differently. i would not assume a guilty until they prove themselves innocent. i would set the epsilon outrageous side, because we do not know -- the details yet e -- epsilon breach aside, because we do not know the details yet of how that happened. in some cases, yes, we know that the company did something wrong, something that potentially could be categorized as being negligent. i think that the big problem, though, with automatically assuming that they didn't do what they were supposed to do is that they may actually have done that. in fact, in one case there was a day to reach into a financial institution -- the data breach into a financial institution and we have case law that said that this company was not negligent, and not only were they not negligent, but they did the right things from a security standpoint.

we are all taking risks going out on the internet. you cannot assure 100% security. you have to accept that certain risk is going to exist, and if people are persistent enough, and they can get at your information. the take away from all that, particularly at the consumer level, is only share what you are willing to potentially give up if there were a bit rich, or make sure that the people you are dealing with, -- if there were bad data breach, or make sure that the people you are dealing with are secure. host: our guest teachers information policy as a professor, an adjunct professor, a george washington university. thanks a lot for your time this morning. "washington journal" starts every morning at 7:00 a.m. eastern time. we will see you back here

tomorrow. it will be a busy week here in washington with a lot more budget news, so see wi -- so we will see you back here tomorrow. host: [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] . >> on this monday, april 11, president obama will propose $18 billion for nasa and its programs next year. the nasa administrator will go before a senate committee explaining the budget needs. we will have live coverage of that starting at 4:00 eastern. the u.s. house dabbles in at 11:00 eastern so the speaker can file the spending agreement that

was reached last week. the house also considers this week the republican budget plan for next fiscal year. you can see lighthouse coverage here on c-span. the u.s. senate will return tomorrow to consider judicial nominations. they will vote on suspending agreement and possibly policy provisions that republicans wanted to put into the spending plan. live senate coverage on c-span 2. >> tonight on "the communicators" the proposed merger between at&t and t- mobile. >> what are the specific arms to the consumers? if there are harm's, they should be merrily tailored to address those, but the merger process should not be an excuse to implement rulemaking of issues that do not arise because of that particular merger. >> "the communicator" tonight on

c-span2. >> c-span2, weekdays live coverage of the senate. on the weekends, "book tv." connect with us on facebook, twitter, and youtube. >> now, former white house senior adviser david axelrod said on thursday to discuss his experience working in the white house and issues involving obama administration. he talks with james warren for about 45 minutes.

>> small, it does not represent none of them. there were a number that adopted. there is no doubt there is a larger discussion to be had. the president said we have to do this in the sequential way. we have to get last year's budget business done. let's have a discussion about 2012, and let's have a discussion about the larger issues. right now we're fighting over 12% of the budget. that is all but discretionary budget is. that leaves 88% of the budget to be discussed. if you are going to thisolve this in tehe long-term, that has to be discussed. these are difficult issues. if there were not difficult, we would have solved that long ago. it will require republicans and

democrats sitting together in good faith and talking about them and not trying to score political points off of them. i expect that conversation will happen. >> the republicans scored a lot of political points on health care. there is no evidence yet that the law has reduced costs. when will americans see changes in the very tangible way that reshapes their views? >> first of all, but there are millions of americans who are seeing changes in tangible ways right now. there are young people that are insured up to the age of 26 who would not have been. there are senior citizens who are getting a better break on their prescription drugs. there are new laws against over reaches by insurance companies in terms of limits they can put on insurance.

it will be 2014 before it is fully implemented. that is when the health care exchanges will be implemented. and so the answer to your question is we need to fully implement this program. we also have to begin to occur encourage best practices all over the country that will reduce costs by automating medical records for example so that we are not repeating test.

simple things that we can do that we know will reduce costs. that takes time to implement. and we have to see it through. >> the bread and butter political question. there seems to be a lot of interesting stuff and bedded in new census data. growth of latino populations. some of it in places you unexpectedly won in 2008 in indiana, virginia, colorado, places that have now by and large bond republican. what about the census data? >> there is no question what you're saying is true in 2008. theyeprented 18% of the total vote. well% in 2010.

the minority of the votes in 2008 was 26% of the total. some of the have to do with the fact that the president was not on the ballot. some of it has to do with the reality of governance. everywhere he went he said change is not easy, it will take time. it will take -- things will not happen overnight. nonetheless, we have gone through a terribly difficult time because of the recession. we have gone through continued battles in washington, and one of the things we hope for is to overcome that kind of politics, and we still want to overcome that kind of politics. i think that is wearing on

people and had an impact. >> we got a tremendous reaction to the announcement that the president had filed his papers for reelection, a tremendous grassroots reaction. it was expressed in a lot of different ways, including small dollar donations. i think there was a real from the people that they did not participate in 2008, that they will in 2012. certainly some of the waves that the republicans have behaved at the state and national level has reminded people that there are elections, and we have to participate. robert kennedy said the future is not a gift, it is an achievement. that means we have to keep working at it. it is not easy. i think people get that. one of the reasons we started as early as we did is we wanted to reach age and mobilize people.

-- we engage in mobilize people. reengage and mobilize people some of the state's we did not win, we see a big growth, particularly in the hispanic population in those states. that will be a factor moving forward. that does not mean those voters are registered and will participate. that is the path that lies ahead, but there is no doubt we are becoming a more diverse country, and that will have an impact on our policy to go speak briefly about your on-the-job training at the white house. stuff you now realize you did not fully get when you walk in the first day. >> as sophisticated as you were, as many issues as she mulled over during the campaign, presumably you did not think one

day you would be owning gm and chrysler. >> we do not own gm. in that is just a rumor. -- that is just a rumor. [laughter] do not forget pirates, pandemic spear ys. >> exactly. >> you realize how unsophisticated you are when you arrive there. when you work for the president and when you are the president you have to deal with everything. the white house is filled with experts on different subjects, the president has to be on top of all of the subjects, and those who work for him have to try and keep up here yet i have to tell you, instead of talking to a hometown crowd, so this probably will not be shocking to you, but there was not a day

that i was there that i was not to not just proud to work for barack obama, but grateful he was there. these problems are so complicated. he always says if it is easy, and never gets to me. they are so complicated. -- he always says if it is easy, it never gets to me. he was always asking the right questions and making judgments that he thought were best for the country, never losing his footing. it was remarkable, because what gets thrown at you is just extraordinary. what i learned is how much i did not know. and i know more about economics, more about pandemic.

i know more about oil drilling sadly than i ever thought i would. every single one of the great things about working in the white house and one of the daunting things that every day you are looking at things that are new in some way and have never thought about deeply before. you are pushed to learn about them and learn about them quickly. it is a great experience. there were days, particularly at the beginning, when each day we were grappling with what we would deal with, the possibility of aanother depression. there was a one in three chance we could slide into a depression, which is something you never anticipated hearing.

you thought that was part of history. here you are dealing with that, and then on top of that you overlay the war's. one day i said to the present i wonder what it would be like to be here in good times? he said do not kid yourself, if things were good, we would not have gotten the job. [laughter] >> speaking of things you confronted, it is a little bit of a lightning round. most international -- interesting international figure you have met. >> i may have mentioned to you i would travel to russia with the president, and he was meeting with prime minister putin and the meeting went long, so they

asked me to sit with gorbachev, who the president was supposed to meet with. i spent 45 minutes with him. that was an extraordinary experience, understanding the role he played in history and hearing his stories, particularly about ronald reagan. he really liked reagan. he said he started off thinking was an imbecile and came to change his view. he said i know reagan started off thinking i was a menace, and he changed his point of view. he said use it in bilateral meetings with reagan, and george shultz would be sitting next to him and never once in awhile break it would go off on our rhetorical flight of fancy, and schulz will slightly places hand on reagan's hand, and reagan would stop speaking.

but he talked a lot about the great things they were able to do together. it was inspiring. he was a really interesting guy. i met a lot of fascinating people, but in terms of foreign leaders, that was really interesting moment. >> this is a truly pedestrian question. what is the high-tech benefits of traveling with the president? do you get to sneak into friends bank accounts? how good is the phone reception? >> well, on the subject, i think i owe you a few thousand dollars, i was a little short. [laughter] we did not sneak into people's bank accounts, but obviously air force one as air force one. the ability to reach anybody in the world.

if you pick up the phone and you want to talk to someone, they will find that person. that is a benefit. [laughter] but, you know, when you are in the white house, any information you want you can get fairly quickly. we are among friends. i look around the room, and i see people with this is your life for me. i see bernie back in the corner over there. he was my first city editor. i always say i want to college at the university of shot, go and was educated at the chicago tribune. -- university of chicago, and

was educated at "the chicago tribune." we really are among friends. i cannot speak for the c-span people. >> the most exasperated member of congress he met. [laughter] >> i am obviously not going to answer that question, but in case you do not recognize an invasion when you see it, but what i will say it is the world of politics and certainly congress divide itself into two categories, people who run for office because they want to do something, and people that run because they want to be something. the second group is more numerous than the first. there was a disconnect sometimes because of that.

if your mission is to try to get something accomplished and it involves expanding political currency to do it, and this president has proved time and again he is willing to do that, there are those that say this is -- i went into the president any times with polling numbers on things that we were working on that were not very encouraging. if you connect the dots kind of decision making, you would say we're not going to do this. thank god for the country that is not how he operates. i will give you an example, the auto intervention. people were not for it. even in the state of michigan people were not for it. they felt that for decades the american auto makers did not make the decisions they should have in order to make their

industry competitive, so why should they get bailed out from their own mistakes? on the other hand, we were sitting in the middle of a very deep recession. if they disappeared, hundreds of thousands of jobs would disappear with them. not just their workers, but the small businesses that supported it, dealerships, and so on. the president said i appreciate that, but if they're willing to rationalize their businesses and make themselves competitive in the 21st century, we should help them do that, because it would be a tremendous blow to a lot of communities to lose them. now we have seen gm has had the most productive year since 1999. they have added tens of thousands of workers, and it is a whole different picture. had he done what some members of congress would have suggested, he would have let it go because it was not at first

glance the politics to what he did. what he did. my exasperation is with those that have a horizon line of 24 hours. off and are guided in their decision making by that, because their principal concern is to get reelected and not move the country forward. there are those on both sides of the aisle who are subject to that. >> let me play devil's advocate and argue in the form of a question, about what seems like a president bowling to popular view? there are guys who were on guantanamo that have been there

for nine years not charged with any offense. there are at least 75 people who the justice department can see has no evidence against. they are just sitting there on guantanamo. there are right about 170 there right now stock. the president clearly got shafted in a way as the republicans threw in an amendment to the defense authorization bill that said basically not one dime of your money can be spent moving any of those guys, so they are stuck. why was that not something that the former usc law professor who knows this is outrageous, why did he not say no? let me say a number of things about that. first of all, there is this

institution called the united states congress. , under our system they have some authority here. they have exercise that authority, and they have exercised it in contravention of the pleas that the president and others have made. we wanted to close guantanamo because it was and remains a hindrance to what we are trying to accomplish overseas. it is a negative symbol. it does not enhance our safety and that is why we wanted to remove remaining prisoners to thompson, ill., into another facility there. the united states congress has blocked that. they have made it more difficult in terms of where the venues in which these folks are going to be tried.

then it becomes a matter of do you try, for example, the man behind the 9/11 massacre, or did you just sit in a holding pattern, a stalemate and not give justice to those who have lost their loved ones at in that catastrophe, in that crime? so the administration and the justice department decided to move forward. there is a qualitative difference between where we were in january of 2009 and where we are today. we did not even have case records for most of the people in guantanamo.

it took months to reconstruct who they were and why there were there. so we went through that process. some of them have been transferred over. others are in the process of being charged and tried. there is this category of people who are there that there is not evidence to try them, but there is plenty of evidence they represent a threat to the country. how to deal with those has been -- it has been a very thorny issue. the president has tried to develop a protocol to deal with that that will give them some sort of review. these are difficult issues that we walked into and have to try and resolve, and try to resolve it in the real world. the president is not the university of chicago law professor. he is president of united states

and has to deal with the many challenges that this poses. he has to do it consistent with our constitution and values and our constitution includes the separation of powers. he is doing the best he can with a very difficult situation. that was a lightning round. you cannot ask questions like that in a lightning round. >> that is like if you were a tree, what kind of tree would you be. tell me about guantanamo [applause] . >> here i am defensive about lack of new ones. sorry. for the next hour and a half, could you just tell us as much

as you have brought up d.c., particular media 0 echo chamber, were there times where you cannot avoid putting on your jacket and going in front of the camera quickly, that it just became a reality of your life, even when you knew maybe more than anyone else in the country, outside the west wing, that the story would be axed. >> that is a lightning round question? that is a question that involves more thought and i can give on this space. if you are asking me if i went out -- >> no. >> let me just say this. there is no doubt that the

hardest thing about money hard things about the presidency, at least if you were in the see i was sitting in is discerning what is real and what is not real. every day is election day in washington. every single day is something that will define the administration. how many days did we go through last spring after the oil leak where we were told this is the defining issue of the obama presidency. obama's katrina. and how many people -- how many of you were talking about that over your lunch today. it was important. for the people down there it was a terrible thing. i do not minimize it, but it is not the defining issue of the presidency. every single day you can find someone writing about something, this is a defining issue of the presidency. what we tried to do is focus on

things that really matter to people. trying to discern from what is real curse is the cable fluff -- trying to discern from what is real verses cable fluff. >> let me talk about the true defining issue of his presidency, unequivocally. obama has a history of avoiding traps, traps that light sets out for him. huge family dysfunction, particularly with his dad. being black in america. coming out of chicago politics. potentially getting stuck in springfield as a legislator. >> you better ask a question,

because you are like consulting everybody in this room. -- insulting everybody in this room. [laughter] [applause] he has navigated his way around a lot of potential landlines. my question is afghanistan, iraq, libya -- is war the one potential trap he cannot even avoid? >> you are asked me to put in a political context what is up fundamentally larger question. i think most americans are wary of war. it has been costly in terms of lives and treasure. and yet they also feel strongly

that we need to do what we can to protect our own security. and the president needs to balance these things. he ran for office promising to end the war in iraq. by the end of the year we will have our troops home. he ran saying that afghanistan, there is no strategy in afghanistan, that we had to do more aggressive things in dealing with al qaeda central. and he has done that. he did it promising that we would surge up and that we would begin a process of reducing forces in the summer. i am confident you will do that. as for libya, everybody wants to generalize as to what are the principles involved. each of these situations is very

different and challenging. in libya we were forced with the faced with a situation of an impending genocide in a country that was pinned between egypt and tunisia, where fragile democratic movements were taking hold. we have the arab league and the allies united in the call for action. and we acted. we acted in a limited way to prevent what could have been a genocide. it was not, i did not think, an easy call. the president did a great job of explaining his reasoning in that speech. i did not know that he views these things as a trap so much as the nature of complex and

challenging world in which you have to evaluate each situation and react to it in a thoughtful, intelligent way. that is what he has tried to do. >> let's go distinctly local. blagoyavich.ag >> i helped him become a congressman because i thought he would be a good representative for that district. and i did not see in him the qualities for executive leadership. and i was surprised when he came to me and said he wanted to run for governor. and he could not really articulate for me why. it goes back to the question of folks who want to do something

and folks who want to be something, particularly when you are running for office like that. you should know what you want to do. you should know why you were doing it. it cannot just be that it is cool to be governor. i just felt i could not do that to the program. i told him that. in many ways that was an end of our relationship. i do not want to pile on attractive story. and has been tragic for his family and the state. i do not want to pile on, but i have a strong sense of knowing him as i did that it was not going to be a good story. sadly that turned out to be the case. >> for those who do not remember, you were a very important player in the initial

victory in 1989. how do you compare richard m. daily with rahm emanuel in 2011? intellectually, stylistically. >> let's just say times were different. it is inappropriate place to say that there is some political risk and ships -- relationships that i have that i will be proud of for the rest of my life. obviously the president is one of them. the other one is mayor daley. i remember how riveted the city was at the time, a racially divided, incapable of doing the things that were necessary to

deal with obvious challenges. it was a difficult time for our city. and he -- you can see evidence of his ingenious and envision all over the city, but perhaps the greatest achievement that he should feel really good about, and we should celebrate is what he did to put this city back together in 1989. he is a unique character. obviously he eats and lives chicago. he came to the office that way. he never had any other aspiration. he was not looking to be governor or senator or anything else. he had this understanding of the

city at a very granule level. he understood every block of the city. he understood the neighborhoods. he has a genius for the city generally. rahm emanuel has a genius for governments and a genius for politics, and i think that will serve him well. i have been impressed with the way he has handled himself during the election and since the election. he has that same drive that mayor daley has. he is a big, strong larger-than- life personality. it takes that to move a city forward. they are similar in that way. one big difference between them is an outgoing personality. rich daley is a very shy person.

rahm emanuel is not shy. [laughter] i think he is a worthy successor to one of the great mayors in the history, not just of the city, but of the country. >> what do you think would be a smart way for rahm emanuel to go about things, particularly fairly early on? is it important to do something big early? civic counterpart to health care, for what might you suggest would be a smart way -- >> it is not like he is painting on a blank tablet. he has some big challenges, and they will not wait. they require action, and they require it quickly, and he knows it. we have fiscal challenges the have to be addressed. we all know the future of the city, i think the future of the

country, i think rest upon how we handle education. we owe it to the children and ourselves as a committee to mixture they get an education that is equal to the challenges they will face in the 21st century. i am sure he will pay a lot of attention to that. we have to have a safe city. much of it is safe, but there are pockets of violence. those have to be addressed. he identifies the serious during the campaign. i do not think it was rhetorical. yes, i am sure he will do some things in terms of bringing stuff to the city that will be important. when he wants to do something -- i will tell you a story about my friend who i have known since he

was 22-years-old. he does not like me telling this story, but it does not watch c- span. [laughter] -- he does not watch c-span. when my wife was pregnant with our second child, rahm emanuel was working for illinois public action. they helped elect a fellow that you know, lane evans. quite a victory. first democrat and 100 years to win in this western illinois district. rommel wanted to get some credit for his organization for putting a big role in it, so he called me and call me and called me, and he kept calling me. finally mercifully susan went into labor and i went to the hospital. we are in the recovery room and

the phone rings. and i pick it up, david, yeah, rahm emanuel. he said i just needed to know how it went. in he said great. he said when you think he will be back at work? [laughter] anything this city needs, and there will never be a more energetic advocate for the interests of this city with business, with other levels of government. no one will be saved from his desire for this city. i think the city will profit from oit. >> a couple of other things before we finish off. there is a formality known as the atomic neighborhood. it is a joke. makes it difficult for some to

leave d.c., especially journalists and politicians. i set out five years max, a years. -- 8 years. and has to be much more difficult for those in the west wing. are you still having any sort of withdrawal problems in not being quite the same information room? not saying exactly who just went down the hall into the oval office, which nobody else in the world would know ever maybe. not knowing exactly who the president on the phone with 10 minutes ago. talk about that. >> anybody who tells you otherwise is lying. it is a narcotic. it is energizing to be in the

nerve center of the world and to be in that information loop, beyond which my colleagues there and the president to be in close proximity in work with him on the day today basis was a great pleasure. i do is refer to myself when i was in the white house as a chicagoan on a assignment i always say about washington what my mother to say about me when i was a child, i love you, i just take the things you do. -- just hate the things you do. i do not like the pathology of the town. and i love being here in a place that is frankly healthier and more real. so yes i very much missed that.

there is withdrawal, but i feel very grounded being home. i just want to say one thing, because we are finishing up here yet i know we have a lot of problems and challenges as a country, and we all are aware of it, but i always think about this experience i had when i think about all the great experiences that i had working as the -- working with the president, and one experience is in 2009 i got to travel with the president to russia. when we arrived, there was a ceremony. understand my father was an immigrant from eastern europe. his family spent four years trying to get to america because they believe this was a place where they could practice their faith freely and where they could pursue their dream. now here i am standing with the president of the united states watching the russians military

band play our national anthem. i sat there with my hand over my heart and i had tears in my eyes because it was the night before what would have been my father's 99th birthday. i was thinking what an affirmation of his face and his family and his country that his son would return side of the president of the united states. it reminded me that for all of it in perfections in challenges, it is such of great country. -- and reminded me that for all of our imperfections and challenges, it is such a great country. that is a big take away for me from this experience. [laughter] [applause] >> i had a couple more questions, but we will do a lightning round later.

do we have time? >> i'm sure david will want to stay in the answer more questions, but we have a role at 1:30. and unless you all agree to go into overtime. >> i do not want you to put this up to a vote. that could be humiliating. >> two fast one's. >> real quick. the one question that was handed to me by your good friend, when would you read your book? >> i am busy right now. someday i hope to do that, but i have a task ahead of me. i will devote myself fully to look for the next year and a half. that is to see to it that our friend gets reelected. [applause] >> for the record, but we should

explain to the c-span audience, this is not exactly a belligerent crowd. some of the people right in front were there. to go there was a woman that told me in 1992 that president barack obama was coined to be president of the united states sunday. >> stand up. [applause] this has beensay a great experience. why don't we just end this by thinking david and gem for an incredible conference. [applause] david and jim, we are not done yet. we have two gift certificate. this is big time. one goes to eli abrhams.

the other goes to judy williams. for you guys -- congratulations. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> what all the events occur spending debate in the preparations for next year's debate. -- what all the events on the current spending debate and the preparations for next year's debate on the c-span library. it is what you want, when you want. >> president obama proposes nearly $18 billion for nasa and its programs next budget year. it is about the same as this year. the budget committee will go before the senate this afternoon. we will have live coverage at 4:00 eastern. the u.s. house will double in

tonight at 11:00 eastern so the speaker can filed the spending agreement that was reached last week. g to putf is workin and into legislative language. you can see the house live here on c-span. the u.s. senate will return tomorrow to consider judicial nominations. later in the week, senators will vote on the spending agreement and possibly policy provisions that republicans want to put into the spending plan. live coverage on c-span2. >> tonight pond oon "the communicators" robert mcdowell on the proposed at&t and t- mobile merger. >> if there are harm's, they should be nearly teller to address those. the merger process should not be

an excuse to implement a rule makings of an issue that does not arise because of the merger. >> "the communicators" tonight on c-span2. >> is really for a deputy minister called -- israeli deputy prime minister on the uprisings and their impact on the israel. and the impact on israeli relations. [applause] >> thank you.

you are the shining beacon on the hill but it directs to politics, which is so much needed in a very confused situation that we face all over the world today. so really my appreciation goes beyond words. every time you invite me, i will come. i also want to keep inviting you to israel. i think this is the main instrument to keep the relationship so lovely. the fact that israel and the united states are natural allies is quite obvious, not only on the base of our s shared values and common threats, also because of the

relationship goes beyond just formal government friendships and alliance, which usually is the case in most international relations. in the united states and israel, i can see from a vantage point in washington, and also now you go into the grass roots. you go into the communities in the united states, and you feel the appreciation and respect and admiration and the connectivity, understanding that we have really a common destiny together. i never tired of listening to my very many friends from the christian communities. the jewish communities, we take it for granted, but maybe we should not, especially as we

hear views from the very left side. i heard one horrifying experience. we came here by way of sacramento. after meeting with the governor of california, i came out and people were signing a petition, sanction israel. who was there? a nice jewish fellow. i tried to communicate with him kerry and i asked him if he has been to israel and seen and heard what we are? before he called us not cease. -- nazis. he said i will never go to israel as long as it is a jewish. i will be happy to come to israel when it is palestine. how can you reason was such things? we do not take jewish support

for granted anymore, but we're very pleased to have the across- the-board of the american social spectrum, agrees support for christians. we are also reaching out to hispanic and other minorities in the american society, because they are very important to keep the relations strong. see if i hear it everywhere i go. i am beginning to hear it in europe. -- i hear it everywhere i go. they say you are there not just for israel, but for us. to defend our ideology, our values, our future. i can tell you the fact that we are being attacked in that region is not because necessarily we are jewish or

israeli, it is because we happen to be there. this is the scene line between emigrations. just like in the other seem lines between radical islam and other faiths, there is war. whether it is pakistan between hinduism muslims or just like what is in the balkans between muslims and greek orthodox or russian orthodox or questions of bosnia. there is a common denominator, which we have to be aware of. it may not be political correctness to say, but this is no time for political correctness. this is time to spell out exactly what are threats. we have been through this before where you put your hand in the sand, it does not help. it does not put away aggressiveness, it does not put

this away for the country. in encourages them to move forward and then the price of putting them down in defending ourselves as much collier. this is the case with hamas and has blockeezbollah. this is why it is important to act on this now. this is pretty much our message. also came totl understand that. i think with the most staggering shock for european was, and i was there at the time when helen thomas made her comments. and as you heard of her? she said what do the israeli's do there? they should all go back to europe. but me tell you there was nothing more shocking for the europeans when they heard they

want to send us back to europe. [laughter] since then they became our best supporters. you stay there and continue to fight for us. so there is a silver lining in the clouds. also when it comes to public relations. we are the first one to understand that. i can tell you it is because we are facing a quantity of attackers. the majority are against us. sometimes it takes time to ruth come out.e troops come ou there was an article published yesterday in "the washington

post" almost saying he was sorry. he sees that israel was not at fault in the sense that we did not target -- you should read it. it is too late maybe, but better late than never now we urge mr. goldstein and the u.n. to reject this feverishly. that they will do the same upper not to retract it. this is this is something that is very important. [applause] and i think it is something of a strategic value for all of us, because we have allied troops still in iraq, certainly in afghanistan. you may have some nato in libya, facing the same situation. i can tell you, there is no

replacement to the united states, not only because of your military technology, strategic might, at economic innovations, but also because of the moral leadership that the united states presents. [applause] and there is no other country like the and and it states which can continue to do that, -- there is no other country like the united states which can continue to do that, and with american resilience, innovation, i know that you are reinventing yourself just like israel does. even though there are blips along the way, a cyclical or otherwise, fairly soon it will be obvious for everyone that the u.s. leadership is here to stay. our interest and our national security is very much depended

and intertwined in yours, and also in a more modest way, american and national interest and security is intertwined with us. as i mentioned, the relationship goes much beyond government. it is people to people. christian, jewish, hispanic community, defense community, economic and a businessmen -- i am very proud, and israel is also very proud to be the largest trading partner with the united states and the region. we in israel by more products and services than anybody around us, per capita more than any other country in the world. as trade goes, we are like no. 22 in absolute numbers. given our size, that is quite significant.

also, the relationship israel and the united states has been very useful for the countries, moving it to grander skills of operation. fta, the free-trade agreement signed between israel and the united states in 1985, the first trip agreement signed. since then, our trade when up hundreds-fold. you see the connectivity at between economies, societies, and this is very important, and they will continue. -- and it will continue. this will also be very important when you look of the new vision for our region. to say that we are seeing a sea change in the middle east is probably an understatement. to say that it is very significant to all of our security and well-being is also to state the obvious.

but i can tell you that from what we see, starting in to any share, but went into egypt and everywhere we see in the globe, including in syria today, is something that i can say for early safely that it is quite genuine uprising. very authentic. there is a common denominator for all these uprisings, and this is deprivation of civil rights, economic opportunities, and of the thing that just stands out from that. very brutal, dictatorial regimes who do not care for the people, only for themselves, and have been able to stay in power for so long just by the might of the sword at police -- and police state regimes. each country may be sui generis

in terms of the characteristics, social fabric. and the histories of the top of the common denominator -- the history is different but the common denominator is same. in libya, you have gaddafi in the west and the people in the east. in egypt, it is probably like a generational conflict. every year in egypt, 1 million college grads go out to the labor markets but they find no jobs. only 30% are employed. this is accumulating. you see the intensity of the problem. in bahrain, and religious wars, .unsunni and shiite what we are asking israel -- what is your sentiment and policy?

first and foremost, we have to remember it has nothing to do with israel. we stay fairly quiet. we do not want to overstate our presence in the region, and anything that we can say may be used against us or may be misinterpreted by leaders or by radical islam. all we can say in a very generic way is, first and foremost, we wish well to all the people around us. we would like to be able to exercise their rights, fulfill their opportunities in an equitable way and a nonviolent way. this is the policy of israel. beyond that, we cannot do much. even if we wanted to, it would be counterproductive. having said that, there is a major stake for all of us, and that is although we would like to see these revolutions consummate in a non-violent way, and in a way which will benefit

the people and the region, there is a major threat, and a major noteat is radical forces - just on the way, they are present in all these flash points in the region trying to hijack the revolution. we have an example from 1979, iran, which also started as an authentic revolution by the people against a very dictatorial regime, and then it was hijacked by the ayatollah and the rest is history. we, not just in israel, collectively, cannot afford another iran in the region. it is very important to realize that whatever we do now, whether is in libya or with the interim leadership in egypt or anywhere else, we have to be mindful that there are various

forces of the iranian revolutionary guards and other agents, and they worked for many agents and proxies, whether it is hamas, islamic jihad, to name a few, they are in the region of the middle east. unfortunately, they have a gateway that is quite open it to the middle east, and this is syria. without syrian cooperation, iran would not be able to act so freely in the middle east. they are there. they turned lebanon from a christian to hezbollah country. hezbollah does not represent lebanese but rather iranian interests. same with hamas. islamic brotherhood in egypt. in yemen, bahrain, even in morocco. by the way, this is not just the scope of their activities.

they are very active not far from your backyard in latin america. there are many, many hezbollah and iranian assaults. we have seen already their capabilities back in 1992 when they bombed the embassy in bonn as iris -- in buenoes aires. the mastermind of these attacks -- there is an interpol injunction against him. he eagerly serves as iran's defense minister. they have an ally, iran, in the region, caracas, hugo chavez, and they are in africa and many other places. this is the major risk we have now, that they will i get the revolutions around us. -- that they will hijacked the

revolutions around us. there are basically two ways to do it. one is the long, methodical way, but still very necessary, and that is to offer a type of marshal plan to the people of the region. by saying, shall plan, that does not mean that you or the europeans -- by saying that marshall plan, that does not mean that you or the europeans will need to put in a lot of money. but the money is very much available in the region. saudi arabia and the gulf countries sit on mega-trillion funds which they could spare, and also it is their best interest to make sure that the iranian revolution will not be repeated. there might be a way to sit with the saudis and other gulf countries and talk on a long- term plan where they put the money through accountability and transparency that will also be offered from the western

countries. basically, there will be an industrial base created in this region and jobs creation. this is the thing that they need. at the same time, europe and the u.s. can offer these methods and their experience to build a strong civil society. separation of powers, rule of law, democratic institutions, press. and there should be an interim period where things like that will be formed, and the most important thing is to project a plan, a vision, to the people so they will have hope. what is happening today and egypt and everywhere else -- the revolution succeeded, but what is happening the next day? are they able to bring food to the table? no. later, it could be more dangerous than the explosiveness

from the that downed and disappointment. this calls for leadership, a summit of leaders in the region , an international community should be called, and this is something which is it doable. but this is something which is proactive and will take probably years to pull -- to fulfill. the other measure is something that can be done immediately and is even more imperative, to stop iran, to make sure that the iranians are not able to infiltrate. and to do that -- [applause] and to do that, it is not enough to go and try and catch every terrorist or any political activist or any imam of the iranians. it is like going after individual mosquitos in a swamp. it is much easier to gedrain the

swamp itself. it is the regime of tavon, and we can do it by -- it is the regime of tehran and we can do it by ratcheted up pressure on tehran. measures were taken by like- minded countries, led by the united states, canada, israel, of course, south korea, japan. but it is not enough, because the regime is not hurting enough. it is not hurting enough to change the conduct and to stop the nuclear activities and the proliferation of terrorism and they're very radical agenda. it to the extent that they do not feel they pay a price, they continue in what they are doing. there is another thing which is beyond our control, but the

iranian economy -- the upside for them is oil prices -- is mary here? ok, good. with the oil prices, the iranians were able to make more than they lost from sanctions. we need to make it more sanctions, oil embargo, and the shipping and transportation measures to which they send explosives and terrorists, just like in the victorian ship intercepted about three weeks ago. they tried by air, i see -- by sea. egyptian military intercepted convoys coming through iran, and

there are daily flights from tehran to the mask -- from tehran to damascus, and it is important to intercept the things that they should not be shipping according to international law, and resolutions of the united nations. this is what we can do very cheaply. we have to remember that for iraq, the nuclear program is not an end itself, only the means to hegemony over the region and much much else. the ballistic missiles today cover the entire middle east, europe, and on the drawing board, can reach the continental united states. anyone who says that iran is like north korea is wrong, because north korea may or may not have two bombs in the

cellar just to extract economic benefits. it is not an ideology for them. for iran, it is ideology of control. for them is do or die, their weight or no way. this is what we face. today, with the upheaval in the region, it is doubly important that we will keep the eye on the ball, that we will focus on iran and not let our attention be spread over on libya, egypt, yemen, bahrain, qatar or any place. still iran is the source. curbing, stopping iran will have tremendous attack on the other regions. we will continue in israel very modestly to work with the united states. we cannot say to much, because it will be used against us and be counterproductive, but it is obvious to everyone that the

problems in the middle east lie within this dysfunctional society and not from israel and not from the israeli-palestinian conflict. for too long, just as an excuse to their own population why they have such bad conditions, always put the blame on israel or the palestinian conflict. israel was not even mentioned, palestinians were not mentioned at all in the revolution are around us. a beliefe i obvious -- it is obvious that what should be a solution has nothing to do with israel. >> to you want to take some questions -- >> would you like to take some questions? ok, we will stop here. do you know made it takes -- want me to take -- ok. >> on the verge of becoming the

fourth largest natural gas producer and the world, in the middle east -- which will change the balance of power in the middle east. how fast new development and -- how fast can you develop it in the middle east? >> as jewish more important now is to allocate the profits. development is no longer necessary. already on the books and it is good enough for us. [applause] i hope will take five years to start producing. i hope that all the estimates are true to it some say that there -- i hope all the estimates are true. son said there are even more than we are estimating. israel is on the verge of economic independence, and not through natural resources, but through intellectual property.

in today's global and technological age, we are placed right there on the cutting edge and the potential for the israeli economy is great. we just last year joined the most prestigious block of developed countries. we were limiting what we don't have any drop oil or natural- gas. i guess this was in many ways a blessing in disguise. now that we don't so much needed, we find it, which is good. it may change geode-strategic considerations and the region. we are already seeing emergence of the alliance that we will have with europe because the europeans need to diversify their resources of energy. they don't want to be dependent on just russia or turkey or certainly iran. the plan is to really work through cyprus and greece as the

hub. greece will the gate wait -- the gateway to pipings that go through europe. when you have the money and resources, don't have pr problems. [laughter] [applause] last one -- we have two, so i don't know -- ok, just these last two, and that's it. >> i'm wondering if you could speak about the role of turkey. it was written in "the wall street journal" today that turkey could be the next going around in this islamist direction. >> quite interesting. bernard lewis, the foremost

scholar on the middle east said that looking and societies and differences, iran may become turkey entered the may become iran. if you recall year and half ago, there were riots in the streets of tehran in the wake of rigged elections of theirs. it was killed literally by the iranian forces, the most brutal. but i think the threshold of fear may be broken after a date cd experience in libya and syria -- after a day at sea at the expense and libya and syria. -- after they see the experience of libya and syria. in turkey, i think it is somewhat different. i don't think we will see any change in the turkish policies until the coming june. this coming in june, and about three months, we are going to

have elections in turkey. until then, we won't see any change. unfortunately, we see that the youth bashing the west as a means to get popularity, especially among islamist forces in turkey -- and by the way, but turkish-is really relationships is merely a reflection of -- turkish-israeli relationships is really a reflection of turkish- u.s. relationships. turks under erdogan did not allow forces to go through turkey to iraq, which would have saved a lot of lives and materials. back in 2008 and last year, they were voting against sanctions on iran, against the united state'' specific request. also, when you look at what is going on there with putting

islamists in turkey in key positions, it is also something which is very, very dangerous. one of the last his appointment was by -- one of the last erdoganointments by was when he fired a professional guy and he put in an islamist with known affinity to iran and the revolutionary guard of iran at. this is what we have to understand that we face. he puts journalists in jail that criticize them. so, basically, i don't looked at it through the scope or prison of iran or turkish-israeli relationship. it is turkish identity. are they going to be what they

used to be, tolerant with western orientation, or will they go the other way? after june, we will know better. it is also important to note that there is an issue between them and europe, where it -- whether they joined the european unit, whether they do not. there are a lot of states that have nothing to do with israel. with turkey, we tell them that we are ready to resume relations as before. but if they don't do it, i think they will have an issue not just with us but with europe, the united states, and with other like-minded countries bro. last one? >> i think we have one more. >> so great to hear you. interesting.

i love your idea about the marshall plan. it jibes with what i heard from a great champion of human rights in iraq, and a journalist, i've interviewed him of much of times. his children were murdered because he advocated cooperation between iraq and israel. he is a true, moderate chatted of human rights, -- true, moderate chairman of human rights, and he said that this op-ed of -- he said that is a pivotal time, identify the people of the arab world and get them organized. what role can israel play in helping the u.s. identified who are these people? there is so much confusion about who can we really work with. are there any efforts afoot to do that to help strengthen those people? >> thank you. as i mentioned, is very important that we continue, especially the united states, to

lead with moral leadership, and this is where israel can help by example of being a democratic state. let me tell you, when you have such a very dedicated forces, radical forces against you, just to lead by example and morality is not enough, because they take advantage of what they see as the vulnerabilities and freedoms in the west. on top of being exemplary in our human rights, is the rights -- human rights, civil rights, civil society, modernity, and all that, we must always present deterrents, because we are against irrational forces who want to take us down not because of our policies and what we do, but because of who we are. when you have a case of that, do or die, you have to keep deterrents. i will end up with a story, and by the way, when i talk about

deterrents and morality, this is where rjc comes to play, because you represent both.ver very true to morals and principles, and yet you understand politics that if we are too kind, it is weakness on the other side. i believe that henry kissinger would have subscribed to rjc had he been here today. i see that matt is already scheduling the next speakers, but very short story. you remember the legendary secretary state kissinger, especially 1974 in the wake of the 1973 yom kippur war, he

came to the region to advocate engagement. it was very, very busy, all the time working around, and you know what is stop -- you know what, his staff made him dizzy, because they knew that if he had downtime, he would make them crazy, so they try to keep him busy all the time. you know people like that who are hyperactive. one day in jerusalem, they find out to their chagrin that they have three hours open in the schedule. what are they going to do? somebody had the idea, let's take him around with that's taken to the biblical zoo. the director of this new book, sam, showing him all around. -- director fo the zoo shows him around. they end in the lion's cage. he turns to the director of the

prophecyhis is isiah's on earth. this is what i am trying to do in the middle east." tell me how you do it. "easy, bring in a new lamb everyday." [laughter] [applause] so the moral of the story -- we as jews have a far too long been the sacrificial lamb in history. no longer. we would rather be the lion than the lamb. [applause] that we will keep doing that with a great, great support of rjc, so i want to thank you so much for the invitation and i want to thank you for this great dinner of yours. i want to thank matt and david at all of you. i have so many friends here come

i want to not start mentioning because i wanted to all of you. we will see you soon, and come over and visit. if not, we will come here. thank you very much. [applause] >> president obama is proposing nearly $18 billion for nasa's budget next year. it is about the same as this year. nasa's administrator will go before a senate subcommittee this afternoon to explain the budget request. we will have live coverage starting at 4:00 eastern. congress will be spending much of this week on spending and budget issues. the house gavels in tonight at 11:00 eastern. the senate will also consider the measure after they consider judicial nominations tomorrow. the house is like here on -- live here on c-span and the senate on c-span2. >> tonight on "the

communicators," robert mcdowell. >> is there any harm coming about as a result of the merger? what are the specific harm to consumers? if there are arms, should conditions be nearly tailored to address those? the merger process should not be an excuse to implement rulemakings on issues that don't arise because of that particular merger. >> tonight on c-span2. >> this year's studentcam competition asked students from across the country to consider washington, d.c. through their lens. the third prize winner help them address an issue that helped them better understand the role the government. >> extra curricular activities such as sports and more important economic activities -- are academics more important

than anyone else? what about a girl who wants to be a swimmer with the boy who wants to be a violinist? sure, practical things are more important, but what about what you love? the question. >> gary, and very characteristic of your states. kids in third grade and fourth grade who cannot read. my point with this is that we cannot do one thing and fix this mess. we can sit here all day and say more charter schools. we can as a improving teacher quality of life itself. that is not going to fix that. groth --ay,

[unintelligible] we are of the mind that to fix indiana's mess, you have to have a comprehensive reform package. it is not one at think it if you go for 3 or four -- it is not one thing. 4 fillersfor 3 or -- structural issues that address the cornerstones of that mess -- you will not clean up that mess in your state. >> it is going to be a tough next two years. the state legislature is adopting at two-year budget. school districts might not expect any additional money for the next two years. they are going to try to find a way of being more efficient in how they spend taxpayer dollars. holding the line on spending, making sure they invest taxpayers' dollars sufficiently and things -- compensation,

effective educational programs, a track record for success, focusing on the things that have the biggest impact. >> for the last few years, the state of indiana has been facing the most difficult financial situation we have seen in recent memory. -- in recent memory as pertains to education. yet test scores up and out, graduation rates are up -- test scores have been up, graduation rates are up. many of our indicators show us that even in the most difficult financial times, by increasing expectations, we can improve a student's performance. the fact is, high expectations don't cost anything, and we have shown is not necessarily more money that will drive the academic performance. >> the financial crisis is only a crisis because the political

leadership chose to cut education rather than other state services or support activities. if education is truly the most important government functions, then there would never be a crisis in education. >> from the federal perspective, there aren't enough dollars to all thed it tto fund needs, and the amount of money required to fund all the special education programs, the federal government funds at about 40%. that means the local district has to pick up the other 60%. does the federal government do enough? no. can they do more? not with the money they have available to them. >> conflicting ideas results in

no results or to ever do what needs to be done to fix this financial mess. >> extra curricular activities, whether they are athletic activities, band, choir, social activities and clubs, need to be maintained in schools. for some students, is what really engages students in the school, whether it is middle school or high school or elementary school. it is what they associate with, something they may enjoy the most. some kids who don't necessarily well in the course subject areas -- core subject areas made it quite well in performing arts or athletics. >> if the purpose of education was to create citizens to participate in a democratic how does thiathletics contributo

that purpose? how does music contribute to that purpose? how does art, science, social studies? you would be able to go through all the activities and determine what each of them is contributing to a publishing the purpose. that is how you set priorities. >> some activities may be more or less important than other activities. i think we have to begin to have those types of discussions so that we can identify how important are the arts, how important are four languages? where are they in terms of our core mission? >> stand by. going live in five, four, three, two, one.

>> cut. >> i'm sorry, kids, but this program is being cut due to budget cuts. we're eliminating all classes and programs that do not have a direct impact on test scores. turn the computer is off. if you need to leave. >> with school boards around the nation cutting classes to to insufficient funds, raced to the top is an act by the government to provide money to schools with high standards where it is needed. >> what they said is this -- we will give you a pool of money, and that is focused on standards and assessment, churning out to the lowest-performing schools, -- turning around the lowest- performing schools. the very strength of race to the top is the effort to set the

very important issues and money to go towards those important issues. >> the motion that is the cornerstone race to the top is flawed, and the reason to use the standardized test as the measuring stick is inappropriate. >> go to studentcam.org to see all the wedding videos, and continue the conversation about the documents -- see all the winning videos, i continue the conversation about the documentary on our twitter and facebook pages. douglas elmendorf was interviewed by "washington post" reporter amy goldstein in maryland. this is about half an hour.

[applause] >> good morning. i am delighted to have the opportunity to open the eighth annual world health care congress, and to wall chum you, a global gathering of health care, government, and corporate leaders. we are the leading diagnosed -- not the testing work with health plans to -- diagnostic testing working with health plans and physicians. demonstrating quality consumer choice, cost effectiveness, and transparency in health care. thinking back to last year, almost to this very day, the big news at the conference with the just-signed patient protection

and affordable care act. as we all know, a 2000-page bill designed to change how help care is delivered and paid for in the u.s. on the same stage last year, our next speaker, dodd elmendorf -- douglas elmendorf, discussed in great detail how the cbo calculated the multi-year impact that this bill would have on the overall bnl of the federal government. for those of you who were here last year, you might recall his final remarks. whether he meant it as a touch of humor or perhaps political fortune telling, i am going to paraphrase your, but he finished the presentation by saying, "of course, all bets are off if, in the midterm elections, we see a substantial shift in power." i think it is safe to say that we have seen that shift in power

a few months back. earlier this year, i had a conference with the blue cross blue shield association, 39 companies that collectively manage about 100 million lives in the u.s. it is clearly, everyone would agree, on the leading edge of those companies that will see much of the action, much of the action, when it comes to the 32 million folks who are expected to enroll in health care programs over the next three years. again, perhaps a bit of foreshadowing -- one of my eight favorite sessions was titled something along the lines of "you have survived the first year of health reform, now what?" on a positive note, as i travel around the country talking to providers, and there is growing concern, and i think everyone would agree, about the sustainability of the current system of health care delivery.

it is the situation compounded by rapidly rising costs as well as a growing shortage of primary-care providers. these concerns have triggered interest in approaches to mitigate the advance of chronic disease and a much greater focus on prevention. and given health reforms' provisions covering prevention, many are already down the path on adding programs that focus on prevention to their overall held strategy. employers i talk with our including its greetings, health affairs, online coaching, other innovative programs. more importantly, as we speak to employers, they are beginning to see the beginning of positive changes in their health care costs. certainly, that is the step in the right direction. whether you are in favor of health reform or whether you are

working very hard to unfund it, a number of the provisions are already taking effect and beginning to change how health care is delivered. programs such as making a small businesses eligible for tax credits, if they can contribute to insurance coverage. also, establishing temporary stable insurance pools for people who cannot get the existing coverage. finally, extended coverage for adult children under the age of 26. we all agree that those things are starting to take effect, but they are just the tip of the iceberg. a few topics that will for sure the controversial and subject to spirited debate, no doubt take a few turns in our federal courts, issues such as whether or not we can require all u.s. -- legal u.s. residents -- to have health care coverage, or expand

medicaid to cover uninsured people ought to 133% of the poverty line, and finally come to establish stable insurance exchanges for small businesses. how this congress and future congresses wrestle with the ongoing issue of delivering sustainable and affordable health care in america will directly impact each of us in this room today, and also our children and our children's children, which i am sure everybody would agree is a very sobering thought. over the next few days, we are going to hear from a number of experts, both from the u.s. and beyond our borders. it will be interesting if collectively, by wednesday, we are smarter on how we overcome the challenges we face on health reform, and if we are going to be closer to understanding how to dan but the trend on health care costs and to achieve cost- effective care. it will be interesting to see.

with that said, i am delighted to turn over the stage did douglas elmendorf, who is the director of the congressional budget office, who will give us your-one perspective on health reform. i will also turn it over to amy goldstein of "the washington post" will moderate our first keynote session. thank you, and enjoy the conference. [applause] >> thank you very much. it is good to be back at the world health care congress, and i am impressed that so many people are up so early this morning to talk about federal health-care spending. i am going to talk about restraining federal health-care spending. i will discuss. specific topics. first, i hope this isn't a surprise to anyone here -- growth in spending on health care programs is one of the central fiscal challenges facing the federal government.

second, last year's major health-care legislation made important changes to medicare in an effort to restrain spending. third, the federal government has other tools it could use to restrain spending on health care, but applying those tools will not be painless. let me elaborate on each of those points. first, growth in spending on health care programs is one of the central fiscal challenges facing the federal government. in the current fiscal year, the federal government will spend more than $1 trillion on health care. more than half of that will be through medicare, a little more than a quarter on medicaid and the children's held insurance program, or chip, and the remaining fifth on a veterans' health care, the military health-care system, a research, and other programs not go all that together represent about 7% of gross domestic product coming out of the country. we are overspending on those

programs that increase rapidly in 22 rising cost per person and increasing numbers of beneficiaries of government programs. last year's legislation expanded the government health-care programs, which will also push up spending. in terms of rising costs per person, here is the most important fact -- between 1985 and 2008, medicare spending per beneficiary adjusted for a change in age distribution increase an average of 1.5 percentage points faster per year than the gdp per person. over the same period, growth in federal spending for medicaid was 1.2 percentage points. that was not a fluke of those particular decades. if one looks back over a longer period, one finds even more rapid knowledge of increases in spending for those programs. -- rapid a relative increases and spending for these programs. another factor was the

increasing number of people eligible for medicare due to the aging of the population now the oldest baby boomers are becoming eligible for medicare this year, and we project that the number of medicare beneficiaries a decade from now will be 1/3 a larger than the number of beneficiaries of medicare today. the third factor pushing up federal health-care spending is last year's legislation, as a result of the expansion in subsidies and changes in interest rules from the legislation, the country is now on a path to achieving 95% health-insurance coverage among its illegal, non-elderly population, compared with -- 83 with a -- among the legal, non- elite publishing, compared with 80% today. it will have a net cost to the pro-government -- to the federal government that increases further beyond. it raises revenues in various

ways, taking all the provisions together, we estimate that the legislation will reduce budget deficits. however, at least at 82021, it will be increasing federal spending -- in 2021 it will be increasing federal spending. last year's legislation made changes to medicare in an effort to restrain spending. specifically, the legislation include provisions designed to constrain spending on health care in ways that would not explicitly shifted the burden to beneficiaries or harm their health. from an economist's perspective, that sounds like the sort of a free lunch that we are trained to be skeptical of. at the same time, there is evidence of unnecessary spending in the health-care system, and considerable consensus among analysts and practitioners about the broad types of change that would be useful, moving away from paying for procedures and treatments and towards paying for value and improving health. equipping providers and patients with better information.

providing a stronger incentives for those providers and patients to control costs. with that backdrop, last year's legislation included many changes in the management of the medicare program. one thing the legislation did is to reduce payments to medicare providers relative to what would have been paid under prior law. fee-for-service updates for many types of providers will grow at less than the rate of inflation. in expectation of ongoing productivity improvements. in addition, payments to medicare vanish plans will be cut sharply. those reductions will impose greater pressure on providers to increase efficiency and delivery of care or else suffer financial losses on the care they provide for medicare beneficiaries. any fixed payment provides incentive to increase efficiency, but cranking down the level of such payments it reinforces the urgency of the effort. unless the governor -- and lets the government after more the savings that result.

we estimate that the cutbacks will save the federal government about $500 billion over the next decade. whether the reductions will be sustained over a long period of time remains uncertain, however. last year's legislation also included numerous provisions intended to identify opportunities and create incentives for providers to make changes to the health care delivery system. those provisions include a wide variety of approaches, some making relatively specific changes, others establishing -- the more specific pur provisions include measures to report the quality of care, creating incentives to lower costs and improve quality by establishing accountable care organizations, bundling payments for different types of care for a single medicare condition, an imposing payment penalties for readmission in certain cases. by contrast, what could inform

future decisions that include activities designed to improve measurement of quality, and expansion of research on outcomes for medical care, and development of new mechanisms to test innovations and it led those that reduce costs and improve quality. these experiments are very important, not only for medicare, but also because improvement in the program as large as medicare are likely to have a positive spillover effects on the efficiency of health care outside of medicare. however, it is unclear how successful these experiments will be par-3 reasons. first, there is little reli -- reliable evidence on how to move medicare in the direction experts supported the problems faced by previous demonstration projects showed the difficulty of making the ideas work in the real world. a second obstacle is that to try to reduce spending in ways that would not impinge on health, we need to measure the quality or the value of care being

delivered. such measures, of course, exist and are being developed, but much more needs to be done before most providers and patients have great confidence and it is measures. a third issue is that the legislation -- with those considerations in mind, the cbo has projected limited savings from the experiments during the next decade. even with all those provisions in effect, and assuming that 30% reduction in physician payments in medicare scheduled to occur under the current law and the law proceeding last year passed legislation, cdo's projections still show spending on federal health programs are rising relative to gdp during the next decade. thus putting increasing pressure on the federal budget. that brings me to my third point -- the federal government has other tools for restraint spending, but applying those tools will not be painless. let me briefly describe five

possible approaches. i want to emphasize that cdo is not for or against this approach is to our role is to analyze alternative ways of approaching budget issues and then make -- then let congress take decisions. one approach is to reverse the expansion of medicaid. as policymakers make decisions about policies that affect insurance coverage, they will inevitably make trade-offs between the level of insurance coverage and the budgetary costs and intrusiveness of the federal policy. significant numbers of people, especially low-income people, will purchase insurance at its marketplace -- will not purchase entrance at its market price at less it is subsidized or encouraged in monetary ways or both could as a result, ensuring universal coverage is not possible without significant subsidies and changes in rules from those in place prior to last year's legislation. i don't mean that achieving

universal coverage should be our national goal. that is a judgment for others to make. i don't mean that the cheering near-universal coverage provides precisely the combination of subsidies and changes in rules from last year's legislation. i do mean that near-universal coverage cannot be achieved cheaply or easily. another approach for screening the federal health-care spending is to reduce the number of beneficiaries federal health programs and other ways. once this of a possibility is to gradually raise the eligibility age for medicare -- one that is a possibility is to gradually raise the eligibility age of medicare. another is this a possibility under the broader approach of reducing the number of beneficiaries is to turn at the federal medicaid payments into block grants instead of matching payments to increase the amounts of this block grants over time at a rate that is below the rate at which spending would increase

under current law and would give the states much greater flexibility in how they spend those funds. under that change in policy, state government would presumably put tighter limits on eligibility for medicaid or reduce benefits in some other way, especially if the size of the block grants fell relative to the amount that would be provided under current law. a third approach to restraint federal health-care spending is to increase the premiums or cost share amounts paid by beneficiaries. an option we have analyzed it would be to increase the basic premium for medicare part b on a gradual basis to 35% of the costs from the current level of 25%. a related option would be to change the cost-sharing structures for medicare insurance. for example, by replacing medicare's, a mix of cost- sharing requirements with a single combined annual deductible, a uniform color

insurance rate above that, and an annual cap on each enrollee's cost sharing liabilities, and by providing medigap policies from covering any of the medicare deductibles. it is estimated that the budgetary effect of that change in policies would appreciably change and strengthen incentives or more prudent use of medical services. it would also provide greater protection against catastrophic costs. at the same time, the chain to put a greater burden on average on medicare beneficiaries. a fourth approach for restraining federal health-care spending is for medicare to take costs into account in its coverage decisions. currently, medicare pays for nearly any medical treatment or procedure that a doctor recommends. it new treatments or procedures are more expensive than existing ways of dealing with an existing problem, and doctors recommend those new types of gears, medicare will pay in general the higher costs. an alternative way to structure medicare payments would be for a

medicare to pay only the costs of existing payments -- existing ways, excuse me, of dealing with a health problem, unless a new treatment or procedure is shown to be better for beneficiaries' health. under such an approach, patients would be able to use their own money to pay for the more expensive care, but the federal government would not pay more itself on must be more expensive and there was shot to be more valuable than the lasess expense care to set a system is much easier to describe that to implement. it would be an immense talents -- immense challenge to implement procedures and to evaluate which treatments or procedures would be better for some or all patients bro. it is an approach that analysts outside cbo are analyzing. if the approach, restricting federal health-care spending, is to cut back tax expenditure