and literature, which is very fair. not being course of at all would have been immediate -- coercive would have been in media. american idea, the market is not ready to provide the capital. in that case, there was not even that objection. the plan was feasible. as i said, the credit squeeze is proposing it as the law of the land in switzerland. why? because banks in switzerland know they are too big to be saved. they're concerned about what is going to happen in the future. in the u.s., they're not concerned so they lobby in a different direction. >> thank you. i will ask one more question. this is my second round. if you fast forward to today and look at the other end of the buchan, march 4, 2011, problems we have now, the chair has described moral hazard and the

like. we talked about that. what did you do? i can anticipate your answers as i think you've given them, just to make it very clear on the record, what would you recommend march 4, 2011? >> briefly, first, i want to emphasize the things we have said. one, you need more capital. and that you need increasing capital has to be with the size of the bank's, the risk of too big to fail. it has to be that this distortion has to be eliminated. secondly, if you have a problem, you should play by the ordinary rules of capitalism. when you go into bankruptcy, you convert that to equity. it is really a version of the standard rules of capitalism. you look at the numbers back in citibank, they had enough long- term capital it was more than

enough to manage them, more than we put in. the answer -- the resolution authority ought to be nothing more than basically the rules of capitalism. but i do feel that because there are agency problems, that the owners or the managers of the banks do not necessarily act in the interest of the owners. the kind of a managerial capitalism, that you have to go bad -- be on that to have regulations and restrictions. for instance, it should not be allowed for government insured institutions were very large institutions to be writing these kind of risky derivatives and under other high-risk activities. so i think we do need additional regulations and more transparency that would

circumscribe excessive risk- taking by either government answered institutions or large institutions, because i do not think capital is enough, is a full solution. >> thank you. >> at the risk of sounding as though simon johnson and i collaborated, i would say i would change capital to equity and picking up what he said, and what i would do is raise the requirement to say that for every -- after minimum size to protect community banks, and you start to phase in capital requirements which start at 10% and really increase as the size of the bank increases so bad --

so that going up to 20, said the largest banks would be paying with their pain in the 1920's. i would face that in beginning now because the big banks are reporting substantial profits and i would give them three years to get to the required capital. as far as other regulations are concerned, i am a believer that regulation only works when it is incentivizing the regulated. that is, if you compare drug regulation reese said, well, we will give you a monopoly and you produce this drug. then you have someone who wants to protect his right. we have to do the same thing. capital is one way to do it. there are other ways to incentivize the bankers. if we just give them prohibitions, you can see it happening, you can see the number of lobbyists, bankers, in

washington every day trying to write the rules that were passed in dog-franc. that is not the way we're going to restrict future risks. >> thank you. >> do not allow them to pay dividends today. we all agree you need more capital. nobody knows how much capital is necessary. even the bankers will conceded the easiest way to increase equity in the business is to retain earnings. they have profits now. that money stays in the bank, belongs to the shareholders. pain that equity under these circumstances makes no sense in economic terms. it is irresponsible, encourages risk-taking of these banks, high leverage and debt. it is completely contrary to the stated policy both in the broad of the administration. mr. timothy geithner says we need capital, capital, capital.

it is completely against the process. the federal reserve process stress test and how it will apply to financial institutions systemically is not done. why would to let them pay capital under the circumstances? it makes no sense and they should not do it. >> thank you. >> i agree with more so what has been said with one situation. if it is done in accounting terms, it is not particularly useful. washington mutual did not violate any capital requirement before it failed. lehman at 11% of capital, just the day before it went bust. i do not think this accounting based measure of capital, particularly use for, what we need to do is market based. we have a proposal based on a swap. he to be based on other indicators. i think the notion is, we don't

want to treat everyone the same because there are people who behave properly. why should they be subject to the same walls? i think the rules should be -- you cannot pay dividends or pay cash bonus. you have to transfer the bonus you want into equity. that would play a bigger role in recapitalizing banks than even stopping dividends. >> thank you, tournament. -- thank you, gentleman. >> if i have learned one thing from this panel, it is to not ask you all the same question. [laughter] i have several questions, but i will ask the specific questions. first, when secretary spoke, one thing i took away from his testimony was the argument that

while we had a lot of problems in our economy, those problems are not really related to tarp. perhaps even problems in credit are not tarp problems not. professor stiglitz, i think your testimony to be the view you do not agree with that. can you explain what it is in relation to those macroeconomic matters that are related to tarp? >> in the short run, and in the long run, but in the short run, i was turned argued if they had given money to the banks in ways or in other ways, they could have induced moral lending. and induced more restructuring. for instance, by the time we bailed out citibank and bank of

america, we were very large shareholders. we could have been even larger shareholders if we had shares -- >> money for the value, so to speak. >> yes. if we used that shareholder voice to say you cannot go make your profits out of speculation or go pay these bonuses -- back to the paying out bonuses -- and decapitalizing the banks, what was the to boy's recapitalization. we allow the capitalization of banks through the palace of bonuses and dividends -- payouts of bonuses and dividends, we did not put any pressure or constraints on the behavior of the banks. so there were, including the restructuring of the mortgages. so given the amount of money if you're putting in hundreds of billions of dollars, it should

have some voice in what happens in the result of that is that we did not get what we wanted, which is restarting of the economy. the long run, the more difficult or even more worse problems because we have a more concentrated banking system in interest rates will be higher, spreads will be higher and the result of that is not only is there longer risk we been talking about, but in the short run, because the market is less competitive, the flow of money in the long run will not be what it should be. >> prof. johnson, treasury seems convinced the banks are healthy, sound or something like that. i wonder if he would comment on two things. is that right? and happen anyone know that is right? with top and a lot about the liability side, given -- we have talked a lot about the liability

side, but what about the asset side of the balance sheet? >> that is exactly right. there's a great deal of uncertainty around asset values. of course, the correct way to assess the state of any banks is to do a stress test. the downside scenario needs to be much more rigorous or negative, pessimistic than the one they used in 2009. i fear the stress test they're doing now, although they have not disclosed anything really about them, i fear the tests are even more gentle. my answer is, we don't know. there are many bad things that can happen. we are not out of the recession as my colleagues have mentioned in many dimensions. the sensible, a prudent thing to do is to require the banks retained earnings and build a bigger equity buffers against potential future losses. that is in respect of of whether you accept my view or other

fees. -- that is a respective of what the except my view or other views. the head of the bank of england, even if you do not agree with the views of those people, just today, the only thing that makes sense is to have the retained earnings right now and not pay out dividends, given what we know and the many things we don't know, fear about the economy going forward. >> prof. meltzer, you're suggesting that we have size adjusted capital requirements. as i noted in the prior panel, it was one of the recommendations of this panel in our regulatory reform progress to congress. >> good for you. >> thank you. it seems the most obvious idea to me and i'm heartened to see some of your experience having recommended it. >> said vitter introduced a bill to do it.

>> i have also been involved in the arguments on the hill that prevented it from being mandated it in dodd-frank. i find it is being treated as though you're suggesting a perpetual motion machine in the political process. can you explain to me why something so sort of straight forward cannot seem to be taken seriously? >> yes. the bankers do not want it and they come down with the lobbyists and hordes to tell the congressman that you are facing disaster. there will not be loans for the public or capital to build industry, all of that stuff. >> the me ask and then i will stop. >> we got to the 1920's with capital requirements. >> since we're talking about size-weighted capital requirements, would that not as many would be a powerful incentive for institutions to be smaller and then they would lend more when there were smaller?

i mean, would it not move rashly to step away from the too big to fail structures and the amount of credit provision would not be affected? >> we would remove the incentive, which pushes them to be bigger and bigger all the time. that would be good. i do not think they would be small, but i think it would be smaller. there isn't any evidence that i know that says their economies scale of that size, which makes them want to be bigger. i want to add one other thing. in 1991, i believe congress passed the audition. are you familiar with that? did they use it at all? no. what did it call for? it called for early intervention. just completely ignored. they gave reasons. they said it did not apply to holding companies and such things as that. given all the things they were doing, they could have made it

work. they closed them down. we have to legislate it. thank you. >> i am allowed to keep going, i am told. [laughter] >> my understanding, there is not economies or evidence of scale or scope and banking over about $50 billion in total assets. the macy $100 billion if he wanted -- you may say $100 billion if you want to be generous. >> i want to emphasize one more theoretical point, the requirements of leverage, basic idea and economics that says leverage does not buy you anything except hire probabilities of defaults. and so the argument that they're making that it would interfere with the efficiency of the economy has no support in the

economics profession. >> one argument i want to dispose of. there is the notion that -- you suggested various levels of capital be required. but how much capital should be recorded in a given size, just the notion of a sliding scale does not -- is there any basis for the argument that a sliding scale would bring on a credit crunch? >> no. >> no. >> can i dissent on this? >> i think i found a point of disagreement. i feel proud. >> i have to say i have great respect for prof. stiglitz. i think since miller, the level is not irrelevant. i am surprised to say to see now is completely irrelevant. i do not think is relevant.

i think in the current situation, if you were double the capital requirements to banks to mark, you would have a credit crunch. there would be a consequence. why? the managers do not want to raise more equity, regardless if this is in the interest of the shareholders. they do not want to raise more equity. the alternative to raising more equity is to lend less. i think there would be consequences. i think the argument they're going to use to say why the sliding scale is bad is that it is going to unfairly affect the large banks. i completely disagree with this argument. i think now we unfairly favor large banks, so a sliding scale with only bring a level playing field, but that is the argument they will make. >> your point about the credit

crunch is a constitutionalist argument. >> why? >> you get more collective form of lending, that is, if a bank -- one argument made is of the corporations are so big that they need to have big banks, but they can syndicate the loans for hundreds of years, syndicate the loans and service the banks. >> known is proposing you immediately double -- no one is proposing immediately double it. you could dump assets. look for example at the plan put forward by david. experienced treasury and to this demonstration. now the proposals out there, ways you can time the shift in capital requirements to phase in

these kinds of either higher level overall or step level as prof. meltzer is suggesting. it would not a contraction mary. >> my chair has some of this must come to an end. >> this is been a fascinating conversation. i'm certainly not one to try to compete with you on your field. i will pull you over to mind as a mere labor economist and start talking about executive compensation, which has received a certain amount of attention. my own view of this issue and combined with the current crisis sort of has evolved over time. to one in which it seems to me when you have a too big to fail financial institution, it is the case that shareholders very much value risk and are going to move toward more leverage. they are going to compensate executives in a way that would

have them shift the risk profile of the investments they make out to a more risky environment. you do not need to take a very strong stand in terms of what you think executive pay is set optimally or not. in the presence of too big to fail, both shareholders and executives are willing to move towards more risky forms of investment and are going to be compensated. i guess i would like your thoughts and my hypothesis. i will start with you, professor stiglitz. >> the important point you're emphasizing is that the decisions made by the banks are made by managers, not the shareholders. and there cannot be misalignment of interest -- there can often the misalignment between the two dead. i remarked before, there needs to be regulation affecting shareholder compensation, regulations in general,

including those affecting shareholder incentives. those incentive structures can leave them to want to undertake excessive risks and there may be limited ability of shareholders to constrain the ability of managers in that way. there is a second problem in managerial compensation you did not mention that i think is important to realize. when you get shareholder stock- option kind of compensation, it provides an incentive for you to distort the information that you are providing. so it encourages non transparent accounting. there's always going to be a lot of discretion, a lot of the issues that we have ignored the mistakes that have been associated with the ability not to keep on bad mortgages at full value and the whole distortion in the assessing of the asset structure. but the point is, if you have

compensation that is related to the seeming performance of the share market, you have an incentive to distort the information provided by the market and to the regulators. >> does anybody have anything different to add? >> yes. if i may, i agree theoretically if the two big to fill guarantee holes, then the interest of management and his guard can be aligned to they want them to take risk. as a practical matter, the kinds of concerns professor stiglitz engines comes into play. i would refer you to a paper that went carefully through the compensation of the top 14 executives of the top 14 financial institutions in the u.s. between 2000-2008 and on as executive stick out in cash bonus and three stock sales, $2.6 billion in cash. the top executives took around $2 billion in cash.

if you're a shareholder in that time, you did pretty badly. that suggests as a practical matter, maybe because of misrepresentations and maybe some other reasons, the shareholders do not do well the when the managers take a great deal of risk and get paid on more less immediate return basis, equity basis, not properly risk adjusted. >> i worried about this problem a lot as a practical thing because i was a chairman of an audit and composition committee for a fortune 500 committee -- company. i face the problem of how your award chief executive and a subsidiary executive. i do not think there is an easy answer. dodd-frank , up with the proposal, and on finding -- non- binding vote. so far, i think the evidence shows that the shareholders do not care much. i think that should be evidence

enough to leave alone. >> professor -- >> except in this case. >> i want to ask you a somewhat different question. a more related to your recent paper "paulson's gift." yet estimate that's tarp preferred equity infusions and the fdic debt guarantee costing taxpayers $44 billion. you talk about an alternative plan. the government could a charge more for both the equity infusion and the debt guaranteed as one of the day when invested in goldman sachs three weeks before the polls and plan. can you elaborate on the difference between private party transactions undertaken at the time of tarp and the actual tarp transactions? >> yes.

i think they're two aspects. first of all, the capital infusion that was done was done not in market -- known in market terms, worse than the one that warren buffett got in return. the same is true for the debt guarantee. what is interesting, when the debt guarantee was extended, we observed the overall cost of insuring, the institutions dropped. even if we take the value of this cost after the announcement -- think about systemic effect an individual affect. even if we sort of take away the systemic effect, the cost of insuring institutions was too cheap and was not really been varying according to the type of

institution. for jpmorgan, this was not very convenient. for citigroup or goldman, tremendously convenient. the number are doing does not give a good picture is sort of the cross-section was -- j.p. morgan was heavily penalized by the plan. the market expected them to buy on the cheap and the other worked expecting to sell. citigroup, morgan stanley and morgan were tremendously helped by the plan. there's sort of this cross- section aspect. it is important because it distorts the market incentives. by treating everyone the same, the good managers are not rewarded in the bad managers are not penalized. >> let me ask a final question. as anoften characterized able to out reached consensus on any issue. i would argue the five

independent economists and the war room, i will be arrogant enough to put yourself -- myself in your group, agree about the importance of incentives and the effects the distorted incentives have brought this problem and continue to have today. this is a point i have made repeatedly since being on the panel. i can understand why folks ignore me, but i struggle to understand why they ignore you. and i guess i am curious on your thoughts. what are we doing wrong? what are we doing wrong as a profession? i think these issues are something the economists do agree about. i guess i would like your thoughts. i am tired of shouting to the wind. i don't know about you. professor stiglitz, i will let you lead off. >> i think what is interesting about this particular case is that there is a broad spectrum

of support from the left and right in the economics profession, but this goes back to the particular groups who are big beneficiaries of this particular system. they have a lot of money. they have a lot of money to invest both in trying to shape public opinion and to get what they want. i do not find it that mysterious, and a way, that there is a lot of money at stake. a lot of money. the money on the other side of try to create a more efficient, more fair system, the point that a number of people have always made, those are lots of people and you have concentrated in fisheries and the alternatives are much more diffuse, very hard to get a fair battle we have this much money at stake.

>> prof. meltzer, you have been doing this for a long time. what are your thoughts? >> i'm a strong believer in what is called political economy, that is, making policy the first four letters of policy and politics are the same and the money is very important. we are fighting a battle -- i agree with my old friend who said, our job as economists is to come up with proposals and when the crisis comes, we will be better than the proposals that will occur at that time. he and we have had a record of getting things done that way in crises. in the ordinary course of events, you're fighting tough political battle in which, as joe just said, is much at stake and a lot of money that goes into campaigns coming from wall

that makes a big hurdle to get over. when my bill was produced, there was not much support from the senate banking committee. >> it is a fascinating question. when confronted by these proposals, the bankers were going to move to the u.k. when confronted by the u.k., they said they were going to move to new york. you have to have the world financial centers. there are people within the federal reserve system and other regulatory agencies who totally get this. i am not saying we convince them. they came by this opinion by themselves. there are other people who have said they are adamantly opposed

to apply the logic we have presented here today. they do not come out and discuss it enough and clearly enough. ultimately, the reasons make no sense at all. it was the legendary republican senator at the beginning of the 20th century who said there are two things that matter in american politics. the first is money. and i do not know what the second one is. [laughter] >> i think there are a couple of reasons. we are reminded that there are people who are well organized and there is a lot of money at stake. i believe in democracy. on some topics, this can be overcome. it requires that the topic is sufficiently interesting and

easy to understand -- easy to explain in the media that it generates public outrage. in terms of the developmental issue, people are much more sensitive because you can explain it easily to be ordinary human being. when it comes to capital requirements, it is hard to be successful in explaining or pushing the political agenda against the entrenched interests. this is not a selected sample. there are people who are actively engaged in public speaking. i do not think you can say the thing about most economists. most economists do not write in

newspapers and to not actively take positions and they are not public figures. the type of policy advice you give is not strong. i think they do not care. >> thank you. >> superintended? i say to the best for last. >> we know that liquidity is a firm's failure. lehman brothers is a good example with respect to the capital position at the time. the impact of short-sellers, the fact that short-term funding can dry up at any point in time. i would be interested in your views on the relationship between capital and liquidity and your views on the proposals out there, particularly under

iii and the proposals with respect to liquidity requirements. >> the way that it represents a short-term debt can run quickly. i do not want to take any risk that the other party will fail over night. over a day, it is not large enough to compensate for the risk. when the market sentiment shift and there is a fear that the, the party is an solvent, the short-term lenders stop lending. that is why it is important to have a cushion of long-term debts. the ball low requirements -- the

ball so -- the basel iii requirements for long-term debts are important. short-term borrowing is favored on the part of institutions. the bankruptcy in 2005, by exempting personal bankruptcies, they made them cheaper than anyone else and make them more fragile. i am favor of some requirement in terms of compositional liability. >> the issue you raised focuses

particularly on the question of the shadow banking system. this is a serious problem. a lot of discussion is focused on the banking system. the point where lehmann brothers showed up was the collapse of the reserve fund. people thought they could use the shadow banking system for a substitute -- as a substitute for the banking system. we have to see them as an integrated whole. we should not use the shadow banking system as a way of circumventing the banking system. that is one of the important aspects. i want to agree with the professor. the incentive structures that are built steadily into the structure, like the banking

provision, is an example of something that is a major distortion that got little attention at the time it was adopted. it is an example of the kind of concerns. another example is where you have incentives where some of are done in a transparent market and some are done over the counter. that is an incentive to move things into the dark area where there is no way to regulate. the way we are going right now is to create new opportunities and incentives to move things away from where we can see what is going on to where we can. these liquidity issues become all the more important. >> i did want to ask about the regulatory reform efforts about riskier activities, proprietary

trading, swap activities and moving those activities, the proprietary trading, had to fund -- proprietary trading, hedge fund activities into a holding company. i would be interested in your views. are you shifting those activities into a less regulated area or would you prefer to see them within the bank holding company structure with a higher level of oversight and capital requirements? >> there are two separate issues. we have to deal with the too big to fail banks and the financial institutions, whether they are banks or non-banks. we have not talked about the to court -- the two core letters that failed. that represents -- the two correlators that failed.

that represents systemic risk. where ever they are, there needs to be transparency. and the movement to allowing large segments of transactions to be in a non-transparent been you seems an invitation to problems. >> i would like to say that on the money market funds, the biggest part of the off banking system, how did the crisis come about? they had to mark their assets to markets until they got to the point where they no longer could do that and pay the face value. they got the sec to change the rules. they did not have to mark their assets to market. when there was a run after

lehman brothers, if they had been forced to mark their assets to market, that would have been the normal course of events. that was just a bad ruling. we ought to reverse that ruling and say when the liability is only worth 95 cents, they are only worth 95 cents. that is a mistake. i agree with a comment you made quickly. it is a major problem you have to think about. if you regulate too much, they are going to shift and someone has to bear the risk of the full movement of the american economy. if we shipped those risks out of the banks, the most regulated -- shift those risk out of the banks, the most regular -- most regulated part of the system, that will not be in the long-

term interests of the economy. you have to be concerned about what we do to keep the risks where we can see them. >> the most descriptive is to a-mole.he whack- >> that is another reason why capital requirements are much more desirable than regulation. >> i agree completely. many of the chateau structures were constructed to get around from -- to get around capital requirements. i agree that we have constructed incentives for too much short-term funding of longer-term assets. they should be funded with equity because of the nature of the risks. i would emphasize we need high capital requirements across the board.

we were discussing an incentive for a management to get big enough so they can fail. i would end by quoting someone i know in the hedge fund industry. he said, let's face it, on the too big to fail debate, you lost. now what we are working on in the hedge funds is how did we come too big to fail? >> can i endorse strongly with the professor said. i think the single evil rule is the one that provides an appearance of safety in money market funds that helps the market themselves as safe deposit when they are not. we have 2000 pages of legislation. we could have changed that rule.

i do not think it is subject to congressional approval. it is a rule of the sec and no one is discussing doing it. >> i have been around this place for almost 40 years. i have never seen a paddle or witnesses in the more agreement in my entire life. let me tell you something, i know you know about disparity in the political ideas of the witnesses. there are different use about this about everything between everyone of here on the panel. it is difficult to get some of these ideas that seem to be straightforward and widely held by people who have been thinking about getting it into legislation. i really want to thank you all for taking time out of your day

to come down here and do this. we really appreciated. the record of the hearing will be kept open for one week. i want to finally say, banks. i want to thank my fellow panelists. i came in on this late. the welcome and the ability -- i have never seen a group that is so easy to get along with and is so easy -- so willing to come to common ground. having been a staff person, when you show up at this point when the staff is in existence, you are a little scared. i want to tell you, this has been a top staff. they are absolutely incredible. naomi and elizabeth do an incredible job. i want to thank everybody. with that, we will close the

hearing. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> will there be a public report? >> next, a state department briefing has the latest on the middle east. after that, president obama talks to miami high school students about the importance of education.

mit american history professor pauline maier has written several books on the american revolution. her latest, "ratification," out this past year. we are taking your phone calls, e-mails, and tweets on c-span2. you can also find the entire weekend schedule on booktv.org. >> this weekend, live from the u.s. capitol, the 150th anniversary of abraham lincoln's first inaugural address. reenacted by sam waterston, and we will go to f street, and visit the home of woodrow and edith wilson. talking about the white house

and power and the buildup of our cold war arsenal. get the complete schedule online at c-span.org/history. >> state department spokesman pete j. crowley speaks with reporters necks about libya, including the ongoing violence between anti-government protesters and gaddafi. and humanitarian assistance in the region. he also talks about president calderon's damage -- comments on the damage to relations with disclosures by wikileaks. this is about 50 minutes. >> you have been hanging out with those white house guys.

>> if we could briefly talk about mexico? >> i was going to accentuate the word briefly today. >> everything has not started yet. we have to formally banged the gavel and declared this in session. we will banged the gavel and declared this in session. >> good afternoon, and welcome to the department of state. a couple of things. this -- we have -- if we could start off with just a brief tribute, today we are saying goodbye to two very good friends within the state department. press officer ginny staab in our western hemisphere affairs bureau is leaving washington shortly. she's been a great supporter of many of you through the last couple of years.

she will be reassigned to portugal as a cultural affairs officer. we'll all have to find a reason to go to portugal and cover cultural affairs there. [laughter] but we certainly thank ginny staab -- been an outstanding press officer on behalf of assistant secretary arturo valenzuela and a great friend and colleague of ours in pa as well. and likewise, shortly the secretary will bid farewell to assistant secretary rich verma, who has been a tremendous friend and colleague of all of us for the past couple of years. most recently, rich helped the secretary both in her recent testimony of last week -- in fact, today is supposed to be his last day. he's extending into overtime next week when the secretary does one more hearing on the hill. but he certainly helped shepherd the effort throughout the executive branch late last year that led to the ratification of the start treaty. so we will bid a fond farewell

to our friend, rich verma. the secretary this morning had a bilateral meeting with minister of foreign affairs and religion dr. rene castro of costa rica. she thanked foreign minister castro for his leadership in the region in working to enhance citizen safety, promote economic development, innovation, science and technology, and ensure environmental sustainability. they discussed closer collaboration through the region. for those of you who saw the press availability afterwards -- [inaudible] -- not only working issues of -- to strengthen multilateral organizations within the hemisphere, to work multilaterally and bilaterally on the issue of citizen safety. turning to europe, the united states remains gravely concerned over the continuing post-election crackdown by the government of belarus on civil society, independent media, and the political opposition. through its ongoing detentions,

trials, and harsh prison sentences, the government is creating new political prisoners. we urge the unconditional release of those detained in the crackdown without trials and the creation of space for the free expression of political views, the development of civil society, and the ability of citizens to expand their contact with open societies. for example, there were nine presidential candidates for office. two of them are in jail, seven of them have been charged under these draconian actions by the government of belarus. they are simply unacceptable. turning to the middle east, the united states today deposited its instrument of acceptance to join the international renewable energy agency, or irena, becoming its 63rd member. irena formed in 2009 in response to the growing international interest in the adoption of renewable energy

technologies to meet the challenges of sustained economic growth, energy security, and climate change. supportmission is to and expedite member-countries' transition to greater renewable energy use by helping identify and facilitate adoption of appropriate and optimal policies, business practices, and technologies. to date, 148 countries are irena signatories. and as i mentioned, the united states is the 63rd to ratify the statute. the irena is headquartered in the united arab emirates. as the secretary mentioned this morning with regard to libya and tunisia, that two c-130 military transports have landed in djerba, tunisia, delivering humanitarian supplies from the united states agency for international development. each aircraft carried three pallets of aid supplies, including blankets, rolls of plastic sheeting, and water containers. and those supplies have been

offloaded and are now heading for the border between libya and tunisia. as we've observed during the course of the last 24 hours, flows have appeared to slow somewhat, although that situation could easily change. our estimate -- or the estimate of the international organization for migration at this point is that an estimated 200,000 people have fled libya. of those, roughly 108,000 have repatriated thus far. there is an international airlift in progress which has significantly helped in easing the crisis caused by the influx of migrants into tunisia. these c-130 aircraft today are carrying humanitarian supplies. we anticipate that tomorrow they will return and participate in the flow of migrants from tunisia back to egypt.

>> sorry. on that 108, they are libyans who repatriated back to their country? >> no, these are third-country nationals. thank you for the clarification. these are all third-country nationals who -- as we've said, the estimate is there could be as many as 1.5 million third- country nationals working in libya, and many of those are still in the process of making their way out of the country. >> also on that, unhcr, i think, said today that they were concerned that one reason the flow could be dropping was that people are being prevented from crossing the border by guards or militia on the libyan side. i'm wondering if the u.s. has any evidence of that. >> we've seen -- we've had that same concern. as we mentioned yesterday, we had seen a dramatic drop-off in people at the border and we are -- we share that concern that perhaps there are some security elements in libya that are inhibiting this flow. we're looking at that. i don't know that we've yet seen any specific evidence, but

that remains a concern, yes. >> are you making -- are you working with countries bordering libya to allow passage, like chad and other places, to -- >> say it again, sir? >> are you urging these countries to allow passage of these people expeditiously? >> well, no, actually -- in fact -- >> because some do not have their passport. they're taken by the employer. >> sure. but in fact, it is a tribute to both egypt and tunisia that notwithstanding their own transitions in each country, they have been able to effectively work with the international community and, broadly speaking, manage this tremendous influx between -- out of libya in both directions. and obviously, the international community, including the united states, is prepared to help them. but i think the situation on both sides of the border -- it is a remarkable tribute to both countries. >> p.j., is there -- there are many indian nationals in libya. the indian government has asked any help in any way?

>> goyal, i'm not aware of any specific help, but what we have been doing for the past couple of weeks is sharing information broadly across the international community. when we were chartering aircraft up to a week ago, we were opening seats for countries who were able to get their citizens to either the ship dock or the airport. and likewise, in the succeeding week, we have been working with other countries as well, and in a small number of cases, we've been able to put americans on board, ships and aircraft that are leaving libya. so i'm not aware of any specific requests, but this is something that we are cooperating broadly as much as we can. >> can you shed some light on the possible number of americans that are working in the remote oil fields? we are told that there a number

of americans who are working in remote oil fields. and what is the status of these oil fields? >> well, we have evacuated a very significant number of people, and we have, as a government, but also private companies have also made their own arrangements to take employees out. i don't know that at this point we are aware of any u.s. citizens who are still in libya who have not made a choice to stay. but we remain open and continue to work with anyone who is contacting us and seeking assistance in leaving libya. there are something approaching perhaps 6,000 people in libya who are dual nationals, u.s citizens as well as having libyan citizenship, and it is, just from a practical

standpoint, more difficult in those cases since libya, as i understand it, does not recognize dual citizenship. so anybody in libya who is a dual national has to leave using a libyan passport, not an american passport. >> but you're not aware of any of the international oil companies that are keeping their employees hunkered down -- >> i'm not aware at this point of any significant number of people that are still in libya who have not already found ways out. >> p.j., the gaddafi forces are clashing with the rebels in different places and trying to recapture the areas dominated by the rebels, and they are using grad rockets and helicopter. how do you view these clashes, and how can you help the rebels? >> well, we continue to watch the situation very closely inside libya, and we do know that there is an ongoing clash between elements that are still

supporting or sympathetic with the gaddafi regime and those who are now in opposition. as the secretary indicated this morning, we continue to evaluate options as to how the international community might influence the situation inside planning continues to provide the president with a range of options. we remain in discussions with allies, including nato, about possible actions. but as she did again, we affirm that the best solution for libya is for colonel gaddafi to cease his attacks against his people and to step down. >> p.j., what -- >> and update on the no-fly zone issue? >> no update. we continue to have that option under active review. >> p.j., what is the -- >> the difference in tone

between the white house and the state department on one side and the defense department on the other, i mean, obama yesterday said we're looking at the full range of options. you're talking about a full range of options here. but the military seems, as bob gates says, we need to choke off loose talk, and he's talking about all the risks of military action. >> i don't see any daylight between those statements. what the secretary of state rightfully says, as the president emphasized yesterday, is we are developing a range of options and no option has been taken off the table. as secretary of defense gates reminded -- he's absolutely right -- that we have to -- you have understand the implications of establishing a no-fly zone. it is not something you can do with the snap of a finger. there are implications for this. there are costs for this. and -- but that didn't preclude that this could well develop into an option that we have to

seriously consider as things go forward. >> p.j., what is -- >> what kind of discussions took place today between the secretary and her counterparts in the defense department? any -- how did it transpire today? any -- >> i'm not aware of any specific conversations today. i mean, there is -- we continue to have an interagency process where we, on an ongoing basis, evaluate events in libya and continue to develop the options that the president has requested. >> p.j., what is your opinion of these rebels that have taken up arms against the libyan government? does the libyan government has a right to defend itself against these particular people that have taken arms against them? do you consider this -- him attacking unarmed civilians? or is there the beginnings of a civil war in the country, where he's entitled to defend himself and his forces against those who have arms?

>> well, the fact that the government has turned lethal overwhelming force against its population is, obviously, of grave concern to us and we think has delegitimized colonel gaddafi as a leader for libya. we have called for him to step down. we are gravely concerned about the ongoing violence, and obviously there is a risk that this violence could deepen into something like a civil war. we want to do everything that we can to avoid that happening. and again, the best solution here is for colonel gaddafi to give up the fight, step aside, and open the door for new leadership in libya. >> yeah, i understand that. but the direct question is he is -- i'm not talking about

unarmed civilians, which clearly i would understand that you would have an issue against him attacking unarmed civilians and people in the streets. i'm talking about armed rebels that are fighting the government and government forces. does he -- what is your opinion on his military action against them? is this an act of war? is this some kind of civil war? or do you consider it part and parcel of the same thing of his attacking -- >> well, the united nations security council resolution passed just about a week ago made clear that the violence needs to stop. >> on both sides? >> well, and, elise, that is something that we have espoused from the outset of these developments across the region. if you go back to the principles that we have enunciated throughout this, these issues should be resolved through dialogue, not through violence. but it has been colonel gaddafi

who has chosen to carry the fight to those who have stood up in opposition to him, and he and those around him bear the responsibility. and the un security council resolution made clear there will be accountability based on the actions that have been taken. he could very well have opened the same kind of dialogue with his people that we're seeing in bahrain, that we're seeing in oman, that we're seeing in other countries. he chose to turn his weapons on his people, and he will be responsible and accountable for those actions. >> but no, let me -- this isn't answering the question, though. i mean, but -- if you're using that argument, then you're saying that in egypt or tunisia or bahrain or anywhere where those governments have used force against the people, that those people are entitled to use force against them. so are you saying that these rebels in libya -- and while you've said it in other countries, you haven't

specifically said in libya that you would urge both sides to exercise restraint. are you saying that these libyan rebels are entitled to carry arms against gaddafi or not? >> well, it is difficult for me to sit here and characterize -- i mean, what might be happening in one corner of libya is different than what's happening in another corner of libya. i mean, it was the libyan regime that turned its guns on its people, and it is the people of libya that are forced to defend themselves in light of the aggression that the libyan regime has carried on, not just by military forces, but by these mercenaries that are in the employment of colonel gaddafi. but there was and remains the opportunity for dialogue. it is colonel gaddafi that first chose to claim that the unrest that's occurring in libya is because the population is drugged. and then he has claimed that

it's all about al-qaida. ultimately, it's all about him. and these people are standing up and demanding a new day in libya, and they are entitled to that new day. >> but how can you say that there's room for dialogue and at the same -- in the same breath say that he has to go? who are they -- you're not giving him any space in that dialogue clearly. >> well, we think he's crossed a line in the actions that he's chosen to take over the past two or three weeks. and as we look at the situation, we want to see -- as the secretary and the president have said, we want to see genuine reform. and it is clear to us that gaddafi is not interested in reform. >> so that dialogue that you're proposing would be between whom? >> well, i'm saying that there was that opportunity. but now it is gaddafi who has chosen to deepen the violence against his people, and that's why the secretary and the

president have clearly -- and others -- have clearly called for gaddafi to go. >> so there isn't room for dialogue? >> i think there's room for dialogue to facilitate gaddafi's departure from the scene. >> and it sounds like you're saying -- just to be clear, it sounds like you're saying that these rebels are entitled to take up arms against colonel gaddafi. is that true? >> no. i mean, elise, you're using one terminology. >> well, i mean, you used -- >> i mean, there is clearly a political opposition that has developed -- >> well, it's an armed political opposition. >> well, all right. there is clearly political opposition that has developed in libya. and there was the opportunity for dialogue involving colonel gaddafi. i think we're likely past that point. at this point, the dialogue needs to be between those who want to see a brighter future for libya, a democratic future for libya. and in order to see that happen, as we've said, it's time for colonel gaddafi to step aside.

>> p.j., in principle, does gaddafi have a legitimate right to self-defense, one? and two, do you know the identity of the rebels? >> well, i mean, in a -- i mean, there are rights and there are responsibilities. >> right. >> gaddafi has been a brutal dictator for four decades. and based on what he has done in turning his weapons against his people rather than engaging them, we believe that he has forfeited the right to lead libya. >> p.j., the rebels are in need for arms to end gaddafi's regime and they are asking the united states to provide them with some kind of ammunitions. are you ready to cooperate with them on this regard? >> right now, we're focused on the humanitarian implications of what is occurring in libya. it may well be the case there

are too many weapons in libya already. we want to see this peacefully resolved. we want to see the violence and the bloodshed stop. we are evaluating a range of options as things develop. but at this point, we -- our preference would be to see a peaceful resolution of this. >> providing arms -- >> do we -- >> and that's why we have called clearly for gaddafi to step aside. >> providing -- >> as being the most likely step that will lead to an end to the current violence. >> p.j. -- >> providing arms is one of these options? >> i'm not ruling anything in, i'm not ruling anything out. we're quite aware that people have called for arms, weaponry. that -- we have made no judgments on those things. but right now, we would prefer to see this resolved. and the best way to resolve this is through gaddafi's departure. >> who are the rebels? does anyone know their identity, their political identity? i mean, how would you -- >> i mean, you're talking about rebels. that has implications. i'm talking about the emergence

of a genuine political opposition. there are people who are standing up. they are a range of figures -- tribal figures, political figures, military figures, businessmen who are saying that they want to see a different system emerge in libya. we are reaching out to as many of those figures that we can to both understand what is happening now and understand how we can be most helpful in bringing this current situation to a successful and peaceful resolution. but they are a wide-ranging group, but we see signs that they are beginning to organize and coalesce, and we will be watching and communicating with them and trying to find appropriate ways to be helpful. >> is there a discernable, tangible structure, command and control structure for the rebels -- >> is -- >> that you know of? >> i mean, in our conversations there appears to be an emerging structure. but again, this is something

that's still in its nascent stages. >> p.j. -- >> but p.j. -- >> the gaddafi government said today that they have appointed a replacement for the un ambassador who renounced him a couple of weeks ago, a former foreign minister dr. treki. my question is -- have you heard anything from them regarding the ambassador in washington? >> not since the fax earlier this week. >> which you -- which is not anything official in your -- >> well, which -- i mean, if -- i mean, libya has the ability to talk to us if they choose. >> and secondly, on dr. treki would there be any issue in him coming to new york, to the united nations, any visa problems, anything? i mean, he becomes -- if the un accepts his credentials as the libyan envoy to the un, would they -- would you -- >> well, again, that's the first step. obviously, we have official responsibilities in supporting the united nations. there are agreements that guide that support. but the first step in this process is for libya to

authentically and authoritatively declare who their representatives are in this country. >> p.j., as far as options are concerned, mr. gaddafi still so far is not listening to the united nations or the international community. one, do you consider him still the president or ruler of libya? and two, how long is -- >> he is responsible for libya still. >> how long these options will go? because before you say you want to avoid a civil war before more deaths occurs in libya. >> well, again, this is something that we watch closely. it's an evolving situation, it's a dangerous situation. mr. gaddafi is responsible for what is happening in libya today, and we in the international community will hold him accountable. >> in terms of the evolving situation, i mean, at what point is it deemed a humanitarian crisis. the president said that he's considering all options, military, non-military. but if -- at what point -- i

mean, people are being fired upon. in your own words, you said that gaddafi's unleashed lethal overwhelming force against his people. so at what point -- has it deteriorated to the point the u.s. feels it must be compelled to act? >> that's a question that defies an easy answer. we continue to watch the situation closely. we are -- >> is there a redline for the united states? >> we are concerned about what is happening. and as the situation evolves, we'll see the options that the president has called for develop fully, and then we'll make decisions as appropriate, working collectively with the international community and others in the middle east. >> so is there a benchmark? >> we are watching and developing, and we're prepared to act and respond as appropriate. >> is gaddafi winning right now? it seems to me the government doesn't -- your government has no real plan on what's the next step to raise the pressure on him.

the protests aren't making further inroads right now. >> well, i would say what we want to see is the people of libya win, and they win with gaddafi's departure. >> the focus remains humanitarian. you said the two c-130s that have landed and unloaded. will there be any other c-130s leaving the united states or any -- >> well, these were european- based c-130s. >> oh, okay. >> and as i said at the beginning, today they were delivering humanitarian supplies. i believe tomorrow they will be back on the ground in tunisia, prepared to move citizens, egyptian citizens or others, out of tunisia. >> but as the -- if there continues to be a flow, although you say it has slowed down -- >> yeah, we -- i mean, we are -- we remain concerned about this flow of people, even if it has eased from levels of earlier this week. the conditions there are still arduous. it's cold at night. these people are exposed to the elements, and we want to get them back to their home

countries. and airlift -- particularly in the case -- since a very significant number of these people are egyptians, that remains a major focus. but obviously, we are working with other embassies. and as people come to the border and they identify themselves as citizens of a particular country, iom and unhcr, working with the united states and others, will look for ways to ensure safe passage. >> mr. crowley, on mexico -- different topic -- "the new york times" is reporting today that the status of ambassador carlos pascual in mexico was discussed in yesterday's bilateral meeting at the white house. after that meeting, are there any plans to recall ambassador pascual, given -- that if he could -- [inaudible] that president calderon said, having a relationship with him? >> i know of no plans. ambassador pascual and his mission have done and are doing

tremendous work to advance u.s. national interest and to support our mexican partners in addressing mexico's security challenges and issues within our bilateral relationship. >> but mr. calderon mentioned yesterday in an interview with "the washington post" that the relations with the u.s., due to the status of ambassador pascual, were very strained. how can you say that relationships -- that the relationship is just going naturally when the president of mexico is saying that the relationship is not particularly good because of the ambassador? >> look, we understand the challenges that we have with mexico are difficult. it is putting stress on mexico and on the united states. we are working hard with mexico on security issues that are of great concern to both of us. we recognize the extraordinary burden that this has placed on mexican institutions. that's why we have the merida

initiative to help mexico in every way we can. as the president said yesterday, we have -- we are doing more on our side of the border. we have to keep up the pressure on these international criminal organizations on our side of the border as well as helping mexico and others in the region. we are doing that. these are hard, difficult challenges. and ambassador pascual is working effectively under difficult conditions to manage the -- our bilateral relationship and to help deliver the kind of assistance to mexico that we have pledged. >> but can you confirm if it was an issue in the meeting -- >> i don't know. >> it doesn't sound, though, as if it's an issue of that the mexicans have a problem with u.s. policy or things like that. it sounds like it's specifically personal to ambassador pascual.

and you've always said that you have relationships with countries, not with individuals. so is that the case in terms of ambassadors? i mean, if a country doesn't like or doesn't get along with or doesn't feel that a particular ambassador has a feel for their country, are you going to let the relationship suffer at the expense of standing by your nominee? >> well that's a hypothetical -- i mean, that's a hypothetical question. >> it doesn't sound like it's a hypothetical question. >> no, but ambassador pascual is, in our view, doing tremendous work on behalf of the u.s.-mexican bilateral relationship, and i know of no plans to adjust his status. >> but do you have the idea that maybe this can have damage in the relationship with president calderon? you have reached an amazing level of cooperation between both countries. is it possible that maybe due to this lack of confidence of president calderon in ambassador pascual you can start seeing some problems --

>> look, i've given you the u.s. perspective. i can't speak for president calderon, and i do not know that he was the subject of any discussion yesterday. >> but is this wise, p.j.? is this wise to maintain the ambassador even when the president -- he has any good relationship with president calderon? >> but we have ambassadors around the world to serve our interests. and in doing so, we believe that that serves the interest of the country and the region to which they are assigned. but -- and we -- as i read that story yesterday, i believe president calderon raised the issue of wikileaks, and we fully understand that the revelations of some of these cables have created tensions. and whether or not that exists in mexico and other countries as well, we are determined to work with whatever tensions have been created by the emergence

of these cables. that said, without speaking about any cable, what these cables show broadly speaking is u.s.diplomats serving in difficult circumstances all around the world, addressing the common challenges that we have with our partners around the world, and solving problems. that is what ambassador pascual and his team is doing in mexico city. that is what other ambassadors at our embassies are doing every single day, and he and his team are absolutely serving the united states's interests and, we think, the interests of mexico and the region as well. >> but you withdrew ambassador gene cretz from libya. before this whole thing with libya happened, you withdrew ambassador cretz because of the wikileaks revelations. he was considered to not be able to do his job in the country. so what's the standard? >> that's not the reason we removed --

>> well, what is the reason then? >> that's not the reason we removed -- (laughter). >> you sure about that? [laughter] >> no, i am sure about that. we brought back ambassador cretz for consultations because we had genuine concerns about his security. >> by the way, does the state department have full -- >> but it was related to the wikileaks cables. >> i'm just saying -- i mean, i'm just saying that -- and right now, ambassador cretz is on the job working hard to understand fully what's happening in libya and to see what we can do to help the people of libya see a better tomorrow. >> by the way -- >> do you have any concern -- >> does the secretary have full confidence -- >> p.j. -- >> in ambassador pascual and the job he's doing? >> yes. yes. >> do you have any concern that maybe this can be taken by the mexican government as a challenge to impose somebody whom they do not like and refuse to work? >> again, i've given you our perspective. >> change of subject? >> sure. >> the palestinian-israeli issue, do we have an answer on

the status of mr. rahmah? >> no, i've asked the question. i have not received an answer yet. >> okay. i still have a question on that. have you read or seen the statements made by dr. nabil shaath one of the palestinian negotiators in paris. >> i have not -- >> he said the following, that, quote, "the united states is not to be trusted, and, in fact, it has been lying about its effort to pursue a peaceful settlement and to achieve the goals stated in the september 1 declarations." what do you say -- what is your comment? >> all right. we're doing what? >> he said that, quote, "you are not advancing the cause of peace, and, in fact, that you are lying about your role," unquote. >> i have not seen those specific comments. >> okay, but he -- >> all i can tell you is what the policy of the united states and the obama administration is. we continue our efforts to pursue comprehensive peace in the middle east.

we are squarely focused on trying to help the israelis and the palestinians achieve a framework agreement and ultimately a two-state solution. we are strong advocates of a viable palestinian state, and we are strong advocates of a state of israel that can live in peace and security with its neighbors. we are determined to continue this effort, and the best way that the parties can advance this process is to return to direct negotiations that were -- that's what we're trying to do. >> but he said that in the context of pushing the europeans to go their own, so to speak -- on their own and recognize a palestinian state. would you support that kind of independent -- >> well, again, our view is that the only way to resolve the core issues is through direct negotiations. and any other efforts are sideshows that we don't think will be successful. >> and finally, would you discourage the palestinians

from going to the general assembly to pursue the reinstatement of resolution 181 which, in fact, created the state of israel? >> we do not believe that will be a successful strategy. >> p.j., how are you continuing your efforts regarding the peace process? and it's been a long time since we've seen senator mitchell went to the region. >> well, we had david hale yesterday in the region. i believe he had meetings with palestinian officials. we expect to have meetings in the coming days with israeli officials. we haven't stopped doing what we're doing. you may not see -- it may not be evident every single day, but we continue to work with the parties to try to narrow the existing differences. we understand that they exist. we understand this is going to be hard. >> are you going to -- >> but just because we're -- there are fewer formal meetings than might have been the case six months ago, it doesn't mean that we're still not determined to try to move this process forward. >> is senator mitchell still working on --

>> every day. >> did mr. hoff go to syria recently? >> i'll check that. we'll take that question. i don't know what fred has been up to lately. >> p.j., on pakistan, there are reports that the united -- that the state department, in fact, recommended that this minority minister be given an armored vehicle in the weeks before he was assassinated. can you confirm that, and can you say what the holdup was? >> i will not comment on that other than to say that we shared our genuine concerns about his security, but beyond that, i won't comment. >> can you say whether any efforts that you would have recommended at the very least were held up by any snags in the u.s.-pakistani bilateral relationship? >> i would not tie that to the case of mr. davis. we are quite aware that he had received multiple death threats. we are concerned about his security, as we would be for any government official or prominent individual subject to those death threats. and we encouraged the

government of pakistan to do everything possible to provide for his security. but beyond that, we won't comment. and he -- tragically, his funeral was -- mr. bhatti's funeral was today. ambassador munter and other members of the embassy staff attended. >> just to follow up, as far as mr. davis case was concerned, yesterday he appeared in the court and pakistanis are now saying that they will bring murder charges against him unless u.s. swapped with the doctor that -- aafia that have been held here. i mean, where does this case will continue now and -- as far as the relations are concerned, according to my colleague, and as far as this -- what they are saying, swapping with the -- one of the pakistani nationals held here? >> okay. i mean, as we explained yesterday, there are court proceedings that are continuing. we look forward to a march 14th

high court hearing and we hope that this -- we continue to work with the government of pakistan and hope to resolve this as quickly as we can. >> same issue. >> david. >> it follows, then, that you don't believe that the pakistan government did enough to protect bhatti? >> again, i'm not going to comment on his security. as the secretary and others have made clear, this is a great tragedy for pakistan, and we remain concerned about issues related to tolerance in that country. >> change of subject? >> on iran -- >> yeah. >> thank you. may i confirm your statement yesterday on north korean uranium enrichment program? you said you're seeking for a united nations security council reaction, but you didn't say, like mr. einhorn said in seoul, that you're seeking for a chairman statement. does it mean that you've toned down what you're seeking for? do you have a set official

standpoint of what you're seeking specifically at this -- >> no, what i said was that we are consulting actively within the security council, and as mr. einhorn said, one of the possible outcomes of that consultation could be a presidential statement. >> another thing -- why did it come up at this point of time that you suddenly started raising this as a loud voice? does it do -- anything to do with, like, the chinese government taking -- i mean, sitting as the chairman position at the security council this week*? >> i don't know that there's any particular timing of it. we just simply made clear that we continue to focus on full implementation of un security council resolutions. we want to see north korea undertake all of its international obligations. and we have made clear that, in our view of denuclearization of

the korean peninsula, that has to take into account the uranium enrichment program. that's the position of the united states and that's something that we continue to talk to others about. >> same topic -- >> how is your talk with china? >> hmm? >> have you been trying to -- i mean, i know you've -- >> have we talked to china about this program? yes. >> same topic. >> yeah. >> chinese nuclear envoy mr. wu dawei said in an interview with xinhua that nobody wants to put any preconditions on the resumption of six-party talks. what's your response? >> well, we want to see any dialogue be constructive, so i don't -- i'm not sure you call it a precondition. we just want to make sure that there's a firm understanding among all of the parties and an expectation that progress can be made. and as we've said, one of our indicators to demonstrate that

it will be fruitful to have these kinds of conversations would be a seriousness of purpose -- a demonstrated seriousness of purpose by north korea. and one way to demonstrate that would be to improve and reduce tensions that currently exist between north and south korea. >> and one more on north korea. a south korean high-level intelligence official told the lawmakers in seoul that kim jong-un has been officially invited by china to visit beijing. we don't know when. are you concerned about the report? >> i don't know why we'd be concerned about reports. >> any response -- >> north korean leaders go to china all the time. >> but it's kim jong-un, not kim jong-il. >> i understood what you said. [laughter] >> is the u.s. promoting or supporting an initiative to suspend iran's membership in the un human rights council? >> there has been a great deal of discussion within the un human rights council about

iran's abysmal human rights record. i don't know of any specific plans for suspension at this point. >> but will you support such a -- >> again, it's a -- i don't know that there is any initiative being put forward at this time. >> is there -- >> p.j., on egypt? p.j., zahi hawass is probably the most ubiquitous egyptologist and the -- formerly the minister of antiquity -- resigned saying there is a great deal of looting and he cannot control the situation. is the united states or the state department in any way involved in the preservation or the prevention of looting of egyptian antiquities from egyptian museums? >> i don't know of any kind -- i just can't say that there have been any specific discussions with egypt on this subject. i would say that our approach

here, whether -- in the case of egypt and in the ongoing efforts that we've done with the international community to preserve assets of egypt -- we're taking steps to preserve assets for the people of egypt, for the people of libya, for others, and we certainly think that these are cultural assets that belong to the egyptian people. they should be protected. and -- but i'm not specifically aware of the concern or theft of antiquities at this point. >> p.j., have you got any update from your diplomats in the courtroom on havana on the case of alan gross? >> we have diplomats in the courtroom observing the ongoing legal process. i haven't gotten any readout from them today yet. >> yemen, just wondering if you can update. there continue to be protests

there, obviously. if the salih government falls, what will that mean or will it have any impact on the u.s. pursuit of al-qaida in the arabian peninsula and its security interests there? >> well, there's a presumption behind your question. the president solidly remains the president of yemen. he has, in fact, opened up a dialogue with his opposition. there's some fairly public negotiating going on. but this is exactly the kind of give-and-take that we believe is necessary so that governments can be seen as responding to the will of their people. >> p.j., you called -- >> [inaudible] >> i'm sorry. what? >> what about the protestors who were killed in yemen? >> we are -- there have been some fresh reports of protestors killed. the embassy there is trying to verify those reports. we have been monitoring the

clashes between pro-government and anti-government protestors that's been going on for some time. as we've made clear, even as we support dialogue between governments and opposition figures, we want to see these efforts done peacefully and in the pursuit of more responsible and representative government. violence needs to stop. >> lawmakers on the hill, though, deemed this one of the greatest concerns to national security for the united states in yemen right now. where does that -- does that unrest impact all of those concerns? is it something that the u.s. is worried about? >> i'm not sure i get the link between the hill and -- what concerns are they? i mean, i'm a spokesman for the executive branch, not for the legislative branch. >> i'm well aware of that.

[laughter] i mean, i think it's fairly obvious what i'm asking is that the united states obviously has a concern in yemen. this has been prioritized by a number of officials, including the state department -- >> yes. i mean, yemen is a very important country to the united states. >> so what impact does this unrest have on that security concern? >> well, they're not mutually -- they're not mutually exclusive. in other words, there is a genuine security concern in yemen that is a concern for yemen and for the united states. >> so nothing changes? >> since -- in the last handful of terrorist attempts in the united states, they had links back to yemen directly or indirectly. so we are working with yemen and have been for some time to improve its counterterrorism capabilities, and we are cooperating fully in that. >> thank you. [laughter] >> time to go. >> it's time to go. [laughter] >> p.j., can you take -- p.j.? >> hold on.

this is fascinating. we're in the dark at the state department. [laughter] that said, part of the solution to -- part of the solution to yemen is more effective governance, a broader economy, greater opportunity for the -- for people who live in yemen so that they'll choose constructive pursuits and not extremism. so these two things go hand in hand. >> p.j., there have been several reports over the past few days about the possibility of establishing a taliban diplomatic office in turkey, and i just wondered what your position might be on that. >> a what? >> a taliban diplomatic -- a representational office in turkey. >> who would establish that? >> well, probably the turks would allow it to happen -- >> i don't know anything about it. >> okay. but do we have any position on it? i mean, it's -- >> i don't know anything about it. >> so is it a -- >> so it's hard to have a

position on something that i'm unfamiliar with. >> p.j., a quick one on that tri-valley university students are still worried and ambassador of india meera shankar wrote to the secretary, the secretary wrote her back, and what students are asking the state department these conversations will not help what is our future. >> well, i think the focus right now on issues regarding how -- what happens for students who are not implicated in the ongoing investigation, those are matters under active discussion within the department of homeland security. >> thank you. >> p.j., i just want to know what's happening with sending an ambassador to venezuela. is there any news? >> no news. have a nice weekend. >> next, the supreme court oral arguments in ashcroft versus al-kidd.

after that, president obama talks to miami high-school students about education. >> this weekend on a booktv, a boxer who's been 20 years in prison wrongly accused of murder. also, massachusetts senator scott brown on his troubled childhood and rise as a national political figure. look for schedule information at booktv.org. get our schedules by e-mail. signup for our booktv alerts. >> with a two week extension in place, republican and democratic leaders keep working on a spending bill. what's the debates on c-span's congressional chronicle. we transcripts of the recession. find a full video archive of

every member. c-span.org/congress. >> on wednesday, the supreme court heard oral arguments. u.s. citizen claims he was detained as part of a plan to arrest muslim men expected -- is suspected of having terrorist ties. a lower court's rejected mr. ashcroft's assertion that as attorney general he was immune from prosecution. this is about one hour. we'll hear argument next this morning in case 10-98, ashcroft v. al-kidd. general katyal. >> thank you, mr. chief justice, and may it please the court -- this lawsuit seeks personal money damages against a former attorney general of the united states for doing his job, allegedly with an improper

motive, yet the attorney general, like the federal prosecutor in idaho who sought the material witness warrant at issue in this case, was performing the functions of his office. there are three reasons why the petitioner should not be personally liable for money damages. the first is because the prosecutor's act of seeking the material witness warrant is integrally associated with the judicial process and entitled to absolute immunity. to view it any other way is to expose both line prosecutors and high officials to lawsuits by highly incentivized litigants based on their purportedly bad motives. that is something this court has manifestly resisted and for good reason, because improper motives are easy to allege and hard to disprove. allowing such suits to proceed would result in burdensome litigation and interfere with the ability of prosecutors to do their jobs. the second reason is that the fourth amendment was not violated, and, therefore, qualified immunity applied. there can be little doubt that the statutory requirements of section 3144 were met in this case, and, equally, there can be little doubt that the subjective motivations of attorney general ashcroft or the line prosecutor are thoroughly irrelevant to whether a fourth amendment violation exists.

this court has repeatedly rejected subjectivity, explaining that otherwise time- consuming, vexatious, burdensome, and, indeed, destabilizing discovery and litigation would be the inexorable result. and the third reason, and the easiest reason, is that whatever one thinks the applicable law is, what it -- it was manifestly not the law in 2003 when the warrant in this case was issued by a neutral judge in idaho. >> can i ask whether your second reason doesn't boil down to saying that it makes very little difference whether ashcroft is held immune by absolute immunity or by qualified immunity? >> oh, no, it - >> once you say that -- that motive is not introducible with regard to the qualified immunity question, and once you say that he's using a witness subpoena, and you can't look behind it as to whether he was abusing it for some other

purpose, is there any difference between absolute and qualified immunity? >> well, i take it there may be a difference. we think the court should first decide the absolute immunity question, which is the way that this court has historically handled questions when there's an absolute immunity question and then a qualified immunity. i take it that the qualified immunity question in this case is one about whether motivations matter for the fourth amendment. whereas the motivation question in the absolute immunity sense, as respondents see it, is something broader. it's not limited to the fourth amendment, per se. their argument is if the prosecutor is -- has bad motives essentially or a certain bad motive, an investigatory or purposeful bad motive to engage in preventive detention, that somehow official - subject to final review pierces the veil of absolute immunity. that is something this court has never accepted. >> well, i thought the -- i

thought the argument, rather, was that this is not as close to the core of the prosecutorial function as some of the other functions to which we have given absolute immunity, and since it's so dangerous, since there is such potential for abuse, we shouldn't confer absolute immunity on this particular conduct. but i don't understand why if we agree with you on qualified immunity, there is any difference whatever. >> justice scalia, to be sure, they are now making that argument in this court, that this doesn't fall -- this isn't intimately associated with the judicial process. below, of course, they said the reverse, that material witness warrants were associated with the judicial process and that the only difference is that - that, here, they had a bad motive. bad've talked about the motive point. now, with respect to whether this is intimately associated with the judicial process, these are material witness warrants being sought in connection with an ongoing investigation by a prosecutor. it is quintessentially a

prosecutorial function to obtain these warrants and has been for -- for hundreds of years, and it's the exercise of th prosecutor's professional judgment, which is something that this court has looked to. >> was the prosecution already pending when this -- when this warrant was issued? >> yes, it was. the indictment of mr. al- hussayen was in february 2003. the prosecutors learned in march that mr. al-kidd was about to board a plane and go off to saudi arabia for an unspecified length of time. they then acted immediately. they went to the court and said we need this warrant to secure this testimony. that is, to me, essentially what prosecutors do and protected by imbler. to see it any other way is to expose prosecutors to lawsuits for - >> was mr. al-kidd -- was he released after -- i understand he didn't testify at the trial, and there was an acquittal, and then other charges were dropped. was al-kidd still in custody as

a material witness after the trial was over? >> justice ginsburg, he was in -- he was detained for only a period of 16 days total in 2003. >> but he was restrained much longer -- for 15 months. >> he had travel restrictions placed upon him until the trial was over and until the government -- because after the resolution of mr. al-hussayen's case, which was acquittal on some charges and a hung conviction -- a hung -- a hung decision on others, the government thought about retrying mr. al-hussayen, took it very seriously, and 20 days after al-hussayen's verdict by the jury, we reached an agreement with them in writing that mr. al-hussayen would leave the country and -- and not come back, and in exchange we weren't going to prosecute him any further. and so, immediately -- i think quite soon after the jury verdict, the conditions placed

on mr. al-kidd were lifted. and i should say that the material witness warrant statute laces into it a whole suite of safeguards to prevent against -- as, justice scalia, you pointed out -- the potential abuse for the -- for material witnesses by prosecutors. i think congress has set up several different things to prevent that. the first is, in order to get a material witness warrant, the prosecutor needs to show both materiality and then practicability. the second is that there are strict limits placed on the conditions of the -- on the ability of the prosecutor to detain anyone. section 3142 says that a detention can only be allowed by a judge if, quote, "no condition or combination of conditions will reasonably conditions will reasonably assure the appearance of the individual." and then there's a formal procedure where they have a right to counsel, they have the right to cross-examine witnesses, to present evidence, to proffer evidence at the hearing, and the like -- all the hearing, and the like -- all to show that they shouldn't

continue to be detained. >> well, in light of these restrictions, i would like to come back to the question that i understood justice scalia to be asking. if the court were to hold that obtaining a material witness warrant does not violate the fourth amendment where the statutory requirements, and in particular establishing materiality, are met, why would it be necessary for the court to decide whether there's absolute immunity when a prosecutor seeks a material witness warrant? >> for two reasons. >> for two reasons. number one is i think that's the way this court has historically gone about it, probably for reasons of constitutional avoidance, to not reach constitutional questions if there's an absolute immunity question. and the second is, here, you have a ninth circuit decision, justice alito, that says that absolute immunity can be pierced by a prosecutor's bad motive. that is something that infects not simply material witness warrant cases but, indeed, virtually any case. as we point out and as the dissent below pointed out, that

kind of argument could be run by any defendant who says you didn't intend to actually indict me, or, you didn't care about that, you really wanted to flip me to get testimony against some higher-up. and to allow defendants to make those kinds of arguments and to expose line prosecutors and attorneys general to that form of liability is an extremely damaging proposition. the -- with respect to the fourth amendment question about whether or not motive applies, i think this court has quite clearly said in whren that motive is not something that should be looked to, that the subjective motivations of the prosecutor are not -- >> but that's after there is probable cause to suspect that criminal activity has occurred. criminal activity has occurred. and then you -- once you have probable cause, they're not going to look behind probable cause.

but, here, the whole reason for using this material witness statute is that there isn't probable cause to believe that al-kidd did anything. the violation -- there was no violation of the law. so whren is different. it's a different case. >> justice ginsburg, it's certainly different in -- in that respect, but i do think that difference doesn't matter, because i think what whren and edmond and the cases were getting at is, is there some objective, individualized determination by a neutral judge? and, here, as i was saying earlier, there is quite clearly that laced into the 3144 statute itself. that is, the judge must find materiality and - and impracticability of the testimony. and that is a standard performing, i think, a long- standing government function of making sure that testimony, important testimony, is available at trial. so it is not like a situation in which the government, just on their mere say-so, can put

the - can detain someone on the basis of them saying, well, we think this person has information. i think there are strict standards placed on that, and, indeed, federal rule -- federal rules of criminal procedure 46 adds standards to it by saying that a prosecutor must report to the judge every 10 days about anyone who is detained and assure no more detention is necessary. so that - >> i don't see - >> i don't see - >> how does that - >> i don't see how that would make any difference to the -- at least to the absolute immunity question. you wouldn't assert that there is absolute immunity if there's a statute such as this, but there is not if there isn't. i mean, either this is core prosecutorial function for which he can't be sued or it isn't. so what difference does this statute make as far -- as far as absolute immunity is concerned? >> absolutely, justice scalia. i was just answering justice ginsburg's question about qualified immunity. >> okay. >> i imagine one point about the statute might be that the

statutes, going all the way back to 1789, do reflect that this is a prosecutorial function to the extent there is any doubt. so, for example, the 1846 statute said that an attorney -- excuse me, an attorney of the united states must apply for a material witness warrant. >> so for us to agree with you on absolute immunity, we would have to believe that even if there were no such statute and if a prosecutor simply detained somebody as a material witness without any check of an independent magistrate, he would be immune? >> i think that is correct, that that is quintessentially what prosecutors do in the exercise of trying to get a trial going. now -- >> suppose that a prosecutor reads the statute, there must be an affidavit that says this witness is material. and there is irrefutable evidence that the prosecutor said to colleagues and others, i do not intend to try this person, ever, no matter what -- i just want to ask him questions. in that case, has the statute

been violated because he is not material? >> well, if the -- i'm not sure i totally follow - >> i'm not saying it's this case. i'm saying it's a hypothetical case. >> if the evidence shows that the evidence is not material, then the statute is violated. >> and the reason it is not material is because the prosecutor has no intention whatsoever of ever bringing this person as a witness in any trial. >> i do think that that would generally mean that materiality would be violated. i could imagine some theoretical construct. >> if materiality is violated, does not then that -- that prosecutor -- since he had no intention of bringing him to trial or of having him as a witness at a trial, that prosecutor would not be immune? >> justice breyer, let me -- just make sure that i understand the contours of your hypothetical. i don't think that subjective motivations of the prosecutor go to materiality. so if - >> well, how does it --

>> here's how i think it works. so i think that congress set up the objective two-part test to decide whether or not an arrest warrant would take place, which is materiality and impracticability. now, that isn't subjective. that is simply, does the person have material information that can be used that -- that's relevant to the trial. now, if the person has a -- the prosecutor has a subjective intent that says i'm never going to use this testimony, then i think that that doesn't -- that will almost always reflect the fact that materiality just objectively hasn't been met in a given case, but theoretically i could imagine a circumstance in which the prosecutor has that subjective intent but yet is material. with respect to that, congress has a different safeguard at the back end, in 3144, and that is the language in 3144 that says a judge in the detention hearing is to inquire as to whether or not the detention is necessary, quote, "if there will be a failure of justice" if the person is released.

>> and you can't look behind that, right? you can't look behind that? if the judge has said it's material, that's the end of it. you have absolute immunity, right? >> well, i think that the - the defense can litigate that and appeal that set of issues, but i don't think - >> can appeal the judge's determination that it's material? >> absolutely. >> well, then how can you have absolute immunity? >> well, they did, because we're talking about - >> oh, you mean at the time it's issued? >> exactly. >> i see. >> at the time itself. but i think that's an important point, justice scalia. with respect to absolute immunity, this court has often said that it is the crucible of the trial process itself that often is a safeguard against abuse. >> well, what if you didn't have -- again, what if you didn't have this prescribed judicial process? >> i take it that the logic of this court's precedence is that absolute immunity would still apply. and the reason for that is that absolute immunity isn't some rule to just protect prosecutors willy-nilly. it's to protect the public. and as this court said most

recently unanimously in the van de kamp case, that -- quoting learned hand -- that there is a cost to this. no doubt that certain individuals will be harmed, but the cost of rooting out the bad apples through damages lawsuits is far worse, that it causes prosecutors to flinch in the performance of their duties. >> there is a difference between calling a witness at trial and arresting a person. how is it a part of the prosecutorial or the trial function to arrest someone? protected's absolutely is your use of that person at trial, not your arrest or detention of them? >> no, i do think it goes quite a bit further than that. i think it -- and i think burns v. reed -- and the relevant language is at page 492 -- i think is relevant because it says that it's pretrial conduct, in order to secure the testimony for trial or the like is what is protected as well,

that it would be far too narrow to just focus on the trial itself. that would be the contours of absolute immunity. i think justice kennedy's opinion in buckley is also instructive in this regard, because what that opinion says is that allowing only immunity for the trial would just allow individuals to constantly replead their allegations and focus only on the pretrial conduct and be an end run around absolute immunity. and, again, absolute immunity is important not for the prosecutor for his own sake or her own sake, but because ultimately that is what -- that causing -- damage liability will make prosecutors flinch the performance of their duties more generally. >> you don't -- you don't think there's a reason to make prosecutors flinch against willy-nilly -- that's not what i'm claiming happened here, but if you take the point that you're raising, then prosecutors can out of spite, out of pure investigative reasoning, out of whatever

motive they have, just lock people up. >> justice sotomayor - >> and you're basically saying - >> making prosecutors flinch is always a bad thing. what i'm referring to is this court's precedents that say damages liability on prosecutors is the wrong way to go about it because the costs are too high compared to the benefits, and there are other ways of dealing with that -- from professional discipline, as malley v. briggs and imbler said, to bar actions, to the crucible of the trial process itself, which is a way of dealing with that. >> well, there are procedures set forth in the statute, i'd say you would add, which you think are not necessary, but are there in order to make them flinch in a different -- in a different - >> that is precisely correct. we don't think those are constitutionally compelled, but we do think they provide a very important safeguard. >> what's your best authority that at common law or the

common law tradition, there is absolute immunity for witness -- for the issuance of witness warrants? >> i don't think it's come up with respect to public prosecutors, and so our argument here, to the extent the court reaches that question - and, again, it wasn't -- it wasn't raised below in the brief in opposition, but if the court wanted to reach that question, i think it would be that the argument would derive the same way as the arguments in this court's post-imbler cases, which is, as long as it is intimately associated with the judicial function that the prosecutor is doing, then absolute immunity should extend to that context. >> then a second question, quite apart from immunity, just addressing the substantive constitutional issues under the statute, suppose that the prosecutor has probable cause to indict and try the person for the crime. suppose also that there is good

reason to show that he would be a material witness as to another participant in the crime. does the government have any duty to proceed with the indictment, or can they just hold the person as a material witness without indicting? witness without indicting? >> i do think that the government -- i'm not sure if we have any policy with respect to that, but i think that -- that we -- that at least for fourth amendment purposes, there wouldn't be a violation if the government held the person for essentially a dual motive, and that is what i understand they have now conceded at page 31 of their brief, which is in dual motive cases, the government's action is permissible. if there are no other questions, i'll reserve the balance of my time. >> thank you, general. mr. gelernt.

>> mr. chief justice, and may it please the court -- in dunaway, this court emphatically reaffirmed the bedrock fourth amendment principle that a criminal suspect may not be arrested, absent probable cause to believe there has been a law violated. the rule is fundamental to our traditions, is widely viewed as a defining feature of our country, and has been steadfastly protected by this court for more than 2 centuries in both good and bad times. the material witness statute represents a dramatic departure to the rule, allowing the arrest of uncharged, innocent, even cooperative people. if a material witness arrest is constitutional, it can only be because its purpose is to secure testimony and not to preventively detain and investigate the witness himself. >> do you acknowledge that it is then constitutional? your opening comments make me think you don't even acknowledge that it's constitutional then? >> justice scalia, we are not pressing that argument. i would say that based on the legal historian's brief there is a strong argument to be made that it is not constitutional, with respect at least to

cooperative witnesses. the statute the framers enacted in 1789 would not allow the arrest of any witness unless they came voluntarily before the magistrate and refused to even promise to return. not even a surety or a surety or a bond was allowed. so we do think there is a strong argument, but we are not pressing that argument. our argument is that it cannot be used for ulterior purposes. and i just want to pick up, if i can, with justice breyer's hypothetical that he posed to the government, which is of course our hypothetical. the government started out this case throughout the lower courts and in the opening brief saying purpose is wholly irrelevant. this is whren, even though whren is probable cause to believe a law has been violated. this is whren, purpose is wholly irrelevant. we posed a hypothetical which we actually think is this case and is consistent with our factual allegations, that the sole reason this arrest was made was not to secure testimony but to preventively detain and investigate someone for whom

there was no probable cause or violation of the law. that is a difficult situation i think to reconcile with whren, i think an impossible situation to reconcile with whren, or with the text or history of this statute. the government has now come back and trying to have it both ways and saying, well, the statute wouldn't naturally allow that. but if purpose is -- as justice breyer pointed out, if purpose is truly irrelevant why they want to make the arrest, the government should have answered "that would be fine. the only things we need to satisfy are the objective components of materiality and impracticability." >> is this a -- is this a realistic hypothetical that you've posed? now, in order to detain someone under the material witness statute, that person, potential witness, must have material testimony, not just relevant testimony, material testimony, testimony that would be of some importance in the criminal prosecution. so your hypothetical is a situation in which there is a witness and this witness has important testimony that could

be used in a pending criminal case, and yet the prosecution has absolutely no interest in calling that person as a witness. how often is that going to arise? >> well, justice alito, i think a few points, one is just as an initial matter. the statute has not actually been interpreted to go beyond relevance, in the way you're posing it. interestingly, earlier statutes actually said the testimony needed to be necessary. and so, that's - that's actually an important watering down. but putting that aside for the moment, we think that what -- it did happen in this case, it happened after 9/11, i think that goes to the crux of our case here. we are not trying to fiddle with the use of the material witness statute in the everyday context, and i think that's the point the federal prosecutor's brief is making. what we are saying is simply that the principle has to be that if you do encounter that extreme case, this court should not bless the situation where it literally can be used as a

preventive - >> the problem, and it's, i think, the problem that i think whren highlighted is that the allegation can so readily be made in every case under the material witness statute is that this is one of those bad intent cases, and the case has to proceed so that we can prove that. one of the ways we prove that is by asking everybody who is involved in the process. why did you do this? what was your intent? i mean, the whole purpose of whren is to make sure that kind of stuff doesn't happen. >> yes, mr. chief justice, but let me say that i think i -- i understand whren, i obviously don't want to tell the court about its own cases, but is that it was drawing a conceptual line, that the first point about whren, and i think the fundamental point, was the conceptual point that as the whren court put it, only an undiscerning reader would conflate cases in which there was probable cause of a violation of the law with cases in which there wasn't. so i think the whren court is not saying we wouldn't look at purpose. purpose. i think that's the teaching of the special needs cases.

now, to your practical question about why would this be hard to allege? i actually think that this is one of those unique situations which it would be very difficult to allege. take the government's cases, for example, that they've cited, like daniels and betts, the material witness cases, you have witnesses being arrested, not showing up for trial. as the court of appeals made clear in those cases, they were the main witnesses, not showing up on the day of the trial or right before trial. it would be virtually impossible for those witnesses to turn around and say the only reason i was arrested was for investigative purposes. and i think that on top of the fact that this statute is used very rarely, i mean what we have pointed out is other than in immigration cases, which the person is already subject to custody, there are only a few hundred each year. and again, i think what the green brief is saying by the federal prosecutors is, look, the settled understanding of this statute among line prosecutors has always been, you use it to secure testimony. maybe there's a windfall in the back of your mind that this person might be a suspect, but you certainly can't use it where you have no intention of using the testimony. i think then the limitations on

this statute become meaningless. i mean, take - >> so every time the prosecutor elects not to call one of these witnesses for a variety of reasons, you would have a claim that this wasn't designed to elicit testimony? >> no, no, we don't think so, mr. chief justice. i think what we have -- we have said is that calling the witness or not calling the witness can't be determinative. i think one reason is you wouldn't want to create a perverse incentive to have prosecutors simply call the witness just to cover themselves. so i think you would have to allege much more, and i think that's what we have done. i think there is an entire set of allegations with respect to mr. al-kidd, and they fit a national pattern. and i would importantly say in the questions presented, the government raised an iqbal claim as to plausibility only as to a small part of this case which is no longer part of the case, which is, was mr. ashcroft involved in the specific statements in this specific affidavit. they did not allege that the allegations of a pretextual policy were implausible. so it is not before this court,

it is not a question presented, and i think it is telling that the government didn't raise it. they are sitting on all the information about what happened after 9-11 as a policy matter, and they did not claim it was implausible. >> just a point of detail. i may not be recalling correctly. you said this statute is rarely used. i thought there were 4,000 material witness hearings a year. is that mostly because of the immigration? >> yes, justice kennedy, and i apologize if i wasn't clear. that what the -- what the court of appeals showed and what the statistics also show is that roughly 92% of the cases are immigration cases, where the person is already subject to custody, and there wouldn't be any need to use it in that pretextual way. so what we're talking about is a few hundred each year few hundred each year throughout the country, and again when it's used properly, it's going to be virtually impossible to allege something like this. >> do we have statistics for the states, how many states hold - how many people are held under state material witness statutes? >> we have looked for those, justice kennedy.

we have not been able to find them. what we do know about the states, though is that more than 30 of the states have statutes that are much more restrictive than the federal government, because what they do is they follow what the framers did in 1789, which is to say the witness has to be given an opportunity to comply, and that's what the framers did. you have to ask the witness if they will continue to comply. if they won't -- or you have to make a showing of why it's impossible to ask them. so, i think in many states it won't be a problem. i think actually, you know, the state issue is an important one because what the federal government is arguing here is, of course, well, our prosecutors are very well supervised. well, that doesn't take into account if there is a deliberate attempt to misuse it. but i also think what we're looking at are states, local counties, cities where there may not be the resources necessary to put checks on, and what the government's asking is for this court to hold that as long as you can make the minimal showings of impracticability and

materiality, which don't even require the evidence to be important or that the witness be uncooperative, you then can have any purpose you want. so you could have states, cities, local counties saying every member of this gang or every member of this business must know some information about the person that's been indicted. >> your argument is that the constitution does not allow a material witness to be detained, so long as the witness says in court that he or she will show up for trial, no matter how much evidence there is that this person poses a great risk of flight? if the person says in court, i will be there, that's the end of it, the person cannot be detained? >> do i think the constitution requires that? >> yes. >> i think it probably does, but we are not taking a position on that. i mean, what we are basically saying is that it is out of whack historically. it wasn't until the mid-1900's where that could happen, where even if they said they would come back, you could hold them. so i think it's out of whack historically, and there may be a real constitutional argument. we are not pressing it. we are simply saying that if

it's used for its proper purpose, then we are going to assume it's constitutionality, which the ninth circuit did, but it can't be that it can be used as a preventive detention. and i think any reasonable official -- and i want to go to the qualified immunity if i could -- would have seen that, because i think the analysis would have been the following. you would have pulled out dunaway, and you would have seen that you need probable cause to arrest someone, probable cause of wrongdoing. and you would have then said, well, we don't have probable cause of wrongdoing, so you would have pulled out whren then, because whren talked about pretext. what whren would have told you is do not conflate cases in which there's probable cause of wrongdoing with cases in which the court has granted an exemption from the probable cause - >> you might turn out - >> if you were writing a law review article, you might have done that. but we're talking about an officer. i think the first thing you would do is say, well, let me see these material witness statute cases, and what would he have found? >> well, i think what he would have found, your honor, is that the court has not specifically -- i grant that it has not specifically ruled on the

fourth amendment, but what he would have found in barry and the other cases, is that the court repeatedly, repeatedly referred to statute as a means of securing testimony. so i think the reasonable official would have said to themselves, well, it's clear under the fourth amendment that i don't have probable cause, but maybe the statute is allowing me to do it. now, first of all, it statute can't authorize a fourth amendment violation. but putting that aside, just a - >> but, again, you're talking about the officer, he reads the statute and then doesn't say, well, but maybe the statute's unconstitutional, so i need to do more research? >> exactly, your honor. and i think what the research would have been done, they would have looked at barry and all this court's other cases and would have specifically said it's to secure testimony, and then i think a reasonable official would have looked at the text of the statute, everything in the text of the statute is about securing testimony, including the deposition requirement, you must be released if your deposition is taken, you must have a deposition. all of those things do not suggest -- if the government's interests could be simply we want to hold this person

because for preventive detention reasons, none of the statute would make sense. i think that a reasonable official could not have turned to this statute and said, yes, i'm looking at the statute, and it seems like i can use it for whatever reason i want. >> so the eight judges taking the opposite position in the hearing en banc below were just being unreasonable? it would have been unreasonable for an officer making this determination to agree with eight judges from the ninth circuit? >> i think, your honor, the -- mr. chief justice, the only way i can answer that is to say this court has never made determinant of whether there are dissents. i mean, take the brogue in this court, two justices of this court descended on merits and yet you still found that the law was clearly established. >> what we said in wilson, i'm quoting, judges -- when judges disagree on a constitutional question, it is unfair to subject public employees to money damages for picking the losing side of the controversy. >> i mean, but i think brogue goes the other way. ultimately, all i can say, mr.

chief justice, is i think the fact that there were dissenters can't be dispositive, and ultimately this - >> well, i agree with -- i agree with that, of course, but at the same time, it does seem that you're imposing a very heavy burden on the officers in this area when do you have a situation where eight judges, when they conduct their research, come out the other way. and that type of burden is particularly heavy when you're talking about if they guess wrong, it comes out of their pocket. and if i'm the officer in that situation, i say, well, i'm just not going to run the risk of, you know, having to sell the house because i agreed with eight judges on the court of appeals. >> well, your honor, i think - you know, of course, i'm not sure it will actually come out of their pocket, but i get the crux of your point. i do think ultimately, though, that this is a situation where a reasonable official would have had to say to themselves, "i can use this as preventative detention." because i want to be very clear about our position and how

narrow it is. we would concede, for purposes of this argument, that if they wanted to use this for dual motives, then there would have been a real question there. if they said, look, we want the testimony, that's what the statute talks about, but we also hope that maybe something else will come out of it, that's a closed question. but if they would have said to themselves, which is all we're saying this case is about, is, "look, we don't want this testimony." in justice breyer's hypothetical, there's clear, objective evidence. we don't want to use this testimony, perhaps it's counterproductive in our case. we're not going to use this testimony, but we would like to hold the person. i think that is very difficult for a reasonable official to say to themselves, this statute grants me preventive detention powers. i mean, i think you would be looking at a statute going back to 1789 that this court has repeatedly commented on that is only about testimony. you would be saying to yourself, this statute allows me to engage in preventive detention even though congress has never passed a statute like

that, congress specifically rejected preventive detention powers - >> you don't think that an official reading all this court's cases saying subjective motivation is not proper in determining the application of the fourth amendment would be able to think that this would apply here, too? subjective motivation doesn't count here. what counts is whether there's -- there are objective criteria that would permit the detention? >> i don't think so, justice alito, respectfully. i think when you pulled out whren, which, of course, is this court's landmark decision on pretext -- whren could not have been clearer. the court specifically said only an undiscerning reader would conflate the two. and i think the conceptual point whren was making is straightforward. the fourth amendment says you need probable cause or a violation of the law to arrest someone. if the government wants to walk in and ask for an exemption from that standard and says, the reason we want the exemption is because of the purpose of

the arrest, then the court in whren said, well, then they must adhere to the purpose. otherwise, it's simply an end- run about the probable cause. i mean, consider two cases - >> but the fourth amendment doesn't say you need probable cause. there are situations where you can conduct a search without probable cause. there's the terry search. there's administrative searches. there's a lot of exceptions. >> yes, justice scalia, but i think -- well, the terry -- the terry stops, i think we put to one side, because as the court in terry said and as this court has interpreted terry, those were because those were not full-scale arrests and the administrative -- sorry. >> administrative searches, automobile searches, you know. >> absolutely, and those all fall into the special needs category, and those were cases you, your honor, in whren distinguished as conceptually different than when there's probable cause of a violation of law, because what you yourself said in whren was, look, the government is asking for an exemption from the traditional fourth amendment standard and they're saying the reason we want the exemption is because of the purpose of our search.

you said, well, then, of course we're going to hold the government to that purpose. they can't tell us, look, we don't want to meet the fourth amendment standard because of the purpose of what we're doing, but then turn around and not adhere to the purpose. and so if you had two cases, one where there's probable cause of wrongdoing and another case where there wasn't, the judge would say fine to the first one and then he would say to you, well, the second one, you don't have probable cause. the only thing the government could say at that point was, well, that's true, but we're not trying to investigate or prosecute the person as in dunaway. we have a different purpose. maybe it's administrative. maybe it's to secure testimony. maybe it's a roadblock. maybe it's something else. and then if the court said, well, fine, then go ahead and do that search on less than probable cause, if that's your purpose, you couldn't turn around then and not -- and then not adhere to that purpose. i mean, i think that's what we're talking about, is that - >> you seem to acknowledge that in -- a dual motive case would not violate the fourth amendment, or wouldn't necessarily violate the fourth amendment.

isn't that right? >> yes, your honor. >> do you think that a reasonable official would appreciate, well, it's okay for me to have a dual motive, but i have to stop and think -- is my interest in investigating this individual further the but-for cause of my desire to get a material witness warrant? do you think that was apparent? >> i think it actually is, your honor, and the reason is because i think it's -- i think it actually gives cushion to the reasonable official, because i think once you are saying we want to secure testimony, it might be very difficult, as the chief justice was pointing out, to say, well, how i do know if i could have ulterior motives or not? not? that might be a very difficult situation. but i think a reasonable official -- this court's proposition that this court would have to - would have to bless, based on the allegations here are, the official said, look, we think we can show materiality and practicability because mr. al-kidd is taking a trip, he is being cooperative, but he is taking a trip and he works for the same charity.

we do not want the testimony. we can't use the testimony in this trial. the only reason we want to do it is to hold him, and we don't have probable cause of a violation of the law. i think any reasonable official would have understood that as preventive detention, and there - >> i'm not sure why that just can't be resolved under the issue of materiality. the magistrate asks the prosecutor why he wants to do this, and he infers from what the prosecutor said that -- just what you say. then it's not material. it's not a case. >> that goes to the crux of, i think, what is going on here. we have said that both the fourth amendment and the materiality as well as other parts of the statute would deal with it precisely. the government's opening brief and throughout the lower courts said, no, it doesn't matter if you're going to use the testimony or not or we have any intention. we posed that hypothetical in our brief. the government came back and

said, well, maybe that could be done with materiality. if the government was going to stick to their position, their conceptual position, they would have come back and said, look, the objective components of materiality and of practicability have been satisfied, because he's taking a trip and he worked for the same charity, and who cares whether -- so if the court is prepared to put a limit on, you have to use this for its stated purpose, testimony, that's all we're asking for. i mean, the case has changed now because of the concession that the government's made on pages bottom of 15, top of 16, where they're now saying, yeah, where they're now saying, yeah, that is a tough situation, and maybe we can deal with that through the statute. but that's all we're saying. the ninth circuit understood this as a sole motive case. the government understood it in their cert petition and in their brief to this court as a sole motive case. we have said we think the analytical test is a but-for, but we're prepared to go with sole motive, and our allegations, our factual allegations, are consistent. in the proposition, we are simply saying, we don't think this court can bless it.

you satisfy practicability in some objective way. you don't care whether you're going to use the testimony, you may have no use for it, but it's an end-run around locking people up. >> where did you allege that the desire to detain was the sole motive for this? >> your honor, i think that the clearest allegations are at 111 and 112 and 154 of our complaint, in the joint appendix. what we said is it was not to secure testimony. and i think the ninth circuit certainly understood it that way at pages -- i apologize -- way at pages -- i apologize -- 25a and 40a of the opinion. and the government, in its cert petition and its brief, understood it that way in saying, we don't know how the ninth circuit would deal with a mixed motive case, clearly suggesting that the ninth circuit was a sole motive case. and so again, all we are saying is it cannot be that this statute be transformed into a

preventive detention statute, and i think particularly so because the government after 9/11 specifically -- as the green brief notes -- specifically asked congress for preventive detention power, and that power was denied. what they granted was a very limited seven-day hold only for noncitizens. and so i think what we're talking about in many respects -- at a macro level is a separation of powers case as much as a fourth amendment. i think it's not -- it's not dissimilar to the dialogue this court has been having in the guantanamo cases with, look, you need to go beyond the fourth amendment. if you think you need such a fundamental change to our country's traditions, congress is going to have to take the first step, we'll look at it and there will be a back and forth. but here what happened was the preventive detention powers were denied and yet the government still went ahead and used the material witness statute. and again, i can't stress enough that the government did not raise an iqbal claim as to the plausibility of these

allegations. only now in the reply brief where they're trying to address a sole motive situation, or a but-for, which is all we're asking this court to address, the government has now said the allegations are implausible. i think that in many situations -- you know, with the absolute immunity point, if i could just turn to that for a second -- the history, as you said, justice kennedy, the government has conceded they don't have a case on their side. we have plenty of cases in which, as the historians' brief points out, and as our brief points out, in which there was not immunity for the arrest of a -- for the arrest of a witness, which is very different than calling a witness, justice sotomayor. and what we are talking about here also is the government's burden. so i don't think that's something we could have -- we could have waived, especially since the ninth circuit addressed it and put the government on notice that the government came forward with no historical evidence.

and it's not inconsistent with warrants generally. as this court made clear in malley, it surveyed the history of arrest warrants and said, look, arrest warrants, there's no history -- we're not going to grant absolute immunity for arrest warrants. in burns, justice scalia pointed out that there is no history with respect to search warrants, and i think the history with respect to material witness warrants is even clearer. so what we're talking about is no history. we're talking about a fairly ancillary and rarely used process to the criminal justice system, and one we're talking about where there's sort of a unique confluence of factors where you have someone who is not the defendant in the trial, who is a third party, and their liberty is being deprived. and it's the type of statute that can be abused. i mean, i think the government's whole point is it's a dual motive type statute, and so that because it can be inherently abused, there has to be some checks on it. and this court has never said that you would have absolute immunity for all prosecutors in all cases.

we are certainly not raising a motive case with respect to absolute immunity. what we are simply applying is the court's test in absolute immunity, which is the functional approach, you have to make that threshold determination about whether something is investigative or not. and i think that's the teaching of buckley. take two witness interviews. they're the same act, but the prosecutor clearly can be engaged in interviews for different reasons. in buckley, it happened to be on those facts the court believed it was investigative, based on the allegations in the complaint. but what if it were 2 days before the presentment to the grand jury? it's likely the prosecutor would have assumed he had probable cause at that point and was prepping the witnesses. those are two acts, but you have to look behind them. i think there's no way around looking behind. the alternative, the flip side of what the government's asking, is -- rigidly categorize every single act a prosecutor may undertake in this country and say it's either wholly investigatory or wholly prosecutorial.

and i think that's a very difficult test. i think there's no reason why district courts can't make an initial determination. i think here in particular, judge -- was in a unique position to make the determination. he sat at the underlying trial of al-hussayen, so he knew what testimony and what was going on. >> you're going way beyond what i thought you were arguing. you're saying you always have to make that determination of good faith, right? in all cases, including when the prosecution is accused of bringing a prosecution purely for harassment purposes? >> no, your honor. and i -- justice scalia, i apologize if my argument was going beyond. >> that's what i thought you were saying. >> i think what's going on here is there's a unique set of factors with respect to material witness, not the least of which is the history with respect to both material witness arrests and warrants generally, and i think there's been no counter-history by the government. i think back -

>> we're dealing here with a bivens action? >> yes, your honor. >> under what theory is the history of immunity at some point in the 19th century relevant to the scope of the immunity that should be available in a bivens action? what's the theory for that? >> well, your honor, i think -- i don't know that i have an independent first principles theory. i think this court has said repeatedly that you will keep the immunities coterminous and you will look to the history in both cases. so that's the butz case. >> does that make any sense? >> does that make any sense? can understand it with respect to 1983, on the theory that when congress passed the predecessor of that statute it implicitly intended to adopt the immunities that were available at the time. but when this court invented the bivens claim -- in when -- 1971 or whatever -- that the court was committed itself to recognizing only those

immunities that were available at the time when 1983 was adopted? >> i think, you know, part of what the court's answer is, it's a practical concern. that it's just too difficult to have different immunities, and the court -- so the court has repeatedly reaffirmed that, and i think from a policy standpoint, a practical standpoint, it's felt that that's the right analysis, and there has to be some way to tether the immunity analysis. and history is ultimately, i think - what the court has said it's a necessary though not sufficient, and that once you sort of unmoor it from history, it becomes very difficult to keep the two. so i think what we're talking about here is a statute that had enormous consequences. it's third parties who have been cooperative, even, who have done nothing wrong, that end up in jail, and to say that there is going to be absolute immunity is very dangerous. is very dangerous. this court has repeatedly said that the thumb has to be on the scale against absolute immunity. that's an extraordinary

protection, and if there's anywhere where there needs to not be complete insulation, it would be where you have third parties, and -- who are going to jail. the only other case, prosecutorial immunity case this court has had where it was a third party and not the actual defendant was mitchell, and the court denied absolute immunity. all the other cases, some of which you have denied absolute immunity, some of which you have granted, it's been the defendant in the full judicial process. here we're talking about third parties after 9/11 who repeatedly went to jail. i think the allegations are very clear that it's at least but- for - we think sole -- but certainly far more than dual motive. people were held -- half the people were held more than 30 days, even though the statutory presumption is 10 days. many people were held for months. they were arrested at gunpoint. they were not immunized. half the people were not called to testify. it went on in cities all over the country, people being held under horrendous conditions for long periods of time, interrogated about their own activities. >> thank you, counsel.

general, you have 10 minutes remaining. >> thank you. this is a simple case. it's not about guantanamo, it's not about separation of powers, it's about one simple thing -- should we allow damages actions against an attorney general of the united states and ultimately ausas for doing their job, when they're alleged to have a bad motive? if i could start with the chief justice's point about the cost of these lawsuits and allowing them to proceed. my friend on the other side says, well, but this will be a small, rare case, an isolated example, but i don't think that's true. i think if you allow their motivation argument to pierce absolute immunity, you will have this in every case or near every case. 95% to 96% of federal cases are resolved by plea agreements. so there isn't someone who is actually called at trial. you could allege it in any of those cases. and particularly when you lace on to that what my friend has said is a disturbing, quote,

"national pattern of abuse" of the material witness statute, something which we --with which we vigorously disagree, but if you could add the fact that someone wasn't called on in a trial to that national pattern, then you'll be having these damages actions quite a bit of the time. the time. now he says don't worry, it will only be a few hundred of these lawsuits. well, leaving apart the fact that that excludes immigration cases and excludes the states' cases, as justice kennedy said, a few hundred lawsuits just at the federal level filed against the attorney general? >> general katyal, there are some elements of this picture that are very disturbing, and we are talking about the attorney general and the attorney general's immunity. but there are allegations here that this man was kept awake, the lights shining in his cell for 24 hours, kept without

clothes. now that doesn't sound like the way one would treat someone whose testimony you want. is there a remedy that he has for that obvious mistreatment? >> justice ginsburg, with respect to that whole set of questions, conditions of confinement, that isn't before the court right now. what is before the court is exclusively fourth amendment concerns. now, mr. al-kidd did sue other people, including the warden who was responsible for that, and i think that there have been other ancillary litigation with respect to that, but to hold either the attorney general or prosecutors liable is something that would, i think, ultimately open the door to, at least there are a few hundred lawsuits at the federal level if not more. >> i would like to go back to the statute. if an officer fills out an affidavit for a search and says there were drugs in the house, so i want to search it, and it

turns out he was lying, you would have a damages action? >> the officer - >> yes, yes. >> you potentially have a damages against the officer, not against the prosecutor? >> no, no. i'm saying the officer, because he told a lie. >> yes. >> all right. now here it says that the person filling out the affidavit has to say he is a material witness. so suppose that the plaintiffs were to prove that the individual who signed that was not telling the truth in saying he is a material instant -- witness because not just but for, but there was no possibility he would call this individual, none. and that's what they have to prove. it's really very hard burden of proof. now, one, would that interfere significantly with law enforcement? and, two, how do you distinguish it from the drug case? >> justice breyer, i'm not sure

if your hypothetical has it as the prosecutor who is filing the affidavit and lying or the agent. if it is the agent, i don't think that is something as to which absolute immunity, that's malley v. briggs and a whole line of cases. qualified immunity, of course, would, and indeed those claims are pending in this - >> but in the case of the agent, you're prepared to say that we will allow the plaintiff to go into his motive to the extent that the plaintiff can show there is no possibility he intended to call this individual? >> i think that at least for purposes -- i would say there is at least no absolute immunity prohibition against that. there may be -- may be relevant under other lines of authority. but with respect to my friend's point about your hypothetical in which he said that there -- you know, the government isn't sticking to its position or something like that, i just want to be clear. our position is for the fourth amendment, it doesn't look to subjective motivations at all. that's whren and brigham city and the like, but the statute in 3144 does have safeguards,

prophylactic safeguards to guard against the type of abuse that i think several justices have mentioned today. so that you could only detain someone so long as their release wouldn't result in a failure of justice and the like. my friend also said that -- that there's no historical precedent for this. i would urge the court to look at the 1846 statute, which didn't require failure to comply before a witness was brought in on a material witness warrant and it didn't -- and it had sureties in it. i don't think what the government is doing here is any different. maybe i'll just make one final point, picking up on what justice alito said about the allegations in this very case, because i don't think if you look at the complaint that the allegations in this case prove either that the attorney general or the line ausa had a single motive. this is fleshed out at pages 17 to 19 of our reply brief. at best, they're consistent with their newly minted standard, a dual motive standard.

and given that, i think that the complaint would fall on their own terms, and indeed that law - that line that they're proposing, a but-for causation line, would be extremely difficult to apply in practice and would ultimately lead to lawsuits filed against attorneys general and line prosecutors alike. if there are no further questions - >> thank you, general. the case is submitted. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> next, president obama talks to high school students about the importance of education. in the oversight hearing over the impact of the troubled asset relief program. then we will show leave the supreme court oral argument again in ashcroft v. al-kidd.

>> watch the spending debate so far with c-span congressional chronicles. read transcripts of the recession and find the full video archive for every member. c-span.org/congress. >> over a thousand middle and high school students entered our contest. we will announce the 75 wonders of the confrontation wednesday morning during "washington journal," and we will stream of all of the winning bid is. >> on television, on radio, an online -- c-span, bringing public affairs to you. created by cable, it is washington your way. >> now president momma's visit to a miami high school to talk to students about the importance of education.

the president toured some of the classes with education secretary arne duncan and former florida gov. jeb bush. some students showed the president the projects he had been looking on -- they had been working on. here's a look. >> so nice to see you. how are you? good to see you. that is great. we're going to do a little demonstration? ok. [inaudible]

>> its program to do a step ladder. >> all right. zero. bridging oh -- oh, nice. you program this yourself. [inaudible] how long did it take you to put this together? >> programming -- >> it took about half an hour. >> for me, it might take longer.

what we have here? >> it will move upward at 90 degrees. >> let's check it out. oh, oh. >> later the president spoke at a student assembly. why freezes in domestic spending should not include education. he is introduced by jeb bush. this is about 40 minutes. >> ladies and gentlemen, welcome

the secretary of education arne duncan. and introducing the president, governor jeb bush. [applause] >> good afternoon, everybody. secretary duncan, president obama, i am incredibly honored to be here to welcome such distinguished guests to our beloved state and introduce you to incredible students leaving the state of florida in terms of education achievement. because of florida's system -- [applause] because of florida systems of high expectation, accountability for school, rigorous college prep courses, and the broadest array of choices for families,

the sunshine state students are above the national average in reading and math and more students are graduating than ever before. but there is a lot more to do. a lot more to do. mr. president, as you have said, education achievement is not a republican issue or a democrat issue, it is an issue of national priority. states must be held accountable for setting high expectations for all students. every shot, regardless of their family income, should have access to the quality education. it is vital that high school students graduate with the knowledge and skills to be successful in college and then in their careers. children have all my one chance to receive a college education. they deserve to learn from excellent teachers. those teachers deserve to be rewarded in their work of equipping the next generation of leaders. let's give all the teachers of central high applause.

[applause] we know this is possible because we see a happy hit -- happen. miami central hyde under principle turner. -- we see it happen here under miami central high under principal turner. without further ado, i give you the president of the united states, barack obama. [cheers and applause]

>> hello, rockets. thank you. thank you, everybody. everybody, have a seat, have a seat. have a seat. it is good to be here today. i'm excited. i am thrilled to be here, rockets. bonswa. it is good to see all of you. i want to, first of all, thank somebody who i think is going to end up being one of the best education secretaries that we've ever had, arne duncan, for being here.

we also have -- your congresswoman, frederica wilson, is here. give her a big round of applause. congresswoman debbie wasserman- schultz is here -- give her a big round of applause. your outstanding school superintendent, alberto carvalho -- give him a big round of applause. and a very, very impressive principal -- renina turner. give it up for renina turner.

i gather we also have some members of the football team here. i understand you guys were state champs -- is that right? they look pretty big. and some of them aren't smiling, you know -- they've got their game face on. we are also honored to be joined here today by another champion of education reform, somebody who championed reform when he was in office, somebody who is now championing reform as a private citizen -- jeb bush. and we are grateful -- we're grateful for him being here. aside from being a former

governor of this great state, jeb of course is best known as the brother of marvin bush. [laughter] apparently the rest of the family also did some work back in washington back in the day. the truth is i've gotten to know jeb because his family exemplifies public service. and we are so grateful to him for the work that he's doing on behalf of education. so, thank you, jeb. now, i just had a chance to take a tour here at miami central -- met your outstanding principal, ms. turner. i talked to some of the great students who are here.

we went through a lab -- they had robots, they had computers with vectors and this and that. and i was a little confused, but i nodded, pretending like i understood what was going on. and it's inspiring to think about where you were just a few years ago and then where you are today. right? you came together to turn this school around. and i think the rest of us can learn something from that -- because that's what we're going to need to do all across the country right now. we are at a pivotal turning point. we just came through a tough recession that's taken a big toll on families here in florida and all across the country. and to accelerate our recovery in the short term we took some

essential steps to spur hiring and economic growth, including tax cuts that are making americans' paychecks bigger and letting businesses write off their investments -- and i am proud -- i'm proud that republicans and democrats came together to get that done. and you're already seeing those steps make a difference. this morning we learned that the unemployment rate fell to its lowest level in nearly two years. our economy added another 222,000 jobs in the private sector. that's the 12th straight month of private sector job growth. so our economy has now added 1. 5 million private sector jobs over the last year. and that's progress. but we need to keep building on that momentum. and in a world that's more competitive, more connected

than ever before, that means answering some difficult questions:how do we attract new jobs? how do we attract new businesses? how do we attract new industries to our shores? how do we grow our economy and out-compete countries around the world? how do we make sure all of you -- all of our students, whether they go to miami central or anyplace else -- how do we make sure you have a chance at the american dream? that's why i'm here today. that's what i want to talk to you about. because in today's economy, companies are making decisions about where to locate and who to hire based on a few key factors. they're looking for faster, more reliable transportation and communications networks, like high-speed railroads and high-speed internet.

[applause] they're looking for a commitment to innovation and investments in basic research -- so that companies can profit from new ideas and new discoveries. but most of all, the single most important thing companies are looking for are highly skilled, highly educated workers. that's what they're looking for. [applause] more than ever before, companies hire where the talent is. now, i want all the young people here to listen, because over the next 10 years, nearly half of all new jobs are going to require a level of education that goes beyond a high school degree. so, first of all, you can't

drop out. you can't even think about dropping out. you can't even think about dropping out. but it's not going to be enough just to graduate from high school. you're going to need some additional education. and a good education equals a good job. if we want more good news on the jobs front, then we've got to make more investments in education. as a nation, making these investments - in education, in innovation, in infrastructure -- all of them are essential. now, what makes it tough is that we're in a difficult fiscal situation, as well. for too long, the government has been spending more than it takes in. so in order to make sure we can keep doing our part to invest in miami central, to invest in your schools, to invest in pell grants, to invest in your education, then we're also going to have to get serious about cutting whatever spending we don't need. so what i've done is i've

called for a five-year freeze on annual domestic spending - and that more than $400 billion over the next decade, and it will bring that kind of spending to a lower share of our economy than has been true for the last 50 years. to achieve those savings, we've proposed eliminating more than 200 federal programs. we're freezing the salaries of hardworking civil servants for the next two years. we're finding ways to save billions of dollars, of tax dollars, by selling, for example, 14,000 government properties that we don't need anymore. and that's just a start. if we're serious about tackling our long-run fiscal challenges, we're going to have to cut excessive spending wherever we find it - in defense spending, in spending on entitlements, spending through tax breaks and loopholes. and i'm going to be sitting down with democrats and republicans to figure out how we can reduce our deficits.

but i want everybody to understand, our job is not just to cut. even as we find ways to cut spending, what we can't do is cut back on investments like education that will help us create jobs and grow our economy. we can't sacrifice your future. think about your family. let's say something tough happens -- somebody gets laid off in the family, or you have a medical emergency. if you're a family that has to cut back, what do you do? first thing you do is you give things you don't need. so you give up vacations. maybe you eat out a little bit less. maybe you don't buy as many new clothes. maybe you don't buy that new car that you thought you needed. but the last thing you give up

on is saving for your child's college education. the last thing you give up on is making sure that your children have the books they need and the computers they need -- because you know that's going to be the key to his or her success in life, over the long term. well, the same is true for our country. when we sacrifice our commitment to education, we're sacrificing our future. and we can't let that happen. our kids deserve better. our country deserves better. and over the course of march, what we're calling education month around the white house, i'm going to be traveling the country, and arne is going to be traveling the country, and we're going to be talking to parents and students and educators about what we need to do to achieve reform, promote responsibility, and deliver

results when it comes to education. [applause] and i decided to come here to miami central to kick off education month -- because you're doing what i challenged states to do shortly after i took office, and that's turning america's lowest-performing schools around. this is something that hasn't received as much attention as it should. but it could hardly be more important to our country. right now, there are about 2,000 high schools in america - about 12 percent of the total number of high schools in america-- that produce nearly half of the young people who drop out of school.

you've got 2,000 schools -- about half the dropouts come out of those 2,000 schools. and we know these schools are often found in rural areas or in big cities like miami. many of these schools have lots of haitian americans and african americans, latino and other minority students. and miami central used to be one of these schools. used to. [cheers and applause] but it's important for us to remember where we've been so we know where we need to go. i mean, this used to be a place where the problems on the streets followed kids into the classrooms. it was hard for young people to learn, where the dream of college was out of reach for too many, where there

was a culture of failure that brought everybody down. now, turning around these schools isn't easy. a lot of people used to argue, well, all they need is more money. but money is not alone going to do the job. we also have to reform how things are done. it isn't easy to turn around an expectation of failure and make that into an expectation of excellence. in fact, it's one of the hardest things you can do. and there is always plenty of naysayers out there who will say it's not even possible. who say that turning around a failing school means just throwing good money after bad. who say too many of these schools are beyond repair. who say we ought to give up on those schools and focus on places that have more breaks and have a little more going for them.

here's what i say. i say i am not willing to give up on any child in america. [applause] i say i'm not willing to give up on any school in america. i do not accept failure here in america. [cheers and applause] i believe the status quo is unacceptable, it is time to change it. and it's time we came together -- just like jeb and i are doing today - coming from different parties but we come together not as democrats or republicans, as americans -- to lift up all of our schools -- and to prepare students like you for a 21st century economy. for a 21st century economy.