going to fight, and then you have to fight and talk. >> just to add to that, i absolutely agree. successful negotiations on our side is about leverage. leverage requires you to be able to be clear that you are staying and fighting. my co-author here, andrew, actually wrote in an earlier piece that the taliban viewed this as, why should they buy a loaf of bread from us today when the condoned the bakery tomorrow? we're no longer part of the landscape for years down the road, they will hold up that long a holdout -- and own the entire bay agree. -- the entire bakery. that is our overarching interest. taking a, if you're sense of direction tonight that texas about some of the short- term tactics, but you did not follow through and i do not want

to pick up on that. -- and i do want to pick up on a. we're talking about the capacity of the american political system to sustain a position in support of its own national security interests. there is a big question mark about that. for four decades, we had a conception that involved over some years of containment, deterrence, that enabled us to sustain a position against an existential threat. today we do not have the domestic consensus, and so for a reaction, i viewed this as likely to be an in and out and back again problem over an extended period of time. i think it is certain that our political pressures will have us would draw too soon to deal with

the underlying threat. what is the underlying driver that makes this such an extended problem? we see ourselves as a threat, but the turmoil within the muslim world, the desire of the al qaeda-types and others -- yes, they want to hit us but to get us out of the way. their big prizes pakistan and the nuclear weapons, saudi arabia and its energy, and you can take it from there, and that is the underlying driver, it seems to me, in this fight. over time, we will see whether it is tactically directed at us or some of these other states, seeing a heightened threat whether it is pakistan losing control of the nuclear weapons, or some of the other issues. we are likely to get hit again. it seems to me that is the context with which we will withdraw too soon, we will get hit again, and we will have to go back in.

timemay be 10 to 20 years' horizon which does not do good in terms of the immediate political decision making. all alike. their reaction to the perspective over time. >> thank you very much. >> dick, as always you have gone right to the heart of two of the really critical issues here. the first is, if there was another major terrorist attack in the in addis states and it did not come from afghanistan, as presume for a moment that it came from the tribal regions of pakistan or it came from yemen or somalia or one of those other news havens -- new safe havens. there is no one word that covers so many different groups now. one of the first questions that would probably be asked -- do we

have 100,000 troops in the right place? it came out of pakistan, where almost all -- not everyone -- of the terror incidents that have happened since 9/11 emerged from, it would raise the question, what is it that we would do the day after the attacks in those troubled areas of pakistan? both the bush administration and the obama administration at various points has sent convoys quietly to make this point to the pakistanis -- imagine what united states might have to do in the tribal areas if an attack like the times square bombing attacks was significantly more successful. think about doing that now for that moment came up. i think that is one very big question. the second question which no one really wants to take on in the midst of this mid-course review

of pakistan strategy, is, of which country is strategically more important united states, afghanistan or pakistan? i think the question answers itself. it is clearly pakistan. that is a very difficult issue to take up. even the mere discussion of it makes it more difficult to work with the pakistanis. >> can i have one thing more? what david just said is extremely important but also important that it not be leading to a misperception. pakistan may be the most important country, but what pakistan will do, " we can do with pakistan, depends a great deal on their perception and believe that we're corps to stay in afghanistan. if we're going to stay in afghanistan, then they have options about government reform and taking on the insurgents. they would not perceive themselves to have those if we are going to leave.

i think the pakistani analysis as mine is the same. they're realistic choices are between backing a potential taliban victory, which might be somewhat more friendly to them, or risking a taliban defeat by the northern alliance victory. they may see other choices. that is not a view of the one -- we want them to be deeply engaged in. pakistan may be the more important questions -- country, but it does not mean that you have an alternative. you need to handle the two together. >> of french philosophers said once during the days of the sailing ships that shipped as i have a port, no wind will get there. i listened as carefully as i could.

the day after we defeat al qaeda, that is no longer our goal, then i hear it that we're going to weaken the taliban to get better terms to negotiate, then i hear, hear what legitimate and effective government to which the ambassador already said it. importantr it's very that we're there to avoid a fight between the pakistan -- we need them to balance china. it is really about china. and then i hear that we're there to ensure we have a constitution to be observed by the taliban. i am clear that we have to stay in order to get something.

i am not clear plot that is. -- let that is. >> anyone prepared to answer that question. >> i want to talk about that we have to rethink how we conceptualize what work there. like in the year 2010, it is not like the korean war or be in on. we are a different trend. in terms of what we're doing, vital interest that often driver decision making there. one is to prevent al qaeda from being able to get enough traction in this part of the world to regenerate another attack on the analysis. yes, al qaeda is now metastasized to other parts of the world, but their leadership and core functionality is still in this part of the world. if we're not in this part of the world, their strength in their reach from the part of the world is going to increase. and as we talked about pakistan maintaining a us stable control

of their territory and its nuclear weapons. that is when they get better or worse. we wanted to be better. if we're not there, our influence on that drops of the floor. it changes in terribly negative way toward our longer-term interest. i think that is what we're trying to achieve. how we do that and what level of troops, how we transition from the very expensive footprint we have now and use the next two or three years to build more capable afghan forces to help us with the anti taliban insurgency, then maintain and during preference, that as part of our road map. and reducing wars, we have to be careful we don't put the template of the toy is a tree on top of this fight and say it will look like korea or vietnam war world war ii. either we face off the taliban are we exited and we come out of this area altogether and it goes back to something else. those are probably not in any of

those three cases viable outcomes. they do not reflect the nature of al qaeda and the next 10-15 years of fighting al qaeda and islamist extremists around the world is going to look like. this is a wicked problem around the world, and how we transition in afghanistan will have a huge influence on whether we're successful or not. >> one follow-up question. >> i suppose, reasonably, you have all avoided the question here. the one that we have opposed. i think that might be a useful conclusion on c-span today our circumstance. does russia not hope that there is not going to be renewed

hotbed center of support troops coming out of afghanistan and four or five years? doesn't india hoped this will not be the same festering sore, or mentally kashmir will not remain in nagging problem? in short, is there not enough self-interest with neighboring powers with even three years of determined diplomacy with a grand vision in mind, what is it that all four of us, iran, double patio -- we cannot say that the goal must be to find zero way to wind down our military presence, which really sounds like it is given more political expediency. the circumstances on the ground.

can you speculate what you like to say? >> i would like to get a shot at this. >> this will be the roundup of our discussion. >> yes, the first point is, what we want in afghanistan is essentially a stable situation. most of our goals are driven by what we do not nine -- do not want -- i 10 year civil war, the destruction that comes from such relation to pakistan if all the players are drawn and. the encouragement of radical islam, if that has the defeat of the second superpower. those are big things that may last for many years. they are worth fighting over, even that they are-goals -- even negativeare- -

goals. i started in the u.s. army as you did and i remember my early instructor told me that hope is not a plan. i think there is a hope for bringing regional states together on the basis you described. i think we should begin to talk about that. i think we must recognize in doing so that right now they are all driven much more by their fears then there are by their hopes. and unless we can alter the balance of what they see as possible, then the fears are going to be the driver much more than the hopes. we have to do two things they one time. we have to be able to start the discussion of a regional solution, perhaps including a u.s. withdrawal and

neutralization, because some of the things the states fear is our presence. we have to start talking about that. but at the same time, we talk about that, we have to make clear that we are prepared to fight and stay for considerable periods of time. the one reinforces the other. they are not contradictory. they are essentially. elements of a common strategy. the annual -- if you do not pair them, then you will run out of time. >> the only point i would make that we have not yet is that the results of these midterm elections is that president obama probably now has a republican mark hardy in the house, but depending on what we learn about the farm policy of the nations of some of the newly elected members, it may give him a little more time that he would have had had he held on to the

house and to the kind of majority he had in the senate. that said, one of the biggest problem see is going to face is that he has to demonstrate between now and 2012 that there is an end. in mind. i think that many voters understand that the goals have shifted from those first days after 9/11. it was only six or seven years ago that president bush would give speeches in which he had picked resigns behind them were put together by white house image makers to make it clear that we were going to win clear victors in both iraq and afghanistan. i think americans of all political stripes have moved beyond that. they are looking as ambassador neumann said so well for what they want to avoid happening as opposed to what will happen.

at some point bank, and probably by next summer, the president is going to have to match up his troop presence with the specific goals that he laid out, the narrow goals he laid out on december 1 of 2009. i suspect that when he does that, you could see affair -- a further narrowing of those goals. >> general. >> how it back -- i would endorse ambassador neumann's points. i hope it does not dress down the wrong side of the street. i have two sons that are both u.s. army captains. i know exactly what the costs are that the american people, a small number of them, are bearing with regard to troop levels in this conflict. is never far from my mind, i can assure you. if the the cost of doing this wrong will be far greater for the united states if we get it wrong over the next three years after all the sacrifice that is already gone into afghanistan.

it is about looking of what we're trying to achieve on the road ahead. i very much of -- believe that that regional neighbors have to play a role, but they cannot play effective role some was the lead in that is states is one to stay engaged in this part of the war. -- they cannot play effective rolls if they believe the united states is not going to stay in this part of the world. we paid a high price for that. i don't think there is an option that has 100,000 americans there for years. i recognize the cost we're paying in terms of our national expenditures in our debt and our deficit. but we have to be careful on how we manage this. it will have a huge impact on our small contribution to a afghanistan over time. i agree with everything i've just heard except for one thing. my sense that whether you're dealing with a diplomatic end of the military end of this, the political part with karzai, all

of them are not yet together with the reality of american life today, that we're not where we were 20 or 30 years ago. and i pick up point that he made. we may be pulling in and that is a certain point hit, and then we will have to strike out once again. but the idea that we can do everything in the kind of careful cover responsible transition -- careful, responsible transition? possibly. when you contrast this, i come up with a simplistic explanation that the white house simply wanted to kick the can down the road and not have to face the real problem of what do you do when it is not clear, when it is absolutely not clear that your policy is working, and if it is not clear, what you do? continue with it?

this president had certain things in his mind when he came sen. reality seems to deny him that opportunity to implement the dreams that he had. i think we have had a terrific conversation that thank you very much for coming. thanks, c-span. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> southern sudan will vote on whether to become an independent

country. we will cover up for on the referendum. it begins at 10:00 a.m. eastern on c-span3. later in the day, also on c- span3, a conversation on the future of afghanistan as the u.s. plans to withdraw troops next summer. that is live at the center for a new american security at 1:30 eastern. now, former cia director michael hayden talks about terrorist threats around the world. he spoke last week at the jamestown foundation. his remarks about 40 minutes. >> what we go ahead. -- why don't we go ahead? thanks everyone for staying till the final word of the date given by general michael hayden.

he really deserves no it tradition. is the former director of the central intelligence agency, responsible for the plans and capabilities of america's adversaries to produce timely analysis for decision makers and conducting covert operations to thwart terrorist such as a birds we've talked about today. i am going to turn the floor over to him and he needs no further introduction. and we've always his final concluding remarks and observations about today's events. it is a great pleasure to have general haig in here today. thank you, sir. -- general hayden here today. >> thank you for letting me be part of an impressive gathering of a highly regarded institution. i regret i have not been able to be here all day. i have had access to some of the slides that presenters have

shown you. and from those, part of the presentation, i have a reasonably good idea of the general flow of the conversation, but i regret i have not been here to hear all the details. knowing what i know, about what has been discussed here today, if i could step back and look at it through the lens i bring to it and try to characterize the massive debt to which you have been exposed, and put a template on it, it is more comfortable for me coming from my own background -- i have the two templates public to share with you. one comes from my army brothers and career. they talk about the close battle and the deep battle. the close battle fought a the small unit level. you have troops in contact and in essence you have fighting going on.

the deep battle, according to american military thought, by far is the most important battle. that the battle that you want to shape. success in the deep battle create circumstances under which the close battle is fought tomorrow or the day after or next week. in terms of what it is you have discussed today, a close battle is what we and our allies and friends are doing to prevent people who have -- who are committed to telling us from killing us and our citizens. the deep battle is about the production rate of those people who might intend to kill us and our citizens. some might criticize too much too much at the expense of the

deep fight. the challenge with the deep fight, the production rate of those might do us harm, is our levels to influence it are far less powerful than our levers influence the close fight. it is one thing for those three letter agencies around town to affect that immediate defense. it is quite another to effect philosophical or theological developments in other parts of the world. the second template i would share with you is one that i picked up from a good friend. hank ended his government career. he was a cia case officer and one of our first officers into of afghanistan after 9/11. he talked about putting another

template on things he discussed today, another way of organizing the data. he talked about the three things that you need to deal with in order to deal with our current challenge. that is leadership, safe havens, and conditions. echoing my comments from the first template, i think we are doing well against leadership. some progress in regards to safe havens, but again, the other element, the conditions, much more difficult for us to handle. i thought a lot about what you have discussed over the past six hours. what could possibly be in terms of value added through my limbs, here.

i have been asked to talk for about 15 minutes and then to respond to questions for an equal amount of time and i will do that. i would like to import one message that i think is important to you. it is through my limbs and my life experience. it is arguably less scholarly than the things you have been discussing, probably more operational. this probably more present tense than some of the things that you have been discussing. my last job in government as director of the cia was the most intense job i have had in my life. your focus on the here and now. prominence that is so strong in the intelligence community is kind of a recalibration of how we are currently proceeding the

threat . because of the surprising continuity during the 43rd and 44 presidency of the united states when it comes to fighting this war on terror, we actually think we have been successful. if you bear with me, if i had a white board, i would be projecting things up here, but you will have to help me make hand puppets as i describe this. if this is the level of american and allied effort in defense,

most of the spectacular attacks of which we are all familiar, 9/11, world trade center 1, the attempted plot against airliners about a decade ago, east africa in the bombings, the attempted plot from great britain in the summer of 2006. we actually have some level confidence that we can be successful appear. in an intelligence officer and one thing we got one word we never use this "never." i am not saying that these kinds of attacks are not possible. these are complex. there are relatively slow moving. they have multiple threads. they have a planning fred, and operational fred, a training fred, a finance fred, a forgery thread.

we discover one of those threads and then we have a fur ball and we have a pretty good idea of what the plot is. i came into the cia the last few days of may in 2006. the last thing i was on was the airliner plot that was being born in great britain. false bravado of an intelligence officer is a very bad thing. we were all over that plot. we have a great knowledge about that plot. from what i can recall about the summer of 2006 is when they were going to arrest the people. americans wanted to have been relatively soon, but the british one of the plot to spin

out so that they could build up the strongest possible case for ultimate appearance before a court. fairly -- feeling fairly confident about what has been the preferred akaka attack, the large, complex attack against an iconic target designed to create mass casualties. look what has happened in the last 12 to 18 months. let's take christmas of last year. we were mounted against this from yemen. when i was director of cia, i would actually say to the large audience and small, every known threat to the american homeland has threads that take it back to the tribal region of pakistan.

this attack did not. this attack was hatched by a franchise. that is different than what we saw appear. think back for some of you may have been two years ago on thanksgiving eve. i was in my new house and i was chopping celery for the thanksgiving stuffing and i have the television on and i saw television's -- i saw hotels ablaze and by -- ablaze in mind by -- beyond that, i had a deep concern in my professional persona. this was a very high impact attack. it was conducted against a major metropolitan, a commercial area.

they were a dozen folks with automatic weapons and cell phones. immediately after the attack, we began talking about al qaeda going to a school in mumbai. i think that they have. if you look at the press coverage weeks ago when we thought something would happen in europe. they describe it as mumba stylei attacks. -- mumbai style attacks. now, walk with me into times square last april. we have a naturalized american citizen, self radicalized, setting himself up an improvised explosive device in a metropolitan area. self radicalized.

you can throw major hassan of fort hood into that same mix. we have franchises now. and self radicalize individuals. i think in capturing what was trying to be said. in the future, it is far more likely that al qaeda attacks against america and other countries as well will be less complex, less well organized, less likely to succeed and will be far less lethal if they do succeed. they will just be more numerous. now, let me finish up by saying a few words as to what i have told you that and what i think it is important and what its implications are.

the first implication is operational. i am speaking as an american. i think this transfers to other security services. it will require this new level of threat. it will require a shift in how we are dealing with this threat away from a heavier -- the emphasis on intelligence to an increase in law enforcement did it will be a balance between foreign and domestic and it will likely shift in the direction of domestic. the balance that we now have between prevention and being forced to defend at the point of attack, it will probably shift to being forced to defend in the

event of an attack. the open question is, how well we do it? there are policy implications. you have a tax up here. what you need to do with my left arm? i can push it down. how much more of your commerce, how much more of your convenience, how much more of your privacy are you willing to have pressed to gain a better probability of success against the new flavor. put another way, for most americans, this is not a metaphor, how much will it or you -- how much are you willing to take at dulles international?

that whole pack down kerflop that we had was the breaking down of this dynamic. the new threats are down here. this is where the current threat is. cook there is one more implication and that is at the strategic level. what is our definition of success? since 9/11, our definition of success in the united states, politically, is that there are no successful attacks. this current circumstance is penalty kicks. i do not care how good the goalie is. this ball, sooner or later, is going into the back of the net.

the important policy question is how to respond to it. do we punish ourselves, but it is one that came to my mind. do we [inaudible] politically? frankly, we have been pretty successful defending us. that in response to a successful attack. those folks that i left behind, i think they are asking for an american conversation on my left arm. do we go out to our public and say that we can do this, but we

need to agree that we all think that is a good idea. if we do not think that it is a good idea and we keep the are relatively close to where it is now, we all shake hands and recognize that we are accepting some degree of risk down here that we might otherwise reduce. but by balancing values, we have chosen not to do so. i think it was suggested by bruce, earlier, that al qaeda tactic may be too exotic -- to exhaustless with security measures did we will do that in the american political context after the ball is in the back of the net. in the present tense kind of guy. all of the pots are deeply important and will be in the

balance of success and failure the fight is the most important one. the close fight is an important question. it is one that will require some political maturity on the part of my nation and our political leaders to deal with it and an -- with it in an appropriate way. i thank you for your attention and i would be happy to take any questions that you might have. [applause] >> we will open the floor to questions. do not be bashful. no questions? here is one right here. and the second one. >> i am a full-time contractor

for the program evaluation. one of the things that struck a chord with me was when you discussed the difference between the close and the people fight. are we going to have to maintain our readiness and vigilance with respect to the deep stuff for a simple reason that if something should happen in the close battle, particularly in the homeland, then the american people are likely to demand a deep response if you will. >> this plays out over several turns of a wheel. if you look at the thinking of close battle and the battle, -- deep battle, it is more of a -- the battle -- in the deep

battle, i would ask -- i believe to the core of my being that our success in the close fight has been largely derived out of not just playing defense but out of offense and keeping al qaeda of maine on the defensive -- main on the defense. do not take it to mean that close battle is all about goal line defense. in the immediate battle, is taking the fight to the enemy. but the deeper battle, the one that i am referring to, is about ideas. it is about what people think. it is about what people are motivated to do. i want to choose my words carefully. i wish i had a prepared text to

make sure that i was precise. we had this kind of thing in the cold or. we talked about canning containment. that is kind of the close battle. over time, the deep battle was the battle of freedom. america and western europe had a very prominent role to play in that it logical fight. communism is a western philosophy. therefore europeans and americans have some legitimacy in that debate. marks evolved out of other thinkers. it is far more difficult for a nation of the united states to engage in the dispute about ideas in a religion that is by

and large historical traditions of judeo-christian. it is so hard for us to be engaged in it that when we do, would probably make things worse. this is a question about authentic and voices within islam working of the future. -- working out the future. sorry, the was a very long answer, but an important distinction. >> a question down front. >> i am a journalist from pakistan. in the last few years, we have been speaking to american offices.

we have not broken our link. the americans have been responding by giving more and more aid to pakistan. his feeling was that the americans have no plan b to meet this challenge. i tend to agree with him. why did the americans and western europe -- how long will we continue giving more aid to pakistan military?

>> i have already heard about my good friend and his lunchtime conversation and i hope that we are able to discuss it. we are getting together later. i am going to give you an incomplete and not suffer -- not totally a satisfying answer. this is particularly for someone who has been where i have been to discuss in great detail. when we talk about a visit that i made to pakistan after the assassination. with tinted to do this under the radar. it was not supersecret. we did not want journalists like yourself reporting on immediately. we have what i would call the trip from hell. we saw the president. we were sent by president bush.

the message that i had four presidents sharra -- musharaf was a we have had great success in pakistan. in fact, we had captured more al qaeda senior leadership incorporation with the i assigned and we had with any other service in the world. that is fact. i then pointed out that we have not seen that some kind of corporation in the tribal region. after the peace agreement that the governor signed in september of 2006 in the tribal region, it changed the dynamic and set the conditions for it to be a safe haven for al qaeda and both the pakistan and afghanistan tell them. i said to president musharaf

that we oppose that agreement. but at least i think that i understood the thinking behind it. his view that those kind of folks were not just a threat to america, they were a threat to him. what i was trying to drive home to him, it was that his metric should change. now, those folks in the tribal region were not just a danger to the united states or just a danger to afghanistan, he should now perceive them as being a threat to him and his government. i pointed out that after he sent his special forces into the red mosque that previous summer osama bin laden had issued it a fatwa against him and we saw a merger pashtun to the extremism.

this now represented a serious threat to him as it did to us. you know this better than i. he was distracted. we made the same argument to others. to the degree that we win that argument and to the degree that we address that point, some of the things that you are suggesting get much reduced. to the degree that we are unable to make that argument, some of the things you're suggesting, i think, continue. back to that fundamental premise, do you agree or not agree with that? >> on this side of the room? we will come back to you after that. >> mark all read from the

department of defense. lred from thee department of defense. you mentioned that we increase restrictions. i am curious of your opinion on how we approach that. you argue that our greatest success would be highlighting our liberties. how you think we should best approach this new threat that we see right now. >> it is very hard to say that this is in the left-hand column and this is in the right hand column. the pat down thing, i work very closely with the deputy director of the fbi. obviously, i am putting that in the that is ok column.

in terms of the current threat, i am someone who is quite comfortable with working on authorization from the president. i tilt in the direction of using the full extent of a law to ensure security. i understand the great danger. if this is what the law allows, i do not want to go to that political the grinder. let's play inside this box. just a few yards back from what is legally permissible. i have trouble with that as an individual.

if i am playing in a box that is not as big as the policy box allows me, i am protecting the united states citizen. you may want to describe that in a security mindset for people that have a more libertarian view. if i am playing on the inside box, even though i put it in a larger box, i hope that has meaning for you. if something bad happens, let me show you the new box. i know the american political process. i am not giving it a clear answer. one needs to be very careful about not using all the tools available because if you do not use all the tools available and horrendous things happen, in one

sense it is katie bar the door for convenience, and liberty to read it is not that simple an argument as security and liberty. it could really hurt liberty over the long term. all that said, me, personally, i am not interested in pushing it down much further. >> a question over here in the back. >> i am with the university of maryland college park. i found your discussion very interesting, particularly the distinction between the close fight and the defiant and you said that the fight is very important and then you said that you're born to talk about the close fight because that is what we do all the time and that is

what i understand. it raised a concern. we read about how al qaeda has a strategy of death by a thousand cuts. one of our most critical resources is the attention and focus of our leadership. strongting the very sense that we're spending so much time in the close fight that we are not doing the thing and we are not preparing for the next battlefield. >> great point. you are right. frankly, that is a message-that is the message of was intending to send your my job was incredibly present tense. this is probably not the agency what in the deep fight for ideologies and ideas and all those things. i think that is one-third this is very important.

-- i think that is one -- this thing is very important. now, they do not spit on them at the airport. soldiers are highly regarded. 1% of the country is defending the other 99%. there is a very good argument to be made at the issues in afghanistan are not the product of inattention by the department of defense or the cia, but the product of attention by the rest of the american government which did not strap that on as something the need to be concerned with. let me go deeper. i suspect we have a lot of people that's been a lot of time on college campuses. let me give you an analogy. let me go back to the late 1940's.

you had to the canon article followed up by the c-68 that set the framework for soviet expansionism. think in your mind 10 years after we came down from the mountaintop. go back in history and think of how many colleges are now offering soviet studies. how many colleges are now offering studies in marxism. take your machine and fast forward. we are melting years beyond 9/11. where are you? people in the room are playing this game, but in talking more generally around american society. how many studies to we have out

there? how many rigorous academic studies of islam to we have going on in universities across the united states? the whole question of radicalism. we do not have the comparable heavy lifting for the current conflict. you are absolutely right. i think that my message was successful. for security establishments are doing much to ask for them to do, fighting the close fight. this is an all-america response and there are a lot of folks that are not yet on the field. >> one more. >> i am with the investigator project on terrorism. i have a question. you predicted that future terror

attacks will be less complex, less organized and of less likely to be successful. but how do you explain something like the mubai attacks. there is a tendency to replicate attacks in the developed world. in 1993, it was replicated in london and madrid. how do you explain that? >> i agree. in an intelligence officer by profession for it we never say anything that is absolute. we always hedge. do not take any of those judgments as being obsolete -- being absolute. the ones that succeeded were before 911. -- before 9/11.

you go with someone like this one terrorist who was not well trained and probably not even well vetted. why? because we probably would have wanted to fight him even with the limited help that he got. i am trying to suggest that the style of attack to which they have been forced, bruce went to the death of a thousand cuts and said that al qaeda had a national security council meeting and said that they needed to change our strategy. i do not think that is true. i think this is more a product of success, that they are unable to conduct the kinds of attacks that they would really is still like to do. if the attacks -- that it would

really still like to do. if the attacks -- i think, collectively, it reduces the probability of success. all that said, i say that the ball's going into the goal. >> thank you, very much. we would like to thank everyone for participating in this conference today. [applause] we will see you here next year. we still have some books for sale. that is a way to support jamestown. look for the dvd is that are coming out soon. have a safe trip home.

>> on tomorrow's washington churl -- washington journal, stephen more on congressional republicans. then, ethan rome who says part of the health care law is unconstitutional. after that, author bob cavnar. "washington"washington each morning at 7:00 p.m. eastern. an annual government survey examines a high school students.

live coverage at 10:00 a.m. eastern. >> the senate move forward on the tax cuts and unemployment benefit package earlier. before the vote, steny hoyer said that he agrees. then, the director of the national economic council, lawrence summers, talks about the u.s. economy. a u.s. district judge said that part of the health care law is unconstitutional. he ruled that the mandate to buy insurance goes beyond government authority. we spoke to a reporter about the ruling. will also get a response from the white house.

>> peter landers, what did the judge fined unconstitutional in the health-care law? >> he singled out the individual mandate that says that you have to carry health insurance or pay a penalty and he says that this is unconstitutional. he says that congress has never been allowed to legislate that you must buy something that you uy.ldn't otherwise b >> what argument do the administration make that they could regulate that? >> obama it administration says that what you are really doing is using when you will get health care and who will pay for it. what you're really saying is that you will pay for it later out of your own pocket or, quite possibly have the rest of the

public pay for it. if you are uninsured, he may not be able to afford your care. the decision to go without health insurance is a form of economic activity and it cannot be regulated by congress. >> this was a case that was brought by the attorney general, but there are other health care court cases that are going to challenge the health care law out there. >> that is right. the biggest one is in florida were 20 states' attorneys general are challenging the health care law and there is a hearing on that case this thursday. i think that is the one that is going to probably lead the pack once the ruling comes out. >> when you say that, it makes us think that when there is more coming down the road in terms of appeals. will this end up in the supreme court? >> i think that is where it is headed. an appointee has hinted that he would rule the same way the

judge ruled today. those are two rulings against the law. those are the ones that will get the most attention as they go through the courts. >> with this ruling in virginia, is this something the of administration thought was coming? how big of a blow is this to the health care law? >> based on what the judge said earlier, it is not a huge surprise. the one element that we were not sure of the forehand was whether he would somehow deal with the implementation of the law. he is for me to let it go through the appeals process. >> on this virginia case, is there any indication how soon the decision will be appealed? >> i assume it will be appealed very soon. i am soon -- i am sure that we will -- that there is another

judge who ruled in favor of the obama a administration and there are already conflicting attendance. >> covering the action in the courts on the federal health- care law, peter landers. thank you for a lot of the. -- thank you for that update. >> now, reaction from the white house on the ruling on the health care law. robert gibbs is also asked about the tax package. this part of the white house briefing is 15 minutes. >> the umbrella is there to mark the seat. that is an interesting -- i do

not know. >> mr. feller. >> two topics. on the health care ruling, the passage here in which the judge says that the unchecked expansion of congressional power to the limit suggested by the minimum coverage provision would invite unbridled exercise of federal powers. suggestion by the minimum coverage provision would invite unbridled exercise of federal powers. and this is not about -- just about health care, but it's about individual right to choose to participate. doesn't this indicate or validate a central argument of skeptics, which is that despite your intentions you can't require people to participate a lot like this? >> well, in a couple of port

things for perspective, then. first and foremost, obviously the administration argued on the other side and i do think it's important to keep some good about the fact that there are now 20 or so cases making their way through federal courts. the court -- this was the eastern district of virginia. 115 miles away, the western district court of virginia ruled that november 30th, to uphold the same provision that the eastern district and its judge had ruled against. so i think the other court, the eastern district of michigan on october 7th ruled in favor of the law as it was passed. so i -- again, we disagree with

the ruling. obviously, the individual responsibility be portions of the affordable camera are the basis and the foundation for examining and doing away with insurance company discrimination on behalf of preexisting condition. obviously, without individual responsibility portion of the low, you could not -- you could not find yourself dealing with preexisting conditions because the only people who would likely get involved in pursuing health care would be that very sick. and i briefly, that would be enormously expensive. >> given that it is so fundamental to the whole lot any of these different court rulings, is that clear to you that this is going to go to the supreme court? >> i am not a legal scholar, ben. i think that it is safe to say because there is several other

cases in the pipeline and because you've got disparate corporal aimed 115 miles away, that the bill will continue to have its day in court. i do think it is important that even this judge ruled that the bill continues to move forward in terms of its implementation. and obviously, the individual responsibility ethics of this legislation were to go into effect until 2014, so they sometimes work this through. >> just wrap up this part, what gives the weight of companies that ultimately will prevail if this case continues to go to the attached >> again, i think -- i am certainly not, ben, a lawyer in terms of the legal arguments that underpin each of the priests. but i would say challenges like this are nothing new in terms of laws that have come before the courts in the past in which -- in which our position as

prevail. work confident that it is constitutional. and quite frankly, the three corset render decisions on this decision, to uphold our favor. >> democrats in the house are talking of targeting the estate tax provisions that they're unhappy with and maybe dealing with added an amendment or legislatively changing the language. as the white house urging those democrats not to do that if that could cause the whole deal to unravel? >> obviously, ben, the senate is going to vote on -- on a procedural vote that little bit later on this afternoon. i think the president is encouraged by what we here in the senate and believe that the legislation will pass that hurdle and the one important step closer to passage. in terms of -- i'm not going to get involved in sort of what the

amendment process might be in the house at this point. i think you have seen whether it was in here on friday with former president clinton or whether you have seen justice morning that this is something that has broad bipartisan support in the public. it's an excellent -- it's a good agreement. it's an excellent agreement on behalf of millions of americans who will see their taxes go up. those that are impacted in having lost a job in this recession will have the security of knowing that their unemployment benefits won't follow the link to politics. in the middle class will enjoy a significant tax cut in the payroll tax portions of this bill. so we are encouraged that we get closer and closer each day to having this agreement become

law. >> can you talk about the initial reaction to the health care ruling? were you surprised by a? and how concerned are you about the fact that their are a lot of other lawsuits out there? >> again, this is the third federal -- this is the third federal court that is rendered a decision on this portion of the affordable care. and two of those courts have upheld it. so i think we are confident that the affordable care act to move the appellate. >> is the next best for you? >> you know, the department of justice will have to make decisions about appealing this particular case. my sense is that that appeal decision is something the likely make, but i would point you over to them. >> and just a question -- larry summers gave a farewell speech today at a think tank, and i'm just wondering how the

decision-making is going on his replacement. do you still have to do that before the end of the year? >> you know, look, i would say that it is -- i am not sure that that is going to get done by the end of the year. obviously, a whole host of legislative -- lots of legislative work around the lame duck with a budget, taxes, start, "don't ask, don't tell," the dream act. there are a whole host of things that have taken up a bunch of bandwidth and a bunch of time and it's unclear to me whether that will get done before the end of the year. jake. >> it appears that one of the main reasons why the judge will decide -- ruled that congress exceeded its constitutional power is because for what i can only imagine were political reasons, the word tax in terms of the penalty for those who don't have insurance, who can afford it, was replaced by the

word penalty. and he said because the legislators who drafted -- >> let me -- i have been getting ready for this. i've not had a chance to read that and ignore folks and you are taking a look at it as well as the department of justice. i don't have a direct response to the judges, some of the individual reasoning mean i've got to have an opportunity to look at it. >> i mean, this is how it is. >> i'm not doubting what you're reading. i'm just saying i've not had a chance to read it or have a chance to talk to counsel here about how they take care. >> all right, well, the question would be, was in retrospect a mistake to change the terminology from -- i understand you're not ready to answer right now. maybe get back to me. >> i need sometime to have somebody take a look at it. >> can you get back to me on that point, though?

>> i'll see whether they can, yes. >> you keep talking about two other cases where the judge ruled otherwise. and those, it's my understanding that those were democratic appointed judges and in this case by republicans. his politics playing into any of this? >> i., dan, don't know the answer to that. the judges clearly make different decisions based on different points of reasoning. i think our belief is that the health care act will go forward and that it is constitutional, that it improves people's lives and particularly this is the basis that it said, of the provision that allows us to finally address the lingering discrimination against those who have a preexisting condition. it also, by the way, you know, your health care, my health care, everybody has health care

in this room pays the uncompensated -- the cost for the uncompensated care when somebody doesn't have health insurance, gets into a car accident, becomes thick and then they're going to the.ear to the emergency room or because of the seriousness of their illness and not having regular backups or primary care. all of that is -- that is paid for by you and me. we seek to address that in the affordable care act. that's why i think the progress we've made in offering tax credits for those to afford to be able to have a minimum set of health care -- a minimum standard of health care that allows us not to pay for their

health care in that sense, the health care that they need. >> can you tell us what the president's reaction was? >> i have not seen the president since the ruling. >> is there any annoyance at all, the signature item for the president and for this white house continues to be challenged, something the president says is critical for all americans, yet he continues to be challenged in a court? >> again, i can't speak to the motives that -- it would appeal only spaces -- i don't remember quite the coverage when both courts upheld the law, but that is just from the cheap seats. well, you do mention sometimes when planes land safely, there is not breaking. >> can i take a crack at a question? >> you can try. you're sort of like the district court. one court ruled -- go ahead.

>> the congress is about -- that wasn't about to take office in january is much more predisposed to oppose the health care law. do you worry about this one politically will help provide momentum for either starvation of the health care law through lack of funding for stronger action against the health care law? do you think this politically will be ammunition? >> i don't because i think the position that is held by those who seek to repeal the law i think has been their position both in the courts ruled against their position and when courts rule in a way that upholds their larger position. so i don't think that impacts it. i think it is important when you hold these provisions back or when you these provisions, that the impact of that is, as i said, if you are somebody that cannot get health care because of preexisting conditions, to

guarantee that when this is fully implemented in 2014, they go beyond what do that. that's a no win like this and i think that's important for everyone to understand. >> thanks, robert. given the signal that henry hudson has said in previous writings on this back in october, for example, which are then surprised if he had done anything other than what he did? >> within, i don't think this was the decision today was how he decided it was a surprise to anybody. >> are not a legal scholar and i'll accept that. but anyway, the president is -- >> i didn't go to law school like you did, chip. that is worked out so well, you are here in the front row of the briefing. [laughter] >> sedan as well. i hear the theme music to l.a. law.

[laughter] >> but the president was a legal scholar and still -- and he said you haven't talked to him since he came down. does he get personally involved in the arguments? >> not that i'm aware of with justice. obviously in a regular meetings with them, white house counsel bob bauer will update in -- will update him on where different courts are, you know, not long ago and turned those the western district of virginia. that was something we covered. i don't honestly remember and i can go back and ask and see whether or not he has read. >> as he put in his 2 cents and make suggestions -- >> i'll take that questttt

>> u.s. diplomat richard holbrooke has died. he served as the special envoy to pakistan and afghanistan. he helped draw up the bosnia peace agreement. on friday, he suffered a torn aorta and underwent 20 hours of surgery. richard holbrooke was 69. >> house majority leader steny hoyer said he expects the health-care package to pass later this week. the cumbersome and spoke at the national press club. this is one hour. >> the house of representatives shall be composed of members that are chosen every second year. so says the constitution. it is a time when some americans

were pushing for our leaders to be selected for life and our founders meant a revolutionary choice. the created a government that was found every two years to listen to the people. we ought to listen to the people all the time, but we must listen to every two years. this is been a great source of our strength. it has also been the source of our greatest test as a people. no form of government is more demanding than ours. that is what benjamin franklin called our government a republic if you can keep it. keep the' that republic or civic virtues, sacrifice, self discipline and self restraint. they are the virtues that neighbors need in a community and communities in a nation. they call us to look further into the future than just the

next two years. so, our form of government demands leaders who are fearful of losing the next election and therefore are cognizant of the will of the people, but are not consumed or immobilized by the fear. our politics may run on two-year cycles, but our problems to not. we will not get to full employment in two years and will not get out of debt in two years. we will not get our middle class out of this historical of inequality and lost opportunity in two years. but in two years, there will always be another election and there will always be easier ways to win them taking on a long- term structural problems that the five quick answers. it is easier to rail against spending without cutting anything of substance. it is easier to stir up culture

wars and resentment. all of those tactics have proved successful, but they're also poisonous to our future. what a republican needs our leaders that are willing to look further, even if it costs them. in 1993, a congressman voted for the clinton budget and it cost her her seat in the congress. but that budget helped create 22.7 million new jobs and the biggest surpluses in our history. history proved her correct, but it cost her her seat. i believe history will say the same of so many of my colleagues in the 111th congress who made political sacrifices to do what they believed was right. our form of government also

demands sacrifice from its citizens, not just in times of austerity, but it all times. it demands citizens who see through politicians promising everything at once. it demands citizens who understand that the contrived drama of the news cycle is trivial next to the slower, more profound cycles that shape our future, the cycles of educating each new generation of children, or of innovating technologies that inspire new innovations in turn, or of struggling to bring our nation's books into balance. when will the last month's elections, we see a great deal of anger and the fear, much of it warranted. that anger can be valuable if it pushes us to confront america's deep challenges, but not if it pushes us into two more years of zero-sum warfare in washington. that anger must be tempered, and i believe that it can be. america is not convinced that

either party has all the answers. answers. on november 2, i believe the voters called us to find common than simplistic sound bites. for real problems, problems like unemployment, economic growth and deficit and debt reduction, we need to seek common ground. november 2 certainly wasn't a victory for the democrats, but republican senator elect from florida was also right when he said we make a great mistake if we believe that tonight these results are somehow an embrace of the republican party. they were results from a public that wanted us to share responsibility, to find common ground on our common problems, to put forward a domestic agenda that thinks in decades, not election cycles or news cycles. i believe that the agenda must be founded on job creation, the

strength of our economy and our middle class and real fiscal responsibility. when it comes to jobs, i think there is a growing recognition on both sides that manufacturing must be a part of a return to long-term strength. both parties understand that manufacturing is one of the most important sources of well paying middle class jobs. both parties understand that manufacturing has taken a severe hit over the last three decades which saw the number of american manufacturing jobs cut nearly in half. and both parties recognize that reversing that trend is a critical part of being the kind of nation we want to be, a nation of innovators and producers. a nation that competes and wins in the global market and keeps building so much of what makes the world run and happily the world wants.

those goals are behind as you have heard me say in the past to make it an america agenda, a plan to rebuild america's manufacturing strength. and though the make it in america agenda has been initiated by democrats, it an agenda that appeals to the broad spectrum of americans who see themselves as principaled pragmatists looking for policies that work for themselves, their families, and their country. in the 111th congress, republicans and democrats were able to line up behind helping american investors get their products, inventers get their products to market faster making it cheaper for american manufacturers to obtain the material they need to produce goods, helping veterans find jobs in the growing clean energy sector and more. labor unions and business alike join to support our manufacturing agenda because

they share an understanding that it's not enough for america to innovate new technologies. we have to bring them to scale here in america. that is it's no longer enough to simply invent and innovate and develop here and then watch our ideas roll off assembly lines in other countries. that pattern has cost jobs and hollowed out our communities across america. because innovation eventually follows manufacturing, it has set us back on a range of products that will be vital to the 21st century economy, everything from computer chips to photo voltaic cells to precision optics to electricar batteries. one of the founders of intel said if you continue to manufacture overseas, soon your inventers and innovators will follow and go overseas.

both parties have an interest in changing that dynamic. so i'm hopeful that we can make progress on manufacturing bills in the next congress, bills to strengthen job training partnerships between workers, businesses and educators, bills to help job training programs to the jobs that manufacturers most need filled, bills to support american exporters, fight for a fair trade playing field for our workers and companies and hold china and others accountable for the unfair subsidy it gives its own companies through currency manipulation. the creation for an environment in which manufacturing job growth is both desirable and profitable should be a joint responsibility. job creation will still be the measure of success in the next congress, but we also need a congress that's committed to investing in economic fundamentals and growing our middle class. from that perspective, i think

the outcome of the tax negotiations between president obama and republicans is mixed. on the one hand, i think that extending unemployment insurance, cutting payroll taxes, and keeping taxes low on incomes under $250,000 are proven steps to grow the economy, help families in need and create jobs. but i simply do not believe that the deep debt that comes from republicans' upper income and estate tax cuts is worth their minimal impact on job creation. those cuts, in my view, harm our long-term prosperity with little short-term gain in return. they are found on the fiscal fiction that the billions including from the best among us will have a positive effect on job growth. that's why this deal is giving democrats some pause. having said that, i believe that action is necessary and compromise was inevitable. in the next congress, we have

to move beyond emergency measures. the recovery act, in my view, helped stop a depression, but now it's time to invest in the fundamentals of long-term self-sustaining growth, growth that is not founded on debt. i think the investment manager, jerry grantum said it real. "growth depends on real factors. the quality and quantity of education, work ethic, population profile, the quality and quantity of existing plant and equipment, business organization, the quality of public leadership, and the quality, not quantity, of existing regulations and the degree of enforcement. the intelligence of our investment in real, lasting growth will determine whether we meet our goal of emerging from the recession as a stronger country.

there is another reason why emergency measures aren't enough, the state of our middle class. even if our unemployment rate were instantaneously sent back to the 2007 levels, we would still be a country with a declining middle class and with levels of inequality we haven't seen in nearly a century. that is an issue about which all of us should be concerned. the middle class was struggling long before the crash hit. since 1980 in actual dollars, the average income of the bottom 90% of americans has not budged. over the same period, the wealthiest 1% has come to control nearly a quarter of all income. and now our colleagues on the republican side of the aisle are going to the mat for a high estate tax exemption that will

exclusively benefit 39,000 of america's wealthiest families. our challenge then is to foster smart growth that lifts the middle class. and whether we will reach that goal depends on whether we have the discipline to make and sustain a long-term commitment to making things in america, make it in america, and promoting science and education. if we do have that discipline, we can find common ground on investing in outstanding education and basic research. they have little economic incentive to perform on their own, smaller companies, but can turn a small public commitment into enormous dividends. as we remind ourselves anytime we use the internet, a computer mouse or g.p.s., all of which were substantially enhanced by

government investment and basic research. this commitment should not be a partisan one. even though the once bipartisan science investments of the america competes act unfortunately failed to win republican support in this congress, i am still hopeful that the partisan equation can change now that republicans share responsibility for our growth. that's especially likely when republican business allies remind them of the dismal economic outlook for a country whose investment and research in development as a fraction of the economy continues on a four-decade course of decline, a country that has fallen behind japan in patent application and is on pace to be overtaken by china as well. and a country who is k through 12 math achievement continues to rank at the bottom of the developed well, -- world, that

is simply unacceptable. it should be an especially loud wake-up call to see students in chinese school systems significantly outpacing american students on that same assessment, scoring 20% higher in math and 15% higher in science. so i'm hopeful in the 112th congress will see a stronger commitment to basic research and math and science education. i also believe we can find common ground on education reform that builds on the successful race to the top program to bring more accountability and data-driven results to our classrooms while at the same time providing the necessary support to schools and teachers educating our most at-risk populations. this kind of commitment to research and education is the foundation of a stronger, more

competitive middle class. it also is the foundation of real economic growth and of the new jobs we need. in fact, according to a study from third way, if our economy grows by 2% instead of 3% per year over the next decade, that difference will translate to an unemployment rate seven percentage points higher. simply 1% difference in the growth of our domestic product. another area for common ground on growth follows from the point about the quality, not quantity of existing regulations. congress needs to take a serious look at our international competitors' regulatory policies and ask how they contribute to job creation. we need to look at the quality of our own regulations. so what extent are the regulations we have protecting the status quo and to what extent are they hindering

innovation. are there places we can make it easier to start new places and easter to grow them by simplifying and streamlining the regulations we have. all of us have heard the cries of help from those who want to add to our country's free enterprise but feel frustrated by the government hurdles they confront. democrats must stand ready to work with republicans and they with us on research, education, reform, and streamlining regulations. there are, of course, some core principals which we should not and will not compromise. expecting and ensuring that the health of our people and our environment safeguard and protecting our consumers from unfair practices that put them unknowingly at great economic risk. the rules we enacted for wall street were necessary to curb the irresponsible and unchecked actions that led to financial

crisis. these rules will help protect jobs and savings from another devastating crash. they move our economy away from the damaging cycle of bubble and burst toward a pattern of more and consistent steady growth. for the same reason, we will protect americans' control over their health care. it puts our companies on a more equal footing against international competitors who benefit from lower health care cost. it frees potential enterprise to start business on their own without worrying about losing health coverage and it brings more fairness to the lives of middle class families who for years have paid more and more for less and less secure coverage, coverage that has often failed to be there when they needed it most. in both cases, democrats have worked to create rules for fair play that protect and promote economic growth.

if democrats want to be the party of the middle class security, we must also be the party of growth. we have built a remarkable network of programs to make america's life more prosperous, more dignified, and yes, more secure, from social security to health care reform. but if we want to keep that network in place, especially as our country ages, we can't neglect or devalue the importance of strong economic growth which help those progress stay viable. along with opportunities, we must also recognize obligations and limits. if we are to protect america's opportunities for the long haul and maintain america's place in the world, we must find common ground to restore america's fiscal soundness. the threat of fiscal turmoil is concrete, not abstract. and it would be felt in the

life of every american unsustainable debt eventually means skyrocketing interest rates and a tanking economy. that makes it harder to get a college education to start a business, to buy a house, indeed to plan a future. no other issue calls so strongly for leaders who understand the importance of hard choices and hard truths. no other issue calls so strongly for citizens who know what it takes to keep a republic. the wise i sacrifice today that helps our children prosper tomorrow. i'm heartened that the president's bipartisan fiscal commission put a plan on debt, a debt that needs to be at the center of our national conversation. the commission plan, along with plans released by the bipartisan policy center and

the center for american progress and others is a compelling summons to a realistic embrace of responsibility. reality tells us that we must address both spending and revenue. not until our economy is back to health, but certainly very, very soon. we have to reform entitlements to keep them solvent for future generations. that could mean some combination of raising the retirement agency with an exemption for americans who can't work as long due to physically demanding jobs, raising the social security income cap making it more progressive and sticking to the provisions we passed in the health care bill. medicare and medicaid, while we have taken some actions, still require substantial attention. we must continually review discretionary spending including the largest area of discretionary spending, defense. defense spending is now higher

than in any year since world war ii and it has exploded by more than 2/3 since 2001 without even counting the money spent in iraq and afghanistan. secretary gates has said the pentagon's "culture of endless money is now a grave threat to our military strength and national security. no discretionary expenditure shall go untested for need and effectiveness in the future congress." finally we're going to have to raise revenue, which can be accomplished as suggested both by president obama's commission and the tax reform commission under president bush by simplifying the tax code and reducing both rates and tax preferences. a simplified tax code can save families and businesses precious time, unleash economic growth, remain progressive and

help reduce the deficit. president obama has indicated that he is giving tax reform serious consideration. i would urge him to do so and to move in this congress on that issue. he has my support and i hope that's an area in which we can make bipartisan progress in this congress. in the realm of fiscal discipline more than any other, our economic future rests on our ability to find common groun we have done so in the past. we need to do so in the future. if we continue to see the future in two-year increments, however, each party can continue to demagogue these hard choices until the crisis comes. and that crisis would make even more painful choices on avoidable. the challenges are daunting, but i have spoken to many americans and not a single american have i talked to who

believes they are beyond our ability to solve if we have the will and courage to do so. we have the toughness and the ability to overcome far worse and we still have those qualities in america. what i hear more and more, however, is the doubt that our politics are equal to our challenges. it is that base a doubt that we still no how to practice the civic virtues, the self-discipline that guided us through civil wars and depressions. and in the face of almost 10% unemployment, staggering debt, and historically struggling middle class, we spend the next two years, if we spend the next two years in squabbling, in positioning, and in trivialities, we have proven the doubters correct at a

terrible cost to our children and our country. when ben franklin reflected on the high difficulty of keeping a republic, he wasn't indulging in blind pessimism. he was challenging us, his inhair tors. i still believe and i think -- behindarityors. i still believe that people have the burden of self-government in hard times. i believe that government was founded on exceptional principals, but i also know that our exceptionalism is not a birth right, not an entitlement. it has to be fought for and won and held in every generation. and that fight is going to define the years ahead. not a fight between nations or between parties, but a fight to live up to the grave responsibility placed on every one of us by our precious form

of government, a free people, a democracy. no matter who wins the next election or the one after, that is the fight we must win or lose as won. thank you very much. [applause] >> and thank you very much for your time. we'll enter the question and answer portion. once again if you can identify yourself after you are called upon and wait for the microphone to arrive. for the first question, it is the prerogative of the organizer of the event, mr. robert wiener of robert wiener and associates. where is that microphone? >> and, steny, thank you so much for coming to the club. it's a real honor to have you. as i said, the importance of it has shown that the president of the club ramped it up and

decided to be the host of the event. we're thrill that alan verga has done that. >> the president, right? >> that's true, mark hamrick will be coming on next year. steny, you mentioned the fiscal commission provocative report but they and many republicans and many in the media have, don't acknowledge that social security is solvent and you remember my sorted background when i was the chief of staff of the house aging committee, that social security is solvent and paid for through 2037 and 25% at the short at the most even after that it doesn't contribute a dime to the deficit even on paper, so it isn't anything the deficit commission can take advantage of other than taking money from it. how did social security become the symbol of saving the deficit and doing something instead of the real costs of iraq, afghanistan, tax breaks for the rich, and will democrats and the congress as a

whole resist the sound bite to save the budget by cutting social security? >> well, thank you. first of all, let me say that social security ought not to be looked at as a way to reduce the deficit. your point is well taken. however, at the same time we need to make sure that social security is not only solvent through 2037, but solvent for future generations and, therefore, we must address its solvency within its own construct. i think that's what many have said. there are many ways to do that. frankly, social security is much easier to deal with than is medicare and medicaid which as i pointed out to you is a very much greater challenge in terms of cost. now you mentioned as well the expenditures that we have made without paying for them. we fought two wars and have incurred about $1 trillion,

none of which has been paid for. it's all been borrowed money. when i said the civic virtues of self-discipline, we need to make sure that we pay for what we buy and, therefore, we included in our budget a statutory pay go. i think that was a return to what we did in the 1990's and disciplined ourselves in terms of expenditures. i think we need to continue to do that. what i have said and many of you have heard me say, in the short term, in an economic downturn, you cannot do that because what you need to do is to give stimulus to the economy and you can't depress it at the same time. and, therefore, you need to encourage that at times of economic stress. however, we incurred great deficits at the time of economic well-being.

that has been the problem that we confront today. your point that social security is clearly something that democrats are going to make sure that is in place, is solvent, is there for future generations, will not be privatized and will be as generations have had it to rely on in their retirement. >> james reed, reporter at wrjw news, the campus radio for george washington university. my question is regards to the new freshmen class in congress. the media has portrayed that many are members of the tea party. you said you will work with the republicans and conservatives in congress to get things done. my question is how would you

plan to extend the democratic way, well, the way of making laws and the democratic process, how do you extend that to the tea party, in which ways would you do that? >> of course, you can't simplify that -- any of the parties because there are a lot of discussions within and the tea party is not a party in the sense that we know of it. all of them are liked as republicans so that what we need to do as republicans and democrats is come together and understand that these are, as i said, pragmatic difficult problems that confront us. not ideological problems, they're practical problems. it's been done before. ronald reagan sat down with tip o'neill and addressed social security and made it solvent to that year that bob weiner talked about. ronald reagan and his people came together in 1986 and

passed a tax program which said what i said needed to do, lower rates and reduce preferences. i think we can do that. i think we can do that because the demands to do so are compelling and immediate. i'm hopeful that members of both parties will come together and do that. i certainly intend to work with mr. bainer and mr. cantor and mr. mccarthy, all of whom i have talked to about this effort. i don't know most of the new members who have come on the republican side. i know all the democrats, all be nine, a lament believe fact about true, there are many more republicans. let me say this i have been in politics for a long time. in 1964, long before, maybe before your parents were born, maybe not quite, in 1964, it

was reported that the republican party was on life support and may not survive. lyndon johnson had a huge victory. in 1968, of course, the republicans won the presidency. in 1972, the democrats were assessed as being almost gone. we won one state and the district of columbia, maybe two states and the district of columbia. two years later, the president who won that 1972 election resigned in one of the biggest political crisises that has confronted our you country. in 1976 we won the presidency. four years later, you know it went to ronald reagan and it goes back and forth. in 1994, of course, the republicans won a big victory in the house. in 2006, 12 years later, we won a victory and enlarged that

victory in 2008. what is my point? my point is that both parties ought to get the message that, look, if you're not doing the right thing, we're going to change horses. i think the american people want us both to work together to solve problems that are real problems, not ideological left and right problems, but problems that they see in the terms of their jobs, in the debt that confronts their country. those are the two major issues in this election. we need to address both. >> mr. hoyer, what changes do you plan to make in the tax bill before bringing to the floor and do you expect ultimately that they will be passed and ultimately sent to the president to be signed into law? >> the answer to the second question is yes. the answer to the first question is honestly what the

senate passes first, they're going to pass something, they're going to bring it up on the floor tonight as you know and perhaps pass a bill, not perhaps, i think they'll pass a bill sometimes on late tuesday or wednesday. we will address that bill as you know. as i said in my speech and you have heard me say before, tom, i have real concerns that the suggested tax cap on the upper income returning to 2000 levels only where the economy, during those levels, did very, very well. but as a result of the republican tax program as you know, they sunsetted their tax cuts and they would be reinstated in january. i think that reinstating those for the middle income people would have an adverse effect on the economy and ought not to be done. i don't think it would have an adverse effect on the upper

income nor do i think that the change in the estate tax that is recommended, the so-called lincoln-kyl compromise, will add $700 billion, well, actually more than that when you consider both, the cost of that will be justified by any increase in the economic stimulus. there is much consternation in the house about the estate tax. i expect there to be some consideration of that. as you know, last december, a year ago, we passed a $3.5 million 45% rate which has sat in the senate for 12 months. i think that's unfortunate that it has sat there because our republican friends raised correctly the issue of certainty. whether it's an estate tax, business taxes or personal taxes, certainty is a stabilizing productive facet of

our tax system. we will see what the house will do on that. it will go to the rules committee. the ways and means committee will have some input into that and we will see what action they take. >> [inaudible] >> mr. axelrod said yesterday on one of the talk shows, he doesn't expect any significant changes in the house. >> i guess the issue there is what is significant. we passed a $3.5 million estate tax -- $3.5 million

>> i had a follow-up question about the estate tax. you said in your speech and q & a here you expect the tax cut bill to be approved and sent to the president. are the house democrats willing to stop it, to go all the way to the wall over the estate tax issue? >> what i have said repeatedly and what the president has said and what president clinton said is that i think the president believes and i believe that increasing the tax load on working americans at this point in time on january 1 would not be helpful to continue to grow the economy. as a result, we don't want to see that happen. in order not to see that

happen, you need to get a bill through congress and signed by the president. we're working on that. the legislative process is a process of give and take. i think that's going to occur. >> i just want to be clear on what you're saying. >> identify yourself. >> i'm phil jackson with cbs news. i want to be clear that you will bring whatever the senate passes to the house floor and but that you will expect some sort of estate tax amendment? is it an amendment and do you expect that to happen this week? my other question is is this about letting your members vote for something, vote against the estate tax provision as worked out between the president and senate republicans or is this about actually wanting to change it and send it back to the senate so they would have to take it up again? >> a lot of us would like to change it. a lot of us believe there is a

compromise available. we'll have to see where the votes lie. as you know, when and if the senate sends us a bill which i expect to be hopefully earlier this week than later this week, i think it will be referred to the rules committee, the ways and means committee and others will have an opportunity to suggest amendments to the senate bill and then the rules committee may really report out that bill with amendments. .

at the end of the day, it sounds like somebody really got it here. >> i think the country may take a hit. that is our concern. the country is in deep debt. the american public is very concerned about that. there is no simple way to reduce that debt. it will take contributions from everybody, in my view. but certainly, our caucus believes that the wealthiest in america needs to help pay the bill. they are helping to pay the bill and they did that in the 1990's

when we have the surplus. we do not think the proposal dealing with upper-income or the estate tax or useful in trying to get a handle on our debt. having said that, everybody in the legislative process takes a hit. the legislative process is usually a process where everybody thinks, jeez, i did not get everything i wanted. my experience of life, i have not gotten everything i wanted. that is life. sometimes, when my wife was alive, we would sit down and say i want to go to this movie and she wants to go to that movie. and sometimes we went to my movie and some time we went to her movie.

that is the way life is. >> if, as expected, the senate returns strong votes in favor of the existing legislation, does that make it more difficult for house democrats to amend it to? will you or the speaker bring the floor, even if it is apparent that there is not enough house democrats in favor of it? >> i do not want to anticipate that there will not be a majority of house democrats. there may be a majority of house democrats that mean that before the house senate bill -- may not before the senate bill as it comes over. but they will have opportunity to get input and we will have to see what the rules committee reports concerning the senate bill. we have indicated that we want to make sure that middle-income taxes on working americans do not go up on january 1. we do not think that is a positive effect on the economy.

furthermore, i will lots before the speaker, i will speak for myself -- i will not speak for the speaker, but i will speak for myself. on unemployment insurance, which every economist says is one of the biggest spurs to the economy that you could have, it is absolutely essential. unemployment insurance is a moral imperative. we have two million americans who have now lost their unemployment insurance through no fault of their own, simply because there are not jobs available. there are five people looking for every job that is available in our country. they simply cannot get jobs. we need to make sure that they can sustain themselves during this time when we tried to bring back the economy so there are jobs available for those folks. there are a lot of things in this bill that i want to see passed.

and we have an argument about other aspects of the bill. that should surprise no one who has grown up in any kind of a family. the only time you do not have a disagreement -- i have disagreements myself -- we try to figure them out and that is what we're doing. i think we will have a vote on the senate bill. with possible changes. i wanted to make that clear so you did not have me -- >> -- >> we will have it with amendments. we have to see what the process is. furthermore, we have not seen the senate bill yet. it is difficult to comment what we will do with it yet. >> you mentioned a meeting with the physical level, including urging president obama to take up tax reform in the next

congress. maybe you could expand on that. and where is the optimism for dealing with this -- and where does the optimism for dealing with this come from? the republicans took a house because of health care reform. if tort reform means losing politically, where is the appetite? >> i am not sure i agree with your premise, either on 2006 or 2008. i think would happen was coming in 2006, the american public felt that the policies of the republican party and george bush were not working. and they wanted a change and they voted for change. in 2008, they voted for change. in 2010, i think what they voted gst was out of a great annex

that the economy had not responded. unemployment was at 9.6% and they did not believe that the policies put forward were working. also, 1994, policies were not working in the standpoint of the american public. it led to the best economy along with the i.t. explosion. actually, the i.t. explosion facilitated by the fiscal responsibility that was pursued and the economic policies that we adopted in 1993. i do not except your premise as to why the election turned. on your specific question, i have for long time believed that tax reform was essential. the last time we reforms taxes in a significant way rather than

simply raising or cutting rates was in 1986. we focus on trying to bring a handle and reduce rates. i do not want to endorse part of the proposals made. but i enthusiastically endorsed reducing preferences so that people are making decisions on their business judgment, not their taxes. and i think it would spur economic growth to reduce rates, which reducing preferences will allow you to do. i think both are essential if we will balance the budget in the next generation. >> -- >> the timing, i think a said

this next congress. the only time you can only do that is when you can get bipartisan participation. it is very difficult for one party or the other to take a stance that we will try to take the medicine go down easier. these are tough decisions to make, subject easily to demagoguery. therefore, you need bipartisan participation. when ronald reagan and tip o'neill agreed on social security reform and then on tax reform, frankly, it was relatively easy. when you do not have bipartisan agreement, therefore, i hope that david can and sandy logan, the chairman and the ranking member can work on this effort, i hope that president obama and democrats and republicans in congress can work on this

effort. americans are spending an extraordinary amount of time and money on paying their taxes. it is not conducive to growing our economy. we need to change the system of picture near complexity. we have exploded, even in the last decade, the number of pages of regulation in the tax code, which is not helpful. we need to simplify it. we need to bring down rates. in my opinion, bring down preferences. this will be a major argument of the administration in the coming congress. >> we have time for two more questions. questions have been predominantly coming from the right. let's work on the center and the left. [laughter] >> i want all of you over the to know that i do not necessarily consider you of the right. [laughter]

>> i know part of this depends on what the senate does, but timing, you said wednesday you expect to get the bill back. few expect to put something on the floor before the end of the week? >> and one of the fact that every member would have to get home for christmas, -- in the light of the fact that every member would like to get home for christmas, including me, both harry reid and i come in terms of scheduling, are hoping to conclude our business in the house on the 17th. if we have to come back because the senate still needs to do work, we might do that at some point. but it is our hope that we will get out on the 17th. has to know, the continuing resolution that is currently in force under which the government is being funded expires on saturday the 18th. i hope that not only the tax bill will be considered within

that timeframe, but we must also consider what i hope to be, from my perspective, either a c r or an omnibus. i would prefer an omnibus which speaks more to the funding priorities that the appropriations committee in both the house and senate have already worked on. >> final question. >> congressman, my question is they did not give the required 14 votes for madam speaker to bring it to the floor. however, it did 11 added 18. 11 out of a teen is above 50%. that would have passed congress. -- 11 out of 18 is above 50%. that would have passed congress. would boehner considering it to

the floor? >> the majority leader in the senate and the speaker and the house, if they got 49 of 18, which was required under the president's executive orders establishing the commission for recommendation to move forward, the commitment of the speaker was -- she and i made the same commitment -- was that, if it that 14 out of 18 and it passed the united states senate, it would move through the senate first and then the house would put it on the floor. that has not happened. more importantly, i think the commission and the damage she woodland commission -- and the dominici woodland commission and

others have done something very useful. they have described the problem and the proximity of the crisis and suggested solutions. i would certainly hope that all of these commissions, their work product, would be taken into consideration by the congress and the house and various commissions and moving forward to address what i believe debate one of the most critical challenges confronting our country and particularly challenging for your generation. we call the world war ii the greatest generation. if my generation leaves you and my children, who are older than new, and my grandchildren, one of who is about your age, in deep debt so that, in your time, you cannot respond either to national security crises,

health crises, and national disaster crises, and you have no resources to respond, you will not think regeneration was great at all. notwithstanding the fact that it did not get 49 of 18 and will not move to the house as a not get 14 out 18 and will not move to the house as a package, in the long term, we must grow the economy. if not, we will not be able to bring the deficit down. if we do not to bring down the deficit in the longer term, our economy will continue to struggle in the long term. thank you all very much. [applause]

>> thank you for being here today at the national press the meeting is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

[inaudible] [inaudible]

>> of nets, remarks from the white house economic said byron -- adviser lawrence summers. after that, look at guantanamo detainees trials and a look at u.s. policy in afghanistan. southern sudan will vote on january 9 on whether to remain united with northern sudan or become an income pendent country. tomorrow, a panel will leave you that referendum. live coverage from the u.s.

institute of peace begins at 10:00 a.m. eastern on c-span3. later on c-span3, a forum on the future of afghanistan as the u.s. plans to begin withdrawing troops next summer. that is live at the center for a new american security act 1:00 at 30 eastern. >> it is hard to get there and hit hard to leave here. all of us to leave and the senate always continues. >> search for farewell speeches and look at retired members on the c-span video library with every c-span program since 1987. more than 160,000 hours, all on line, all free. is washington your way. white house economic adviser lawrence summers said that he expects low consumer demand to remain a drag on the u.s. economy for several years. he spoke at the economic policy

institute. mr. summers is stepping down as director of the national economic council at the end of the year. this is all little over an hour. >> hello, my name is larry michelle, and i'm the president of the policy institute. thank you for coming here. he is the president of the president's national economic council who will offer his remarks after his two-year tenure at the white house. we're pleased to host this defense. i must admit that a number people have looked and thought this was odd to have larry summers did to his speech at epi. what to set the record straight. there are a lot of things that larry and i have in common. we're both named delivery. [laughter]

we're but the economist and have done a lot of words on the labor market, on jobs. second, we were both raised in the philadelphia area. third, he has two uncles who were not awarded the nobel prize in economic. i have two locals. [laughter] ok. i do not want to leave the impression that they're not fundamental differences between us. in my view, larry has four fundamental values. when he moved to boston, he adopted the boxes -- boston red sox is his thing. i am still a fan of the fighting fils. i hope this qualifies matters for everybody. on a serious note, i am honored that larry is here to offer the speech. he is at a remarkable career --

he has had a remarkable career. 30's, he was the chief economic adviser to democratic candidate, michael dukakis. he was awarded something very important in the field of economics, the john bates clark award, given every year to the most as any economist under age 40. he served at the world bank, the treasury, went back to harvard and was harvard president. then came back to be president obama is director for the nbc. -- for the nec. among all that, he is trying to tackle the recession. i am sure that he will talk about that some more. i give you larry summers. [applause]

>> thank you for the introduction. at of all the introductions of have ever received, that one is certainly the most recent period [laughter] -- the most recent. [laughter] i am glad to be at bpi this morning. for 25 years, -- at epi this morning. for 25 years, you have been a significant part of the importance of economic politics. it is by what happens to the middle class that our policies middle class that our policies have to