so-called middle-class entitlement, a social security and medicare, but we also need to look at various other entitlement programs, including farm subsidies. many of these do not really fill a compelling public purpose. all of that needs to be on the table. host: richard jackson. his report can be found at their web site. thank you very much for being on the program. guest: you are welcome. host: we want to lead folks know that the house of representatives starts at 12:00 p.m. and then they will pick up a resolution providing for consideration of a resolution for reducing non security spending to fiscal 2008 levels. that will get started at 2:00

p.m. you can find more information on that at our web site, c- span.org. thank you for participating in today's program. we will see you tomorrow on "washington journal" at 7:00 a.m. eastern. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> as you heard, the house is coming back in at noon for general speeches. debate gets under way on the resolution that would require non-defense spending to be

reduced to 2008 levels or less. paul ryan says it may cut $60 billion from the fiscal year 2010. the debate is getting under way at 2:00 p.m. eastern. the senate remains tomorrow at 10:00 a.m. eastern. they will take up a consideration of changes in their filibuster rule. the house on c-span. the senate on c-span2 tomorrow. state of the union coverage gets under way at 8:00 p.m. eastern, followed by the speech at 9:00 p.m. eastern. you can also follow its online and on c-span2. the supreme court is in session.

it scalia will be speaking today before the tea party caucus on capitol hill. last week, the court heard a case on the limits of state secrets. top lawsuits could then expose a vital national security information. this one involves the federal government, boeing, and general dynamics. >> this is one hour. >> general dynamics versus boeing and the consolidated case, general dynamics versus united states. mr. phillips. >> thank you, mr. chief justice. the proposition is the one embraced by the federal circuit that says the united states can declare that certain of its

government contracting partners have operated in default and under those circumstances can reach into the contractor's pocket and withdraw $1.35 billion of moneys that were spent by the united states, but for services that were rendered without question pursuant to the contract and pursuant to the instructions of the united states government. when the contractor seeks to defend against the claim that it has engaged in some kind of default concept, the government can insert the state secrets privilege and deprive the contractor the ability to effectively respond to the government's conclusion. under those circumstances, it seems to me that court's decision in united states v. reynolds, which is that the government is certainly free to assert the state secrets privilege, but when it does so, it has to assume certain

responsibilities, at least in the circumstances where the united states is the moving party. >> mr. phillips, when the contractors failed to deliver the first aircraft at the time specified by the contract, their reason was that the cost would far outrun the contract price. it sought to reformulate the contract. at that time -- correct me if i'm wrong -- the contractors said nothing at all about the superior knowledge and the government's obligation to share information. >> there was nothing specific with respect to that, justice ginsburg. it was the first time the contractors identified the superior knowledge problem. the government issued a cure notice. until that point, the parties

are attempting to negotiate and work to a final resolution of this project to bring the contract to a happy resolution. >> you would expect them to say , if that was the intent going forward on this contract, to at least mention that. >> i think you have to put this in context, justice ginsburg. during this time period, there were efforts to get access to both the b-2 and a1-17 stealth technologies. there were discussions that went back and forth. the court held that the information was forthcoming, but it was too little and too late to effectively allow the contract to proceed as planned. i agree. in a perfect world, you would identify this. in this situation, the parties are trying to come to some kind of resolution that allows both

sides to be satisfied by the final disposition. >> why wasn't the need to share that technology a part of this contract for conditions to the contract? i have gone through the contracts -- not all of it, but enough of it. i have not found anywhere in the contract where it requires the u.s. to share information with you. does that have anything to do with what due process would require? >> no, justice sotomayor. >> i'm going to pose a hypothetical. let's assume it requires sharing of superior knowledge and the government invokes its privilege. is that a different case than this one in terms of due process? situationhe former where it has been made a condition of the contract

required different treatment than this situation where the government is just saying, if you want to raise a defense, then you do what every other litigant does. you proceed with whatever evidence you have. that is usually what happens with other privileges. >> we would have been perfectly content if the old met decision was that it was impossible. i want to answer your more fundamental question, your honor. the basic point is that the background principle of law, the superior knowledge defense, is the understanding of the parties entering into the agreement. that has been around for a long time. it is an understood basis on which the parties enter into an

agreement. the second answer is that you are asking us to put into a contract something about information that we do not know anything about. we have some sense about a b-2 and a1-17, we do not know anything about the other programs. >> where is the obligation of the government to tell you to build it this way using the technology we have? i thought your claim was that you were promised this information and use structured that contract based on a promise. >> we have a series of distinct claims. the first claim is we would have never entered into the contract in the first place if the government had provided us with information based on the superior knowledge that, for instance, the weight specifics were literally impossible to comply with. if we would have been told that much -- just given a warning --

we would not be in this situation. >> there's a factual dispute about that. i read somewhere that there is a claim that they told you your weight specifics were not right. >> there may be a factual dispute and i would be happy to litigate that issue, if we could get to that point. the bottom line is -- again, to state the proposition as starkly as it is. they are saying that the government can assert a claim for $1.35 billion against us and tell us that we cannot defend against that claim, even though the reason why is because of the fact that the government did not provide us information at the outset. >> the two questions i have -- first of all, justice sotomayor, sorry. i did have her question.

that is suggesting that in this case, it is not unfair to hold your client in this case. you can reach two circuit court opinions here and you would think this does not have much substance to it. as for question, if i understood it. let me give you the other question. if we except as a principle of law what was said in reynolds and apply that to government contracts, where sophisticated contractors are perfectly capable of negotiating their own contracts, we are not just throwing a monkey wrench into the gears of government contracting. we're throwing the whole monkey. that's my second question. this is not a case that calls for it. two, the threat the government contracting -- by changing from

reynolds to hear -- is overwhelming. >> it seems to me, clearly, this is the precise situation where reynolds is saying -- if you cannot bring forward a legitimate defense. we do not know what information we did not have. it's very difficult to say how strong our defense is under these circumstances. we do know that the federal claims judge looked very carefully at this and said we were making an impressive showing in these circumstances. our position is that we had a very valid defense. this is not a contextual. we're not throwing this in as a mechanism to force the government to assert its state secrets. it's a fairly contrived approach to litigation and not something i would imagine any circumstance in which we would do that. two, i do not see how this throws a monkey wrench into this process whatsoever, much less the monkey.

the basic understanding is that the government is not entitled to force its contractor down a ruinous course. if the government has information available to it, then it has to make that information -- it has to be forthcoming with that information with the contractor either at the outset or as matters go along. >> the petitioners were the moving party. isn't that right? >> moving party is not a self defined concept. the petitioners were the plaintives. >> the scheme was known to them beforehand. >> the review was scheme also says that 1986 -- the federal circuit said the mere filing of a complaint immediately vacates

the contrasting officers rule. our understanding was that there was a problem with the way the contract in officer operated, we would be able to file a claim and immediately take the rule of the table. under those circumstances, we are asking for the status quo. that means there's no contracting officer decision and no basis on which the government can make a claim for $1.35 billion. >> you referred to that several times now. i thought that was not a payment based on completed work. the government says that of -- says that money was advanced. it distinguished the $1.35 billion that you legitimately received as a progress payment.

>> what had not happened -- there had not been a final sign off by the contract officer approving it and reducing it to a liquidating claim. that's a vastly different statement. we have an argument with respect to half of that that it had already been approved. these were services rendered. this was not some kind of a prepayment for services to be rendered in the future. that is not the nature of this contract. this was for work we had done, for which we have submitted specific claims, and for which the contracting officer had been pending before him at that time. what the government says is that it was a payment and it did not ultimately get the airplanes.

that is obviously true. they terminated the contract one year before the airplanes -- >> you are here seeking to emerge as the total winner. if it would have been successfully completed. >> no, justice ginsburg, that's not true. we're asking for the remedies that were available. under those circumstances, the government has a wonderful mechanism that protects it against the kind of lost profit damages that might otherwise be available in a situation where you have a more traditional breach of contract. all we're asking for is the actual amount of money that we extended that the court of federal claims explicitly found. at this stage, it has not been challenged. these were all reasonable, a

level, and foul -- reasonable and allowable. >> why should we view this as a dispute between two parties? if we did that, one party would be the moving party with respect to some claims and the other party would be the moving party in respect to the remaining claims. >> justice alito, i think that is precisely how you should look at it. we would be comfortable with that. it's clear to me that except in the hypertechnical way that you articulate because of the way the contract disputes that that the government is unquestionably the moving party. >> i think it is questionable, mr. phillips, for this reason. you say it is an implied term of this contract and that the government has a duty to share certain information. you are seeking to enforce that

implied term of the contract. it seems to me, as to that alleged to the, you are the moving party. >> that is one way to argue -- one way to articulate it. the other way is more consistent with the reality. the government is making a claim for $1.35 billion on the basis that we did not act in a timely fashion. that is the only thing. our answer to that claim is to say -- no, we are not at fault for the delays because you did not provide us the information or you did not spare us the burden of having to go down this path. >> then you go on to say -- moreover, give us the payment for the additional money, beyond the $1.35 billion that you have

already given us. >> that goes to justice alito's question. is there a way to evaluate those claims separately? yes, and they should be. >> it seems to me, if you say the government has come up with a defense that makes it impossible to decide who is in the right, i think the usual course taken by courts would be to leave the parties where they are. the matter cannot be litigated. that would mean you would keep your $1.35 billion, but you would not be entitled to sue for the additional amount. if you were that worried, you should have had more frequent progress payments or something. why don't we leave it where it is? >> to be sure, we would be much more comfortable in the world

you just articulated, justice scalia. >> with interest. >> with interest. it's starting to add up, your honor. certainly, we think that is the minimum we should be entitled to. to some extent, you could say we are a little greedy. the standard rule is that if you take a contract and you say you cannot make a determination that the contractor has been guilty of default, then the contract should be -- you convert it to a termination for convenience. the question then simply is, what declare this to be a termination? >> you get to keep the $1.35 billion. there was also another figure. $1.2 million that you would get

on top of that. >> what the $1.2 billion was the additional amounts of money that were expended by the contractors. they were reasonable, applicable, and allowable. it would be the standard operating procedure. if you have a termination for convenience, where the government says they do not want these airplanes any more. the government has the right to do that. then the question is, what are the reasonable costs that are reallocated as a consequence of that? >> the government did not do that. you're making that up. the government claims you are in default. why should we force that down the government's throw out? we can no more say the government is at fault than you are. >> the question is -- if you

call the game off, what flows from that? if you can say that we will let the government call it default -- the position we would say is the government cannot call it a default. someone is going to have to make a judgment that's not an honest assessment of the facts of this case. if you say it is not a default termination, there are certain consequences that flow. it automatically turns into a termination for convenience. >> the fallacy is we're not assuming we agree with you on the rest. we are not saying that it is not a default termination. we are saying that we do not know. we do not know what the state secrets thing is. the government is entitled to

make that determination. we do not know who is in the right. why forced the government to go through a termination for convenience? >> i would think that the more appropriate way to proceed under those circumstances, given that a default termination carries collateral consequences -- it creates the possibility of the varmint -- of debarment. the more appropriate way to proceed would be to say, "i cannot make a determination in this case. therefore, under the contract, it automatically converts to a termination for convenience. once that happens, then you go down the road of evaluating those costs.

i'm sure the government has arguments about those costs and we can debate those. >> give us a way to reach the result justice scalia is suggesting. you are being greedy. you admitted it. termination for convenience carries its own automatic consequences. it appears unfair in light of the fact that the litigation of the default termination has been invokes because there's a risk to the united states. is there a reasoned way to do it, to not oppose that and fairness and not, explain to me why it is unfair to say you

entered a contract knowing that the government could invoke state secrets and it has. you always knew the government could do this. that goes back to my original question. you could have contractors around that. >> and so could the government. the background is the united states versus reynolds. that says that if somebody is a moving party, that is the party that will bear the burden. >> can i ask you whether that principle makes any sense? both parties have argued it. in the contract situation, the question of who is the moving party is very often arbitrary or fortuitous. if you think about this in a private setting, you have one contractor who fails to perform

or provide some efficient product. you have another who decides it's not going to pay. the question of who the plaintiff is is often a matter of fortuity. who gets to the courthouse first or what the payment schedule has been like. why in this contract situation is the question of who is the moving party -- why does that make a difference? >> in reynolds, the court used the language "moving party" for that reason. the party had in mind the party that is seeking relief. >> seeking retort. reynolds was tort action. >> that is the specific action.

>> the question is -- what is the payment schedule? if i paid you already and that i find that your product is deficient, then i will go to court and the man my money back. if i find it before i pay you, then you will go to court and say that you have to pay me. why is there a difference? >> i have $1.35 billion in my pocket for question -- for services that were unquestionably rendered and satisfy our portion of the obligation under the contract. >> both party has the claim. one says you provided deficient performance and the other says you were obligated to pay. it can be structured in either way. >> i do not disagree with that. the bottom line is, what

principles of fundamental fairness tell you to do in this. >> that's exactly my problem. when i look at reynolds, reynolds does not hold anything in your favor. it holds the opposite. in a criminal case, we said it was unconscionable for the government to both prosecution and not to tell them the secret. it says such a rest now has no application -- such a rational has no application. the exhibit that is not unconscionable consist of the two opinions of the federal circuit. what do you want me to read to get over that impression? >> well, the very fact that the corps says -- the court says and limit its ruling --

>> it is limited. it says the rationale is unconscionable. i do not even have to go that far. what should i read to get over my unfortunate impression, which i got out of the two opinions that i did read? what do you want me to read to get over that impression? i think you do want me to read something. >> the court of federal claims opinion that give rise to this in the first place. the judge says, "we have made an impressive showing of a defense ." the federal circuit's view is -- we do not care. in that situation, where we have made that kind of showing, the default rule -- >> that showing was based on the review ofthe court's

privileged information. made this judgment on the basis of a great deal of information. it could not conclude that you were right as a matter of law. is that correct? >> it recognizes it terminated the discovery early. terminated -- it terminated discovery very early. we do not know about the other programs. there's nothing in this on any of that, your honor. >> thank you, mr. phillips. >> general? >> thank you. two basic things decide this case. the government is not affirmatively invoking the power of the federal court. only the plaintiffs are. 20 years ago, the asked the court to set aside the decision of the contract in officer and to reward them over $1 billion

in contrast. the government asked to dismiss the lawsuit. reynolds makes clear that the state secrets privilege could be used to bar a claim at most, only when the party that is relying on secret information is trying to use it to alter the status quo. >> we have gotten to this point in the dispute. you say they're at fault and you fault.say you are at why don't we hold the whole -- why don't we call the whole thing off? >> for several reasons. that is affirmative use of the federal court's to alter the status quo. >> only because you altered the legal status quo. the legal status quo was going along with the contract. you alter it by holding them in default. >> i disagree.

i think the contract itself specifies that the contracting officer will decide whether or not there is a default termination. once they do that, they owe the of liquidated payments. >> isn't that the affirmative step? >> it is under the terms of the contract, but not under the federal court. >> he works for you and he is the one changing the status quo. >> those are the terms under the contract to which they agreed. our central -- in a world where the federal court does not know who is right and who's wrong on a claim, it should get out of the business altogether. >> am i correct to interpret what you just said to mean that you think this case should be decided under the basic

principle of reynolds? the party that seeks affirmative relief from the court is the party that bears the burden involving invocation of the state secrets privilege. i'm asking us to adopt a new test. >> absolutely. i do not think we need to go there. there are special arguments available in this case, because it was a contractor. i think this is a simple principle. the accord does not know who is right and who's wrong in the superior knowledge defense. the question that justice sotomayor asked about what did the court of federal claims decided -- we cannot know one way or the other.

>> i'm interrupting justice alito because you answered his question very quickly. it is your position that if we determine you are the moving party, you lose. he asked you whether we apply reynolds. he did not say which point of reynolds. are you conceding that if we apply reynolds and we find you are the moving party, you lose? >> absolutely not, justice sotomayor. i do not think reynolds says that if the government is the moving party it is an automatic loss. there's no reason whatsoever -- >> let's talk about moving party. i do not know that moving party means who comes into the court first. in the context of a contract dispute, i would say the moving party is the party who is trying to use principles of law to

change the contract. that is the government here. the government is blowing the whistle. the government is saying you are in default. since you are in default, we can walk away and we can claim the money we have party paid. that seems the moving party. >> it is important to add to your definition -- using legal principles in a federal court. that is what reynolds is talking about. >> that was the situation in reynolds. i am saying that illogic of the matter, when applied to a contract situation -- that the logic of the matter, when applied to a contract situation, ought to be the one that is asserting that the law requires this results.

>> i do not think that is what reynolds is getting at or what this subsequent decision is about. all of these decisions say to gather -- together that if you do not know one way or another, you should return. there was an undoubted right of the government to have $1.35 billion. some of you have suggested that maybe we should cut it even then they keep the $1.35 billion and we do not have to pay the $1.2 billion. i suggest there is no principled way to do that. >> why isn't the undoubted right of the government before the lawsuit is filed -- why is it the undoubted right of the government before the lawsuit is filed?

if he was wrong about that, it was not the right of the government. >> let me write -- me read the contract. "of the contract is terminated under the default clause, the contractor should repay the amount of on liquidated -- of unliquidated profit." they came to us and said, " please do not take this money from us right now." we entered into a different agreement. joint appendix, page 342. it seems to me a very odd notion of due process to say that somehow that we agreed to their deferment creates some entitlement for them to keep the $1.35 billion. >> i have this question about due process. the due process analysis -- what

is reasonable, what is necessary, and what is unconscionable. it seems to me that is an extrapolation of what reynolds said. i do not know why we do not have that as a federal, a lot of contracts. i do not know why we need to elevate this to the due process analysis. >> i will say two things. >> assuming that we apply reynolds. >> if you were to look to that background principle, you would not just look to reynolds, but others that make clear that at the time they signed the contract, they were on notice that highly classified information that is the subject of litigation is something that generally cannot be litigated in the federal court. if you want to think about due process with respect to federal contracts, you would ordinarily assumed that the contract itself -- assume that the

contract itself -- they would work that out ahead of time. you could have written into the contract that information. >> it just restates the question of what you do if you apply reynolds to this case. i think it comes out as a wash. >> i do not think so. the contract is undoubtably clear that in order to challenge the contracting officer about a default termination, they have to invoke affirmative judicial relief from the federal court. >> this contract did specify certain information that the government agreed to give the

petitioners. >> that is peppery get -- that is correct. >> mr. phillips says they could not specify disinformation because they did not know what it was. they did not know what was secret information. they did not know what to ask for. >> it's very odd to bid on a multibillion-dollar contract on the assumption that they're going to get some technology that they have not even specified. we are bidding for their research and development. they brought in lockheed, who built planes precisely for the reason they said they would have the technology. you can see their offer. i do not think anyone held a gun to their back. >> they claim you knew that it was impossible to do what they contracted with you to do. the weight of the plane -- they

say that you knew that because of other contracts that you have had, yet you did not tell them about it. >> justice aliyah, first -- >> we do not know if that is true or not. we will never know if that's true because you blew the whistle and said state secrets privilege. >> they have had massive opportunities to litigate almost all of their challenges. the one exception is the superior knowledge aspect of this case. much of that has taken place in a highly classified environment. >> you are saying it is not impossible? >> those are the citations in the government's brief. >> what is -- at the weight

contract for? >> later, we relaxed the weight specification. our central submission to you, if you're not sure, if you do not know who is right or wrong, the federal court can be complacent -- the implicit for winners and losers. >> a counter claim obviously means someone else is the moving party. >> that is correct. >> if somebody wants to get money from the federal government, they have to go to the court of claims. >> that is correct. >> this is pretty convenient for you. >> they agreed when they signed the contract. they knew the deal going in. if they wanted to challenge the decision of the contracting officer, they would have to come

in. you could have structured it very differently. you could have said that if there were a termination for default, it would automatically change. >> you had the burden of proof on the issue of the faults -- on the issue of default. >> if you follow their rule, they're asking the court to proceed counterfactual a and say that they are entitled to the $1.2 billion, as if they have proved the superior knowledge claim. >> i think justice scalia was asking mr. phillips -- why can't we say all bets are off and everybody go home with what they have? it is either a default termination or termination of

convenience and nothing in between. do you agree that's what we're dealing with? >> i do agree that is the way the contract is written. a distinguished meant between liquidated payments, of which the government has no rights and unliquidated payments, as to which the government has rights. >> i don't care how the contract is written. if we're going to say that there has been a broken play, we cannot apply the contract. it is totally irrelevant to what the contract says. you just leave the parties where they are. >> i'm saying to leave the parties where they are under the terms of the contract. >> [laughter] >> i do not think the federal courts should be in the business of micro managing under the due process clause in a contractual

situation with parties that can protect themselves. >> we can do it as a matter of a lot of contracts. when we look at reynolds, reynolds' talks about the moving party. i'm not sure that that phrase "has or had"had a definable content -- that phrase has or had a definable content. at some point, if the person invokes the privilege, we have to decide if it is fundamentally fair. >> even if you follow that reasoning, and i do not think you should, they would still lose. they would still bear the burden of persuasion on superior knowledge. the defense disputes that issue

in this case. i do not think that would be the rule. i do not think that is inappropriate rule. underlying reynolds is the central proposition that a court should not be picking winners and losers either way. >> suppose that state secrets have prevented you from being able to prove your default claim, that you were unable to make that showing because of state secrets. what would happen then? the secrets that you wanted to protect were actually the key to your proving that there was a default. >> in that circumstance, i think a case would be dismissed. they would be coming in and seeking affirmative judicial relief to void the contracting officer's decision and get

whatever damages they want. >> let me understand that. you are saying that if the state secrets prevented you from making your affirmative case, you should win that one, too. >> that would be the general proposition. if the federal court cannot know one way or another who is right and who's wrong, it should not grant affirmative relief to a party. >> to a moving party and you are never the moving party. >> that is the contract they signed. they could have signed a different contract with different results. >> did the contract contained the term "moving party"? >> it did not, but it did say who had to come into federal court to challenge the

contracting officer. >> that is what i do not understand. yes, the default is decided by the contracting officer. by law, you cannot collect on the judgment once they file a complaint. you cannot do anything until you get the court to affirm your default. you are asking for a legal declaration of being right that they defaulted. >> justice sotomayor, this is a very important question and that is the impression left by their briefs. the filing of their claim in the court of federal claims they say vacated the contracting officer's decision. that is wrong. it says that a clause can be put into the contract to continue its and require -- continue it

and require performance. >> you're going to fast. i do not think i remember this in your reply briefs. >> it is in the footnotes. our question is that -- right now, we have an absolute entitlement to the $1.35 billion. that is what the contract says. that is what the deferment agreement says. we're not asking, justice sotomayor, for any judicial review. we want the court to stay out entirely. if you do what's mr. phillips -- do what mr. phillips says, that is affirmatively using the power of the federal court, granting

him relief on a claim that he has not proven. >> we're not granting anybody relief. we're leaving you where you are. we do not know what the answer is, so go away. we leave you where you are. >> justice scalia, we have no problem with a go away world. if you do that and return to the status quo, we would have the $1.35 billion. that is with their -- that is what their own filing said. >> that assumes that the contracting officer's default termination was valid. we do not know if it was valid and we do not want half -- want to have to inquire if it was valid. everybody keeps the money that he has. >> that is affirmatively using

the power of the court to set aside the contracting officer's decision, which is prevented by reynolds. if we had simply insisted on our $1.35 billion at the moment it was owed to us in february of 1991, we would not be having this conversation. the only reason we are having it is because we ceded to their request to not take the $1.35 billion right away. >> you keep saying there is a sophisticated party. what with the contractual terms look like that would have avoided this problem? >> it would have been simple. in the event that the government invokes state secrets, it automatically becomes the agreement. if they do not do that, that underscores the problem with their argument. they are saying, "read the

contract precisely this way." i agree with you. i think that would be a very unusual contract for the government to get into. that is not what they are demanding. >> how do they write the contract? your answer cannot be -- the only way they could write it is a way you would never accept. >> there are other ways. there's a possibility that they may demand extra money in exchange for greater risks. there may be alternative dispute mechanisms available. i do not know. >> would it be a problem in the alternative dispute resolution? >> it may be the equivalent of -- you may have panels. i'm not sure of what it would be precisely. the need for this court to be involved is a lot lower than in the criminal context of

reynolds. they are not in the business of trying to willy-nilly advance the state secrets privilege to undermine and take their money away. the 2003 federal circuit's decision -- since then, there's only been a couple of instances in which the government has invoked the state secrets privilege in any contract situation. they have done it a whopping two times. >> i had the wrong impression. would you go back to justice kennedy's question for a minute? i do not quite see how you do this as a matter of constitutional law. the due process clause is tied to a fundamental and fairness.

the answer has to become in this type of circumstance, -- the answer has to be, in this type of circumstance, it depends. shouldn't it be written as an exposition of the superior knowledge doctrine, which seems totally open to it? should it be written as a matter of discovery law? how would you -- would you speak about this for a minute? >> i think due process is an ill fitting concept in this contractual dispute for a couple of reasons. not just that the sophisticated parties agreed head of time, but the whole notion of due process -- the government has waived its

sovereign immunity. they do not have freestanding rights to come in and claim fundamental fairness on contracts. i think that is implicit in the constitution itself. they do not have that right. the question becomes, is there some extra protection the courts should give, i can to reynolds, about the government using -- akin to reynolds, about the government using state secrets? my answer is no. the option is to use the contract as the basic rule for decision. the contract itself specified it was done under the shadow of reynolds. it specified that they would be the moving party. they would have to challenge the decision of the contracting officer. >> you could say the contracting parties could have put this down.

but that is not the way the contract law works. >> with respect to this, this specific set of issues could have been worked out in advance and was worked out in advance. they knew that they bore the burden of walking into court, paying attorneys, and everything else to challenge the decision of the contracting officer. they also knew that the government had an undoubted right to the unliquidated progress payments. the contract they signed says this. default termination automatically gave that to the government. the argument they are advancing -- let's collapsed those two and keep the $1.35 billion because the government has not given it to us yet. >> i do not get that

distinguish -- why is it un liquidated? >> other work, which is claims they have made but they have not been approved by the government -- mr. phillips, i do not think there's any kind of evidence that says that they had a right to the unliquidated profit. >> what is the other $1.2 billion? >> the $1.2 billion that he is seeking on top of the $1.35 billion -- >> you can watch all of this on c-span.org. we're going to take the white house you live white, where president obama will announce new efforts to support military families. he is joined by vice president's wife, jill biden. this is just getting under way

at the white house. >> i want to offer a special welcome to our service members and military families. your presence today honors us all. i'm proud to stand here this morning as a military mom. my son is a captain in the delaware army national guard. he recently spent one year in iraq. my husband and i know well the mixture of pride and concern that all military families share. from earliest times together, michele and i have had the privilege of meeting with military service members and their families all around the country. people and families like so many of you who are with us today. people like jessica sanders, who i met at a deployment ceremony for members of the delaware army national guard 126th aviation

regiment. her fiancee, captain mark thomas, was deployed in the coming weeks to afghanistan, where he and his unit will provide medical evacuation for troops, allies, and afghan civilians. captain thomas' parents are here today, too. today, too. thank you for your service. [applause] people like sandra norris, it was of colonel john norris, met last summer. she has volunteered thousands of hours of her time and expertise over the past 20 years, leading family readiness groups and supporting other military families as an adviser and

friend, all while raising two sons and coping with john's a 42-months in combat. each of you here today brings your own story of service, strength, and sacrifice. just like the many other military families, we have been fortunate enough to meet. michelle and i have heard your concerns about school and career issues. we have shared your joy when your service members of return from deployment. and we have tried to offer solace when your soldiers have returned home injured. returned home injured. and in each and every instance, we have been moved, not just by your sacrifices but by your incredible spirit and commitment to america. michelle and i have talked a lot about the ways that all americans can support our troops and tanks those men and women for their service. -- and thank those men and women

for their service. today, we're supporting our nation's military families. at the direction of the president, the agencies are acting in a coordinated, strategic, and comprehensive way to bring the full force of the federal government to bear on this critically important issue. as a teacher, i am particularly pleased that the department of education is supporting the military children in public schools throughout the country, and i am looking forward to working with secretary duncan to help teachers understand how they can meet the unique needs of the military student in their classroom. i am also heartened by the efforts to respond to the challenges facing our guard and reserve families. from helping them sustain their businesses to supporting their reintegration back into their communities after deployment,

today is an important next step in this administration's commitment to support our servicemen, their families, and our members. michelle and i hold this commitment close in our hearts, just as we keep each of our soldiers in our hearts and in our prayers. as long as we have the privilege and honor of serving in our roles, we will do whatever we can to support those who protect us. who protect us. and now it is my pleasure to introduce my partner, my dear friend, and our first lady, michelle obama. [applause] [applause] >> thank you. good morning, everyone.

[applause] thanks so much. thank you, all. thank you for being here. thank you, jill, for that kind introduction. it has been a true privilege to work with you on these and so many other issues. and we have a lot more work to and we have a lot more work to do. i am looking forward to it. i want to recognize all the members of the cabinet, the elected officials, and the military family advocates that we have here with us today. and let me say a special word t specialhanks to vote -- a special word of thanks to folks like patty shinseki, becky gates, and of the spouses of the joints chief of staff and the senior advisers who have been such good friends and trusted counselors to both jill and me over these past couple years. but most of all, i want to take a moment to thank those among us today and everyone outside of this room who wears our

country's uniform and the families who served right alongside them each and every day. working with all of you is some of the best word i do. your stories affect me, not just as first lady but as a mother, as a wife, and as an american. stories like that of a military wife who has balanced raising a daughter, volunteering for her review nick's family retinas groups, and a career as a community developer, all while living in seven different states over 17 years. stories like the woman who had just gotten her nursing degree and quit her new job only after two months so that she could take care for navy still brother who was wounded by an ied. two of my favorite people, and today he is doing better, even running 10 miles on a pair of prosthetic legs.

stories like the young woman just 15 years old who took on the role of a third parent, helping her brothers and sisters with homework and helping with meals as her mother cared for her wounded father. she summed it all up by simply saying they needed me. and i was there for them. stories like these and stories like those of so many in this room are a reminder of what words like service, strength, and sacrifice, with those words look like in real life. they are a reminder of the love that keeps us together, the love of family, the love of country. and for me and for jill, they are a reminder of our obligation to our troops, our veterans, and their families, an obligation to work harder, an obligation to channel the strength and courage of our military families and

veterans into our work on their behalf. again, i know it jill feels the same way, and we have learned so much as we have tackled these issues together. we visited with servicemen and women, like many of you, at fort bragg, and in san diego and new york, at launched will end in baghdad. we have played with your kids that child care centers. we have sat with you a hospital bed sides. we have heard your concern around conference tables. we have invited you to the white house for roundtable discussions and beg your picnics, and even a halloween haunted house or two. -- and backyard picnic. we have seen you getting back to your communities, no matter how strapped you are for time or resources or sleep. we have heard how difficult it is when the only way you connect with your spouse's by sporadic cell phone calls or e-mails. we have seen the strength to

have shown when a loved one comes home with a wounded body or painful memories and the journey back to normal takes longer than expected. and the more we have listened, the more stories we have heard, the more we recognize that there is no one single definition of the military family. there is no standard issue set of challenges that you all face. the lives you leave, the families to build, the issues to confront are as diverse as anything seen throughout america. you are not just a military wife or husband. maybe you are a mother or father. maybe you, too, where a uniform or take care of the wounded warrior or survivor to one of our fallen heroes. you're starting your career or looking to succeed in the one you already have. you're trying to save for college for your kids and retirement for yourselves.

you're hoping to squeeze in that late ninth class -- late night class and they get back in time for dinner. for dinner. you're trying to save up for that down payment on a home, still for the right day care center for your kids. and so for me in for jill, this is not about just understanding your concern. it is about addressing your concern. it is about telling your stories throughout the country. but more importantly, giving you a voice with decision makers. most of all, it is about getting something done. it is about making real, lasting changes that make a real difference in your lives. and that is why today means so much to us. that is why we're so excited. because back in may, i announced that my husband had directed his cabinet to identify new priorities and new partnerships to support our military families.

so today, they have come back with 50, 50 specific commitments that aimed to keep improving air quality of life. for instance, the department of education is simplifying its financial aid application process just for you. the department of labor, commerce, defense, and the small business administration are partnering with the business community to expand your career options. the department of health and human services, education, agriculture, and defense are working together to expand your child care options. look, the list of commitments goes on and on, addressing everything from homelessness to mental health to employment opportunities for young adults. so this effort gives you all a seat at the table, not just at the white house or the pentagon or the va, it gives you a seat

at the table all across the federal government. and i want to emphasize that this is not a one-time press conference. this is not just the headline for today that gets buried under tomorrow's news. these are lasting commitment by the government to address your needs and concerns for years to come. and my hope is that these recommendations will live on no matter the president, no matter the party. so today is not the end of this process, not by a long shot. do not think for one minute that i jill and i will not keep pushing and advocating in fighting for you, because we will. and we're not going to stop until every part of our society, every part of a both inside and outside of government, is fully mobilized to support our troops and their families. after all the time i have spent

with you, i know how much you deserve our government and our people's support. i know it because of your stories. i know it because of what you have done for this country. i know it because of that 15- year-old who answered the call just refresh she was needed. some of the best memories i have had in the past couple of years are with you. and my husband feels the exact same way. i know that because of the moments that we have shared with wounded warriors and survivors, because of the military children who have made as both smile, and because of the conversation that he and i have had long after those events are over. that is why he has been such a leader on these issues. and that is why i am so proud to introduce this man, because he hears your stories, not only as president and commander-in- chief, but also as a loving

father and as a wonderful husband. it is not hear me say that often. [laughter] so i give to you the president of the united states, barack obama. [applause] >> thank you, thank you. thank you so much. thank you, everyone. please have a seat. thank you so much. well, good morning, everyone. i want to thank michelle and jill, although i have to say i hate following both of them. [laughter] as i think all of you sense, when they speak, the government listens. you should know, and then as joe biden would agree with this, when they speak, the president

and the vice president listen. [laughter] so michelle and jill, on behalf of all of us, thank you for being such extraordinary champions of for our military families and making sure that their priorities are america's priorities. two other members of congress who are here, members of my cabinet, joint chiefs of staff, leaders from across the administration, and most of all, our troops, their families, their advocates, thanks for joining us. as we make an unprecedented commitment to america's military families. now last month, i was in afghanistan to visit our troops and to thank them for their service, especially during the holidays. i think that as some of you are aware, we fly in in the dark of night for security reasons, and

announced. folks, i am sure, have to folks, i am sure, have to scramble on the other end to make sure our visit works, and we had a wonderful crowd, a great rally. and then afterwards, i took the time not only to meet with general petraeus and some of the other commanding officers, but i also met with a group of our special ops forces. now anybody who has met with navy seals and delta's, you know that these are some of the toughest, most battle-hardened troops in our military. they are involved in some of the most dangerous fighting that there is. these are tough guys. looking at them, you can tell they are tough. some folks in that being tough, but these -- you can just tell these guys are tough. and they embody the courage and character that makes our military the finest in the world. and to give you some sense, these guys are going out on

helicopter raids at night with very little support. and carrying out extremely dangerous assignments each and every day. so i asked them, i said, what do you need from me? what can i do to support you better? and without missing a beat, the look me in the eye and give me their answer. it was not about more equipment. it was not about more resources on the battlefield. in fact, it was not about them. they said to a man, sir, take care of our families. take care of our families. if we know our families are all right back home, then we can do our jobs. so we're here today because

nearly a decade of war has taken place, and our armed forces, you and your families, have done everything you have been asked to do. you have been everything we could ask you to be. you have done your duty. and as a grateful nation, we must do ours. must do ours. we have to make sure that america is serving you as well as you have served us. this is not just the military. this is not just a moral obligation. it is a matter of national security. with millions of military spouses, parents, and children sacrificing as well, the readiness of our armed forces depend on the readiness of our military families. as michelle manchin, she and i see this in the spouses we meet.

-- as michelle mentioned, she and i see this in the spouses we meet. on vacation in hawaii, we met many military families that the marine base. what is true then and the conversations we had is what we find wherever we go run the country, a truly heroic wives and husbands to become single parents on the home front and somehow keep it all together. the house, kids, maybe even a job of their own. we see it in the resilience of so many military kids, boys and girls who, like all the other kids, are just trying to grow up, try to find their way, but who, unlike other kids, are also having to worry about whether their mom or dad is going to come home safe. come home safe. we see it die and the diversion of care givers who tend to their loved ones, -- we see it in the devotion of caregivers who tend to their loved ones day in and

day out. and we see it from the quiet pride of our veterans, who only ask that we live up to those words from president lincoln, that as a nation we truly care for all those who have borne the battle. we see it in the unending love of the families of the fallen. the goldstar families who have given their nation the people that loved most in the world. as commander-in-chief, i am determined to do everything in my power to make sure that we are fulfilling that request from our troops, that we're taking care of their families. that is why over the past two years, we have made major investments. more military housing, more child care, new schools for our military kids. more counseling and career support for spouses. more help for those tireless

care givers. dramatic increases in veterans' health care and helping hundreds of thousands of veterans and family members pursue their education through the post-9/11 gi bill. and that is why it ordered this government-wide effort. a presidential study directive, to bring together the resources of the federal government for this mission. for those of you who are not familiar with these president joe directives, these are reserved for some of the most important and complex national security challenges. i think mike mullen would share with you since becoming president, i have only ordered about a dozen, including this one, which we believe is the first one ever on behalf of military families. today, i am proud to announce up for the first time ever, supporting the well-being of our military families will be a priority, not just for the

department of defense and the department of veterans affairs, but all across the federal government. that is why all these cabinet folks are here today. 16 members of my cabinet have committed their departments and agencies to making military families one of their highest priorities. we're focusing on four areas. the things you said mattered most to you, whether you are army, navy, air force, marine, or coast guard. active, guard, or reserve. a veteran or a member of a family of the fallen. we did not wait for today to launch these efforts. launch these efforts. many of these efforts have already been under way. that includes innovative new partnerships so that in tough fiscal times, our government is more efficient and serves you better. let me just list our primary

focus. focus. first, we're putting new emphasis on the quality of life for our military families. the departments of defense, health and human services, for example, have joined forces to improve community mental health services and prevent suicides. in new office in the treasury department is working to protect military families from the meat -- from abusive practices like predatory lending. it turns out that military families are more subject to some of these financial scams than just about any other group. the agricultural department is expanding its support for families in rural areas. a disproportionate number of our military families come from rural areas or are stationed in rural communities. the interior department will use our national parks to help our wounded warriors recover. and we're going to remain relentless, not just that va but

at hud andhhs and across the government, in our fight to end homelessness among our veterans. we have to have zero tolerance for homelessness among our veterans. [applause] [applause] second, we're putting a new focus on the education and development of our military children. most of whom go to public schools. so for the first time ever, the department of education will make military families a priority for some of its grant programs. that is going to give states and communities new incentives to address the unique needs of military children. the interior department, which is already one of the largest federal employers of young people, will create more opportunities, like summer jobs for young people from military

families. and today, we are renewing our call for every state to adopt the interstate compact, which makes it easier for military children -- [applause] [inaudible] [applause] third, we are redoubling our efforts to help military spouses pursue their education and careers. as michelle said, we have brought in the departments of labor and commerce and the small business administration. we're going to help spouses get that degree, find that job, or start that new business. we want every company in america to know, our military spouses and veterans have the skills and the dedication, and our nation is more competitive when we tapped their incredible talents. [applause]

and finally, we're going to keep increasing child care for our military moms and dads with young children. this is not just a job for the department of defense. as michelle said, the departments of education, health and human services, and agriculture are now helping, too. in working together, we believe we can find new child-care options for tens of thousands of military children. so these are just some of the nearly 50 specific commitments that my administration is making today. in other words, we're not simply reaffirming our responsibility to military families. we're upping our game. in fact, these 16 members of my in fact, these 16 members of my cabinet have signed their name to this report, pledging personally to see this through. so gang, you're all on the hook. [laughter]

we know where to find you. [applause] not only to fulfil these commitments but to make sure that as we go forward, our military families are being heard across the government, that is what we're looking for here. michelle and jill said they're going to keep pushing, and i promise you, they're not kidding. and as president, i am going to make sure that we get this done. we also recognize that this can be -- cannot be a mission for government alone. government has its responsibilities. but 1% of americans may be fighting our wars, but 100% of our americans need to be supporting our troops and their families. 100%. [applause]

to help launch this effort, michelle will be on oprah this week. [applause] to urge every american jew -- every american to join a new national campaign to support our military families. that is a pretty good plug. you see, this is one of those challenges and one of those moments. when we have to remember what unites us as to a and -- as americans, what we can achieve together, and what we owe to each other. especially to those who served and sacrifice so we can live free and be safe. i want every service member who is deployed to know that when you're over there taking care of the country that you love, your country is back here taking care of the families that you love. i want every military wife and husband to know that we're going to help you keep your family strong and secure.

i want every military kit to know that we're going to be there for you, too. to help you grow and to live your dreams. i want our goldstar families to know that this nation will never forget and will always honor the supreme sacrifice that your family has made to our nation. and i want every single american to remember that as the beneficiaries of their service, each of us has an obligation, a sacred duty to care for those who have borne the battle. these are my commitments. these are michelle and i jill's commitments. these are my administration's commitments, and must be america's commitments. as long as i am president, we're going to keep working to fulfill those commitments for all who serve. thank you very much, everyone. [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2011] [applause] [applause]

>> thank you, everybody. [applause]

>> and a couple of other news items out of the white house today and possibly why you did not see vice-president by the here today, he reported for jury duty this morning in wilmington at the superior court there. also, the associated press reports the white house official as telling them that the intern to gabrielle giffords, daniel hernandez, who helped her during the shooting, will be present with michelle obama, sitting with michelle obama tuesday night for the state of the union. we will be back at the white house likely within the hour as robert gibbs has his news briefing coming up at noon eastern. ahead of that, we're going to take a lead to the house at noon. they come in for morning our speeches and noon. legislative work gets under way today, debating the rule for resolution which would call for cutting all non security, non- defense federal spending two fiscal years 2008 levels.

that debate getting under way at 2:00 p.m. eastern, and we will have live coverage here on c- span. the senate does not back until tomorrow. they are in at 10:00 a.m. and will take up a possible adjustment to the rules on filibuster. live senate coverages on c- span2. then the state of the union tomorrow night, courage on both c-span and c-span2. a gets underway at 8:00 p.m. with our preview program and the president's state of the union address getting under way at 9:00 p.m. eastern. it is reported today that the undersecretary of commerce for international trade, a guest this morning on "washington journal" hinted that the administration will not attempt to move the three of standing trade agreements in tandem earlier this year, but instead will focus on the south korea free trade agreement. he was our guest this morning for 45 minutes on "washington journal." we will show you as much of the conversation as we can until the house comes in at noon.

span3. >> "washington journal" continues. host: the commerce of international trade secretary is here to talk about commerce and trade. how successful was last week's visit by h presidentu -- visit by president hu of china? guest: that trip was part of an ongoing effort to make sure we have a balance in never trade relationship. we have a trade deficit with china, and we are working hard to increase exports. during the first 11 months of last year, we increase exports up to $82 billion, a 34% increase with china. as part of the talks leading up

to the trip, we were able to work on issues that affect that the relationship. we were pleased with the visit, and we think we made some progress. host: in terms of overall praise for countries outside of the u.s., how much of that percentage was done with china? guest: it is a significant amount. among the emerging markets, it is one of the countries that we are paying attention. china, brazil, india are becoming more important trading partners. nevertheless, mexico and canada, which are long time trading partners, are still second and third trading partners for us. host: we are talking with francisco sanchez. our topic is trade and the global economy. if you want to get involved in

the conversation, give us a call. the numbers are at the bottom of your screen. we will also take your messages through e-mail and twitter. guest: i met with the ministry of commerce, the foreign minister, their technology and innovation people. we talked about issues that affect our ability to export, the fact that american companies ability to compete in the market. some of those issues i mentioned earlier, they have indigenous innovation, an effort by china to increase innovation within their own country. that is a worthy goal of any country.

we do not condemn that. but there are good policies and bad policies. we encouraged them to promote policies that do not prejudice foreign companies and are consistent with international trade principles. we made some progress in that area. host: what do you mean? guest: there was some discussion within the chinese government to restrict the purchase by government entities, only products created for the innovation of those products were created within china. that would be very detrimental to american companies. host: our first call comes from maryland on our line for republicans. caller: thanks for taking my call. i could not stand the organizing for american people that were continuing to call the last few seconds, so i wanted to call in.

this is regarding tariffs. when you look at labor costs here in america, the production costs in america of versus european countries, japan, we do have in fermenta regulations, labor laws, things of that -- we do have some regulations, labor laws, things of that nature. some sources say that tariffs -- can they help americans get back to work? i will take my answer offline and thanks very much for c-span. guest: the caller is right in that emergency -- emerging markets such as india, china, and brazil, in many cases they do not have the same regulatory structures that we do.

perhaps an advantage is created. we worked very hard to reduce trade barriers that can hurt american companies from competing in doing business with those countries. one side of the equation is trying to break down trade barriers in the countries that hurt american business. on the other hand, what we do here, we tried to create a level playing field at home. countries that have companies that dumped products in our country, dumping product is selling it below what you would sell it in your own country, we have laws and ways to combat that. unfair subsidies is another way that we make sure we create a level playing field. i think reducing tariffs in general helps create the free flow. i am not sure that raising tariffs here is the best way to go.

it is important that we create a level playing field both at home and abroad. host: and there are a guide and pamphlets put together. this one is called doing business in iraq and describes iraq as a market with strong long-term economic potential. how are these kind of pamphlets

or publications put together and what kind of a benefit is it for a country -- a company trying to do business with a particular country, in this case iraq to go through this particular guide? guest: we had a team of trade specialists that help put these guys together. the international trade administration office, we do trade admissions, and we have a service where we will help companies set of all of their meetings abroad and give them basic market information like this guide. i took a trade mission to iraq in october with 14 u.s. companies, including boeing, general electric, some engineering firms, construction management firms. while there are still challenges in iraq, emerging opportunities, spending over $80 billion in

infrastructure and products over the next few years. it a great opportunity for american companies. we provided those -- we provide them with thatback to the phoner discussion on international trade and the u.s. economy. pennsylvania on our line for democrats. caller: good morning, gentlemen.

how are you today? host: fine. caller: years ago you look at the american economy and products, and i always had issues with the quality of the things that we made in the united states. many things we make in the united states are very good. but you can look at a rack of clothes and tell the ones that were made in the united states and the ones made in japan or china or other countries. they were better quality in terms of neatness. we have to go back to producing things that we can compete with those countries. if you look at something made in china or japan and something that is made in the united states, the quality would be even better than those things

made overseas. host: we will leave it there. guest: i think america can compete with any country in the world. we are still the top manufacturers in the world. we make some of the finest airplanes, some of the finest machinery, medical devices. there are a lot of areas where we excel. one of the things that has given us a comparative advantage is that we invest more money in research and development and innovation than any other country around the globe. this continues to give as a competitive edge. i am confident giving aid level playing field, we can compete with just about anybody. host: next caller. caller: if i were to get a small business administration loan, i would have no confidence that i

could pay it back, because i would believe that i would get rid of by the chinese. by the chinese. host: if you got that low, what kind of product would you like to produce? what kind of product would you like to produce? caller: i do not want to talk about it specifically, because i do not have a patent get. host: you are concerned that those in china will still your idea and undercut your business? caller: they may change it somewhat. i think the law is you can change it 40% and get a patent. so i think they would rip me off. there are legitimate tactics to

improve an invention. basically, in my situation, they would rip me off, and i would not be able to make any money. host: what is out there to protect that? guest: he is right. historically, we have had concerns not just in china but also on -- in other countries regarding intellectual property rights. our international trade and administration along with u.s. trade representative's work very hard to strengthen international property rights protection. you mentioned, what were some of our successes during the china visit? this is an issue that we give focused on with our counterparts in china. we need to continue to do that, because there are still challenges on intellectual property rights with china. what i would tell the caller is that china is not the only

market to focus on. there are a lot of other places. if he is interested on moving forward, we would be happy to work with him on loan advice along with looking at markets that may be a good fit for his products. host: tennessee, republican line. caller: i am interested in a -- here in the united states, we have a many regulations about bringing a product to market as far as environmental and so on. how can we compete with other countries where the regulations are not as strict, so they can import the same product but cheaper? how can we in the united states compete with that kind of a situation? host: thanks for your call. guest: president obama recently spoke to regulations and the need to look carefully at the regulations and make sure that we are not keeping regulations on the books that hindered

competitiveness. he is undertaking a process right now to look at regulation as effective competitiveness. the caller's question is not only right but timely. the obama administration is taking steps to make sure that the regulation does not hurt competitiveness or try to minimize its impact on our global competitiveness. host: in "the wall street journal" this morning, there was this op-ed, obama is free trade opportunity. here is what they write.

are you finding this atmosphere to be more excepting in willing to work with the president as far as working on free trade agreements? guest: president obama has been clear that he recognizes free trade is an essential part of the global marketplace. we need to work hard to open the market, increase our exports. he has been very supportive of moving the free trade agreements that we have pending moving

forward and dealing with certain issues that are still involved in various agreements. it remains to be seen how open congress will be that they are moving forward on these free trade agreement. we will bring the korea trade agreement to the congress very soon. i am optimistic that when we lay out the opportunities to strengthen our economy's growth and create jobs, we will see the support to ratify the caribbean trade agreement. -- korean trade agreement. host: we will show what one person had to say about this topic and then get comment. >> we need to open new markets on the services around the world. we have a free-trade agreement

right now with south korea, panel, and one other area. they have been languishing because of the fact that speaker nancy pelosi refused to bring them up and president obama did not send them out. he has indicated a willingness to bring of these agreements. we want all three to be brought up. the colombia and panama deals were brought up before the korea deal was done. that will create jobs here in the united states. host: your response? guest: i agree with the congressmen that we need to get these three deals modified -- ratified. not all trade agreements are created equal. one thing president obama is committed to is to make sure that we bring free trade

agreement to congress. we have taken the best interests of american business and workers and farmers into consideration. we as an administration support ratifying all three of these agreements once we work out any pending issues we have with them. host: back to the phones, and democratic line. caller: i had a couple of points. i will try to be as brief as possible. i think we need to be very careful like the secretary just mentioned about the free-trade agreement. we have a de been- industrializing a lot of our manufacturers. one person mentioned about the

missed regulations. these trade agreements can hurt our economy. we should be concerned about hu jintao before he came here said the dollar would be soon eliminated as the world reserve currency. if those things hold, we could be in some trouble. i think those are issues that need to be addressed. i believe and employment -- unemployment is not accurately counted. they do not count of those that have explored all forms of benefits. [unintelligible] we should not give people false hope. host: we will leave it there. guest: one tool that we have to expand exports, and i would say that we have 17 free trade agreements with countries around the world.

generally, these have been effective tools for increasing exports made by american businesses and workers. if you take oil out of the equation, last year we had a trade surplus with the 17 countries with which we have a free trade agreement. 44% of all of our trade in the world happens with these 17 countries. these 17 countries represent only 10% of total oil gdp. if these agreements are negotiated properly, they can be an effective tool to create american jobs and increase exports. host: twitter has sent us this message. guest: free trade is reducing or

eliminating tariffs, for example. we have to be concerned about nonce tariffs -- non-rarriffs trade barriers. we have to look at public good but some things that create a barrier for trade. we have to create standards and regulations as well as tariffs. if we can harmonize them and reduce tariffs, we can do more for good and have more exports by american companies. host: we are talking about trade and the global economy with francisco sanchez. he previously served as senior policy advisor to president obama during his 2008 campaign, and has also been the chairman of the hispanic national

leadership council and for an organization and the u.s. department of transportation under president clinton. our next call comes from new jersey. caller: good morning. thanks for c-span. i only know what i read in the papers. it is apparent to me china is practicing the old fashioned mercantilism. we have been playing into their hands for a generation. i know from the moderator's comments, there is a particular interest in aviation. we see that ge is helping china develop their domestic commercial airline industry. isn't it clear that the pattern, which has been established in other industries, will be in

this aviation where we will teach china how to make commercial aircraft. the day they will load their first airliner will be the last day they buy eight boeing aircraft, which is one of our major exports. -- by a boeing aircraft, which is one of our major exports. guest: he is right that the chinese and the long-term plans are looking to build an aviation industry. what i can tell you is that boeing is not only one of our biggest exporters, it is our biggest export. one of the things that makes boeing such a successful company is it is constantly innovating. the landscape the commercial aviation business is going to change in five or six years. china will not be the only country that will build a

commercial louis, missouri. caller: just once i would like to have is well-prepared for ths competition. i am confident that with our aviation, we will be able to compete now, but well in to the future, because of innovation. we still need to work very hard as it relates to making sure we have a level playing field in china and other emerging markets. host: new york, the democrats' line. caller: the problem with the trade agreement is that it disproportionately favors the transnational corporations over laborers. i can give you an example. transnational corporations can go anyplace they want to go. their factories, technology, where -- they can go anywhere

they want to go where they can find cheap labor. unions, which we have here in united states, are not allowed into these countries. they are not allowed to form unions or petition for higher wages change environmental standards. that is why we were able to create a middle class in united states and be able to form unions. if they cannot do that in countries that we trade with, [unintelligible] cannot. this is the problem with average trade agreement. host: we will leave it there. guest: the obama administration is committed to make sure we have enforceable provisions on labor and environment in the free-trade agreement. that is what we have in the last couple of free trade agreements

that we have seen ratified and any negotiations that the obama administration takes will include the labor and environmental provisions. i should say that free trade agreements, if done right, can be beneficial for american workers and businesses. we need to engage countries on free trade agreements. south korea, which has very much been in the news recently, they have trade >> we leave this to take you live to the u.s. house for morning speeches. ves.] the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's rooms, washington, d.c., january 24, 2011. i hereby appoint the honorable virginia foxx to