to housing. in fact, a lot of benefit changes aren't changing. we're required by law to abide by the defensive marriage act. regardless of what's happening in different states, we haven't changed that. we reserve the right to look at emerging things because there could be some things we're not anticipating. that's why this is not locked in and concrete. there could be something we don't know about and that's why that is slightly open. the guidance addresses what i shared with you. that's the information we shared with service members, but there could be something we don't know about. >> the team has laid out information, the content of the training. the services are just providing the structure, but it's

consistent. >> i wanted to point out general cartwright said it, but we've been working with representatives from the military departments to develop the training guidance and training plans, so to speak, and we expect to have those accomplished next week, so it's been very helpful because it's been a joint effort with not only the military departments, but the joint staff to develop consistent training. >> would it be fair to say that by next week all the training modules will be completed by all the services? >> yes. >> i have two questions, one relating to nondiscrimination. in terms of nondiscrimination, i noticed in the guiding principles it says that

unlawful discrimination and harassment will not be tolerated. however, sexual discrimination is not part of the laws. wondering how it interplays and what legal remedies service members will have regarding to any discrimination. and, secondly, wondering what the situation will be -- there's been a question about recruitment for discharged military members. is there anything addressed there and for those that don't rejoin the military will that be expected of them? >> i will go with the second one first. there is no changes are expectations right now with

that. why know exactly all of what you are getting at, but there is no expectation of change. as far as equal opportunity, treated fairly, that's basic, standard military discipline. when we talk about leadership and discipline and respect, there is no need to change the laws there with regard to anybody that wears a uniform or doesn't. it's laid out. there's no specific class or category or anything with regard to treating and taking care of your people. it's fundamentally basic. >> what remedy will service members have because there is no legal remedy -- >> we leave this program to go live to the white house for remarks by president obama. >> my administration has been closely monitoring the situation in egypt and i know we'll be learning more tomorrow when day breaks. as the situation continues to

unfold, our first concern is preventing injury and loss of life. i want to be clear in calling on egyptain authorities to refrain from violence against peaceful protesters. people of egypt have rights that are universal, according to freedom of assembly, freedom of free speech and the right to determine their own destiny. these are human rights and the united states will stand up for them everywhere. i also call upon the egyptain government to reverse the actions they've taken to interview with access to the internet and cell phone services and social networks that connect people in the 21st century. at the same time, those protesting in the streets have a responsibility to express themselves peacefully. violence and destruction will

not lead to the reforms they seek. this moment of volatility has to be turned to a promise of peace. we've been clear that there must be reform, political, social and economic reforms. in the absence of the reforms, grievances have built up over time. when president mubarek addressed the egyptain people tonight, he pledged a better democracy and greater economic opportunity. i just spoke to him after his speech and i told him he has a responsibility to give meaning to those words. to take concrete steps and action that deliver on that promise. violence will not address the grievances of the egyptain

people. the suppressing ideas never succeeds in making them go away. what's needed right now are concrete steps that advance the rights of the egyptain people, a meaningful dialogue between its government and its citizens and a path of political change that leads to a future of greater freedom, opportunity and justice for the egyptain people. ultimately the future of egypt will be determined by the egyptain people. i believe that the egyptain people want the same things that we all want, a better life for ourselves and our children and a government that is fair and just and responsive. put simply, the egyptain people want a future that befits the heirs to a great civilization of the united states will an ally with that government and

we're looking forward to working with them to achieve it. around the world, governments have an obligation to respond to their citizens. that's true here in the united states. it's true in asia. it's true in europe. it's true in africa. it certainly is true in the arab world, where a new begin ration of citizens has a right to be heard. when i was in cairo shortly after i was elected president, i said that all governments must maintain power through consent, not coercion. that's how the people of egypt will achieve the future they deserve. surely there will be difficult days to come, but the united states will stand up for the rights of the egyptain people and work with their governments in pursuit of a future that's more just, more free and more hopeful. thank you very much.

>> president obama addressing protests in egypt and called for consent and not coercion. we return now to the briefing on the don't ask-don't tell military policy concerning gays and lesbians serving in the military. >> calling on people to exercise restraint in a volatile situation. >> i want to follow up on the question about gay marriage. i'm curious what the process for reviewing the benefits would be, if for example, somebody on overseas deployment that is legally married. can they take that back with them or how does it work when you have a service member legally married in a state that

recognizes that. >> first of all, the defense of marriage act, marriage recognizes heterosexual. so that's the first piece. from the legal standpoint, you introduced a policy that a hypothetical construct couldn't address. >> in the state department, for example, there are policy-level changes that can be made to ease the transitions and i'm curious about if somebody in the position in the military, what would be your approach? >> wet -- let me just say that i don't want to get into hypotheticals, because it's a slippery slope. if you can look at what commanders deal with and a

normal person deploying, there's policies in place about who can go with whoeever. there are policies that exist and we haven't changed the policies. there are benefit issues that may be gray areas that we'll look at later. we're not sure where we'll be on that yet. so we're not saying that everything is ironclad. right now as we move forward toward implementation and repeal, we don't anticipate that change at this time. i hope that helps. >> is it still accurate that service members have been approved for relocation -- >> since the decision was made by the secretary that general counsel, myself and a service secretary will see it, we don't

comment on individual cases, so i wouldn't be allowed to talk about anything that's gone through. >> anything approved or not approved? >> if it was approved and done, that's fair. i can't talk to you about what's coming forward. >> is it still accurate that no service members have been separated under don't ask-don't tell since october? >> i don't think that's accurate, not since october. >> there was one case that the approval was before the policy change. it was in november, but the approval was signed off on before the procedures were changed. >> on the question on the timing, to be clear. have you built in a 60-day lag time for getting this

accomplished by the end of the year or is it a situation that you could get to december 31 before the recommendation is made, which puts us into next year once that lag time before it goes away? >> the conditions on the ground will dictate how fast we go. so to even imply we have a target to do it by this day would be a misnomer. we'll move responsibility quickly but deliberately. as secretary gates says, we believe we can do it within the year. based on with the we know right now, we believe we can do that. there is no artificial target put down because that would create an artificiality that wouldn't be real. >> so your belief is that you will get to the certification point and whatever date that is will be within 2011? >> we believe -- i believe,

secretary gates believes, it can be done, but there could be unknowns, so we will not put pressures on the services to do the training that has to be done in order to ensure that we have a responsible process. >> you said you don't require 100% training to be enforced and then later you said, it's a judgment. do you have a target date or a target percentage for the active component and reserve component, given the challenges posed to the reserve component, will it be lower? >> as i said, i believe it's a

subjective judgment based on what we've seen as we go through the training. if we get out to some percentage of the force and we're not seeing any anomalies and we think we've taken on anything that might have come up in our views to adjust, my sense is -- and i can't say because it's a subjective judgment -- that the chairman and secretary will look at that and say, i think we've gotten the bulk of the units completed. we still have more to do, but we understand what they are and we'll get at them and there will be individuals thought that will be harder than others and we're ready to certify because we're comfortable that we have and understand the challenges in front of us and we have the history of what we trained behind us. >> my sense is, really good working relationship with the services as we do this. they -- not only the service

chiefs, but the senior enlisted, you get good vibes about where we are in terms of cooperation, information coming forward, but there's a subjective part to this, and that's where the commander, as the general was saying, makes that call and that dialogue goes between people within the chain of command. >> will it be against military regulations to discriminate against service members based on their sexual orientation? if somebody says, i didn't get a promotion because my commander doesn't like the fact that i'm gay, can they -- is that a bit of evidence they can cite in claiming discrimination, that they've been unfairly treated? will that be in military regulations? >> i think it already is in military regulations. if you believe you've been

unfairly treated -- >> based on sexual orientation -- >> based on anything you believe and you can substantiate that -- if you believe you've been discriminated against, there are ways to address that or redress that within the system. >> a person before couldn't say, i was discriminated against because i'm gay because that was telling. >> so the absence of it before, removes the category. it doesn't change the fact that we don't discriminate against anybody. you have redress if you believe you have been discriminated against. >> i don't believe it's a protected class. >> that's right. you are starting to take us to a legal area, which is the reason we ought to get a lawyer

to look at this and make sure there's the right language because there is an issue of protected class and how we deal with it. it would be better to not guess at it and make sure that the language is right. >> no one has been officially discharged under don't ask-don't tell since last year, but there are people reportedly being processed for discharge according to gay rights groups. is it still possible for someone before certification to be discharged under don't ask-don't tell. if that's the case, is there a consideration of a temporary moratorium. >> okay. it is still possible for a person to be discharged under the existing law. i've heard nothing about a moratorium. >> it goes out through certification plus 60 days.

we'll look at every case, but we cannot discuss any cases. >> how specific are we going to get? is the training going to be that you shouldn't discriminate against others or that you have no name-calling, no jokes, no avoiding certain people because of their orientation? will it be examples and are we -- is that something that the services are supposed to come back with or something coming from the d.o.d. level? >> well, first of all, we've given work with the services in putting together the guides they will be implementing. the services have been given some examples. it goes back to leadership -- and i'm not trying to wear out that word, but it really does go back to how commanders -- because they're evaluated based on their judgment and how they treat their people. how disciplined they are, professionalism, things like

that. so the training will be service-specific and unit-specific. you have some units that won't -- they won't need certain things. >> i think you've covered it. >> will good leadership and good discipline be specific enough for that marine unit that may already be saying some of that? i think you said there are some scenarios, so is there example of what's acceptable and what's not acceptable behavior? >> i'm trying to understand how to go at this to give you what you are looking for in an answer. there are already behavior and conduct standards out there. they're reviewed to make sure they cover the waterfront of all the issues. we've really not found, to my knowledge, anything lacking there.

the standards are still valid. >> gentlemen, what we're developing is a standardized tool kit. the reason we've brought the services together for the last several weeks was to develop training so they can put their training pieces on it. there are examples in the training and that allows the leadership to present them and allows the discussions so that people can get a better understanding as they go through that normal course of events. >> can you tell us what is in it? what examples? >> they will get various training materials. it conceivably could be the

service commander's video showing the leadership from the front. they will also get the power point slides that have the policy and specific for the various tiers and then the vigniettes. >> are they in the back of that book? >> similar. some are the same, but not all of them. >> all of them? >> i think they are. there was a purpose that they were in there. they did a good job in their survey and recommendations. >> so that's the training, the discussion with the rank and file? >> using the vignettes to spur the conversation.

>> dr. steel, you said you were a marine commander at some time. let's say you are at a marine outpost and you call everyone together, what would you tell them? >> i don't know if i would use that construct right now. what i would say is we're serving on the tip of the spear. we want to take care of our marines. it's important for us to not only watch each other, but this is a family. quite frankly, i'm pretty close to you when i'm out here because i'm depending on you. what's changed? not a whole lot. i'm not too sure i am concerned about your orientation. i want to come back alive and i want to bring you back alive. and that's the focus here in accomplishing that mission. though we complicate it by orientation, i want to

accomplish this mission to bring you back alive. you have a family you are coming back to. and, again, it gets into orientation of a person's sexual orientation as opposed to what we should be focusing on, which is a mission and taking care of our marines. >> what if someone says, i don't want to serve with someone who is openly gay what, would you say to them? >> we'll take care of our marines. >> after you are done with the initial training, will this become a yearly training? >> we haven't talked about that. it's up to the commander. we're talking about implementation right now, which is what we're moving towards. what happens annually, i'm sure that book will be open. if history is any indication of things, there will be a need

for not just this but continual. i know the training and development of those in a uniform is a constant. >> if there is no moratorium in place, can you explain why there have been no discharges in the last three months since the secretary changed the policy on having the two of you and the chief overseeing charges or discharges? >> i think it's been -- i don't know if i would say a lack of discharge, but the process is deliberate. there is more scrutiny with the general counsel, my office, service secretary, as you go through the process. when you raise something from wherever it was before with the commander processing discharge,

you are at a level of review that elongates a process. i'm not saying there won't be discharges. i'm saying that there's a lot of review in the process. >> would you discharge somebody right now in this climate as you are moving towards certification? >> each individual case is judged on its own merits or demerits. so, quite frankly, yes, if the case merits it. there are a number of circumstances that could lied to that. i cannot talk about an individual case, but yes. >> what would a circumstance be? you are making it sound like there would have to be something additional that just a simple violation or statement.

what would the circumstance be that would lead you to say it is appropriate? >> i can't tell you. when i review a package, even now before we had this discussion, dealing with any number of different issues, there is not one particular spring that you pull to dole with that. it's all that that individual is about. to be able to say that this fits the absolute of what that is or what it wasn't is inaccurate. >> one last time on that. [laughter] if you had -- >> nevermind. we're done. >> if you had a package of somebody that would meet the criteria to be readmitted to the military and you were trying to decide whether or not

to discharge that person and you know that he would be let in after he's released, are you going to at least slow roll those? it seems like there's a lot of bureaucratic waste to proceed and kick out some people throughout the year that you will readmit next year. >> the don't ask-don't tell law is still in effect. we're obligated to follow that law and to say anything other than that at this time would be inappropriate. >> all right. thank you, all. >> thank you.

>> no question 9/11 redefined the presidency. it made it clear that my most important job was to protect the country. i made a lot of controversial decisions to do that, many of which i describe in the book. if i had to do them over again, i would have done them. >> former president george w. bush talks about his memoir "decision point" sunday at 8:00 on c-span's q & a. >> this weekend on c-span 3, we'll tour the home of frederick douglass. from the nixon foundation and library, a focus on daniel patrick moynihan whose career

spanned four presidential administrations. see the complete schedule on-line or you can have our schedules emailed to you. >> now, two philosophies on how to improve the economy. from this morning's washington journal. this is an hour. >> there's been a debate raging across the country as the white house turned to the budget and deficit about the right approach, that whether or not with the precarious economy more investment or spending is necessary and whether it's important to focus on the deficit. matthew mitchell, research fellow at george washington university. >> we're a research institute based at the university. we focus on public policy and the intersection of it through the lens and try to bridge that

gap between what research is showing and what policy leaders are doing. we're a market-oriented think tank. we do have a view that in a lot of ways market solutions tend to be superior solutions. >> and senior fellow, brookings institution, isabel. "time" cover came out, brand-new one. it has an interesting photograph, which has been pieced together, why obama loves reagan and what he's learned from him. i would like to ask you, how does this debate right now differ from the supply side debate of the 1980s? >> i think, by the way, one of the things that obama shares with president reagan is they're both very upbeat.

. optimistic. i thought the state of the union address was a very upbeat talk about how we can win the future if we did the right things. on economics, i think there really is a difference because supply side economics says all you need to do is make sure the economy has low tax rates and very little regulation and let the market work and it will grow very rapidly. and there was a specific believe that if you cut taxes, it would actually bring in more revenue. i don't think any mainstream economists believes that is true, although tax cuts can have some impact on growth and have some revenue and facts -- effects. the otheride, more keynesian

side, says it is really important when you are in a downturn such that we have right now and unemployment is over 9%, to use government -- you use government to bring back jobs. you may need fiscal stimulus, you may need monetary policy. right now monetary policy is about as stimulative as it could be and fiscal policy in is in this bind because we have these very large deficits, which makes it difficult to say we should do more. it is also political and possible -- politically impossible. host: you espouse what theory? guest: i would argue, as most conventional economists would these days, we should pay

attention as we are in a downturn and not a good time to be cutting spending and raising taxes. you don't want to do that in the middle of a recession. on the other hand, you do want to have a fiscal plan going forward that shows that you can get your fiscal house in order. that will reassure financial markets and our creditorsbroad that we know what we are doing and prevent an increase in interest rates for a fall in the dollar from disrupting any recovery that may be incipient. host: matt mitchell, you were not ound for the reagan administration, but let mesk you out how you viewed the problems the country has as different or the same as earlier periods in our recent history. guest: i think one thing i think is different is spending. if you look at what happened during the reagan and the station and rely what happened with republicans in the decades

that followed, it was a significant, only laser-like focus on taxes and taxes on the. while they did cut taxes, they never addressed spending and the share of the economy actually increased. bill clinton is one of the only presidents in the world war ii period as salt spending as a portion of the economy decrease. -- that saul spending as a portion decrease. thpeople who are opposing the administration, i think for the first time in quite a while, are not focused as much on taxes as they are on the spending prlem. to me, i think that is heartening a little bitecause this obsession with cutting taxes and let spendin continue atts previous paced i don't think makes a lot of economic sense. host: but the recession we are in, why do you call spending a problem? guest: for a number of reasons. the main reason is it that it drives two things we know that

harms economic growth. if its paid for with taxes, that can harm economic growth. there was a study by president obama's former economic adviser and her husband on that. if it is paid for with debt, when not excessive debt and deficit also harms economic growth -- we know excess of debt and deficits also harms economic growth. it is in my view, unsustainable. not so much what is happening today -- as a share of the economy it is 25%. in the next five years it will grow another 10 percentage points, 50% in a number of decades. host: you see the same trajectory andre you concerned? guest: i do see the same church rectory and i am extremely concerned, but we should be clear about what it is due to. the aging of the population and the fact that health care costs per person in the u.s. are

accelerating at a very rad rate. that is basically what is in increasing spending as a proportion of the economy. ght now, there is a temporary increase in spending because of the recession and the need to have unemployment insurance at some other programs that were part of the stimulus package. but that is a very short-term thing. i think basically what i am concerned with -- and it sounds like what matt is concerned about -- is not what is going on right now. what we should really be worth about is what the fiscal situation looks like a decade from now, two decades from now, three decades from now. by about 24, just three programs -- social security, medicare, and medicaid -- by 2040, just reprogram skull will consume all the resources we have unless we

-- just host: there are tee ways to get in touch with us. you can tweet or send us an e- mail or give us a call. the phone lines are on your screen. we are talking about the economy and the prescription for it and concerns for the future. all that on the table. r two guests have different prescriptions for how to address it. let's talk about the concern about the demographics, the programs and interest on debt which will consume so much of the gdp. >> i think it's a bell is right. in a lot of ways people in

washington are eager to put a white hat on someone and a black hat on someone else and say it's the other side causing the problem. this may have a lot to do demographics and rising health- care costs. that is nothing that anybo has a firm grasp on how you can address rising health care costs. despite the demographics, there is something you can do, which is take steps now while people have enough time to prepare and to accommodate by increasing their retirement age and indexing the cost of living adjustment, to change into cpi, which is the change in prices. take tho steps to shore up the system now. i would add to the list of things that are causing this increase in spending. which is sort of the a exception that everybody in washington takes.

most people in washington, most politicians admit there's a spending problem, but they make exceptions for one project or another. when you add up 535 exceptis, nobody wants to cut those particular projects, then you have a spending problem. >> what percentage of combined expenditures from home and security, defense, cia, includes securing the nation are in that? >> isabel may have a better s. i would say 20% or 30%. >> all defense + homeland's arcurity would be around 17%. host: do you support the kind of reforms that mitchell suggested? guest: yes, but i would emphasize when we talk about raising the retirement or slowing the growth of benefits, we are not talking about

afcting anyone who is retired right now, or is about to retire. we are talking about putting in place now and plan for the longer-term future that says to younger people today, you are going to get as least -- at least as much in benefs as the car degeneration. you are just not going t get as big an increase as you might have expected. and we are going to encourage you to do some saving to make sure that you have enough resources when you retire. social security was ner meant to be the only source of income for retirement. it was intended to be part of a three-legged stool. it was one leg and then another leg was attention from your employer. the third was your own personal savings. host: it was called supplemental security income at one time? guest: know, that targeted

mostly the disadvantaged, a separate program. host: the social security suggests a wider net. guest: well, i think that is a problem. i think the american public b --need to understand it's not going to be the sole source of income for retirement. for low-wage worker working his or her entire life and has a difficult time saving, i dig a case can be made that we can actually boost what they get in retirement a little bit from where it is now. the president's bipartisan fiscal commission recommended that although we slow the growth of benefits for the more affluent beneficiaries, we should absolutely incrse benefits for those at the low end of the scale and we should also have an exception for those jobs where later

retirement would be better difficult. manual jobs, for example. host: do you support the health care law and adjusting costs? think theon't health care law get the problem. it is interesting. there are claims the health care law brings down the deficit over the long run. the truth in that is what the health care law does is it raises taxes, but it does nothing to decrease spending and does nothing as far as i can tell to lower the cost curve. i am not a health care expert, so i don't want to talk beyond my knowledge. there is not a lot that government can do other than remove the perverse incentives that intervention in the health- care market party has. host: the you believe the health care law will address spending concerns on health care?

guest: i think it will do so modestly. there's a lot of uncertainty. the potentially -- it could potentially have a positive effect, but we don't really know. according to the congressional budget office, which is neutral, its will actually reduce costs somewhat and it will reduce the deficit. it is a very difficult challenge to reduce health-care costs without affecting access. but we should be able to do it. this country as much higher health care cost per person than any other advanced nation by a wide margin. we don't get better health care as a result. so there is something ndamentally inefficient about the way we deliver health care. we don't get good value for the dollar. i think the bill is a good thg, but not perfect. host: say the doctor has been a

guest at c-span many years, so its collaps -- so we are glad to havesabel sawhill at the table. she haspent her life at the brookings institute and pryor was a senior fellow at the urban institute. she's co-director for families. and focused on domestic policy, federal fiscal policy and co- director of the center for children and families at the brookings institute and president of the national campaign to prevent teen pregnancy. matthew mitchell, ts is your first time on c-span. >> it is. >> research fellow with state and local policies at george mason university's mercas center. he has his ph.d. in economics from that school. a ps from arizona state university. thefirst-- a bs from arizona

state. let's get to some calls for our two guests. beginning with norwalk, conn. m, republican, on the line. caller: my question is obama keeps on pulling money out of the private sector through his policies and he keeps on adding to the regulations of the private sector, of the business sector. if you pull money out of the private sector and give it to the public sector, you shrink the money in the private sector. and it keeps the job growth down or exacerbates this long unemployment that we are seeing. do you see anything changing in the hearts of obama in his policies since the election of

the party candidates that will change his policy towards continuing raising taxes and regulation on the private sector? guest: i think in the state of the union address annual saw a very clear pivots of the president towards reaching out to the private sector. in his appointment, also, he has signaled that he will work more closely with business groups the future. -- his appointments. that suggests that he is very aware that government does not create jobs, only the private sector creates jobs. the government's role is to make the environment such that businesses will want to hire, will want to invest, will want to use some of their record profits. the private-sector is very flush with money right now. corporate profitare at record

levels. the stock market is high. what is preventing businesses from investing and hiring is the fact that people are not buying what they have to sell. until we can get the unemployment rate down and get in comes of households but, you are not going to see a lot of hiring. for the longer-term, i do think the things that the president is talking about such as a drop in the corporate tax rate, closing some corporate subsidies or eliminating some corporate subsidies, and reviewing regulations can help. i do not totally agree with your assessment that obama has been especially bad on pulling money out of the private-sector and regulating more than his predecessors. if you look at the data, in

fact, the bush administrion actually increased government spending more than any administration we have had since the second world war other than lbj, other than president host: johnson let's get a call from michigan, democrat. caller: good morning, c-span and susan. my question is as we investigate trade agreements that have been devastating to our job markets in the states. i think that would have an impact on the employment, either that or looking at these countries that flood our markets. host: what do you think of trade and its effect on the state of our economy? guest: there's a remarkable degree of agreement among economists on this. my view is that of adam smith,

that trade is beneficial for every party, really. artificial barriers to trade cause more harm than good. if the government ys i cannot buy a product from somebody because they live in another country, that does mean harm because it raises the prices of my goods and services. the harm that it does for me outweighs whatever benefits of bestowed upon the producers in the u.s. i would argue that there's a dynamic effect where it harms the producer in the long run because it makes them less competitive. the auto industry in the u.s. benefited from intervention on trade policy for decades. over the long run it makes them less competitive and less appealing to consumers. host: there's a great deal of popular sentiment that suggests otherwise. people often say it field trade

agreements haveecimated our manufacturing base. guest: manufacturing is going down in just about every country in the world. the reason is the economy is changing. the service sectors are improving. this is thinking turn. is is what happens in an economy, it's very painful for those going through it. i would argue that it becomes much more painful when government policy shelters people from the fundamental changes that are happening in the economy. host: when naphtha -- nafta was being sold to the public, we heard tre would be displacement. they spoke about the need to retrain our work force. was there enough of that done in this country? guest: i am not sure there was enough. i agree with what matt said in general, but what we need to remember is that there are

groups of workers that are going to be very much hurt in the short run. if all of us benefit from trade, as he argues, but some group is harmed, then we ought to have in place retraining programs and other ways of helping those having to adjust to these very painful anges. i think that the training programs that we have in this country are not terribly good. look at germany. germany is ing extraordinarily well economically, despite all of the financial crisis and everything that we have seen around the world lately. one of the reasons germany does so well is because germany begins to train their workers at a young age. they train them very well. they have partnerships with business to do that. they have apprenticeships. we could probably benefit from

restructuring our training programs. and using community colleges more for this purpose. host: next call from tennessee, california, a republican. caller: thanks for taking my call. ronald reagan when he cut taxes at that time the rate was 70% so it really expert more economic growth. they got more money in their pockets. the president had a good speech. st. that there's gonna to be a freeze is not enough. we need 20% across the board, including closing the department of allocation. and hlth benefits to the epa. and federal workers should get a 20% cut across the board. too much t

regulation. i'm a businessman and it's almost impossible too business anymore. caller: thanks forhe call. some interesting points. one thing that is interesting is obama has this ption in his speech which is absolutely right on. he says that we cannot address our long-term problems without lowering spending and without the loring spending in areas th people do not want to address. these are the entitlement prrams like medicare, medicaid, social security. it was about 1.9% of the entire speech. he never followed up with a realistic plan for addressing that. i still got him for saying this is a problem. what i would like to see is some leadership that says this is what we are goi to do to get spending under control. with regard to the short-term,

20% cuts, i am one of those that thinks if you give a politician a reason not to cut and make the tough decisions, they are gng to run with it and choose not to make the cuts. on the other hand, the biggest problem is projected spending increases. we have to figure out how to get the projected spending increases under control. there's no better time to start than now because it gets more and more difficult mathematically to deal with it as time es on. host: the caller gave us three points. guest: there's a lot to cover. we spoke about the reagan tax cuts earlier. the caller mentioned them as well. they were put forward with the supply side rationale, but they were really keynesian tax cuts because we were in a recession in 1980, a very deep recession. those tax cuts helped us to get out of that recession. ronald reagan then raised taxes

in 1982. then subsequently several other years in the 1980's raised taxes. so that was basically keynesian tax cuts designed to get us out of recession, not to help long- term growth. the president in his state of the union said that the freeze was not going to be enough and en went on to talk about some of t big entitlement programs and revenues. i just want to get on the table that if we were to allow the temporary tax cuts that are going to last two years now that were enacted in december, including income taxes that we all benefit from and that were extended for middle-class and wealthy, if we were to let those tax cuts expire, that would solve a lot of the deficit problem that we face. that would not be the only solution, but it should be part

of the solution. we have already set a lot about regulations. host: here's a clip from congressman paul ryan in his response to the state of the union address. let's listen. >> instead of restoring the fundamentals of economic growth, he engaged in a stimulus spending spree. not only failedo deliver on its promise to create jobs, but also plunged us even deeper into debt. the facts are clear. since taking office, president obama has signed into law spending increases of nearly 25% for domestic government agencies and 84% increases when you include the failed stimulus. all of this new government spending was billed as investment. after two years the and and plummets rate remain above 9%. government has had $3 trillion added to the debt. ho: i want to start with our guests. you said the stimulus program was importa and necessary at

the time and a job creation- focused. why is their unemployment rate still where it is with the stimulus package? guest: there are many good economic studies that suggest that if we had not done what we did, the unemployment rate instead of being a little over 9%, might be 12% now. so i believe those studies. second, i think that -- i misspoke a moment ago when i said that the largest increases in spending had occurred under bush. because i have to acknowledge that as a result of the recession and of the stimulus package that was enacted when the current president first took office, spending. has spending. but you cannot blame the president for a really bad economy. the financial crisis began during the bush administration.

the bailout was a bipartisan bailout of the financial sector. the stimulus package that was passed in 2009 was intended to help get the economy back on its feet again. i believe that without that, we would have had much more severe.. host: did the stimulus work? guest: i am more skeptical. the administration made estimates initially that without the passage of the stimulus, and employment would reach 9%. in reality, with the passage of the stimulus, it was at 10% and its state around that level for a very long time. what is interesting is that if you actually read the literature on this, the language inhe journal is nowhere near the language that comes out of

washington. there's a ton of disagreement about the effectiveness of fiscal policy and stability of fiscal policy. when all of that is condensed in the process and put into the language of politicians, it comes out as stimulus works. i am skeptical. host: a twitter fall or would like to a lightning round and whether use a good or bad to the following things. -- twitter follower. free trade > guest: good. >> trade unions? guest: good. guest: good. minimum wage?

guest: good. host: legal immigration? guest: i cannot speak in favor of illegal immigration. host: high or low taxes? guest: low. host: houston, brian you are on the air on our independent line. caller: i have a question for one of your guests. the first is for isabel. you cut medicaid and medicare when it's already $125 billion in debt. and for matthew, we already had a stimulus package which was almost $1 trillion. he spoke ofnfrastructure spending on that as well. now where did our money go? how much money is left of? of

thank you. we start with you. guest: a lot has focused on how mu bang you get for the buck. the estimates are all over the board. a number of studies found it is much lower than the administration thinks it is. another aspect of research is focused on what is the multiplier multiplying. there's a new study from stanford economist john taylor that looks like this -- looks at this. all the extra government spending in many ways did not lead to increased government purchases. it ended up financing and at the state level, it allowed state governments to cover their deficits. basically, what you see is people are not going out and consuming and spending, which according to knesian would lead to an increase in the

economy and employment. instead they're using it to pay down long-term debt. guest: i am not sure i understood your question. i heard you say how can we cut medicare and medicaid when we already have a large debt? host: that's when i heard. guest: i don't know why we should not over time be reining in health-care costs, which includes medicare and medicaid, precisely because we do have a large debt. the whole point is that they are contributing -- the growth of those two programs are contbuting a great deal to the accumulation of debt and deficits. therefore, we do need to get them under control for exactly that reason. host: now to the social security comments. she writes social security does not contribute to the currt deficit. gut: that is technically

correct. if you believe in this notion that there is money in a trust fund that can be used to pay future benefits. but keep in mind that that so- called money that is in the trust fund is not really money. it is not real assets. it is just paper iou's. there is kind of an accounting mechanism between the social third security trust funds and the rest of government. social security is receiving less money than it is paying out in benefits. iteeds to draw on other resources to pay those benefits. that is what concerns me. if we begin to do something about this now, we could give people lots of advance warning. it would not have to be very painful. if we wait until 2036 -- 2037,

rather. i think i have the date wrong. guest: i think it's 2038. guest: anyway, we will have an effectf falling off the cliff. ho: on twitter, they want clarification. would you explain the term "cash negative? guest: the amount of money that is collected in payroll taxes and these are the taxes that just about everyone ps, the employers and the employees, it is less than the amount that we send o in social security checks this year. host: now to annapolis, jim,., caller: nobody mentions the two

wars and tax breaks for the rich and pop up budgets in the military. only taking 5% from the military and talking about security. didn't we over-pay for that under ronald reagan to fix this problem? host: when the president proposed his five-year freeze in spending, did it include military? guest:no, it did not, but secretary gates and president obama have talked about making some hefty cuts in the military budget. so i think you are going to see some scaling back of military expenditures. obviously, the two wars are something th were started in the evious. previous they were not paid for.

for the first time in history we have put the fighting of two wars on the national credit card. that is not a good thing. i agree with the crux of your question which is whether we ought to scrub the defense budget/ it is not half of what we need, but it is a significant chunk of what we spend and should be looked at. quite a lot of republicans in congress right now do not want to cut defense at all. they want to fence that off and are not willing to talk about the big entitlement programs that we have been discussing. that leaves this very small sliver of the budget that is maybe 15% of all the money we spent, to take all of thcuts. and that creates a very

difficult and not sensible situation. host: this question on twitter deals with state budgets. guest: she is right about the pension programs. pension obligations, according to the states, are under-funded by 1.5 trillion or maybe one trillion. when you actually use of proper discount and account for its in a way that's more economically sound, they are underfunded by about $3 trillion. it's a big pension problem. one of the things we have seen thing is they have increasingly relied on skipping their pension payments in order to balance the books. in virginia this last year they skipped their pension payment as a way to balance the books. that undermines or exacerbates an already difficult problem.

host: there's a comment from sasha in new jersey. guest: if you make an unsustainable promise to someone, you are not doing them any favors the long run. i would much rather tell my baby daughter that you are not likely to see as big a social security check as i saw, so you should get ready for it now. that's a much more compassionate approach than to say it's going to be there and you don't need to save, you will be fine. host: let me ask about the fiscal woes of the state. there are discussions about whether it's possible to change alonso the states can declare bankruptcy. thus cutting some of their pension obligations and other iou's that they have. i want to ask about your concerns on state fiscal woes and their cascading effect on the economy, a larger u.s. economy. guest: it is a very rious

issue. states, almost all of them, are required to balance their budgets. their revenues plummet, which they he done as a result of the procession, and their deficits go up, so they have to take these hard steps that we have been talking about. the federal government has been unwilling to take them. they will have to lay people off and cut spending. that will exacerbate the economic problems we face. so right now the economy is growing at a modest pace. most of the forecasts are for growth rate of maybe 3%. but we have to grow at about 2.5% just to keep steady with the growth of the labor force. we have to grow a lot faster if we want to dip into this pool of unemployed people. the fact that states are cutting back on their spending and

laying people off is just going to makit much harder to get out of the hole that we are in economically. host: we are having a discussion about the economy with two economists from different perspectives. matthew mitchell is based at george mason university's mercatus center. isabel sawhill is at brookings institute. the next call is from connecticut. this is charles, a caller: republican good morning. this is perhaps not germane, but it is something that has aggravated me for ages. i would like to have the government refer not to a budget, because as i understand it, when most families figure a budget, at the top of the page they put down what their income is, then they list all things they will have to spend money on such as food and rent and mortgage and transportation and so forth. if thanumber comes out bigger than the number of the top of the page, they go back and cut down onther thing

the government does not seem to work that way. i would like to know if from now on, can we refer to it as the government's expense account? guest: i will start and say i like your idea in general and i think the government does need to learn to live within its means, which is really what you are talking about. we had a lot of problems back in 2008 leading up to where we are now because a lot of people were living beyond their means. we had access indebtedness in the household sector. people passing out their credit cards, people refinancing their mortgages. and then we had the credit bubble and it created a l of the problems that led to the current recessio

when the government does the same thing, think about it this way, there's not a coin to be anyone to bail out the government if it cannot pay its bills. so, this is one reason why many of us, including me, are very concerned about the fiscal situation that we face and why we hope the president will take leadersh and the congress will follow and there will be a bipartisan willingness to tackle this problem so that we can get our expenditures in line with revenues. whether you do that by cutting spending or raising taxes, the point is we shod live within our means. host: let me put two pieces of informational on the screen. this is from a conservative policy group in the house of representatives, their proposal to cut federal spending over 10 years includes freezing non dispens -- non-defense funding.

let's listen to the president by contrast the day after the state of the union when he traveled to wisconsin to talk about investing in infrastructure. >> we have to be more productive, more capable, more skilled than any workers on earth. it means making sure our infrastructure can meet the demands of the 21st century. rebuilding ourrumbling roads and bridges, connecting americans and american people with high-speed rail and internet. it means doing what we try to do in our own lives, like taking responsibility for our dicit,

by cutting wasteful an excessive spending wherever we find it. and it means reforming the way our government does business so that it is resnsive to the needs of americans. instead of being responsive to the needs of lobbyists. host: matthew mitchell, is the president, although acknowledging the need a voice all spending and reforming government, talks about investment. whereas the republicans suggested cutting. guest: this is emblematic of the proble on one hanyou see even the most aggressive republican proposal starts out with cutting spending in non-defense, non- homeland's security, non- veterans, then they go on to talk about spending. paul ryan is the exception, but most republicans have not come forward with a very realistic way to address long-term entitlement. that is the republican side.

on the democrat side, the president says many of the right things, we need to address the spending problem, spending is a significant issue, but then he makes his exceptions. for him the excepon is infrastrucre spending and investment in innovation and things like that. what serious spending reform involves is everybody being willing to take sacrifices. my favorite program is going to get cut, but that's ok. guest: i would pretty much endorse what matt just said. the problem is lack of specifics. everybody can talk the talk. weeed ople to walk the walk. furthermore, if we need them to walk together. we need a bipartisan agreement that we are going to do the tough things. right now politically nobody wants to go first. nobody wants to jump off the

ship into the cold water and pay the political price for having done so. and so,ach side is waiting for the other toove first. host: we had bipartisan deficit commission whose job was. to do was guest: i think they did their job extremely well and i am very impressed with the bipartisan commission report. they put lots of good ideas on the table. the president in his state of the union said that he commanded the group. he said he did not agree with all of it, but he thought it was a start. so that's good. the bad news is that so far he has not come forward with a very specific proposal. we will see what he does in his budget, which will be submitted in mid february. host: i read that one senator suggested that the report of the commission should be put to a legislative vote up or down.

guest: yes, that kind of proposal is exactly what would be very helpful. look at the 1986 tax reform, this was regarded as one of the better tax reforms. they eliminated a lot of tax exemptions, loopholes, deductions, credits if that were hidden spending. and they lowered rates. this is something that everybody's ox was gored. it was a shared sacrifice and it worked. guest: it is very important. i don't think most people realize that right now there's $1 trillion every year in backdoor spending through the tax code. if we want to get spending under control, we should not just look at programs. we should look at all the special benefits that flow through the tax system to corporations and individuals, which make the economy less competitive, more inefficient, actually benefits people at the

top of the income scale more than at the bottom. the president's commission focused heavily on the need to do tax reform as we did in 1986. that could be the higher priority in my view. we could also simplify the tax system, which the average household would like. host: we have a sweet -- tweet. guest: i am absolutely. guest: i cannot. host: paul on our independent line. caller: i have a two college degrees, one in engineering and another in business. i have been in manufacturing 30 years. i listened to mr. mitchell. he said manufacturing jobs are decreasing all over the world.

these people who talk about manufacturing jobs, they don't know what they are talking about. the first thing, there is no amount of training, there is no amount of equipment that we can buy and manufacture, the only difference is the labor cost. that's it. manufacturing jo have moved overseas to china and vietnam and other countries. there's nothing we can do about it. manufacturing is where the money is. that is where you gave the money. that's the main reason our economy is down. until they cut down on these trade policies, we will be a declining country. that is the bottom line. if you look at where the economy was 100 years ago and if

you talk with the typil american, they would say the backbone of this economy is farming. nearly everyone was a farmer. if you were not, you'll farmer -- you knew a farmer. then people will go into manufacturing. now you see this shift again from manufacturing into service industries and other types of industries that for the most part people are looking past other types of skills rather than using their backs. this is a sort of necessary fact of life. there's not much we can do about that. what i would say is the best thing we can do is to make sure the transition is least painful as possible. policies that attempt to cushion people from this change actually end up dng more harm than good.

for the last several decades we have seen subsidies and tariffs and quotas and all sorts of policies that favor the automobile industry in detroit. as they did that, what it did was its sheltered detroit from the rigors of competition. it added costs to detroit vehicles. in the andhat we found is that detroit cannot compete with that model, cannot compete with other countries. basically detroit was in a recession 10 years before the rest of us. i would argue a lot of that is due to the un-competitive special favors that were given to those industries. host: >> do you share that view? guest: to some extent. one of the reasons that cars d other manufacturers are not competitive is have a unique health care system in this country that is employer-based.

one of the reasons that labor costs are high in the u.s. and relative to some of our competitors is because private employers are expected to cover health-care costs whereas in other countries they are covered by the government. host: houston, republican line, dick. caller: thank you, susan. i heard about germany. determining and japan. the first thing hitler did was he issued money with no interest and started on a german highway. president obama tried to get our infrastructure worked out. had that money been spent, we would have something to show for it. we have something to show for its with gm. people used to work on farms and

people used to make their own shirts and shoes and clocks and stuff like that. you can do it again, america. take your money and invest and sell to your neighbors. the president has spent3 trillion up to a $5 trillion. what happens to the money that disappeared after 9/11, the $2 trillion and the $12 billion that disappeared in iraq and iran? guest: thanks for the call. one of the things i think you were saying that would very much agree with is that we cannot look to the government to do everything. as individuals we have a history of being qte self-sufficient. right now when times ar tough i think it is quite amazing how americans have really not been

complaining much and have been trying to help their neighbors and trying to make do with what they have. and i did the president acally talked about that a lot when he gave his speech in tucson and said that there had been a lot of individual heroes who have come to the rescue of a congresswoman who was shot, and in this time of economic difficulty 1 dingbat can help is if we are all part of this -- one thing that can help is if we all take part. if we improve our education system, that does not just mean the government doing stuff in the education world, it means, as the president says, parents turning off the tv, parents encouraging their children to do well in school.

it means state and local communities taking responsibility for this because education is overwlmingly a local responsibility in this country. so those are my thoughts. host: i want to go to the point that he made about infrastructure spending earlier. he said president obama was laughed off when he suggested that we spend on infrastructure. how much of the stimulus package was direed to infrastructure spending? guest: i don't know the figures. i would guess about one-third of it. i guess a third was slated for that. what i would say is that there may be a role for government to provide some infrastructure particularly for types of goods that are public goods, goods that it's difficult for the private sector to find a profitable way to provide. some models for that are changing. things are far more reasonable than they used to be. we should consider those options as well. if those kinds of decisions should be made based on the

merits of whether it makes sense to do -- to invest in these products. will the product create more value than it costs? i don't see infrastructure spending as a means to have your cake and eat it. we are going to build the rds and create jobs and save the economy. host: here's a file clerk listening to your discussion about coeducation and asking what we should be educated to do. and related to that, this caller makes a suggestion that there are many unemployed college graduates on the street and we don't need more. guest: i would disagree that we don't need more. this is a temporary situation. i hope i's a temporary situation that we have high unemployment. people coming out of college

right now are having a hard time finding jobs, that's true. but it is not the case that we are going to beble to compete long-term if we don't have a skilled and educated work force. host: our final phone call is from pennsylvania, vince, democrat. what's on your mind? caller: good morning. in the early 1970's most insurance or rather health insurance companies were not for profit. i believe it was nixon that they changed the laws that encouraged the big companies to go for profit. as long as they have to pay out dividends and are on the stock exchange and also the high ceo costs and how much money they take out of the system, all of th money is being taken out of the health care system, doesn't that raise the cost of health care?

if we made them all not for profs, would that not be a savings? thank you. host: some of the blue cross are operated as not-for-profit, en't today? guest: i don't know about the structure of the health industry. i am not a big fan of all the profits that the for-profit companies are having. i think that the new health care law is going to try to rein in how much money goes toward profits in overhead versus actual care of patients. but i am not sure that this is an area where we are going to reap a lot of savings. one thing that would help, there's a big controversy about this and i'm not sure how i feel

about itnd it's not consistent with our history and political culture here, but in europe they have much greater efficiency where they have a single payer systems. host: having shown the two differences in opinion, how will e next six mons play out? we're getting close to a presidential election. guest: it could play out the way it typically does which is politicians will kick the can down the road and we will see nobody wants to take a lead on this. the other way is it could work out a way that it has in other countries. in canada in the mid-1990s's they got serious about the gdp ratio, chronic government spending and high deficits. they cut $6 in spending for

every $1 of revenue raised and they solved their problem. if you are able to tackle deficitsith spending reductions as opposed to tax increases, it's much more likely to solve your problem. politicians that do that are more likely -- are just as likely to keep their jobs than the typical politician. so it would be good politics for the president. is it easier to get >> this is c-span, public affairs programming courtesy of america's cable companies. egyptian president hosni mubarak discusses the shake-up in his cabinet. former u.n. ambassador on the

obama administration of reform policy. we have a statement from egyptian president, hosni mubarak. he made his first appearance since the protest began. he has asked his cabinet to resign. this is about 10 minutes. >> i have been closely monitoring of the demonstrations and the cries by the people. my instructions to the government is to provide an opportunity for the masses to present their views and demands. this follows the attempt by some [unintelligible]

i regret the asset victims -- the asset victims -- innocent victims. the way the police added demonstrators was clear. they respect the right of peaceful demonstration. these demonstrations turned into an act of riots threatening the public order and threatening the daily lives of the egyptians citizens. these demonstrations and what we witnessed earlier of riots stays

in the two years would perhaps have not taken place without the huge separation of freedoms. [unintelligible] is it is embracing reforms -- egypt is embracing its reforms. by virtue of all the powers conferred to me by the constitution, i always stress that [unintelligible] will be for the people. i will fight for the freedom of exhibition as long as it is

according to wall and the constitution. there is a fine line separating freedom from chaos. citizens at the freedom to protect their views. i adhere to defending egypt's ability and security. i will not stand for any threat that may jeopardize public safety or public corder -- public order. egypt is the biggest country in the region in terms of the population, geographical location -- it is a state of institutions governed by the constitution and rule of law. we should be cautious.

there are many examples around us that drove people to chaos and mayhem. they gain a democrat -- democracy or stability. these demonstrations came to suppress the local aspirations for more democracy and speed actions to combat unemployment, raising the standard of living, and fighting property, as well as addressing corruption. i am fully aware of the aspirations of the egyptian people. i am also aware of the degree of suffering. we are working day after day. however, the problems facing us

cannot be achieved through violence nor chaos. they can only be achieved by national dialogue and conscious, concerted, a genuine effort. egypt looks backward -- looks at them to live up and steer away from those who invite chaos and looting private property. i have a firm belief and conviction that we will continue our political, economical, and social reforms for a free and democratic egyptian society, embracing the modern principles of the world.

i have taken the side and will always take the side of the poor people of egypt, convinced that the economy is too dangerous to be left to economists alone. i have always been keen on directing the government's policies to work, to be expedited, and speeded up to help the suffering people. our plan to combat unemployment and provide more educational services, health care, housing, and many other services to the youth and citizens will remain conditional on our efforts to andtain egypt's security stability.

we will go about the actions of luting which may indicate further problems to shake the foundation of egypt. i call on our youth and call on each and every egyptian citizen, man and woman, to work for the people and to stand up for their country, not by setting ablaze or destroying public or private property. not by just can we achieve the aspirations of egypt and its people. these aspirations can be achieved for a better future by way of awareness, dialect, and general interest in the public good. my fellow citizens, i address you today not only as the

president of the republic, but also as an egyptian citizen. my faith puts me under the responsibility of this country in times of war and peace. we have weathered hard times and surmounted these problems when we stood up for them as one people and one nation. we are well aware of our direction and our calls. the cause to reform what we have embraced. we will continue steadily by emphasizing our respect for the rule of law and to work more democratically and give more

freedoms to citizens. we will reduce unemployment, raise the standard of living, develop services. we will stand by the people of low incomes. our goals will define the shape of our future. we have no other alternative to achieve them but to embrace genuine work, consciousness, and struggle. we will continue to maintain what we have earned and embark on this, cautious of the future of the nation. the incidents that took place today and the past few days have left the majority of the egyptian people feeling for the

future, cautious of further mayhem, chaos, and destruction. i shouldered my first responsibility to homeland concerts -- security and system safety. we cannot allow this year to get our people. i will not allow this to hold our future and our faith hostage. i have asked the government to step down today. i will designate a new government as of tomorrow to shoulder new duties and to account for the priorities of the upcoming terror. i will not be blacks or

tolerant. i will take all the steps to maintain the safety of all citizens. i will safeguard the safety of egypt and the aspirations of our people. we have a responsibility to safeguard and maintain. may god save egypt, its people, and make peace be upon you all. >> following the egyptian president's speech, president obama also spoke saying president mubarak needs to follow through with reform. these remarks are about five minutes.

[unintelligible] good evening everybody. we had a moderate the situation in egypt. we will know more tomorrow when daybreaks. as the situation continues to unfold, our first concern is preventing injury and loss of life. i want to be very clear in calling upon the egyptian authorities to refrain from any violence against peaceful protesters. the people of egypt have rights that are universal. that includes the right to peaceful assembly and association, the right to free speech, and the ability to determine their own destiny. these are human rights and the united states will stand up for them everywhere. i also call on the egyptian government to avert the actions they have taken the interfere with access to the internet, cell phone service, and social networks that do so much to connect people in the 21st

century. at the same time, those protesting in the streets have a responsibility to express themselves peacefully. violence and destruction will not lead to the reforms they seek. going forward, this moment of volatility has to be turned into a moment of promise. the united states has a close partnership with egypt and we have cooperated on many issues including working together to advance a more peaceful region. but we have also been clear that there must be reformed -- political, social, and economic reforms that meet the aspirations of the egyptian people. in the absence of these reforms, grievances and built up over time. when president mubarak adjust the egyptian people tonight, he pledged a better democracy and greater economic opportunity. i just spoke to him after his speech.

i told him he has a responsibility to give meaning to those words, take concrete steps and actions that deliver on that promise. violence will not address the grievances of the egyptian people. suppressing ideas never succeeds in making them go away. what is needed right now or concrete steps that advance the rights of the egyptian people, a meaningful dialogue between the government and its citizens, and a path of political change that leads to a future of greater freedom and greater opportunity and justice for the egyptian people. ultimately the future of egypt will be determined by the egyptian people. i believe the egyptian people what the same thing that we all want -- a better life for ourselves and our children and a government that is fair, just, and responsive. put simply, the egyptian people what 8 future that befits the

heiress to a great an ancient civilization. the united states will always be a partner in pursuit of that future and we are committed to working with the egyptian government and the egyptian people to achieve it. a around the world, governments have an obligation to respond to their citizens. that is to appear in the united states, it is true in asia, it is true in europe, it is true in africa, and it is certainly true in the arab world where a new generation of citizens have the right to be heard. when i was in cairo shortly after the election, i said that all governments must maintain power through consent, not coercion. that is the single standard by which the people of egypt will achieve the future they deserve. surely there will be difficult days to come, but the united states will continue to stand up

for the rights of the egyptian people and work with their government in pursuit of the future that is more just, more free, and more hopeful. thank you very much. >> next, former un ambassador, john bolten, on president obama's form policy. then a defense department briefing on "don't ask, don't tell." >> this sunday will spend an hour talking to former president bush about his life and his new book. here's a portion of the interview. >> you do not mention scott mcclellan. >> user longest serving press secretary. >> he went out and wrote a book that was somewhat critical. the was not a part of major decisions. this is a book about decisions. this is not a book about personalities or gossip or

settling scores. i did not think he was relevant. >> see the entire interview sunday night at 8:08 -- 8:00 eastern and pacific on c-span's q and 8. >> a former ambassador to the united nations, john bolton, criticized the obama administration on dealing with iran and north korea. this was at a luncheon on capitol hill. his speech on national security challenge is sharply criticized ." that obama's policies on everything from the new start treaty with russia, chinese president whose intel's visit to washington, relations with north korea, and sanctions against iran. he consider it -- he is considering a run for the presidency in 2012. this is just over one hour.

i am the president of the defense forum foundation. the ambassador will be joining us shortly. thank you for being here. i know this is a tedious day to get to work this morning. i want to welcome you all, especially those of you come into our forum for the first time. i hope he will become regular participants. the defense forum foundation was started in the 1980's as a

bipartisan program where congressional staff could get together and hear from experts speakers on national-security issues and the promotion of democracy and human rights. i hope you guys that are new to the forum today will become regular participants. i want to acknowledge a few of our special guest. first of all, i am pleased that we have a member from the -- from career. we also have someone from the embassy of kuwait. we also at the ambassador of the western sahara. [applause] our special guest is here with us this morning. we also have ambassador frank ready.

jeb carney from our board of directors. also from our board of directors, cahhad gore. all like to welcome our staff. [applause] she was an intern last year, but she came to help us today. [applause] our speaker, john bolton, has expertise in united states foreign policy and national security policy. he served as a united states representative to the united nations. he also served for four years as the undersecretary of state for arms control and international

security. he has spent many years of his career in public service. previous positions he has held s secretary for organizational affairs at the department of state, assistant attorney general at the department of justice, an assistant -- assistant director at the center for development. he is known for his outspokenness on behalf of democracy and human rights. if you ask any north korean defector, chinese human rights activist, or someone from the western sahara, they would respond, "we love that american guy with the bushy mustache." [laughter] is a great honor to have the ambassador with us today. ambassador bolton. [applause]

>> thank you very much. i think the defense forum foundation for inviting me back to speak. i want to thank all of you for coming today. i hope while we are here at lunch, it does not snowing as hard as it will be. predictions, as you probably know by now -- predictions are notoriously unreliable. it is not -- it is going to be a lot more than they say. i want to take the beingunityhe here of halfway through the obama presidency, at least i hope we are -- to review what has happened internationally in the first two years in trying to assess what the prospects may be in the succeeding two years.

while the media and the president himself have tried to focus on domestic affairs, the rest of the world is not waiting for us to get our economic house in order. it is a challenge at a threat to american interests. most of our allies around the world are building day-by-day and the question of how we respond to them or whether we respond to them will be increasingly important as we go forward. let me see first if i can identify some of the characteristics of president obama and his administration and how he approaches for policy. i think that does have an impact on the substance of policy. then we will talk about a number of important areas where i think some of our most important challenges will come. at the end, i will be happy to

try and answer your questions on those subjects or anything else that i do not cover. i think the most significant aspect of the president's approach to foreign and national security policy is that he basically does not care about it. i think this marks him as a different from a long line of american presidents since franklin roosevelt to beginning on december 7, 1941, all of them got up every morning worrying about threats to national security policy. it motivated them. it was at the top of their agenda. i just do not think that the priority -- i do not think it is a priority that president obama has. it is not he does not deal with foreign domestic policy, he does. but he only does it when he has to end it cannot be avoided.

you get the sense it was an interference, a new sense in the way of his domestic agenda. related to the first point is that i do not think that he sees the rest of the world as terribly challenging or threatening to american national interest. i think he demonstrated this during the 2008 campaign and many of his actions since taking office. he has desperately tried to avoid the phrase "global war on terrorism" perhaps thinking if you done and not speak about it, there was not a war on terrorism. he said during the campaign that iran was a tiny country and that if it had nuclear weapons it would be a tiny threat. it is certainly true that we do not face the civilization-

ending prospect or the exchange of nuclear salvos with the likes of the soviet union what we did during the cold war, but even a small nuclear weapon can pose a challenge. you can see why even though the threat is asymmetrical, it gives the holder of the nuclear weapon enormous leverage of the united states. even a tiny country with a small number of nuclear weapons can obliterate other tiny countries nearby. ask the israelis. it does not take 1000 nuclear weapons to turn israel into an ash heap and create a second nuclear holocaust. what is tiny to us is not a tiny to other countries. the whole idea that iran is small and insignificant and does not worry us under the current regime gives way to the

president's real view that threats and challenges to america had been exaggerated. typically if you combine two attitudes like that in american history, you would end up with a policy of isolationism. that, of course, is not the direction the president is taking. the is a very strong believer in multi liberalism -- multi- lateralism. alliances, international organizations are a part of any american president's tool kit, but the difference is in this case, the tool kit becomes more important in the leadership. i think that is why when you put all this together that is s to

understand president obama as our first post-american president. that is a very carefully chosen phrase. i did not say on american. i did not say anti-american. i said post-american. in the same sense as many european residents do not consider themselves as merely french or merely german. now they are european. they are part of something larger. i think the president sees himself as something larger as well. this conglomeration of attitudes is not the first time that a leader of the democratic party has had these views. it is obviously the first time that a leader with those views as become president. it reminds me very much of what george h. w. bush said that in 1988 when he accepted the

republican nomination for president and talk about his opponent, governor michael dukakis. bush said back then, "he sees america as another pleasant country on the united nation's roll call somewhere between albanians and zimbabwe." i think what bush said about dukakis you can say about obama. we are nothing particularly special. that is really what motivates him. those of you who watched the state of the union earlier this week will say, "that analysis is obviously false. but what the president said about america. he gave a very patriotic speech." indeed he did, marking the onset of the 2012 presidential campaign. i think the fact that so many people comment on those aspects of the speech reflects the

awareness that it does represent a substantial departure at least at the rhetorical level from the way the president has performed before. i do not think it is a departure that goes beyond rhetorical. we will see in the next two years. based on the evidence today, i think these foundations of the president's attitude towards foreign policy are going to continue. i think that other leaders around the world have come basically to the same assessment. i think they understand the president takes a very different view of america's place in the world than most of his predecessors. they have calibrated their policies accordingly. they see weakness and unassertive denneness. they are going to try to take advantage of it. i think the scope and pace in

the next two years are likely to pick up over what they were in the first two. people around the world have been adjusting their policies to take the administration's view of the world into account. let me give a few examples, i think, of how the president has played these policies alps. let's start with china. having hosted president hu jintao for a summit meeting, i thought it was a remarkable meeting. it was probably the most substance-free summit we have seen in a long time. i think that is a reflection of the lack of brand-strategy that we see in this administration. i think their basic motivator is one shared by many american business leaders and academics and others. that is the idea that china is

engaged in a peaceful rise and that it will become a responsible stakeholder in international affairs. that is certainly one possibility. that is a very desirable possibility. it may turn out to be true, but there are other scenarios as well of a much more disruptive china, much more troublesome, much more challenging to the united states. i think the peaceful rise and responsible stakeholders scenario is based on a straight- line projection of chinese policies since about 1990 -- economic growth accompanied by a larger presence in the world. i do not think that is necessarily the way you project policy into the future for a country as enormous and with the history that china has. it takes a slightly longer.

to plan far. let's look at the last hundred years of china where you had the first establishment of the republic of china, the breakup of china into warring warlords, the war against the japanese, the civil war between the chinese nationalists and the chinese communists, the defeat of japan in 1945, the second establishment of the republic of china, the second fall of the republic of china, the establishment of the people's republic of china, then in the 1950's, the great leap forward of the most tragic economic policy in the history of the world -- more people were killed during the great leap for than any other in history. the great cultural revolution destroyed the untold wealth of chinese culture and history.

that was followed by the political repression in tian an men square and there was followed by economic growth. you leap -- you can predict a century coming of uncertainty. when you look at some of what is happening in china today, the inevitable demographic effects of the one-child per family policy, the questions business leaders have raised about the authenticity of chinese economic growth, the disparities in income that have arisen, the political shape of the chinese government -- you still have to have a lot of questions about what is the most likely scenario for china going forward. we can see unequivocal of evidence that the people's liberation army remains the

strongest and most cohesive force within the chinese communist party, which remains the dominant force in political china. the government has dramatically increased spending to increase its nuclear weapons and delivery capability, enhancing their submarine fleet. they are moving towards a real blue water navy. they are increasing their investments in the area of anti-access weapons like cruise missiles. there anti-satellite warfare experimentation. their success at developing a cyber-warfare capabilities. all of these are accompanied by a creasing political assertiveness as demonstrated by extraordinary claims to sovereignty in the east and south china seas and their disputes over american military

access to the yellow sea in connection with the recent problems with north korea. all of this presents an enormously complex series of challenges to any american administration, but i think our administration has responded basically by turning away and worried about -- worrying about chinese currency policy. i would worry about our own currency policy more. the deficit according to the congressional budget office will be a mere $1.50 trillion. is toesident's response say he is very concerned about it and deal with the deficit mostly with free-standing at current levels except for a few levels where we will decrease levels. all of the staffers in georgia

starting your careers, i want to thank you for taking on this debt you and your children will pay for the rest of your lives and consider the economic consequences for the country. that is going to undermine our strategic projection capabilities beginning almost immediately. here we have a situation. it is difficult for the united states to affect what is going on in china. to pretend these challenges do not exist at all work to ignore them and not deal with them i think is extremely troubling. what i just said about china i can say as well about the resurging russia, whose prime minister, formerly president, once said a few years ago that the greatest geopolitical

tragedy of the 20th century was the breakup of the soviet union. i think most of us think the breakup of the soviet union was a pretty good way to end the 20th century. that is obviously not prime minister pierre 10utin's view. ask people in the republic of georgia what it is like to be the recipient of that policy. what is their response? we want a reset button. during the bush administration, our dealings with russia deteriorated. they deteriorated because of russian threats to cut off gas to central europe, the drive to reassert russia's role in the former soviet union, russia flying political air cover for

iran and north korea's nuclear weapons, and the demonstration's response is to sign the new start treaty as part of the reset policy. what have we gotten from russia for this reset policy? we got the new start treaty. it is a completely circular form of logic as the russians behave in a belligerent fashion. our response is to limit our nuclear weapons capability in a way that constrains us. this -- it does not equally constrained of russia. russia has its legitimate defense needs as do we. russia has one ally in the world -- belarus. congratulations. we have a nuclear umbrella that protect our friends in europe and asia. it is the cornerstone of

strategic stability internationally. that nuclear umbrella is developing holes in it. once other countries see that our nuclear capabilities or deteriorated, they will naturally ask themselves the question, "should we be looking out for ourselves?" this does not achieve the president's objective of moving towards a nuclear-0 world, it increases the incentive for our own friends to find ways to protect themselves against external threats. there, i think, the administration has really perform in a way that has allowed challenges in the proliferation area, especially in the nuclear field, simply to grow. the administration's rhetoric, certainly the president's idea of nuclear-zero must be based on

a road states like newark -- north korea and iran giving up their nuclear programs of which there is absolutely no evidence. the indeed, all the evidence is to the contrary. the president started out his administration by announcing that he wanted to negotiate with north korea and iran. he said, "we will extend our open and if only they will unclench their fist." that is a policy of complete by entity -- naiveity in my view. north korea detonated a second nuclear device and received in response only a modest increase in sanctions and a renewed u.s. activity to reactivate the failed six-party talks. just recently, north korea

revealed a uranium enrichment capability that many, even in the bush administration, denied they were pursuing, while at the same time building a new nuclear reactor to replace one that they had before which was held together by chewing gum and baling wire, demonstrating that this desperately impoverished country, subject to more economic sanctions than any other country in the world, somehow finds resources to expand its nuclear capabilities. i do not think that uranium enrichment facility that they rebuild is the only one north korea has. they would not build it where we never the target's coordinates unless they had one or more backups in the mountains of north korea where we have no idea what is going on

underground. north korea is making progress even as it faces the challenge of regime transition in the world's only communist dictatorship. our response is limited to getting the six-party talks going again. that is a failure of imagination that has to impress others around the world also thinking of developing their own nuclear weapons capability. it appalls the leadership in countries like japan, which visibly feel the threat from north korea and worry that the united states is not going to respond in ways that are appropriate to provide for the defense of its allies like south korea and japan in the region. i think, actually, the failure gets even worse when it comes to

the case of iran. it not only -- not only as the administration "spent wandering the world looking for someone to shake hands with, it has failed to do even the minimum steps to support the iranian opposition. i want to be fair here, it is not much worse than the record of the bush administration in the second half which did not do much to support the opposition either. many people say, "you do not want to provide any material assistance to opposition groups in iran because that will allow the mullahs have to say they are tools of the americas and it will make the opposition less effective." i have two responses to that. first of all, the mullahs are

going to say that any way. it does not matter what we do or do not do it, we are going to get the blame for it anyway. if we are going to get blamed, why not achieve something? number two, i recognize the prospect of paying is not the radical. why not let the opposition groups decide. they figured that they are capable of handling the question whether or not being in balled up in the united states makes it harder for them to carry out there were domestically in iran. obviously the real question, the real threat that iran poses is internationally. they have a nearly successful quest in having a nuclear

weapons capability. second, the terrorist threat they pose around the middle east and around the world. they are equal opportunity terrorists. you do not have to be a shield like hezbollah to get their support. there are terrorist of all kinds of strikes in iraq the get their support. they also support their sworn enemies, the taliban, in afghanistan. this is a threat that i think we have understated for the last two years at our peril as we have understated the threat of the iranian nuclear weapons program. recently you can hear the administration saying that economic sanctions have slowed the iranian nuclear program. i would have to say this is one of the most fanciful claims that i can remember in a long time.

there is no evidence that that has happened. in fact, the administration itself has shifted the rationale for the sanction's policy over the deed of the zero years away from the idea that sanctions would stop the nuclear weapons program to the rationale that sanctions would bring iran to the negotiating table. that is not a subtle shift. that is a pretty genetic change. hal has that shift played out in practice? we just all this past weekend germany's most recent negotiation session with iran that turned into a gigantic thud. if sanctions are not stopping the nuclear program and the fact of bringing iran to the nuclear table is just for them to tell us to take a hike, it shows us

what sanctions are accommodate -- are accomplishing. very little. i favor anything that puts pressure on the regime, but i do not think we should have any illusions that they will have a real impact on the solution itself. i have a lot of respect for mossad as an intelligence agency. i also think mossad is an incredible propaganda agency. if your opponents think you are 10-feet tall and you are telling the world -- you could only imagine what we really did, then you might as well be 10-feet tall. this virus affected the iranian in richmond activities and the iranian program. i think they will be much more effective in how they take in

the enrichment program forward, but there is no claim it had any affect on any of iran's activities. we know their programs have been conducted for 15 years in close- connection with north korea. we know a lot less about a connection of the nuclear front, but we do know, courtesy of the israeli air force, that north korea was building a nuclear reactor in syria until israel destroyed it in 2007. i do not think they were constructing that reactor, which was a call of what they had in north korea -- which was a clone of what they had in north korea. i think we will find out it was a three-way joint venture paid for by the iranians. if they were doing that in syria, what else are they doing in syria and what are they doing

in other countries where we are not looking? this nuclear program is a -- remains a growing threat. i can't the iranians are much closer to a nuclear weapon -- i think the iranians are much closer to a nuclear weapon. part of the test is to break the scope of iran's nuclear infrastructure. that is proceeding right along with construction of the heavy- water reactor in iraq. all this is continuing while we are still waiting for negotiations to begin, let alone to succeed. i think iran's terrorist threat is now even more obvious as well. the threat this week, of course, was filled with reports about the overthrow of the government

in tunisia, the challenges to the governments in egypt and yemen, but let us not forget that at the same time, iran is doing its best, and with considerable success, to subvert pro-democracy progress in other countries. in iraq, i am very concerned if by the end of this year american forces are withdrawn, that we will see iranian influence growing at the government or success for basically repressing the opposition in iraq and in doing a lot of the good that has been done there. even more dramatically right now, the hezbollah terrorist organization has succeeded in imposing a new government in 119 depending on the hezbollah bloc

in parliament. i think that puts at risk the progress of the viability of the resolution. whether or not hezbollah has all three major offices in less than nine -- lebanon, they are still subservient to iran. the rest to other countries is that extremist of a different stripe could take advantage of the instability in those countries to get rid of regimes that may not look like jeffersonian democracy is to us, but which in retrospect look a lot better than the muslim brotherhood in control in egypt or al qaeda in control again yemen. it's still mystifies me that we

have not been able to conduct a referendum in the western sahara after all these years of effort to allow in a true democratic fashion the real residence to express their views of what they want for the future of their country. it is a great tragedy and i hope not a lost opportunity in the region to show what legitimate democratic institutions can do. as you can tell, i am it wildly optimistic about the next two years. [laughter] i do think it is an issue that deserves more attention in our national political debate. obviously like everybody else, i understand that in 2008 we had an economic crisis. the economy was in grave peril and americans, understandably, worried first and foremost about their own livelihoods and their families and so on. i think all the evidence we can

see, not because of the administration policy -- administration's policies, the economy is about to reassert itself. i think we will see real economic recovery this year or next. i am optimistic about that. as i said at the outset, foreign adversaries are not waiting to see how that turns out. they are not really all that interested in whether we restructure our domestic health care system or not, although i do like to say that ahmadinejad and kim jong il were undoubtedly for the public auction. -- option. [laughter] this question of our national security is something a president should be able to handle along with domestic affairs. he should be able to walk and chew gum at the same time.

all of us as citizens have an obligation as well to insist on it, to say to our leaders that we want to know more about how you plan to address the challenges we are going to address in the rest of the world. no matter how strong our economy is here, if we are not facing the challenges adequately, the long-term future of the united states remains in jeopardy. i do not think that has happened enough in the past two years. it is important for congress and others to raise it on the list of priorities going forward. i hope all of you here today will help out in that effort. thank you very much. [applause] as i said, i will be delighted to answer questions about whatever i have covered were this year's array of subjects i did not cover in the interest of time.

perhaps you could just identify yourselves for the benefit of others in the room. >> [unintelligible] what is your opinion of the way the administration is handling the situation in egypt? >> there is a lot we do not know about what is happening in egypt. i think the regime is facing a real threat. i do not think this is a passing fancy. it may have originated with the social networks reporting the events in tunisia, but obviously there is a deep-seated dissatisfaction with the regime. i think the risk, however, is very grave that the baby gets blown out with the bath water here. i think egypt is a very different situation. this is not just about mubarak

or mubarak's sign, it is about the military government that has ruled egypt since king faruk ruled in the 17th century. there could be enormous turmoil in the streets and a potential danger there for instability in the country as a whole. that is why i think the development to date that the muslim brotherhood told its supporters into the street really shows why this is a problem that may not have very good solutions. like everything else in politics, it is about choices. if the choice was between the mubarak regime of the one hand and a functioning civil society and democracy on the other, that would be one choice. that is not the choice we have at the moment. the unlikely choice, unfortunately, maybe the regime versus the muslim brotherhood. the consequences of that would

be extraordinarily dangerous for america, israel, and other interest in the area as a whole. in terms of how the administration has handled it, i think the reaction has been confused. in fairness, i will say that nobody saw this coming including some of the leaders of the opposition to work outside of egypt when the demonstrations began. i think it may not be unjustifiable, but it is understandable that the initial reaction has been somewhat confused. my recommendation would be to be pretty low-keyed publicly at this point. there's too much we do not know. there is too much risk of statements that could make things worse rather than clarified them. i want to know more about what the truth is in egypt, but i take it would be a real mistake to underestimate the seriousness of this threat and the risk to

american interests of this not turning out. that has to be the touchstone of our policy, to protect our interests and those of our friends and allies. >> where do you see the job as regime going -- chavez regime going? >> i am very worried about it. we have all treated him like a clown. he behaves like a clown, so it is entirely understandable. i once heard president bush called him castro without brains, which is a pretty good description. i do not think you should allow his behavior to diminish the threat that he poses. i think he poses no threat to fragile democratic societies in the western hemisphere. -- poses a threat to fragile

democratic societies in the western hemisphere's. he has intervened in ecuador. he provides arms assistance to the guerrillas in colombia. his efforts to take on argentinian debt i think pose a problem to that country. argentinian debt i think pose a problem to that country. i do not know to what extent he is involved ithe mexican drug cartels, but i would not be surprised if he is doing it just because more trouble for us. he is, in a very material sense, a different kind of threat than castro was, even during the height of the cold war because the soviet union always held castro on a pretty short list economically. he was able to do what they wanted him to do. given the pce of oil where it is, hugo chavez does not have

any extern all ster, and he has income, unfortunately. if that is not bad enough, we can see that in the past several years he has reached out to comment in a shot and the iranians, contract to the -- of medina shot -- and the iranians, contract with the russians for nuclear reactors, allowed iran to send the -- setup the largest embassy in the world, i believe, according to reports were there are working hard to circuent sanctions that have been imposed on venezua. ifis people believe that then as williams uranium reserves are second only toanada in the world, cooperation between venezuela, russia, and iran could be very troubling in terms of nuclear issues in this

hemisphere. the regime is a real threat. it appears to be entrenching itself inside of venezuela. i am afraid that our reaction, at least as demonstrated by dealing with what happened in honduras, is to try to appease him, in hopes that he would tone down his picy. there is no evidence that that happened. i think the democratic regimes in latin america would prefer a little more american leadership on the question, although i do not think they will put it in those terms. i do not think they will get it. i think we have another administration in a long series that says we will come into office pay more attention to the western hemisphere, and then does not do it. >> a m from radio free asia. -- i am from radio free asia. [unintelligible]

what you think is the best way to handle north korea, and what do we need or what do we have to do? >> let me point out that it was chris hill who said that. i have been sing that for eighyears. i believe in the power of redempti. i believe -- chris can apologize to me and everyone else that he ignored. welcome to the right side of the bait, finay. the north koreans will not be talked out of their nuclear weapons program. that is as clear as it could be. i think the united states has to focus on the only ultimate solution to the north korean nuclear weapons problem, and that is the peaceful reunification of the peninsula. as long as the regime exists, the nuclear weapons threat will remain, and no one should have any illusions that we can appeal

to the north koreans somehow to loosen up their policy for the good of their people. the north korean population now is on an individual basis for -- four to 6 inches shorter than the population of soutkorea. that is what the policy of the north korean regime has done by creating a prison camp that is now inhabited by 23 million people. any regime capable of doing that to its own citizens isot going to be persuaded by the idea of improving the life of its citizens. so, the question obviously is how do you accomplish reunification? i think the answer is that it has to be focused and consistent pressure on china, to persuade china that its current policy needs to be north korea is

schizophrenic. china says we do not want to have north korea with nuclear weapons because we do not want to destabilize northeast asia. it will effect our economic growth. i take them at their word. i think that alysis is entirely correct. the chinese are not willing to do anything that might risk destabilizing the region, which they properly worry could be collapsed very easily, because they do not want reunification. they fear a reunified korea woulbring american troops to the river on the border with china. they did not like that movie in 1950, and they do not like it any better today. i think they have to be persuaded that they should get on the right side of history. the two koreas will be reunited. china would be a lot better off from its own perspective to support reunification, and the

expanded trade relations it will inevitably enjoy with a reunited korea. i think the chinese leadership is divided. i think the older generation still remembers those glorious days when the communist parties of china and north korea were as close as lips and teeth, as they used to say. good luck with that. i think the younger generation of chinese leaders, and by that i mean people in their 60's, take a different view of north korea. they see it as the baggage said it is. they see the-effected is having on stability in northeast asia -- the negative effect it is having on stability in northeast asia and china themselves. you do not move china on this issue easily quickly. it takes, i think, extended dialogue and pressure, and we're not doing that. that is the rection i would move in.

>> i hope to see ronyon 2012. having said that, i want to get your thoughts on turkey. also, get your tughts on the unrest currently going on in terms of coastal and albania. -- kosovo and albania. >> i think turkey is moving away from the west. i think that a great tragedy. i think we have seen this movement for some years. our inability to win turkish approval to bring in nfantry division across turkey, our nato ally, to deal with saddam hussein in 2003, was an early warning of that. if i do not think it is irreversible. i think turkish democracy remains strong. i think it can be changed. the signs are certainly very worried at this point. i am worried about kohl so low

and what it might mean -- coast of low and what it might mean. i think that the breakup of yugoslavia is still not finished evolving, and the prospects for real turmoil there remains. again, it is just one of those foreign policy issues that it is far -- hard to find out who in the administration is focused on that. like so many other issues, it seems to get lost in the shuffle. i think that is unfortunate, and potentially dangerous in southeast asia, as would be a turkey that went over the edge into a harshly, up politicized- muslim kind of authoritarian governme. i think that would have major impact on europe and the united states as well. maybe we will do one or two more questions. >> with the increase in the

chinese defense expenditures doubling over the last year, granted much less than what we have in our own budget, it will probably continue to increase. do you see in the future, the chinese military looking to maintain a defensive posture, or will they start looking at transoceanic navy's next to follow along with that, with your comments -- navy's? to follow along with that, transgressions by north korea will be met with air strikes. how'd you see china jumping in on that? >> let me try to take on first the general question about the chinese military expenditure levels, and military expenditure levels around the world. secretary gates is fond of saying thathe u.s. defense budget is larger than the next

13 or 22. the point is we have a big budget. that is right. we face a lot of threats. we are the only worldwide super- power. we have a lot of obligations other countries do not have. i do not think we really know what china's defense budget is. they publish a figure at might or might not be related to what the actual budget is. no. 3, this is not a question in many cases of what the outcome of military hostilities between the united states and china would be. nobody is asking for that. nobody should want that. we should be trying to prevent that, but as the chinese capabilities built up, they are at an absolute minimum dramatically increasing the risks and costs to the united states of behavior for our

allies. i am not entirely sure we understand what the full development of chinese capabilities is. secretary gates said when he was there that that was really surprising, said the ex intelligence official. and the same official that canceled the f-22 stealth fighter on the ground that we did not have to worry about competitive stealth technology at that level. wrong again. let me be clear. i understand we are in a period of great budgetary constraints, but i also understand we face threats and uncertainty about the direction those threats will take. that means the perfect -- the pressure on our defense expenditures is going to have to remain.

my final point is that it is not a measure for the united states that we are ahead of other countrieif it came to hostilities, which we do not want. i do notant the united states to be in a fair fight. i do not believe in fair fights. i nt to win overwhelmingly, because that reduces the cost in american lives and risks to our interest. the more overwhelming our capability is, the less likely you get into hostilities to begin with, because not only do you have an extraordinary deterrent effect, you have a dissuasive effect on countries who say we are not even going to go there. it is not worth the expenditure to challenge the united states. china is obviously well past that point. how would this play out? how would these additional air and naval capabilities work?

not in direct conflict with the united states, at least not for the foreseeable future. that is not what we are talking about. what we are talking about, i think, in the short term is taiwan. taiwan does -- china does not want to have our wa over taiwan. if they want it to fall into its lap and ey will do that by threatening hostilitiesnd seeing how the united states react. when they worked up the pressure on taiwan in the clinton administration, president clinton sent two carrier battle groups and i was the end of the problem. how many in this room think barack obama would send two carrier battle groups to the taiwan strait if taiwan were threatened? extly what i thought. i have posed that question to a wide variety of audiences. if i were living in taiwan, i

would be nervous. what china was to be able to do is to be able to project power out p.m. theamous first island chain, and make it very hard for the united states to come to the defense of taiwan' -- defense of taiwan. to the point, president obama would say i wouldather worry about health care than to what -- taiwan. then, the chinese would achieve their objective of getting taiwan back. that is the scenario they would like to see played out. one has to say that the risk and the cost of potentially protecting taiwan's, you could see in congress, at least i would worry you could see an increasing lobbying of people who wod say "let it go." when that attitude spreads, it does not stop that taiwan. in terms of north korea, the

government of south korea now takes, i think, a more realistic view than its two predecessors did. i think they understand better than we do that the real issue here in the short term is the regime transition in north korea. it is by no means -- this is not like england wre the eldest son -- when prince charles, when queen elisabeth, finally goes to her reward, there is no doubt prince charles will finally get to be tamed. since he was born eight days before i was, i know how o he is, and how long he has been waiting to be king. he will be and no one will overthrow him. if that is not true -- that is not true in south korea.

while there is a risk, there is also a tremendous opportunity. the regime in north korea is very fragile. it could come out easily. we should talk to china to avoid problems if that were to happen. there were real instability, we would go in to try to secure nuclea weapons, prevent massive refugee flows, and we do not want to stumble into something as a result of not having communated. i do not think there is much evidence at all that we are in serious discussion with the chinese on that point. i think this is further evidence of just a lack of attention to some of the issues and challenges that we face. >> a quick question on the program for broadcasting in to north korea, to try to get information passed the government to the pple.

do you think that has had any effect? >> i think it is very important to do that. i think what we learn from defectors in north korea is that information that comes out -- comes in from the outside is actually disseminated among the people very widely and very quickly. i do not want to paint an optimistic picture, but i am just saying the population is hungry for information had and would welcome the opportunity is it a rose to see this regime history. just keeping them informed, letting them know the rest of the world has not forgotten about them, and that we are serious about trying to do something about this regime is very worthwhile. i think it is an idea that has widespread support.

south korea, finally -- i was always amazed in many visits to south korea to see how indifferent students and professors were to these grotesque human rights violations taking place in the north. i think that is changing now. i think people have seen, because of the shelling of onpyeong isld, which is sad that it takes that to happen, but i think it is a change in the understanding of the threat posed by north korea, and i think we shoulall try to take advantage of that. ok. thank you again very much for coming. [applause] >> thank you for joining us. we d have d ferris to talk about the war on islam of fascism.

be sure you are on our e-mail list. you will automatically get notification of the next forum. be sure you are on it. thank you again f being here. [applause] [captions copyright national cable satellite corp. 2011] [captioning rformed by national captioning institute] >> next, he defense department update considering don't ask don't tell. then, tim geithner on the u.s. economy. then, differing views on how to improve the u.s. economy. >> on january 28, 1986, seven astronauts aboard the space shuttle challenger were killed when their spacecraft exploded during a launch from nasa's kennedy space center in florida. we will show you a ceremony at

kennedy space center visitor complex ordering the crew of the challenger in remembrance of the 25th anniversary of the space shuttle explosion. that is saturday night at 8:00 p.m. eastern on c-span. >> this sunday, we will spend an hour talking with former president bush about his life in his new book here is a portion of the interview. >> you are through with politics. >> yes. >> define that. >> i do not want to be a perpetual money raiser. i do not want to be on talk shows giving my opinion and second-guessing the current president. i think it is that for the country to have the former president criticize his successor. it is tough enough to be president as it is without a former president undermining the current president and i do not want to do that. i do not want to be on tv.

i tell people that one of the interesting sacrifices is that you lose your anonymity. i liked the idea of trying to regain anonymity to a certain extent. at least in this stage, it is something that makes me very comfortable and it is somewhat lower rating. >> see the entire interview sunday night at 8:00 p.m. eastern on c-span's "q&a." >> now, the defense department announces how it will and lament the don't ask don't tell military policy. the new law reverses a 1993 ban on allowing gays and lesbians from serving openly in the military.

they took questions on the anti- government protests in egypt. this is about 45 minutes. >> okay, thanks, dave. well, good afternoon. i'd like just to give a very brief statement. a few weeks ago -- and, in fact, as recent as yesterday or last night -- secretary gates said that he wanted to implement a process that would be a three- step process that primarily would have three steps, the first step being implementing or changing policies, the second step being training changes, and then of course would be the training of the actual force. as we do that, we're doing it expeditiously. we're doing it quickly in terms of the first part to that. and you have already been given -- should have been given at least two documents. one is terms of reference, which actually lay out the process that we're going through. and the second document actually gets into specifics dealing with the policy changes that have actually been made or are being recommended.

we're still working through policies, if we give this to the services, but that's where we are right now. but the first step here now, dealing with the actual -- laying out the process, what we're going to be doing, has already been laid out. what you're going to see as we move forward, that we have actually three tiers as we get to the training part. we expect to start very quickly. these three tiers, starting out with our experts, that's the first tier; the second tier deals with our commanders or our leaders; and the third tier is, of course, the force as we move forward. we expect to see essentially not a lot of changes in the policy, but there definitely needs to be policy clarification. we are fundamentally focused right now on our leadership, professionalism, discipline and respect. and i have to underscore that every person who serves and who wears a uniform -- and to include our civilians who are

working within the department of defense -- they take an oath. and that oath breaks into that foundation of leadership, professionalism, discipline and respect. that's my statement for right now. and we're open to your questions. >> lita. >> general, two questions, one on the -- on the timing aspect. you all have been dealing with the services for weeks on this. there's obviously no end date set in any of the materials here, but there's been a lot of discussion with the services. so has there -- is there a better understanding then, quickly and expeditiously, given to them for timing purposes, or do you expect it'll take the whole year? and second, i'll apologize for this, but the timing today i don't think we can ignore. egypt, if you could just address the situation in egypt and what the senior military leaders are saying, because you're in ongoing discussions with some of their leaders today, and obviously the situation there is pretty dire. if you could just fill us in a little bit on what's going on. >> okay. back to "don't ask, don't tell" first, and then we'll work to the egypt problem.

you know, we have with the service chiefs and the secretary gone through many sessions really to try to understand the scope of the problem. and as dr. stanley said, we have three tiers. those tiers don't have to be sequential; they can go on together. but we also know that when you're dealing with two and a half million people and a new policy that we're probably going to have some discovery as we go. and so the service chiefs, the one key activity that is probably common to all of the meetings has been the feeling that moving along expeditiously is better than dragging it out. we've learned that from other services, other nations that have moved down this path.

and i think all of the service chiefs believe that is the case. but they also believe that they're going to do some discovery. and so we have a feedback mechanism every two weeks that we come back, sit down together -- what have you learned? what's new? what's different? what have you discovered as you've gone through each of the tiers to try to make sure that we can react and then move forward? i think we leave the year there because it's a good goal. there's nothing that tells us that it's not reachable, but we have to allow for the fact that we may discover something between now and then. the other piece that's important to understand is -- at least from my perspective -- is that certification by the secretary and the chairman does not require a hundred percent of the people to be trained, okay. we're going to try to get to a high percentage of the units as quickly as we can. and that will be our focus

initially, because that's the way we manage deployments. but it doesn't require a hundred percent of the people. and we're going to have some challenges with people like guard and reserve that are not on active duty right now -- finding them, getting to them, et cetera. so that's going to have an impact. so because we say we certify it doesn't necessarily mean we've got a hundred percent, but i would expect that when we get to the certification point that we'll have a good understanding by that time of what it takes and how long it takes so that any of the people that have not been trained at that point, we'll have a good idea how long it's going to take. but that's probably going to be more, the person went to the hospital, the person, you know, is in a place that's hard to get to. on egypt, i think the key activities -- we are talking. we're a military, so we plan, and we go through all sorts of contingencies. but the key activity here, i think, that's really important is to exercise restraint and to do so both on our part but also on the part of our counterparts in the egyptian military. as far as having a position on this and talking about the

events, i think the state department has the lead, and that's where i'd turn. >> you both talked about three tiers. and we'll start very quickly, and the force will be the last of the three tiers. let's say you're a marine at lejeune or in helmand province. give me a ballpark time when you think that marine will start getting some sort of training or education. >> let me just -- i'll take the first stab at it, and then i know the general is going to say something. but each service, first of all -- and if you're using the marine corps, for example -- but each service is going to approach the training differently. in fact, i know the marine corps is looking at tier one, two and three sort of doing some of it almost at the same time. but each service does it by their own call on how they do that. i know that the general has some other comments on this. >> yeah, i mean, each of the services have ways that they implement new policy. and so what we did not try to do was tell them how to do their business, okay? so if i'm a marine and i'm already in helmand province, depending on what it is i do in helmand province will -- my unit, in particular -- will probably drive when i get the training.

ideally, what we want to do is get the training done before you deploy, but that's not always going to be the case. some people are already going to be deployed. while they're deployed, if there is an opportunity based on the type of unit and mission they have to conduct that training in-country, we'll do that. if it's not -- if it's not appropriate, then we'll catch them on the return deployment and catch them as soon as they return home. but most units, you know, will have windows of opportunity while deployed to be able to conduct this third tier, the force-level training. we can get some of it, and maybe save some for later if that's appropriate because there may be things out in the -- out in the field that you just really aren't going to pay attention to because it's not relevant at the time. and when you get home, you may get more. but we will -- >> but ballpark, when do you think it will start? a month? two months? three? any sense -- >> it will be -- as far as the training goes, the services, we're pretty certain they'll be ready during the month of february to start the training because of where we are right now in terms of training policy development. so we're okay there. but even with the helmand province -- [inaudible] >> yeah, i don't see anything that will drag us out to -- beyond february to get started -- [inaudible] >> one last thing, too.

the pentagon report talked about special attention should be given to the 3,000 chaplains, because there was a lot of opposition to this from the chaplains. any sense of how you move ahead on that? should there be some sort of special message to them, special training? >> i don't think there's anything any different here. i mean, having served, the chaplains continue to serve all who wear the uniform, and of course all who are working in -- within the department of defense. and with their own faith groups, they actually still follow their own faith lines. so there's no new policy guidelines coming out there. if -- you know, that's just where it is. >> but that's what the pentagon report said: special attention. >> okay.

elizabeth? we'll come around here please -- >> oh, you're calling? oh, sure, hi. >> yes, you. >> two questions, one on egypt, one on "don't ask, don't tell." on "don't ask, don't tell," the training of the deployed troops, the combat troops, it made it sound in the -- in the implementation plan, that booklet, that it was -- it could possibly be 20 minutes, delivered by the commander in the midst of some other information. i mean, would you disagree with that? it seemed like it looked very brief. >> i don't know that there's a time period. but what is key is that each of the services will tailor it to the way they present training. and, like we said, if it is --an in example here, in helmand province, there may be parts of it that are not particularly relevant to them in the field and -- >> right. >> -- they will get a part of it done, and then we'll bring them

home and finish it off. that's up to the service to work their way through and document. but it's really important to understand that we do take it seriously. it won't just be a kind of a "here, read this and move on." it'll be a training package for which we will document and they will be accountable for. >> so it won't just be delivered orally by a commander and it'll -- then be done with it. >> no, i'm sure an important part of it will be oral by the commander. but he'll have training aides -- depending on the service as to how they do that. >> okay. and on egypt, you -- was -- did any of the -- in the discussions in the last -- this week with the mil-to-mil exchange, did any -- do you know if any of the protests came up during those talks? and was there any guidance given by the u.s. military to the egyptian military? >> it would be hard to have ignored the fact that -- you know, that this was going on, and it wasn't ignored. we had -- i didn't participate in it, but there were certainly discussions about, you know, are you watching more in the hallway than as a structured activity. and no session was structured to address the issue, and so no guidance was given back and forth between the two services. >> but no guidance -- [inaudible] >> no guidance was given. in other words, we didn't say anything to them about how they should handle it, and they didn't tell us how they were going to handle it, because at the time that they were here, it really hadn't emerged -- this was probably -- they finished off yesterday. so, you know, there wasn't a lot -- this has gone very quickly. i mean, it's spiraled up very quickly. so --

>> so you said you're sure, then, saying that there was no discussion about handling protests? >> no, in other words that was not part of the structured discussions. like i said, they were aware of the news. we were aware of the news, more in the hallway in between sessions and whatnot, dialogue going back and forth. but nothing structured and no type of formal discussion on it. >> okay. david? >> general, i just wanted to clarify something you said earlier. did i understand you to say you believe that the full implementation, including the certification, could be done within a year, but you're reserving the right not -- i mean, to extend it beyond that if something unforeseen arises? is that -- is that what you're saying? >> i think if something unforeseen arises, it's important to understand that each of the service chiefs --- we'll do an assessment every two weeks. each of the service chiefs will have access to us and to the secretary to say, "we just discovered something that we didn't anticipate." it's going to necessitate a pause or

something like that. that will all be considered in the so-called calculus of when we go to the secretary and the chairman to certify. and if there's an outstanding issue that we just didn't anticipate, we certainly would reserve the right for that service chief, one, to have a voice in it, and, two, to potentially be determinative of delaying activity. >> but obviously the ultimate decision about whether it was determinative would rest with the secretary, the chairman and the president presumably. >> that's correct. that's correct. >> okay. nancy, then rachel. >> i had two questions, one on "don't ask, don't tell," and the other on egypt. on -- i'm egyptian so i get the mic. [laughter] on "don't ask, don't tell," i wanted to ask you, could you give us more specifics in terms of what the training will be through all those three tiers? that is, will someone have to sign something that say that they received some certain kind of training? can you -- can you spell it out a little bit more? >> yeah. even though we're going to focus on -- initially on the unit level for the force, each

individual will have to have some sort of certification. each of the services is handling that just a little bit differently because we track it a little bit differently. but at the individual level, we'll need to know that cartwright got that training at some point, and then is accountable if cartwright later violates some standard policy or whatever. did he get the training? we need to be able to know that at the individual level. >> and do you have a sense of -- in terms of how much time you think it'll take to train each individual person? is there a minimum amount of time that you see or a maximum amount of time, especially for the experts -- >> no, we left that to the services to determine so that they could use their standard protocols for training, and that we wouldn't drive them to some artificial schedule. >> and then on egypt, did the army chief of staff and his entourage leave yesterday? do you know that? and have you spoken to them since, given that they're being now called into the streets to help quell some of this violence? has there been any communication

between the pentagon and them? >> no, i haven't -- i did not have a chance to talk with general enan. but he is still here in the united states. i believe he intends to return today. >> rachel. >> sir, has there been any guidance given to the individual services about what the training should look like, understanding that would be -- you know, it shouldn't be -- it should be significant; it shouldn't be just a one-off, more than 20 minutes. but has there been any guidance issued as to what they should cover in the course of the training? >> well, the first -- as i mentioned earlier, the terms of reference that the secretary just gave me, that was the first piece. following that, i just signed a document which actually laid out the policy areas they're going to cover, everywhere from housing to how to do records of emergency data. i mean, it just literally lays out everything for them to look at and to modify their regulations. and from that, we're going to take some feedback from them. that will complete the second phase, once we get there. but we've actually put down -- been working with them all along. so none of this is a surprise to the services, because they've actually been working with us, their personnel experts, all of the key people. and also, they've been just

tied in with the comprehensive review working group the whole time. so it's not like a ramp-up from nowhere. they're pretty much in sync with what we're doing. >> not just at the expert level, but even at the troop level, each person will be given a brief about benefits, housing, all those things? >> that's right. that's right. >> and then secondly, just quickly, on the housing and benefits issue, when it comes to same-sex couples, can you just articulate what will change, what won't, and what do you do in states where gay marriage is legal? >> yeah. right now, no changes are expected in policy with respect to housing, those -- that kind of benefit. in fact, a lot of benefit changes aren't changing. we're also required by law to -- you know, to abide by the -- basically, the scripture of doma, you know, defense of marriage act. so regardless as to what's happening in different states, we haven't changed that. now, we still reserve the right, though, to still look at emerging things, as general cartwright said, because there could be some things we aren't anticipating. that's why this is not so locked in and concrete. we're saying right now: no

policy changes dealing with benefits. but there could be something we don't know about, and that's why that aperture kind of remains slightly open. the guidance that's going out right now addresses what i just shared with you. that's the information we're sharing with service members. but there could be something we don't know about, and that's why we're working with the services. >> yeah, and i think it's important to remember, i mean, the team has laid out the information, the content of the training. the services are just providing the structure in which it goes forward. but it's consistent across the services. >> just a second, gentlemen. vee's going to add something on training. >> i just wanted to point out -- and general cartwright said that already -- but what we've been doing for the last several weeks is working with representatives from all the military departments to develop the training guidance and modules and training plans, so to speak. and we expect to have those accomplished next week. and so it's been very helpful, because it's been a joint effort with the -- not only the military departments but the joint staff, to develop consistent training. >> so it's going to say -- fair to say that by next week all the training modules will be

completed for all the services? >> yes, that's correct. >> okay. in the middle. yes, sir. >> okay. i have two questions, one relating to nondiscrimination and one relating to reaccessions. in terms of nondiscrimination, i noticed in the guiding principles that it says that harassment or unlawful discrimination will not be tolerated. however, sexual orientation isn't a part of any of the laws dictating military service, because there is no legal nondiscrimination policy. but then in the equal opportunity it says all service members, regardless of sexual orientation, are entitled, and so on. just wondering how that interplays and what legal remedies service members will have regarding to any discrimination. and then secondly, as to reaccessions, just wondering what the situation will be. in recent days, there's been a question about recoupment sought for discharged military members. is there anything addressed in -- with regarding reaccession,

whether or not recoupment will still be required? and for those who don't rejoin the military, will that recoupment still be expected of them? >> okay, and i'll go with the second one first here, dealing with reaccessions and recoupment. there's no changes or expectations right now with that. i don't know exactly all of what you're getting at, but there is no expectation for change. as far as being equal opportunity, treated fairly, that's basic, standard military discipline. when we talk about leadership, professionalism, discipline and respect, there's no need to even change the laws there. with regard to anybody who wears the uniform or who doesn't wear the uniform, it's pretty laid out. so there's no specific class, category, anything you have to do with regard to treating and taking care of your people. that's so fundamentally basic. and that's part of the --

>> yeah, but they don't need -- i mean, is there -- what remedy will service members have? because there is no legal remedy, and in the -- >> i hear your question. and a commander -- uniform code of military justice, you have request mast, you have any range of things that fit with anybody. there's no special policy needed to address the things that we're talking about here with regard to taking care of people and treating them with dignity. that's so fundamentally basic. so the remedies you have are the remedies that already exist. there's no need to create new remedies for that. >> i'm not -- i think -- and we're both trying to make sure we're getting to where you're leaning. >> yeah. yeah. >> but if your complaint is one that is really not about a law infraction or something like that, then we have this -- what we call request mast. but it is the right of every individual to request to speak

to a superior officer in their chain of command. and so it doesn't have to be because you -- there was a law broken. so there's -- we make sure that an individual has a way to remedy, even if they're not sure that this was a law or a policy that was broken. >> okay. >> jennifer. >> i'm trying to understand more about the amount of time it will take to train and then the sequencing of the certification and then when this will finally be -- where people will be allowed to serve openly. would it be correct to say that it's expected that this will be certified by admiral mullen and secretary gates in march or april, and by the end of the summer we could expect service members to be openly serving? >> no, i think, jennifer, we're -- what we're thinking right now is that we will try to get through the units and make sure that we get the -- a large percentage, let's say, of the units. we won't worry about the individuals so much that we didn't pick up, that were the

one-offs and, you know, not to put them aside, but just to make sure we catch them. but the secretary and admiral mullen will certify to the president at the time that they feel that they understand they've got the bulk of the force and they understand -- they believe they understand all of the ramifications that are out there. after that, 60 days go by before that takes in -- takes effect. okay? so the law doesn't change until that -- the end of that 60 days, okay? so does that get at what you're looking for? >> but does -- would the -- so you're saying no decision has been taken as to when you expect certification? >> no, that will be a judgment. >> just one follow-up on egypt. is it true that embassy personnel and their families have been moved to a secure part of the embassy? and have any plans been implemented to evacuate dependents or those working for the embassy? >> i think it'd be best to go to the state department for that. >> julian. >> so when i've done an embed with a marine rifle company, i would estimate between 20 and

50 percent of the jokes that they do as they're going around are -- you know, you would say are gay jokes based on, you know, maybe mocking someone as being gay or just in general finding humor in that. are you going to try to get rid of that kind of humor? are you -- is the training trying to say that kind of humor is inappropriate? or at what level -- what are you trying to change in the sort of -- are you trying to change the culture at all of, you know, a rifle company? >> leadership, professionalism, discipline, respect are supposed to be there now and should be there even when repeal is affected. to say that you're on the ground and there are certain things that you may -- in fact, as a former commander, some of the things you just described i'd have problems with, without even this conversation. and so what i'm saying is that this is about leadership, and it's not about a specific thing or changing policies that apply to the -- this current discussion.

leadership, discipline, professionalism, respect. >> anne -- oh -- >> and if i -- well, i wanted -- with general cartwright, on your first egypt answer, when you were talking about restraint, you mentioned showing restraint. what -- did you -- i may have misunderstood that. what were you -- you were just restraining from answering -- commenting on the situation before we knew what was going on? or were you calling on people to behave with -- >> right, calling on people to exercise restraint in a volatile situation. >> who do you mean? including the egyptian military, right? >> including everybody's that's involved. >> yes, ma'am. >> hello.

i wanted to follow up on rachel's question about gay marriage. i'm curious about what the process for reviewing the benefits would be if, for example, somebody was sent on an overseas deployment who is legally married; would they be able to request to take their spouse with them? i mean, how does that process work in reality when you have a service member who is legally married in one of the states that recognize that? >> well, again -- well, first of all, the defense of marriage act, marriage recognizes heterosexual. so that's the first piece. and so from a -- from the legal standpoint, you've introduced a policy aspect that's -- gets into a hypothetical -- or hypothetical construct that i couldn't address. i'll leave that there for right now, but i may not have answered all of your question. >> i guess, in the state department, for example, there are regulation- and policy-level changes that can be made to sort

of ease those kinds of transitions. and i'm curious about if somebody was in that position in the military, what would be your approach there. >> well, let me just say that i don't want to get into the hypotheticals, okay, because that really does get to a dangerous, slippery slope. but commanders -- if you just take out your hypothetical and deal what a commander can deal with in dealing with a normal, just a person deploying, there are policies in place right now about who goes with whomever. so if you just take the whole issue of orientation out of it, there are policies that already exist. and we haven't changed the policies. there are benefit issues that may become gray areas that we'll look at later. we're not sure where we're going to be on that yet. so we're not saying everything's ironclad, but right now as we move forward toward implementation and ultimately repeal, we don't anticipate that change at this time. i hope that helps. okay. >> andrew. >> is it still accurate that no

service members have been approved for separation since october when those policies were changed? >> well, i -- >> -- when it was required that you, dr. stanley, and the general counsel would have to sign off on individual -- >> well, since the decision was made by the secretary that general counsel, myself and the service secretary would be, we essentially don't comment on cases or, you know, individual cases. so, i mean, i wouldn't even be allowed to talk about anything pending, gone through, whatever, since we've dealing with that particular confine. i hope that helps. >> so you can't say whether you've approved or not approved any -- >> oh, if it was approved and done, that's there. but i -- i'm not -- i can't talk to you about what's coming forward or whatever. >> i'm not asking -- i'm saying, is it still accurate that no service members have been separated under "don't ask, don't tell" since october? that is accurate for some six or eight weeks out?

i'm wondering -- >> i don't think that's accurate; not since october. >> but, i mean -- [inaudible] >> there was this -- >> well -- >> there was one case, but the approval was before this policy was changed. >> yeah. >> it was in november, but the approval was already signed off on before the procedures were changed. >> so no one's been approved? >> that's correct. >> yeah. >> hang on, david. go ahead, phil. >> on the question on the timing, just to be very clear about it, have you built in the 60-day lag time into your target for getting this accomplished by the end of this year; or is the situation that you could get to december 31st before the recommendation is made, which would push us into next year -- once that extra lag time before the actual ban goes away would take place? >> well, the conditions -- the conditions on the ground would dictate how fast we go. to even imply that we have a target to do it by this date would be a misnomer. and that's since we're going to move responsibly, quickly, but deliberately as we go through the process. as secretary gates says, we

believe we can do it within this year. based upon what we know right now, we believe we can do that. but there's no artificial target put down because that would create an artificiality that just wouldn't be real. >> but his belief and your ability is that you'll get to the certification point, the 60 days will take place and then whatever date that is, whenever it is, will be within 2011? >> we believe -- i believe, secretary gates believes, the service chiefs believe, that it can be done. but there could be unknowns. and at the same time, we're not going to put any artificialities, pressures on the services to do the training that has to be done in order to ensure that we have a responsible, deliberate process. >> luis. >> if i could go back to the certification process, the general said that you don't require a hundred percent training of the force. later you said the bulk of the force; then you said it was a judgment call.

and how do we reconcile? do you have a target date? i'm not -- i'm sorry, not target date but a target percentage for the active component and for the reserve component? and given the challenges posed by the reserve component, like, in tracking them down, is that -- is it going to be lower than what would be for the active component? >> all right. i mean, i -- as i said, i believe it's a subjective judgment based on what we have seen as we go through the training. if we get out to some percentage of the force and we're not seeing any anomalies, we think we've gotten -- they've taken on anything that would have come up in our reviews to adjust and we're moving now through the force, you know, my sense is -- and i can't say, because it is a subjective judgment -- that the chairman and the secretary will look at that and say: i think we've

gotten the bulk of the units completed. we still have more to do, but we understand exactly what they are, and we'll be able to get at them. and there are going to be individuals out there that are going to be harder than others; and that we're ready to certify because we're comfortable that we have -- we understand the challenges in front of us and we also have the history of what we've trained behind us. >> there's -- i just want to add, there -- my sense is-- really good working relationship with the services as we do this. they -- not only the service chiefs, but the senior enlisted. it's just -- you get good vibes about where we are in terms of cooperation, information coming forward and everything. but there is a subjective part to this, and that's where their commander, as the general was saying, makes that call, and then that dialogue goes between people within the chain of command. >> ok, david. >> just to follow up, maybe -- [inaudible]

-- follow up on a previous question. will it be against military regulations for -- to discriminate against service members based on their sexual orientation -- in other words, if somebody says: "i didn't get a promotion because my commander doesn't like the fact that i'm gay." can they -- can they -- is that a -- is that a sort of bit of evidence that they can cite in claiming discrimination; in other -- that they've been unfairly treated? will that be in military regulations? >> i think it's already in military regulations. >> is it? >> yeah, if you believe that you've been unfairly treated -- >> but based on sexual -- >> based upon anything -- anything. if you, in fact, based upon anything that you believe, and you can substantiate that -- what i'm saying now is that essentially, if you believe that you've been

discriminated against, there are ways to address that or redress that within the system. >> well, you couldn't have before said, "i've been discriminated against because i'm gay," because that would have been telling. >> right. right. >> now you can. >> so the absence of it, you know, in law before, once removed, just removes the category if it doesn't -- it doesn't really change the fact that we don't discriminate against anybody. you've got redress if you believe that you have been aggrieved. >> but i -- [inaudible] >> you don't have -- i'm sorry. go ahead. >> no, sorry. i believe it's not a protected class, though. i think that's what you're getting at. >> that's correct. that's correct. >> if it's not a protected class, can you actually assert discrimination? >> you're starting to take us to a legal area which i think is a reason why we probably ought to get a lawyer to look at this and make sure you have the exact right language. because there is this issue of protected class and how we refer to it. so i think it would be better if we do that and not try to guess at it; make sure you've got the exact right language. so allow us to do that for you. >> okay. rachel. >> i just wanted to clarify. you say that no one has been officially discharged under "don't ask, don't tell" since last year. but there are still people reportedly who are being processed for discharge, according to gay rights groups.

can you just clarify if it's still possible for someone, before certification, to be discharged under "don't ask, don't tell." and if that is the case, is there any consideration of putting a temporary moratorium -- [inaudible] >> okay. it is still possible for a person to be discharged under the existing law. i've heard nothing about a moratorium, and that's not on the table, as i understand it. >> and if it goes out through certification plus the 60 days, we'll certainly look at every case. but we can't discuss any cases. >> sir. >> we were talking about the training along the same lines of where we've gone. how specific are we going to get? are -- is the training going to be that you shouldn't discriminate against others, or is the training going to be, you know, no name calling, no jokes, no avoiding certain people because of their orientation? can you give us a sense of, you know, will there be examples? and are we -- is that something that the services are supposed to come back with, or is that something that is coming from the -- from the dod level? >> well, first of all, that we've given -- worked with the services in putting together the guidance that they're going to be implementing. the services have been given

even some vignettes that go through some scenarios. but again it goes back to leadership. and i'm not trying to wear out that word, but it really does go back to how commanders -- because they're actually evaluated based upon their judgment of how they treat their people, how disciplined they are, professionalism, those things like that. so the training will be service-specific and it will be unit- specific, because you have some units that won't -- you know, they won't need certain things, depending on what the unit is. hoss, i know you've probably got a -- say something. >> i think you've covered it. >> i'm wondering, though, is saying, you know, good leadership and good discipline going to be specific enough for that marine unit that, you know, may already be saying some of that? is there -- again, i think you said there are some scenarios. so is that some specific examples, then, of what would be acceptable and not

acceptable behavior now? >> i'm trying to understand how to go at this to give you what you're looking for in an answer. but there are already behavior and conduct standards out there. they are reviewed to make sure that they cover the entire waterfront of all of these issues. we've really not found, to my knowledge, anything that has been lacking there. in other words the standards are still valid. >> general hummer. >> i can add -- [inaudible] what we're developing is a standardized commander's tool kit. so it has the various things in there for the training. and the reason that we've brought the services together for the last several weeks was to develop a great foundation to standardize the training, then from which the services can go and put their cultural pieces on it. but there are vignettes that are included in the training, and that allows the leadership to present those vignettes and then allows the discussions so

that people can get a better understanding as they go through that kind of normal course of events of talking through vignettes. >> can you tell us what's in the tool kit? what exactly is there? >> or an example of a vignette? >> they'll get various types of training materials, conceivably could be the service commanders video showing the leadership from the front. they will also get the power point slides that have the policy, and specific for the various tiers, and then the vignettes. >> are the vignettes the ones in the back of that -- [inaudible] -- book? >> very similar. some of the same, very similar. >> about all of those, right? are they are -- >> i think they are, because there's a purpose that they were in there. i think the crwg, as you well

know, did a very, very good job through the survey and then through their recommended implementation. >> but that's part of the training, is the discussion of those vignettes with the -- just rank and file, with the troops? >> yes. using the vignettes to spur the conversation. >> tom, and then back there. >> dr. stanley, you said you were a marine commander at one time. let's say you're in helmand province at a combat outpost. you call your ncos together. what would you say to them about the way ahead allowing gays to serve openly? what would you tell them? >> well, i don't know if i'd want to use that construct right now. i guess what i would say is that we are serving on the tip of the spear. we want to take care of our marines. it's important for us to not only watch our -- each other, but i mean this is a family, and quite frankly, i'm pretty close to you when i'm out here,

because i'm depending on you. what's changed? i'm concerned about something else. i want to come back alive and i want to bring you back alive. and that's the focus here in accomplishing the mission. and although we complicate it sometimes by orientation, i want to accomplish this mission, bring you back alive. you got a family, you're coming back too. and again, that gets into we're talking about things of orientation -- of a person's sexual orientation as opposed to what we should be focusing on, which is a mission and taking care of our marines, in this case. and i'm going to take care of my marines. >> if an nco says to you, "sir, i don't want to serve with someone who's openly gay, i don't want that person in my tent," what would you say to them? >> we're going to take care of our marines. >> yes, ma'am. >> [inaudible] -- the original training, is this going to become an annual certification or annual training, like suicide

prevention or something like that that the troops will have to go through? >> we haven't talked about that, but that's up to the commander in terms of how they do that. we haven't talked about -- we are talking about implementation right now, which is where we're moving toward. what happens annually and where we go from here, i'm sure we're going to be having that book open. if history is any indication of things, there's going to be a need for not just this but continual -- i know in terms of professionalism; the training and development of those who wear our uniform is a constant. schooling, education, it's just a constant. >> okay. if there's no de facto moratorium in place, can you explain what the reason is for why there have been no discharges in the last three months since the secretary changed the policy on having three of three, the two of you plus the -- [inaudible] -- chief overseeing a discharge? [inaudible] -- lack of discharges -- >> well, i think it's been -- i don't want to categorize it as a lack of discharges, but -- >> well, one of the reasons --

>> yeah, it's been a -- it's been a very deliberate process. it's a -- the process is deliberate now. it's -- there's more scrutiny with the general counsel, my office, a service secretary as you go through the process in terms of whatever you're going to do. and when you raise something from wherever it was before with a commander doing -- you know, processing discharge, you are -- automatically add a level of review that elongates a process. so i'm not saying there won't be discharges, as we -- the question came up earlier. i'm saying that, as we are right now, there is a lot of review that goes on within the process. >> would you actually -- would you actually discharge somebody right now in this climate as you're moving towards repeal and certification? would you actually do that? >> each individual case is judged on its own merits or demerits. and so, quite frankly, the answer is yes, if the case merits it. and there are a number of circumstances that could lead to that, each case. i can't talk about any

individual case, but yes. >> i'm sorry. could you just clarify? like, what would a circumstance be? i mean, you're making it sound like that there would be -- have to be something additional than just a simple violation, a statement or something. what would the circumstances be that would lead you to feel that it was appropriate to authorize discharge? >> i can't tell you what a specific circumstance would be because when you look at the gestalt of any case, when i review a package -- even now before we had this discussion dealing with any number of different issues, there is not one particular string that you pull that deals with that. it's the gestalt of all of what that individual is or is about. and to be able to come out and say this fits the absolute what-that-is or what-that-wasn't is inaccurate. you may not like it, but that's it. >> okay. julian, last one. >> well, just to try one last time on that, if you --

[laughter] -- if you had a package -- >> never mind, julian. we're done. [laughter] >> -- if you had a package of somebody who would meet the criteria to be readmitted to the military for -- and you were deciding whether to discharge that person, and he otherwise you know kind of from the gestalt of his package that he would be let in after he's released, are you going to at least slow-roll those ones just to -- it seems like there's a lot of bureaucratic waste here to proceed and kick out some people throughout the year who you're going to readmit next year. i mean -- >> here's where we are right now. the "don't ask, don't tell" law is still in effect. and we are obligated to follow that law. and to say anything other than that at this time would be inappropriate. >> all right.

thank you all. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> next, secretary-treasurer terry -- treasury secretary timothy geithner on the economy. after that, egyptian president hosni mubarak announces a government shake-up in response to the protests in that country. >> this weekend on american history tv, which will tour the home of a social reformer and exclave of frederick douglass. texas a&m univ. prof. jerry jones talks about cadet woodrow wilson. from the nixon foundation and

nixon library, and focus on daniel patrick moynihan whose career spans four presidential elections. see the complete schedule online at c-span.org/history or you can also press the alert button and have our schedules in mailed to you. >> listen to historic seat -- historic supreme court cases on c-span radio. the court considers copyright and ownership in 1989. >> at the inception of their relationship, he was an independent contractor. he was going to create a commission. >> listen to the arguments on c- span radio in washington, d.c. and nationwide. >> at the world economic forum,

treasury secretary timothy geithner talks about the future of the u.s. economy. he said he was confident that the u.s. was headed towards economic growth. charlie rose not -- moderated this event. >> pleased to see you. tim geithner joins me at an appropriate time. a little bit later, the u.s. government will be releasing their own numbers for the last quarter -- the gdp numbers for the last quarter. we will not know them by the end of this conversation, the. -- though. when you talk about 10 geithner and ben bernanke, you talk about two people who had been on the firing line since the beginning of the economic collapse. bernanke remains at the fed then tim went to the secretary

of treasury. he may not be a candidate for president obama's basketball team at the center position, but he is called in the white house "giant twtim." his legislative accomplishments include health care and reform. the is that the challenge of saying to everyone about economic reform and about the disaster that we face, it could have been a lot worse. we now see in the united states and growing economy and we see unemployment beginning to add jobs. he would be the first to tell you that there is a lot that remains to be done. warren buffett told a couple of days ago when we were talking hisut coming out here that th grade for tim was an a-plus.

he is a relatively tough credit. if you look at tarp and look at the tanks in which they had tough calls to make, those calls seem to have paid off. there remains a lot to be done. i would like to begin by welcoming timothy geithner, the secretary of the treasury of the united states. [applause] we will have an hour, but i would also like to get your questions. we will have an opportunity to include your questions. question per se, sometimes define what is on the minds of people. what are you hearing here at this conference? what do people want to know? >> i have not been here in several years. it feels very different. i think there is more confidence now that the most acute part of the crisis is behind us.

i think that is even true globally. i have only been here for 24 hours, but what people have been hal is me about farare europe doing? how about the u.s. and china? and how confident are you that the american political system will be up to the challenges we still face as a country? >> i want to touch on all of those. tell me how confident you are that the american political system can look at the challenge of economic growth to reduce unemployment in a long-term very difficult and very large debt. >> i spent a lot of time around the world talking to my counterparts. i would not trade their challenges -- i would not trade our challenges for theirs.

we have a very tough set of choices to make especially on the fiscal side. but we are in a dramatically stronger position to confront those challenges. we are in a relatively better position to confront them. we are still a younger country and the other major -- and the other major economies. our productivity growth is unique among the major economies. it was very strong to the crisis. we have a much more open economy. we have a more open immigration. we have better positioned to benefit from the extraordinary talent around the world. it's been with the challenges we face, we are in a better position to deal with those challenges. the great strength of the

american political system is that it has always risen to the challenge. sometimes it takes a little time. it is sometimes a little messy. it is never perfect. america always act. if you think about the last two years, if you try to put in context that underlying concern about whether washington will move soon enough on these long- term thanks, washington at a time of crisis did it do exceptionally important things in the last two years, not just in financial reform or even in health care reform, but in terms of starting, i think, the most promising set of reforms in education we have seen in a long time. we are beginning to see a substantial increase in investment in basic science and

research. those were changes in reform -- i know they are messy, but the reforms were necessary. it is the american system that deliver those reforms even at a time of a deeply divided country during a time of crisis. even with acknowledging the formidable nature of our challenges ahead still, our confidence is high. i prefer our studios of many countries. >> any regrets about the last two years in terms of whether you did enough about whether the stimulus should have been changed or should have been larger? >> we did and what we thought was necessary at the beginning. we looked at the experience of countries around the world and

the president, to his enormous credit, decided at substantial political cost that he would try to move aggressively at the beginning and use the full arsenal. because of that, we broke the back of the financial panic very quickly. it started to turn in march of 2009. use of birth comeback extraordinarily quickly given the financial shock. we knew that looking at experience that the typical mistake governments made in crisis is to stop to send, to shift to restraint. we were not going to make that mistake. we knew that even with strong policy measures at the beginning, that we may have to come back and reinforce those measures. change their shape. that is exactly what we have been doing.

as the crisis receded and the nature of the challenges shifted, we try to shift the thrust of policy to focus on things like long-term investment and infrastructure. those are the things you need for long-term growth. >> units and there was a recovery. that recovery seemed to stall in the eyes of some people. are you sure in your assumption as to where we are and where we are going with respect to the u.s. economy? >> let me tell you what i hear from businesses and investors in the united states. there is much more confidence now that we have a sustainable expansion. it is not a boom. it is not an expansion that will offer the possibility of a rapid decline in the unemployment rate. there is much more confidence that we are able to avoid the risk of slipping back into recession or even a long period

of low growth. i think that confidence is justified. if elected held sentiments have changed -- it really began in august or september -- u.s. seen justifiably more confidence that we will be growing at a reasonable rate. economists now say the economy will grow between 3% and 4%. >> you think that is reasonable? >> i am not a forecast or an economist. what matters really is what the average expectation of the market and what is its distribution. what is most encouraging about the sentiment these last few months is that people have been most concerned about the risk of a low-. a long term growth. they seem much more confident that we will be growing at a reasonable pace. our job is to make sure that

happens and make sure we do not risk leading the economy with an unacceptably high levels of unemployment for a long time. >> what you think the business community and the committee that will be feeding consumer demand is looking for? are they looking for certainty where are they looking for something else to say to them it is time to make an investment in capital allocations, it is time to hire people? >> if you're seen that already. private investment in the united states in capital equipment and software grew at roughly 15% last year. it is still growing quite rapidly. you are seeing businesses start to bet on the fact that the world is not going to be growing. we have had 1 million private sector jobs in the last 12 months or so. you are seeing both of those trends start to gain momentum. i think it is worth looking at

the big strategic imperative in the united states. we are at the beginning -- i still think the early stages of what will be a very long time of exceptionally rapid growth in the emerging economies around the world. the united states is exceptionally well-positioned to benefit from that and take advantage of it. the things those economies need to grow, american economies are still uniquely good at. the united states should be tried to make sure that u.s. companies and foreign companies to invest in the united states and that they are going to be a substantial participant in that huge wave of growth ahead. you're seeing it happen now. u.s. exports are growing quite rapidly. china is growing at twice the

rate of growth of the rest of the world. things that have been traditional with the american economy -- the basic dynamism of the economy, education, the adaption to change -- i still think they seem encouragingly strong. that is what the president paid so much attention to animation, education, investment, and the broader reforms to make that possible. the early shape of the recovery should be encouraging. >> some of the numbers have been revised. do you worry about inflation in those emerging nations? >> anybody who is a central banker in an emerging economy -- those countries have been growing quite rapidly -- are

seeing more pressure. they are facing a more complicated set of challenges in making sure they can contain inflation and dealing with a big surge of capital flows driven by optimism over how strong growth will be. those are world-class challenges. they are familiar challenges to policymakers. some countries have decades of experience in managing those challenges. it would be easier for them to manage this challenges if you saw countries like china and other emerging economies softened their link to the dollar. if they do that, there will be more flexibility to manage those inflation pressures and not risk getting behind accelerated inflation. for the global economy, given that two-thirds of the world's major economies are in the early stage of coming out of this recession, i would not put in

place and on the global level at the high list of concerns. just to start where you began, the most important thing now apart from the united states is doing what needs to do to repair the damage caused by this crisis -- i am the always the first to admit, the u.s. made some substantial mistakes in how we ran our financial system. they caused enormous damage to our credibility and to the american economy. will be living with that for a long time. >> when you say that, you are talking about the failure of enforcement of regulatory authority? >> we just ran an indefensible the antiquateda th antiquated

financial system. it is an obligation that we acknowledge that mistake and make sure we do everything we can to fix our challenges here. apart from what we do, which is important to world affairs, i think it is very important to see europe -- and they will do this. i have no doubt they will do this. we have to make sure they put in place a framework that allows the countries that have difficult reform challenges to let those reforms take hold. i am confident they will be able to do that. >> you are confident they can manage this problem? >> i am very confident. they have no alternative but to deliver on their commitment to make sure they are standing behind those countries and their financial systems because they recognize there is no alternative to the reforms. for those reforms to work, they need time to -- funding is the

oxygen of economies in the finance system. it requires that kind of commitment from the rest of europe to deliver. >> let me stay with that for a second. are you convinced they had done enough so far and that they will be prepared? i in your conversations with central bankers and finance ministers, that they are prepared to handle the problem of sovereign debt whether it is greece, spain, portugal, or italy? >> i do not think any of them would say they have done enough. they are now in the process of trying to shape the escalation on the financial side. there is a question for the european authorities. they have made it clear that they are going to hold it together and not take risks that uc reignited.

>> what impact did have on the u.s. economy the sovereign debt issue in europe? >> i think it had a significant impact in slowing the recovery at a delicate time. most of the world was still quite scored by the trauma of the crisis. the memories were still quite wrong. -- quite raw. when they sell this erosion of the political system outside of the united states, that destabilized confidence. use all equity prices in the u.s. fall to 15% in a short time. that was a shock to the american economy. fortunately, in part because europe move to fix it, that was relatively short-lived. after that brief loss of momentum, the u.s. economy started to regain a little strength starting in august or september. >> presidents are cozy and

chancellor merkle and said they are confident the bureau will survive. >> i will leave that to them. i share that confidence. >> when you look at the biggest issues -- lest they japan for a second. standard and poor's lowered its rating for japan's long-term debt. what does that say to you? what does it say about other countries in the industrialized world? what does it say about some possibility of the united states? >> i think i would rather speak to the u.s. question. >> are you surprised with the japanese? >> if it is a very high-savings economy. they had a high level of debt. but japan's main challenge, and this is true everywhere, is how they are going to grow in the future. how to make sure they achieve a level of growth as the

population ages back in support them. i think that americans in policy understand that, and i think it t recognitionnc across the political system that our financial system is unsustainable in the long run. it will require further changes to bring it under control. we are in the process of figuring out how to build a consensus to make that happen in a way that is going to be fair and preserve strong fundamentals for future growth. our system has a lot of strengths in terms of how we make fiscal policy. it has some important witnesses and challenges.

our strength are the president is obligated to put out a budget that lays out policies for two years. those are evaluated by an independent authority, in this case, the congressional budget office, that has to judge what they produce relative to the economy as a whole. when the president lays al his budget in a few weeks, you will see our view of the best way to bring this deficit down over time to a level that is sustainable and how we can do that without hurting not just the near-term expansion, but focus on education and renovation. the fact that we have to do that is an important strength of our system. our challenge is that is just the beginning of the process. congress has to legislate policies. our real problem now is that we

do not have a device in the american political system that allows congress to commit itself credibly over a multi-year. to policies that will offer an enforceable commitment to bring down the deficit to a sustainable level. that is our challenge just to come back to a question you asked a few minutes ago, when businesses and individuals in need is the ability to understand over time help we are going to solve that. we know we have to solve it, but the ideal thing for incentives and for confidence and certainty as to lay out a path for how we are going to solve those things to allow people to plan and adjust. the early -- the earlier we began these reforms, the earlier people can adjust to them. these are within our capacity to solve.

>> the political capacity to solve? the political will to deal with the long-term entitlements are at the core of our deficit issues. >> the program is not fully invested at the moment, but it is coming. there is no alternative to it. there is no way to avoid it. we cannot grow our way out of its period if you look at our position relative to that of the rest of the world, it is going to be easier for us to bring ourselves down to more sustainable levels. we just need to make sure we can start the process soon. >> do we have a real conflict between the necessity of growth because you must deal with unemployment and a deficit issue and a debt issue that goes to the long-term? are they in conflict said that you have to say to everybody, "we are trying to get the

growth think going and then we will deal with the deficit and the debt." is that the mantra of what you're saying? >> yes. i think that as you do this, you have to make sure that you do not hurt the recovery and take so much risk that you do a lot of damage to the early expansion by shifting to prematurely to substantial restraint. we are not want to let that happen. there are people who do not want to hurt the economy, but they want to move quickly to do deep cuts. it is not irresponsible way to do it. it would undermine the objective. we have to have that process start more gradually. i think we can do that, but as a strategy, you have to be able to lock in politically things people can count on and be

comfortable will bring down those long-term deficits. >> that is the political debate in washington today. >> it is starting. the hard thing i am thinking about fiscal reform is not the accounting question of how you narrowed the gap and hello you need to get it, but how to do it in a way that will not hurt growth or incentives. it has to be fair. it has to be fair to the broad community of your citizens. that is always a political challenge. under the system we have, we have to find a way to make congress commit itself to a multi-year framework to bring down those deficits. >> if you have a congressman called you up and ask you to convince them that it is the thing to do when they feel so strongly about spending and the second big issue is the long- term debt. >> no one who lives in the

united states or sits in washington can avoid the fundamental reality of the fact that we had this unsustainable gap. we do not have unlimited resources. i think people realize that now. when we talk about investment in education or research and science or even infrastructure, we have to do that in a way that is affordable, responsible, and consistent with the impaired did of bringing down the deficit. we have to pay for things that cost money not ignoring their basic costs are hoping they fix themselves. those of the constraints we have to live with. the reality is much more widely accepted in washington that it was over the last 10 years or so. you do not hear people in washington say tax cuts paid for themselves -- pay for themselves or that we can grow

out of those things. the critical test of credibility for us should be can we find a way to lock in multi-year commitments so that we can began helping people adjust and what can we do that in a way that will preserve basic incentives for investment so that we are not hurting what has been big classic fundamental strength of the american economy -- innovation, education, things like that. >> what is going to grow the u.s. economy? >> the basic fundamentals of growth are going to be the quality of talent you produced to the education system. they are the capacity of government to make sure its is investing as only governments can do. the market will not produce on

its own the right level of investment in basic science and research. improvements in the basic quality of public infrastructure which have a lot to do with the cost of running a business in the united states. your financial system does a better job of allocating capital to where the returns are higher. >> there is still money from the original stimulus program are as for structure that has not been spent. -- for infrastructure that has not been spent. >> the funds have been committed. a substantial number had been spent. that will not be sufficient to repair and rebuild the basic public infrastructure that all economies need to operate more efficiently. there is a very strong case for a long-term multi-year commitment to make sure that

roads, highways, etc. are brought more into the modern era. >> david cameron stop to say hello to secretary geithner and told him to tell the president that he had great admiration for the state of the union speech and he was going to recommend his speech writer take a look at it. my question is what happened? in terms of competitiveness, there are things the president should have been thinking about. should he have said, "this is a way to connect the dots in terms of growth, in terms of the economy, and at the same time do things we need to do for the long-term help of the united states," or did he wake up and say, "we are really in trouble with competition?"

>> these things are part of what he began at the beginning of the administration. of course, they were eclipsed in the public eye in terms of putting out the financial fire in the early task of designing a reform to make sure americans have health care. >> in terms of this preoccupation or the public dissension? >> i think the latter. it is one thing to say it was not just an economic crisis, it was an economic recession more serious than americans have seen in generations. it happened in a country that is still quite divided politically. we have a very determined, quite formidable opposition that shows a matter of strategy to stand apart from this early and pierre

tiv of managing the crisis and reform. i think that made it harder. the basic core of things about innovation, education, an investment -- what he is doing now is building on those. you can see evidence of this. it is really important, not just in america, but outside the united states, to see examples of people in washington trying to solve basic problems. some of them from the center, ideally. u.s. seen in the last two-weeks of the year a pretty encouraging capacity to actually get some things done that matter a lot. i think that helps confidence. what we have been trying to do -- and we started this process in september when the president proposed reforms to investment -- is to find things that

republicans support and can do with us such as corporate tax reform, so that we can help build more confidence in the united states. there are people watching and willing to come together and solve some problems. again, there are lots of things that divide democrats and republicans. there are people in both parties who want to make sure those contrasts are sharp and compelling to their constituents. we have to find a way to rebuild the capacity to act because we cannot legislate now without democrats and republicans. the things that matter to our growth in the future require congress. there is nothing we can do at the executive branch. >> had been changes -- there have been changes at the white house in terms of the chief of

staff and economic advisers. it is said that many of them work for president clinton. it is said that this economic team is more sensitive than the previous. you are now the captain of the team. but these are more in line with the views of tim geithner. >> that is true. [laughter] >> was part was true? but you're the chief in charge of the team? >> it is an excellent, a talented group. i think the basic center of gravity around the team reflects the president's basic values on these things. i do not think they have changed. i think what has changed is that we have been able to put the worst part of the crisis behind us and we can now focus our attention on things that matter to long-term growth.

>> part of the message of the government is that we have made sure that we can survive and now we must focus on the future. quite the immediate, urgent, overwhelming priority for us -- nothing was possible without it -- was to break the back of the crisis as quickly as possible. the president was going to spend a huge amount of political capital without much support in making this change is early. we have been growing now for six quarters. it is right to try to shift the center of political focus do things that are about education, animation, and investment. those things matter for the long-term. >> it was said by peter becker in the new york times that you and the president have bonded, therefore you have a unique place to define him.

christine romer said he was a moderate, middle-of-the-road guy. is he is essentially a pragmatist than what is that where he is in your judgment? >> absolutely. he recognizes what we all do that the test the policy is what is going to work to make a difference in people's lives. the quality of opportunity we give people. the tests for all of this should be what is going to make a difference? what is the most effective way, stepping back from politics, that is going to make a difference? this president is doing fundamentally necessary, important reforms like in education, health care, or energy. he is doing so in a way that recognizes that the job of

government is to help shake the incentives and make sure this basic as for structure and network allows the economy to function. if you want to call the centrist, that is fine. >> what would you call it? >> i do not think i can characterize it. i will leave that to him to do. >> i will give you one other endorsement of our president. there is a huge gap. you see it all across the world now between what the economy requires and what political systems are comfortable trying to do. it is the basic test of leadership as it heads of state to try to figure out how to make possible politically famous that are in essential economically.

you cannot let the political constraints and out there prevent you from living on things that matter. that requires the willingness to take risk politically and spent a lot of capital. he has been enormously supportive from the beginning of recognizing that you must be willing politically to take this risk early or you'll be living with much longer-termed damage and cost two things that matter to economic health. that is enormously important. >> would you say that most of the measures that took place to thwart the crisis and create a recovery out of this threat of the greatest depression since the great depression simply were matters of things that work and not a question of a philosophy about government and the economy? >> people tend to look at the

competing strategies when dealing with a financial crisis and try to categorize them as two extremes. you might call it the liquidation strategy. let the market solve it. there are some people, to use the pejorative, they say you should use the nationalization of strategy -- have the government masterfully socialite those risks. we had a different message than that. it was enormously successful. we wanted to recapitalize the financial system as quickly as possible with a framework that maximized the chance that private capital would do that work for us. the things we put in motion in the stress tests were designed to make that much more likely. alongside that, we try to take

the catastrophic risk of the broader financial markets by making a lot of commitments to make sure there was more liquidity left in the dollar funding. those were untested strategies, but they were enormously effective very quickly. i think we were lucky that we moved so quickly to adopt them. it allowed us to bring about a very substantial restructuring of our financial system and to get out of the investments much more quickly at a much higher return financially than otherwise would be the case. i will give you an example. the s&l crisis several decades ago was a crisis much more modest in scale, a much tamer financial challenge. that cost the united states about 3% of gdp.

the similarly measured cost for the united states -- tar, the broader investments we made -- are going to be under 1% of gdp. that is an exceptional outcome relative to expectations. it was possible because you had such powerful support for monetary and fiscal policy early on. >> clearly we had an economic recovery on wall street and the corporate sector. clearly in terms of unemployment, we do not have an economic recovery. tell me what you think will be done over the next two years. some people, the cbo among them, believe that unemployment may drop by the end of 2012 to 8%. do you believe those figures? >> the private forecasters say

that all the expectation that the u.s. economy grows by 3% to 4%, the unemployment rate will be at the low end of 2012. these things are inherently uncertain. unemployment only starts to fall when you see economy starts to grow again. growth has to come first. we are now about 1.5 years into positive growth. as this economy continues to process the recovery, you will see more people put back to work. gdp in the united states is now above the pre crisis levels. unemployment is still roughly in the range of 10%. >> why is that? >> it is partly because of the way the u.s. economy works as a whole. you solve a crisis because people were panicked.

use all american companies cut deeply into the payrolls with brutal force. they have been more tentative because of the scale and because of the aftershocks of that trauma. you see our start to increase early. they are tentative about hiring back full-time people. i think it is fundamentally the trauma caused by the shot two basic confidence. we are dealing now. pat will start to improve. a recovery that follows a crisis like this, a result and part of too much borrowing by households and by the nation as a whole --

those recoveries arden -- will be more moderate. there is no way to avoid that. that consigns us to a much more moderate path. some suggest it will be 2016 until we get back to 5% or 6% unemployment, which is considered full employment. the believe that? >> i do not think the record is good. i am not an economist. all we can do is make sure that people who are responsible in congress and washington are doing things that are going to make it more likely that we grow and we bring the unemployment rate down as quickly as we responsibly can. that is our obligation.

again, what is happening is encouraging, but we have a lot of challenges ahead, not just with unemployment or the trauma you see in the housing markets. >> what are you going to do about freddie mac and fannie mae? >> in a very short time, a few weeks -- and i am glad you raised that. i think the core of the u.s. financial system is much stronger. i think the basic framework of reforms we legislated last year with barney frank and chris dodd leading the charge is a very strong framework of reform. it addresses the court challenges in our system. but we still have a mass in the housing and financial markets. it is almost completely dependent on the market -- on the government. we need to put private capital back into the housing finance

business. that will lead us with a system that will not be vulnerable to a tragic, colossal failure such as fannie and freddie. more consumer protection. >> absolutely. >> are you worried about one of the 50 states or more may go into bankruptcy? >> i would say that it is tough to understate the difficulty you have as a government of the states -- as a governor of the states. it will be hard for a period of time. those pressures are diminishing, but there is a long set of reforms they have to get through. congress did a lot in their first two years of recovery of

trying to ease that burden. but the force of the pressure is diminishing, not intensifying. >> china. hu jintao has said this is not a zero-sum game. you had been a long time follower of china. i believe you speak mandarin. >> i would never claim to speak mandarin. [laughter] >> you have also been part of the security and economic dialogue that has taken place in china and the united states. where are we after the state visit? what came out of it? the the chinese reasonably at the right to say, "we have shown that we are as strong as the

united states on the world stage and there is no bigger player than we are?" >> i do not believe the leadership of china would say that. it is remarkable, the most impressive transformation that we have seen. they had this remarkable capacity to set those long-term goals and basically execute them. the chinese will be the first to tell you that they are -- >> many people do not think they will be one-third. one by one, they are replacing whoever was ahead of them. >> they have they remarkably difficult situation, not just demographically. the labor force will start growing sen. they are at the early stage of building the basic architecture

of a market economy. the economy is overwhelmingly dominated by the state where resources are allocated by the state, not the market. they are committed to that path of reform. what you saw was both president obama and president jintao acknowledged that the world depends on how effectively we together figure a way for us to be growing together to be pursuing policies that are not just in the interest of what we have to do domestically, but are in the growing address of the -- but are in the interests of the growing economy. what we want to do is try to strengthen the incentives china faces to continue on this path of reform to rebalance the

economy, to move towards a more market-oriented system and to join us in try to shape a system that will work for both of us going forward. china was not there when the united states and parts of europe built the post-war economic system. they were not present at the table then. they have taken advantage of the system for the last 30 years or so, but that system has to adapt and change. we are going to have our interests we are going to pursue and they will have their interest they are going to pursue. both countries have to recognize that those interests are closely tied. they are not fundamentally in conflict. they are largely complementary. they have to be comfortable that we are working on a system to benefit our interest as well as theirs. >> will be competing model for other countries around the world?

>> if there is no risk of that. >> the as we look at this, you expect to be secretary of chert the treasury -- the secretary of the treasury for the four years of this administration? >> i am tentative say, "i hope not." [laughter] i will serve as long as the president wants me. >> at the president wins reelection and once you to be part of the government -- it will be hard to turn in dallas? >> the president will win reelection. they will have a chance to make sure he as good people working with him to shape our future. it is a great -- >> the most important lesson you have learned? [laughter] >> there are so many.

there is no -- when you talk to people at a university or people just coming out of college, what i say to them is that you have to work for your country. sometimes there is no greater experience, and no greater privilege, that the more interesting or challenging than economic and economic -- that economic and fiscal policy today in the united states. >> thank you very much. secretary 10 doctor. wait a second. any questions you have before we close off? does anybody want to ask anything? yes. right there. do you have a microphone? thank you, tim. that was great. >> i am very proud of what has

been accomplished. in many places in this forum we have been asked whether we should have more or less government. the question of effective government -- can you address help the u.s. government is making itself more effective? >> i think you phrased it right. it is true in many parts of the world that commitments are unsustainable. when people say those commitments have to be brought back down to earth, they are completely right. what matters is the effectiveness with which governments do things that only government can do. there are basic things -- again, education, the restraints keep it on your financial system, what you do for basic science and rrc