that governments have to do. they have to do them better than they have been done in the past, not just in the united states, of course. it is about competent and creativity and care and the capacity to act. it trivializes the challenges to say it is just about the math. >> thank you very much. our special thanks to secretary of the treasury timothy geithner. [applause] now, a discussion on ways to ht

approach, whether or not but the precarious economy weather got -- more investment is necessary or is it better to work on the deficit. matthew mitchell is at george mason university's mercatus center. guest: we are a research institute that focuses on the intersection of public policy through the economic plans and try to bridge the gap. host: politically on the spectrum? guest: i would say we are a market-oriented think tank. we do have a view that and a lot of ways market solutions tend to be superior solutions. host: and isabelle sawhill, economic studies senior fellow at the brookings institution. i would start with you -- and

interesting photograph of why obama loves reagan. you see a picture of the president and a former president together. i would like to ask you, how does this debate differ from the supply side debate versus the keynesian debate of the 1980's? guest: i think, by the way, one of the things obama shares with president reagan is they are both very upbeat, very 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 other side, 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 creditors abroad 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 around for the reagan administration, but let me ask you about 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 really 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. the people 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 problem. to me, i think that is heartening a little bit because this obsession with cutting taxes and let spending continue at its 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 it is 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 and are 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 rapid rate. that is basically what is in increasing spending as a proportion of the economy. right 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 three 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 anybody 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 those 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 exceptions, 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 gas. i would say 20% or 30%. >> all defense + homeland's

areurity 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 affecting 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 benefits as the car degeneration. you are just not going to 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 never 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 increase 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 fundamentally inefficient about the way we deliver health care. we don't get good value for the dollar. i think the bill is a good thing, but not perfect. host: say the doctor has been a guest at c-span many years, so its collaps -- so we are glad to have isabel sawhill at the table. she has spent 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, this is your first time on c-span. >> it is. >> research fellow with state and local policies at george mason university's mercatus 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. tom, 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. 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 in 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 profits are 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 administration 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 says 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 have decimated 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. this 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 there 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 changes. i think that the training programs that we have in this country are not terribly good. look at germany. germany is doing 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 a 20% across the board, including closing the department of allocation. and health 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 to do business anymore. caller: thanks for the call. some interesting points. one thing that is interesting is obama has this portion 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 that people do not want to address. these are the entitlement

programs 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 going 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 going 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 goes 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 then went on to talk about some of the 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 failed to 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 remains above 9%. government has had $3 trillion added to the debt. host: i want to start with our guests. you said the stimulus program was important 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 in the 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 of infrastructure 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 much 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 keynesian 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 contributing 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 current deficit. guest: 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. it needs 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 effect of falling off the cliff. host: 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 pays, the employers and the employees, it is less than the amount that we send out 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 that were started in the previous. 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 the cuts. 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 serious issue. states, almost all of them, are required to balance their budgets. their revenues plummet, which they have 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 make it 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 that number comes out bigger than the number of the top of the page, they go back and cut down on other things. 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 lot of the problems that led to the current recession. 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 leadership 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 should 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 our crumbling 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 deficit, by cutting wasteful and excessive spending wherever we find it. and it means reforming the way our government does business so that it is responsive 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 problem. on one hand you 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 exception is infrastructure 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. we need people 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, each side is waiting for the other to move 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 jobs 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 typical 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 doing 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 and what 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 and other manufacturers are not competitive is we 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 spent $3 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 i would very much agree with is that we cannot look to the government to do everything. as individuals we have a history of being quite self-sufficient. right now when times are 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 actually 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 overwhelmingly 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 directed 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 roads 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 it'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 be able 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 that 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 profits, would that not be a savings? thank you. host: some of the blue cross are operated as not-for-profit, aren'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 it and 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 the next six months 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 deficits with 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 past week, the republican presidential candidates spoke at a politics and then in new hampshire, our debate today visit to the state for the in a year, they will host the primary. tune in sunday at 6:30 p.m. and 9:00 p.m. pacific. >> i need to stay for the record that i have always been opposed to taxpayer dollars being used for political advocacy. >> their ending taxpayer financing. followed the entire debate on line with c-span's congressional

chronicle. buying did stock that c- span.org -- buying it at c- span.org/congress. >> he announced his this but then john bolton on the foreign policy. now the statement from the president statement. he says he has asked his cabinet to resign. this is about 10 minutes. it mandates that all of us .tand i have been -- >> 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 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] 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 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 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 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 maintain egypt's security and 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 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. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> 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. 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 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 want 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. >> a former ambassador to the united nations, john bolton, in timothy geithner on the u.s. economy. >> tomorrow, tom barrett on the

unrest in egypt and the ramifications for the united states and the united states if he is overthrown. then it douglas holtz-eaking. mark matthews looks at how nasa's message is changing due to the end of the space shuttle program. it is live at 7:00 a.m. eastern on c-span. >> this sunday, we will stick with former president bush about his life. here is a portion of the interview. >> a lot of the actions of harry truman took mainliner easier. many of the decisions i made are the most controversy ill.

it became the law of the land. i went to congress and said we need to ratify that which i had done within the constitution. the congress passed a law that now enables a president to have certain tools. in some cases, it might be too hard politically for a president without an executive order. if that were law, the land passed by a legislative body and might be easier.

>> and a former ambassador to the 19 nations 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 hu jintao's visit to washington, relations with north korea, and sanctions against iran. 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 korea. we also have someone from the embassy of kuwait. we also have 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, chad gore.

i would 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 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 are notoriously unreliable. it is going to be a lot more than they say. i want to take the opportunity here of being 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 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. he is a very strong believer in 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 unassertiveness. 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 forward 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 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 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. the president's response is to 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 putin'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. it does not equally constrain 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 rogue states like 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 hand if only they will unclench their fist." that is a policy of complete naivety 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. not only has 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 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 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 remains a growing threat. 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 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'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 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 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 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." i do not think you should allow his behavior to diminish the threat that he poses. i think he does pose a crack to fragile democratic societies in the western hemisphere. he is obviously -- has intervened in places like peru. the mexican presidential

election recount. she provides -- he provides arms to the guerrillas in colombia. his efforts to take on argentinian debt pose a real problem to that country. i do not know the extent to which he is involved in the mexican drug cartels or if he is doing it because it is more trouble for us. he is, in a very material sense, a different kind of threat than castro was even at the height of the cold war. the soviet union always held castro on a pretty short leash economically. he was able to do what they wanted him to do. given the price of oil were it is, china does not have any external master. he has a lot of discretionary and, even as he works to consolidate his power inside venezuela. if that is not bad enough, we can see in the past several

years he has reached out to ahmadinejad and the iranians. he has contracted with the russians for weapons systems -- advanced weapons systems well beyond any legitimate venezuela and defense. nuclear reactors from russia. he has allowed iran to set up its largest embassy in the world. according to reports, they are working hard to work against the sanctions against venezuelan -- venezuela. dear reserves are second only to canada's in the world. cooperation with iran could be very troubling in regard to nuclear issues in this thing this year. this regime is a real threat. it is entrenching itself inside venezuela. i am afraid that our reaction is demonstrated by what happened

in honduras at the very beginning of the administration. there is no evidence he has come down from his policies. i think the democratic regimes in latin america would prefer a little bit more american leadership on the question, although i do not think they will put it in those terms. unfortunately i think we have another administration that comes into office saying they will pay more attention to the western hemisphere and does not do it. yes? >> someone said the six-party talks were useless right now. what do you think is the best way to handle north korea? what do we need and what we have to do? >> as you point out, that was chris hill who said that.

i had been saying it for eight years. i believe in the power of redemption. i am glad that chris has gone to the point where it can apologize to me and everybody else that he ignored all those years. welcome to the right side of the debate, chris, finally. the north koreans are not going to be talked out of their nuclear weapons program. that is as clear as can be. i think the united states has to focus on the only ultimate solution to the north korean nuclear weapons problem. that is the peaceful reunification of the peninsula. as long as the regime in north korea exist, the nuclear weapons threat will remain. nobody should have any illusions that we can appeal to the north koreans to somehow loosen up their policies for the good of their people. population isan

four to 6 inches shorter than the population of south korea. that has happened in the past 65 years. that is what the policy of the north korean regime has done by creating a prison camp that is inhabited by 23 million people. any regime capable of doing that to its own citizens is not going to be persuaded by the idea of improving the life of its citizens. 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 is schizophrenic. china says, "we do not want north korea with nuclear weapons because we do not want to destabilize northeast asia. it will affect our economic

growth." i think that analysis is entirely correct, but the chinese are not willing to do anything that might risk destabilizing the regime, which they properly worry could the collapse very easily, because they do not want reunification. they fear a reunified korea would bring back american troops on the border with china. they did not like that movie in 1950. they do not like it any better today. they need to be persuaded to come to the right side of history. the two koreas will be reunited like the two journeys -- germany's work. china would be better off to support reunification. it will expand trade relations with a reunited korea. i think the chinese leadership is divided. i think the older generation

still remembers those glorious days when the communist party's of china and north korea were close. good luck with that. i think the younger generation of chinese leaders -- by that i mean people in their 60s -- take a different view of north korea. they see it as the baggage that it is. they see the negative effect it is having on the stability of northeast asia and china itself. i think they are more willing to cut their losses and move forward than people think. but you do not move china on this issue easily or quickly. it takes, i think, extended dialogue and pressure. we are not doing that. that is the direction i would move in. yes, ma'am? >> i have to see you run in 2012. i want to get your thoughts on turkey.

they are irretrievably broken from israel. also your thoughts on the balkans and kosovo. >> i think turkey is definitely moving away from the west. that is a great tragedy. we have seen this movement for some years. i think our inability to win turkish approval to bring in an infantry division across turkey, our nato ally, to deal with the -- to deal with saddam hussein was an early warning of that. i do not think it is irreversible. i think turkish democracy remain strong. i think it can be changed, but the signs are certainly very worrying at this point. i am worried about those above and what it might mean in the balkans. i think the breakup of yugoslavia is not finished evolving.

the prospects for real turmoil there remains. again, it is one of those foreign policy issues that is hard to find out who in the administration is focused on. 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 it obviously would be in turkey which really went over the edge to a harshly, muslim, politicized of authoritarian government. i think that would have a major,-and back on europe and of the united states as well. maybe one or two more questions. yes, sir? >> with the increase in chinese defense doubling over the past year, it will probably continue

to increase. puc in the future of the chinese military looking to maintain a defensive posture or will they start looking at a chance is yet navy? president li has commented on the northwest island issues that other transgressions by north korea will be met with air strikes. what will happen if that escalates? >> let me take on the general question about the chinese military expenditure levels. secretary gates is fond of saying that the u.s. defense budget is larger than the combined budgets of the next -- whenever the number is. it always seems to change. the point is, they had a big defense budget. we face a lot of threats. we are the only world-wide

superpower. we have a lot of obligations that other countries do not have. number two, i do not think we know what china's defense budget is. i think they publish a figure that may or may not be related. number three, this is not a question in any cases of what the outcome of military hostilities between china and the united states would be. nobody has asked that. nobody should want that. we should be trying to prevent it. but as the chinese capabilities build up, they are at an absolute minimum dramatically increasing the cost of the united states of behavior in defense of our own interests and those of our allies. i think the government of beijing fully understands that. number four, as we demonstrated during secretary de's visit, i am not entirely sure we understand what the full

development of chinese capabilities is. when davis flew to china, that was a surprise. the same official that canceled the stealth fighter or limited production on the grounds that we did not have to worry about competitive stealth technology at that level -- wrong again. let me be clear. i understand we are under budgetary restraints, but we also face substantial threats around the world and great uncertainty about the direction those threats will take any form they will take. the pressure on our defense expenditures is going to have to remain. my final point is it is not a measure for the united states that we are ahead of other countries. if it came to hostilities i do

not want the united states to be in a fair fight. i do not believe in fair fights. i want to win overwhelmingly. that reduces the cost in american lives and risk to our interests. the more overwhelming our capability is, the less likely you get into hostilities to begin with. not only do you have an extraordinary deterrent of fact, you have a persuasive effect on countries saying we are not even going to go there. it is not worth the expenditure to try to challenge the united states. china is obviously well past that point. they are not persuaded nor are they deterred. how would this play out? help with 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're talking about. what we are talking about in the

short term is taiwan. they do not want to have a war over taiwan. china will threaten hostilities s.a. engines -- and see how the united states reacts. when china tort up the pressure during the clinton administration, president clinton sent to carrier battle groups to the taiwan straits. and of problem. how many people think president obama would send two carrier groups to the straits if taiwan were threatened? that is exactly what i thought. in a pose that question too many people. if i was living there, i would be nervous. china was to be able to project power out beyond the famous first island chain and make it very hard for the united states

to come to the defense of taiwan. barack obama would rather worry about health care than taiwan. then china achieves its objective with no hostilities at all. that is the kind of scenario that would like to see played out. one has to say, as the risk and cost to the united states of potentially defending taiwan grow, you can see in congress and increasing lobby of people who would say, "let it go." when that attitude spreads, it does not stop at taiwan. in terms of north korea, the government of south korea now takes a more realistic view of north korea that 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 -- this is not like england were the eldest son -- when queen elizabeth pilot goes to work reward, there is no doubt prince charles will get to be king. since he was born eight days before i was, i know exactly how old he is and how long he has been waiting to be king. [laughter] he will be caned and nobody will overthrow him. that is not true for kim jong un. while there is a period of risk there for south korea, japan, and the united states, it is also a period of opportunity. net regime in north korea is very fragile. it could come down easily. we ought to be talking to china

to avoid problems if that happens because i think if there was real and stability in north korea, we and the south would go in to try to secure the nuclear weapons and restrict refugee flows. we do not want to stumble into something as a result of not having communicated. i do not think there is much evidence that we are in serious discussion with the chinese on that. this is further evidence of lack of attention to some of the issues and challenges that we face. >> a quick question of the defense forum foundation program to try to get information past the government to the people. do you think it is an effective way to spread radio-free types of information into that country? >> i take it is very important

to do that. what we have learned from defectors in north korea is that evoked the comes in from the outside is disseminated among the people vary widely in very quickly. i do not want to paint an optimistic picture, i am just saying the population is hungry for information and would welcome the opportunity if it arose, i think, to see this regime history. 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 in south korea. i was always amazed to see how an different students and professors were to these

grotesque human rights violations taking place in the north. i think that is changing. i think people have seen it because of the shelling of the island -- it is sad that it takes that to happen -- but there is a change in the understanding of the threat imposed by north korea to the south. we should all be trying to take advantage of that. thank you very much for coming. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> neck, a defense department update concerning "don't ask don't tell." after that, treasury secretary timothy geithner of the u.s. economy. then a discussion on how to improve the u.s. economy. >> on january 28, 1986, seven astronauts up above the space shuttle challenger were killed when their spacecraft exploded during a launch from kennedy space center in florida. we'll show you the ceremony

from kennedy space center visitors' complex honoring the crew of the challenger in remembers of the 25th anniversary of the space shuttle's explosion. that is saturday night at 8:00 p.m. eastern on c-span. >> this sunday, we will talk to former president bush about his life and new book "decision points per "here's a portion of the interview. >> what is the latest history book you have read? >> i just read a book on theodore roosevelt. >> you mention him several times. why? >> peake effectively used u.s. power, which i did as well. my presidency was defined by september 11. on that day bivalve to use every legal means at my disposal to protect america. i believe that is the most important job in the world.

we have to encourage democracy. that ultimately marginalizes ideologues to use murder as a weapon to spread their views. >> see the entire interview sunday night at 8:00 eastern and pacific on c-span's "q&a". >> now, the defense department talked-about how they will implement the repeal of the "don't ask, don't tell" policy. it reverses a ban on gays and lesbians serving openly in the military. they also took questions of the anti-government protest in egypt. this is about 45 minutes. >> if i could just give a very

brief statement. >> 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 a