>> today, james germans test about u.s. strategy in pakistan. his remarks are next on c-span. then we will hear from treasury secretary geithner and r, and later, a hearing on will and gas legislation. >> history as you know is much more than just politics and soldiers. it is also medicine, science, and art, and music, and theater and poetry and ideas, and we should not love things into categories. it is all part of the same thing. harriet beecher stowe, thomas edison, henry adams, said tonight on q&a, on americans

that may the journey to 19th century paris. tonight on c-span. >> general james jones said the u.s. strategic relationship with pakistan is changing, following the death of osama bin laden. general jones testified at the senate foreign relations committee. this hearing is two hours.

>> this hearing will come to order. i apologize for being a little late. today we continue the series of hearings which we are engaged in, the fourth, actually, with respect to afghanistan and pakistan. and having just returned from the region, i would simply convey to everybody that at every stop and at every conversation, everybody has a

sense that how -- has a sense of how critical this is for our strategies in the region and in each country and in afghanistan and in pakistan. as much as some people have reached a level of patience or serious evaluation about where we are and where we are going, it is very clear to me that we need to be really careful and thoughtful so as to get the policy right, so as to not lose the progress that has been made, and progress has been made, many different places, many different ways, even as we face very real complicated sectarian and other struggles

of a long major against -- of countries and their perceptions of their interests. but we have a vital national security interest in that region, and with close to 100,000 of our own troops and a thousand civilians who are sacrificing in many different ways every day to help build a better future and protect american interests, we owe it to them to develop a road map that allows us to responsibly transition to afghan control and to advance regional stability. members on both sides of the aisle have a pro really been asking tough questions, examining every assumption that guy to our strategy in the region. i want to thank my colleagues for their thoughtful analysis and deliberation, which is a service of the american people. and i believe this committee can

do a service, a continuing service, to the american people as we put the facts out on the table, listen to experts like general jones and others who come before us caught law -- before us,, and devise a strategy that does justice to the quality of sacrifice and contribution of the folks who are there 24/7, 365, some of them on third or fourth tours, or occasionally, even a fifth court in terms of iraq and afghanistan come by. we're fortunate that general jones with us today to help us think about this. i thinks he is one of america's most distinguished and experienced and capable public servants. i am very pleased to call him a friend, and i am glad he was able to come up here today to share his wisdom and insights

with us. before we hear from general jones, let me just give a really tiny encapsulation of what i perceived in the last days, particularly the results of the conversations in pakistan. in afghanistan, i visited -- which is rc east, right on the border of pakistan, and a hot spot in terms of networks coming out of the sanctuaries, and i spoke with our intelligence community personnel and other this there about the impact of those sanctuaries and their analysis of the war. i then flew north, where the unfortunate incident of the blue mosque took place not so long ago.

in order to understand how the groups there in the north, mostly tajik, but where there are uzbeks and others, to see how they view the prospects of reconciliation. and then kabul, in addition to our meetings with and as the officials, i met with the afghan cabinet ministers, provincial governors, civil society leaders, and president karzai and discuss the upcoming transition and the steps we all need to take to ensure its success. finally, i had the distinct pleasure and honor of meeting with our men and women in uniform, including 500 national guard troops from massachusetts who are serving at can phoenix, just on the action -- just on the outskirts of kabul. i know all of us feel this every time we go over there, but you just cannot help but be very

impressed by the quality of this special young men and women who are serving in the armed forces of the united states. they are smart, disciplined, they are remarkably committed, they know their jobs, and they are away from their families, dairy and george archer, they take life and that risks a daily basis, and for that none of us can really say thank you enough. my discussions with them actually helped drive, a critical point -- whether somebody wore a star on their uniform or a chevron on their sleeve or whether it was general petraeus for the young woman that i had a great pleasure of of promoting the staff sergeant -- every person that i spoke with across afghanistan understood that there is no

purely military solution. they all get it. so this is an important moment, and i believe that osama bin debt has opened an opportunity to. i learned in afghanistan that our conscience in achieving -- that our accomplishment in achieving that rate has given them a sense, a renewed sense, a political space and of opportunity and of confidence about the american commitment. afghans do not want the taliban to return, overwhelmingly, but many have concerns about what reconciliation means in terms of their interests. above all, they do not want their struggles and sacrifices over the last 10 years to be in vain. there are many courageous afghans, and i had the privilege of meeting some of them, like a

governor, who are daily struggling to bring about a better future for their country through peaceful means, and we need to empower those voices so they can lead their country in the right direction. i do have reasons for optimism after discussions with president karzai and with general petraeus that we can find a way forward that significantly changes the american footprint and secures our interest. and on saturday night i sat with president karzai and listen to him talk about the necessity of bringing all the parties to the negotiating table. he understands that time and american patientce are running

out, but he is confident that there is a way for that means everybody boss needs. he realizes that afghanistan is going to suffer an enormous economic shock when international forces leave and we have to work together on a plan that is financially and military sustainable for afghans and americans alike. finally, let me just say that as much as bin laden's death opened a door in afghanistan, it has complicated our relationship across the border in pakistan. while the pakistan leadership and people initially reacted raising our actions, the subsequent this course in pakistan unfortunately became quite sharp and critical because of the issue of sovereignty and the questions surrounding the rate itself. relations between us as everybody knows quickly took a

dive, jeopardize both of our national interest. i arrived there sunday night, began the process to see if we can find a way to do the release of, and during that time i met president zadari, prime minister gidari, members of the cabinet, and i emphasized to them the serious questions that members of congress and the american people are asking with respect to pakistan and its role in fighting violent extremism. i underscored the importance of seizing this moment to firmly reject an anti-american merrick's of that exploit our differences instead of finding common ground and advancing mutual goals. i also listened carefully to the frustration that many in pakistan are feeling about how

we have been doing business together, about how the raid was conducted, and perceived in terms of their politics and their ability to manage in pakistan. after many hours of talks, we agreed that it was imperative to move forward jointly and to take specific steps to strengthen the relationship. i also of the size that every step of the way -- i also emphasized every step of the way that this relationship will not be mentioned -- measured by words and communiques, like meetings like i engaged in. it will only be measured by actions, and that should begin today with the return of our helicopter tail to american forces and in the days ahead with very clear to find measures

of cooperation, which will be further defined by high-level meetings by administration officials, commencing tomorrow or the next day, and then depending on the outcome of those discussions, hopefully subsequent visit by secretary clinton. i also want to point out and i am not at liberty to go into all the details of some of the things that we will do in specific terms, but i am encouraged by them, and there is a great ability. actually shift the dynamics of the entire relationship between afghanistan, pakistan, pakistan and united states, and all three, and india, and ultimately change the longer

term strategic interest of the region, but that will depend on a quiet and the effective diplomacy over the course of these next weeks. the final thing i want to say is we do have to remember in this country that pakistan has sacrificed enormously in the fight against violent extremism. over 35,000 of incidents have died as a result of an extremist violence acts, and they are themselves suffering from insurgency in their country. over 5000 of their soldiers have died in efforts to go into the west and take on the insurgents . they did not have a lot of money. in fact, you could call them difficult times, and rely on assistance to be able to wage this fight with us against extremism. their leaders understand that

this moment in this relationship between us is now an important one where they need to take decisive action as part of a regional solution in order to promote peace in both afghanistan and pakistan. i am hopeful that the joint statement that we reached yesterday, which addressed counter-terrorism operations and pursue a political solution in afghanistan, will help provide a road map that helps to get us there. general jones, we look forward to your testimony. again, thanks for being with us. senator lugar. >> thank you, your modesty precludes it being mentioned, but you were out on the ground here at about 6:30 this morning after this remarkable trip, and your report of the findings is already informed us, and we're just delighted he were here with us personally, safely, for are hearing this morning. i join you in welcoming general

jim jones, and i think of personal privilege to point out that in younger viewers general jones was major insurance and i was in my first term in the senate, and we were wandering through france and italy and other situations back in those days, learning much more about the world. later on, i was asked by the state department and the president of algeria the of the commission to go to the desert to free 250 mark and prisoners. as it turned out, the president decided he did not want to go, and i asked general james jones, who was willing to go, and he provided the aircraft to take the moroccans out of algeria. i thank you for those adventures, general jones, but even more for your service to

the white house and this country for over the years. it is great have you here this morning. the reason for this hearing underscored the number of security goals. pakistan is one of the largest muslim countries in the world with a sizable nuclear arsenal. it is in a permanent state of hostility toward india, which the united states has close relations with. it is expanding ties with china, borders iran, a state sponsor of terrorism with nuclear ambitions, can the united states signed its mutual agreement in 1954, we have had great difficulty during the ensuing decades in forming a consistent partnership. one of the main problems in dealing with pakistan is its government is not a monolithic, but rather a collection of different power centers that interact in commonplace ways.

there is the elected civilian government, which over the years has not always been strong or stable. the uniformed military, which has seized power at various junctures. the intelligence service, which has its own independence within the military. we're told a shatter a group of former intelligence agents can act on its own. these different actors compete ultimately and cooperate and their influence is periodically waxed and waned. equally vexing, each of the players and support u.s. policy at one moment, but obstruct it in the next. then there are volatile public elements that can with it into an anti-american fervor, and concede -- and you can see -- although pakistan has cooperated with the united states in many ways, including the fight against terrorism, americans are

increasingly exasperated by the difficulties of the relationship, especially in light of their rate to eliminate osama bin laden, and many critics have accused pakistan of publicity, playing a double game. the event has created an exposed what has been called a trust deficit. it is incumbent going forward at the obama administration and pakistan's leaders, civilian and military, state -- takes steps to close this deficit. that includes deep strengthening programs that form the most candid part of the relationship. pakistan must recognize that the united states does not give out blank checks. the agreement passed in 2009

civilian assistance to give our ties with the back as 10 people on a long-term basis. only a small portion of the available funds have been allocated, namely $179 million, in part because pakistan has failed to impose many programs that conformed to the bill cost criteria. our substantial military aid comes with a requirement that the president certify that pakistan is making significant efforts toward combating terrorist groups, including al qaeda, taliban, and their affiliates. after the raid against bin laden, is a question of whether the president can make that determination. going forward as that -- going forward, pakistan -- and that includes a network in northwest pakistan and caliban, which -- and the ttaliban.

the administration should make clear the pakistan military that going after some terrorists, while cobbling others, will not be tolerated. it should communicate to the military -- to oppose u.s. initiatives and pakistan does the leadership is not acceptable. the revelation of the where baskets and pakistan was a setback to u.s.-pakistan ties, but this event delayed the foundation for a more genuine alliance. an independent investigation into who in pakistan helped support bin laden be a good place to start. a look forward to hearing general jones' views on how we

can strengthen this vital partnership, and i look forward to this vital discussed. >> thank you, senator lugar. general jones, we will put your testimony into the record as if you read it. if you summarize, we look forward to engaging with you. >> thank you, mr. chairman, senator lugar, a special privilege to be here this morning to talk about a very important country and region for the united states and our allies three i deeply appreciate this opportunity. it is something that i have been able to work on for several years, and all went back to 2003, 2004 when i became the nato commander in europe as we discussed ways in which nato would move into afghanistan.

what i would like to do is very quickly just sum up essentially some of the highlights of how we got to where we are and some of the milestones that we covered along the way. as you know, in 2003, nato made the initial determination that it would be interested in participating in afghanistan. that became a reality in 2004. we had a little bit of a bifurcated mission in the sense that nato was expanding to the north in afghanistan and into the west, and the to the south over a three-year period. and the u.s. was running its own separate operation, the united states, under central command, primarily to the east and the southeast in the country.

in 2004, when nato arrived in afghanistan, there was already an important organization called the tripartite commission which consisted regular meetings between afghan military leadership, pakistan leaders of, and the u.s. leadership. nato did not have a role for a mission with regard to pakistan, so it was not included in that group. in 2006, when nato completed its counterclockwise involvement in afghanistan, in the south, in particular, the u.s. and nato missions were combined, and it resulted in a much more cohesive effort, and that structure has been in place now ever since. there are other important things. year fora very keep yy

a couple reasons. it was the year in which pakistan underwent some major earthquakes earlier in the year, and ito responded by providing -- and nato responded by providing humanitarian aid quickly, but what really transpired in 2006 was that pakistan authorities made the decision with a federally administrative tribal areas, in exchange for the tribe's controlling the borders, that the army would not be that, would not come into the tribal areas. those of us who studied the situation were incredulous that this was going to work, events proved and even the pakistani military -- the general himself recognizes that was a big mistake -- because it not only

cemented the existence of the safe havens, but also allowed just a dramatic increase in the flow of insurgents to and from afghanistan from the relatively safe havens in pakistan. as anyone knows who has ever been involved in trying to win the war -- the war against an insurgency, insurgents have a safe haven, that makes it very difficult. it just complicates things immeasurably. so 2006 -- the 2006 decision was a turning point in terms of the number of fighters that were able to infiltrate into afghanistan, and it resulted obviously in our 2009 decisions to augment our own forces in order to turn around a deteriorating security situation

in afghanistan. pakistan had developed its own problems internally. the insurgency that was turning against pakistan in the swat posed a great instability against the government, and the army moved against their insurgents in ways that were very encouraging, and they did a very good job. as a result of pride -- of the prime minister's willingness to reduce tensions at the indo-pak border by pulling back the indian forces, by allowing the military authorities in pakistan to transfer a fairly significant

amount of troops from the border with india to the pressing situation along -- near their capital. as i said, their operations in the swat valley and southwest waziristan were effected. i visited the swat valley and was able to talk to military leaders and the civilian leaders, and while they have the ability to clear -- to declare a certain significant chunk of that character, they lack the capacity to be the transfer to local authorities in such a way that the local authorities can keep the peace in the areas that the army has cleared. it is a very manpower intensive operation. the pakistani army has always been beset by military problems -- have held talks -- lack of helicopters -- but is really

lacking is the ability to transfer and move their troops out of the area and have confidence that local police and local military would be strong enough to maintain stability in those regions. the president assumed the presidency and turned his attention to the region, we optics to consider -- we opted to consider a marsh strategic approach instead of dealing with the three countries, india, pakistan, afghanistan separately. it became clear that increasingly we could not talk about afghanistan without talking about pakistan and vice versa, simply because of the border and the save havens. -- safe havens.

we adopted and thought we did a pretty good job in consulting with both the civilian and military leadership in all three countries to include india. we put together the elements of a long-term strategic partnership plan with all three countries. we emphasized in this partnership that there would be three main pillars to it -- security,, economics, and government and rule of law, particularly for afghanistan and pakistan. in each case when we put this offer on the table, it emphasized the long-term nature of the relationship, the fact that we believed that the region was strategically very important, not only to us, but to peace and stability in the world, and we developed is a civic set of criteria that, in

order to make this plan work, that they also would have to be able to meet and to show progress in arriving at those long-term goals. for pakistan, from our viewpoint, it was fairly straightforward, renouncing terrorism as an instrument of foreign policy and to be able to show a willingness to move and do time and within the needs and capabilities against the other safe havens and terrorist networks in their country. we spent a lot of time trying to help the indian and pakistan relations of, following the attack in mumbai. obviously, very concerned that another attack might happen, and

if such an attack took place, particularly on indian soil, it would be very difficult to control the reaction of india, and so the propensity for violence along the border is always something that we tried to mediate between both india and pakistan. and i think with some modest success, as i said, pakistan was reasonably comfortable in removing some of the troops of the border to go to their west coast. other gestures by india that for most helpful, in addition to the prime minister's willingness to defuse attention on the border, was there the nation of $25

million to help the victims of the flood, the time when their economy could not stand such additional pressure. in 2010, what will efforts to build trust between the united states and pakistan, both public and private trips to and from the area, to build and develop the trust and confidence that is required, long-term strategic plan is still being developed and on the table, we did receive some assistance from the pakistanis in terms of the intelligence exchanges that led to captures of leaders of al qaeda. we have had a pretty impressive run of success in terms of being able to kill or capture a sixth of a good portion of the outcome of leadership, resulting, of course, and the most recent one

involving osama bin laden. i would say 2010 was still a year of testing, building the relationship. the pakistanis' economic woes are well known, and they are being subjected to inflationary tendencies within their economy, and really just been short of funds in order to do what needs to be done inside their country. they still have a the, almost a phobic, relationship with india and we are working hard to overcome the mistrust that exists between both countries. mr. chairman, as you pointed out, the impact of the osama bin laden operation is one that

presents us i think with an opportunity to get past these feelings of mistrust now heightened on both sides, but if we could use this as a pivot point to, again, try to bring about this reconciliation in terms of what is tremendously important for the security of the region, it would be worth taking, in my view, a long-term view. the strategic consequences of a failed state in pakistan or not being able to build trust between the two countries, and it is going to take both sides to worker hard on this, and as you pointed out correctly, i think it is like to take some actionable, measurable demonstrative indication of good

will, but it is so very important. if we want to be successful in afghanistan, the roads to that success have a lot to do with pakistan. it is not a question of who has got the advantage and to hens to gain the most from this relationship. we all lose if it does not work. i think fax hopefully this moment -- i think that this moment, after all the facts are in, that we can in fact continue on the path of a strategic relationship that is a very important for the future of our operations in afghanistan, the stability of pakistan, and also our global effort to make sure that terrorism is defeated once and for all. i think the disappearance of

bliin laden- osama is a terrific message. we have defused many attacks, as a result of this cooperation. i stand deserves its share of the credit in helping us along with that. the fight still goes on against terrorists, but i think that we can honestly say that the world is probably a little bit safer without us, been -- without osama bin laden in terms of the 9/11 style attacks -- and that we can benefit from a surge of international

cooperation that has us at least tracking terrorists organizations wherever they appear. i am very honored to be here, mr. chairman, and i look for to our discussion. >> again, thank you for being here and thanks for that testimony. you have commanded troops in the field had achieved the highest level of military leaders, and you have served as national security advisers to presidents of the united states. so you have seen a kind struggle with a field commander of you and the large strategic view, and i wonder if you can put that together here, help us work through a little but a couple of things. first of all, you would agree, as soon, as most of the reports are stating, that the military

cars on the ground in afghanistan is in fact real, it is measurable, and it is -- he has had an impact on perceptions as a dirty trick is that a fair statement? >> i agree with that, mr. chairman. >> and would you agree also that the biggest single challenge to the security on the ground in afghanistan is the challenge that comes because of the attacks and personnel launched from the western part of pakistan? >> i am absolutely have come to the conclusion over the last several years that, as i said in my opening remarks, that trying to defeat the taliban or any other organization, while they have safe havens across the borders, is extremely difficult. it costs more lives, more of our

national treasure, and it precludes us from being as successful as we otherwise might be. >> with respect to the effort on the ground in afghanistan, the challenge of reconciliation and of trying to find enough taliban who are real who might come over and negotiate, would you share with the committee what your judgment is as to the greatest hurdles or impediments to our being able to do that and how or what we might change or add to the question, if anything, in order to try to facilitate that process? >> with regard to pakistan? , anything that weighs in on the reconciliation, peace process, so we take advantage of this political space that has been created by the military success.

>> mr. chairman, i am of the the you that in all of these of engagements in the 21st century, there are essentially teenager comes -- three major components, and the first is the security component. as time has shown, this is not enough. but security obviously has to be restored to a certain level before he can do anything else, but very quickly, in addition to security, as people transition to a different type of government and want more transparency in their lives, and a credit system, there has to be something else. there has to be reforms to meet the people plus expectations, for instance, governmental policies, role all, where corruption exists, as the

attack, you need a judicial sources -- system that is functional, i need an economic tiller that shows the people there is an alternative to the way they were living before. our assistance package started, and it is those three things working simultaneously in some sort of army that turns the tide. we learned that historically in world war ii, we learn that in europe, in japan, and wherever we have had a comprehensive package that starts with the security element and then as a follow through of that actually shows the people what their lives are going to look like, that is the way to defeat extremist ideologies that will continue to blame us and people like us for being the root of all evil and of all problems.

>> does that really become a nation-building exercise? >> unfortunately, you have to ask you either have to go in and restore and take care of the security challenges and therein rapidly, rapidly as possible, transition that over to the government can take charge, and i think that is where we are today. in december of last year, at the nato says that a summit in lisbon, the alliance agreed on the 2014, which was president karzai's request, that by then he would like to be in full control of his economy, government, of his military, the security mission, and i think we are moving in that direction, and we will see the for steps taken this year. it will not just beat us, but us and our allies who will figure out a way to reduce our forces

they gradually turn it over to the afghans picke. >> is that pakistan peace essential to making that equilibrium who >> it is my opinion degree to which pakistan to this and thus more effective work along their border for the safe havens was concerned us, we have an enhanced chance of a greater degree of success by 2014 if they do that. the importance of pakistan figuring out the ways that they to do their share, with the assistance that they need, that would be a defining moment, they turning moment, in the outcome in afghanistan. >> do they view that in their interest? what kind of afghanistan to they

view as being in their interest? >> it is interesting, and that is a very hard question because there is not just one pakistani view. if you talk to the military, you get certain answers. civilian leadership, you get certain answers trend unfortunately, their concern with industry -- with india has something to do with afghanistan. if you look through their eyes, you are a little bit worry perhaps that while you have an indian cities, afghanistan to the west, and an indian presence in afghanistan insights their fears for long-term future. they have really been careful to not over commit to doing anything in afghanistan, which

is unfortunate, because if in fact that pakistanis really adopted the long term strategic relationship that i think was put on the table in 2009 and reiterated in 2010, they would have a better economic future. they're people would be better. they would be better off. they would get international aid that they critically needed. from our standpoint it seems the logical that they would not seize on that moment. the logic is not always play a dominant role in the situation. >> no, it doesn't. thank you very much. senator lugar. >> general jones, you discussed your laces of with india. what is your judgment as to why there has not been more effort on the part of pakistan or

india to forge ties that would lead to peace between the two countries, granted that it is almost a given that the kashmir dispute is there, therefore co, -- are tolerated by the pakistanis, that, as you suggested, afghanistan is a ground in which both india and pakistan might play against each other, and therefore, not be conceded very readily. you mentioned because of this business with india a lot of the pakistan armed forces feel necessarily that that has to be the major influence in this is where their efforts, expenditures,,. is this an area in which the united states can play any role in terms of encouragement of

peace with we keep going back and forth with israel and palestinians, sort of a cardinal situation in that area. but india and pakistan, clearly, is the heart of the problem. >> senator, you have put your finger exactly on one of the things that is the most vexing of dishes. we have tried to play a role, not an indirect role, but a direct role in defusing tensions, encouraging foreign ministers to meet. as i said earlier, i think prime minister singh deserves a lot of credit for taking a political risk in his own country to show a more reasonable side in terms of this issue, by working to

defuse tensions along the border. he showed great restraint after the mumbai attack. i think this is one problem that the pakistanis have to think very hard about as they decide how they want to play in this regional situation, that they find themselves in the center of on both sides. while that presents some unique challenges, and presents a unique opportunity. it will take political courage and military support of the political courage to recognize that there is a better way here. with regard to india. but so far, they have been extremely reluctant and in some cases resistant degrasse that opportunity -- to grasp that of

it. india's that up during the floods and donated some money, $25 million, and would have done more if they had been properly thanked, and then a reciprocal gesture of good will. but these are things that india -- that pakistan in this very important time are going to have to come to grips with. unfortunately, almost simultaneously, because they need choose on the western side of their country in order to do what we want, what we would like them to do, and their argument would be would be most of the indian army is deployed in front -- in proximity of the indo- pakistan forces. i think there is a big role the united states the plant. we have adopted a regional strategy that makes sense.

it has not always yielded everything we wanted, but we cannot deal with each country individually. it is a regional problem and has that regional solutions. i do think other countries could help materially. china has a border that they should be concerned about. russia has a border they should be concerned about. it may be worthwhile to see, from the standpoint of aid, financial aid, the pakistan, that there might be a possibility to obtain some of that for their own internal reconstruction. >> in the same way that we have taken other diplomatic tacks the past, there seems to be one that would help reset the relations of and be very important, and we have talked about putting together afghanistan and pakistan, and our consideration of putting pakistan and india

for must could be very important. let me follow on that by saying he touched upon the bill at one point, and i mention this in my opening statement. there is a case in which we began talking about this in terms of five years, and pakistani press at the time of all this, as did the leadership. finally, united states has got a long-term relationship, not five months, five weeks, in and out, back and forth. very rapidly, as soon as we began to think about as to who would control the funds got determine the project, what sort of auditing, on behalf of the american taxpayer, this fell apart in a big way. the leadership found all sorts of intrusions the sovereignty and what have you. as result almost nothing has -- as a result almost

nothing has gotten done. it offers a lot of opportunity, a very good number of years, and which as a country we have said we want to be friends, what the quality of the french it actually to come into service by talented american and pakistanis thing together. how are we going to get over and bridge that situation and actually get the blues on the ground in terms of this work with civilians and with ordinary pakistan citizens that might come to have a different card with the united states? >> senator, that, from our standpoint, it seems like an good solution of what should be done, but when questions of sovereignty " -- take in and they feel like they are being dictated to, what they

are being asked to do is an affront to their national pride and so on and so forth, then you get a logical answers, and i set of logic is something here that does not play a big role. the in algae was between the israelis and palestinians -- the analogy was between the israelis and palestinians as well. everybody knows what needs to be done. everybody agrees what needs to be done, but nobody is willing to take a first step. if we can have it on this important moment around osama bin laden and have airing what happened and did not happen and get beyond, and get back to the real strategic potential here,

and get that pakistanis really understand what we're trying to do, which is trying to help them, perhaps working harder to understand how they view the world as well, then i think there is a good possibility that we could do it, but i will freely admit it is a very difficult thing, very difficult point maker in a way that residents in that very fragile country that has a fragility of leadership that is obviously so apparent. >> thank you very much. mr. chairman? >> as i recognize senator cardin, i'm leslie. >> thank you, general, we appreciate your leadership in trying to calm things down.

general jones, thank you for your service. i appreciated very much cricket after -- i appreciate it very much. after the then laden mission, how could pakistanis be so complicitous? then we heard a response come out of pakistan which was encouraging within the first 24 hours, but then there was a an about face in pakistan, very anti-american rhetoric. i think our initial concern was whether pakistan shared our commitment to fight extremists, and that was our main concern. so i think we are now going through an evaluation, whether pakistan is our ally and friend, and if so, why they are feeling so much anti-american rhetoric and causing some concern about our working to

root out extremists in pakistan in that region. if they are not our ally and friend, should we not be looking for alternative ways to deal with extremist in the region, and is worth the type of political and financial investment that america is currently making in pakistan? that is the dilemma that some of us are facing as to whether it is truly an ally or not an ally. i would appreciate your candid view here as to whether the united states -- obviously we want to be strategic friends with as many countries around the world as we can be, but if it is not to be, we have to look at alternatives. i appreciate your review. >> thank you. my personal view is that we should continue our effort to find the magic here that will

cause the stand that in what we think is a direct -- also in the greater context of the stability of the region, a very poor decisions that -- very important decisions that they needed make. i do not know what the answer will be here in terms of the reaction, but inside of afghanistan, i have always been puzzled at why is that the popular opinion with regard to the united states is always such a low ebb and not only pakistan, but in other countries around the world, given the magnitude of our efforts. we need to figure out how he is that we can get a live shot, civilian and military, and popular opinion, because what is emerging in pakistan is a press

that is extremely critical and extremely important in terms of fomenting public opinions in pakistan wher. the strategic and forms of the country is not going to change. it is a given. pivot anden't -- how we rebuild the trust and confidence and how pakistan sees wheremost of their responses tor long-term plans have been pretty tactical responses. they are interested in what we're going to do tomorrow and the next day. it draws off of the relationship. there is collateral damage. we are always living day to day.

it is always difficult to get them engaged. what a country might look like 10 or 20 years from now is important. this is a very pivotal moment. we should do everything we can to try to persuade them to turn in the right direction. >> we spent an lot of taxpayer support in pakistan. all of us understand the strategic importance of that country. my question to you, we have the ability to either refocus that aid or make it conditional on certain commitments from pakistan. we clearly need to do something different in the respect of winning over more popular support within pakistan, which is an important element in our strategies. do you have any advice about

perhaps refocusing the aid, using it in a different way, or the conventionalities likely to be imposed on that aid as to what we will be looking at to pivot to a better position. >> if we decide that we want to to the pakistani military and in return, the pakistani military will commit to a more effective and longer reaching effort against the safe havens and the security of the border, then there are some things that would be interesting to look at. the critical part of the pakistani military is mobility.

it is not incredibly sophisticated. it is transportation. they need help in rebuilding their local enforcement capabilities. two divisions are permanently tied down there because there is no way to transition to anything. there is no infrastructure. i think we could be helpful and other countries could be helpful in providing the necessary mobility that they need in order to go after things that we think that they should do. i think that it would take a commitment on their part that they would be willing to do this. that commitment has just not been made. they have opted for playing both ends against the metal and that is where we are.

there are other levels of basic assistance that the country needs. in terms of economic packages that people have put on the table. they would be transformative in terms of the economy. they have to show that they are willing to implement reforms against corruption. and to show that the rule of law is something that they are willing to live by. the occasional stories about the traditional killings which jeopardize our relations -- extraditional killings which jeopardize our relations. we need to keep the relationship that the current level, let alone progressed to the level we would like to see it progressed to. it is a difficult moment.

it is a moment of opportunity if cool heads prevail. particularly in pakistan that the leadership take the longer term vision. >> thank you very much for your response. >> sure. >> thank you, mr. chairman. thank you for the hearing. i know you look more rested. you wake up and watch what we are doing and you smile. to answer the question about go.e the aid should we did not talk about conditions on which aid should flow. this has created embarrassment within pakistan. if they are willing to help us

root out the extremists in other areas, is that one of the conditions? most of us are willing to call timeout on aid until we can ascertain what is in our best interest and what is the transactional relationship. what are the things that you would ensure it is the case before we provided more aid to pakistan? >> the two main qualities that we hope to have achieved with pakistan were on the table. the first one was that pakistan, like other countries, should make a clear and definitive statement that as part of their national policy they reject the use of the terrorist instrument as a part of foreign policy. that should not be hard to do.

the second is more difficult. that is that they should commit to making sure that in order to live up to that first statement, they are willing to do those things that are required in their own country to ensure that the terrorist organizations are gradually rooted out. unless and until they commit to doing these things, it is going to be difficult to get our taxpayers to understand the logic that continue to support a country that does not seem to get its act together on those particular very logical points. >> you being one of those taxpayers, do you agree that that is the type of thing that

we should get out of pakistan? >> it is fair, given the enormous potential of the benefits that could have accrued from pakistan and the people. the country, not just from us, but the international community as well. that is the best road to the future. >> what is the best way to make that happen? when we have evidence that they evidenceroute out the terrorist organizations? >> it is going to take a major internal re-evaluation of how they do business to get to that point. >> you would want to have the understanding before you saw any more aid flow to pakistan?

>> pakistan should really consider, to make a proactive statement as part of their national policy and start demonstrating their willingness to actually live up to that policy. as a consequence of that, the kind of assistance that they need to get to where they cannot possibly go would then flow that way. to me, it is no more complicated than that. they will make it very complicated. >> i think it is very impact fall that a former national security adviser would make that statement. i have been here four years. about every six months, our reason for being in afghanistan changes. it keeps re-evolving. the late mr. holbrooke said that

we were there because of our strategic relationship with pakistan. we have witnesses that believe that pakistan does not want a stable afghanistan. they want a degraded afghanistan that does not have the ability on the rear side of india to cause much trouble. i wonder if you have any thoughts in that regard. >> pakistan has pursued a policy that has been for several years, very difficult to understand from our viewpoint. the failure to move against terrorist organizations and patrol the border, even though they have rendered some assistance and we have to recognize that. it is something that strikes us as being illogical. from their viewpoint, with their concerns with their neighbor to the east in india, seeing the

presence of india in afghanistan contributes to a philosophy of encirclement, which they are uncomfortable with. we are at a point where this relationship, we have to have a very serious meeting of the mines to say, how are we going to proceed from this point on? we cannot continue the way it is right now. and the successful raid on the osama bin laden can be pivoted to a positive in the future if we go the right way, or it could be a negative. i am hopeful that at long last, cooler heads will prevail and logic will come into the equation. our colleagues in pakistan will see the future with a little bit more of a strategic vision than

what they have been shelling. i understand the stakes. the adverse potential of any kind of future attack from pakistani soil in india, the united states, or elsewhere will dramatically change the outcome for pakistan. they have to understand that that is a very, very serious risky business that they are playing. by not making the declaration and not showing the world that they're willing to move against these terrorist organizations. >> as i listen, we talked about the strategic relationship. we look at afghanistan. we look at the bipolar or non- rational activity that takes

place in pakistan. it is hard for me to ascertain exactly what our strategic relationship is because we do not want this in extremas hands. other than that, it is hard for me to understand in today's terms, what are real strategic relationship is. i would love for you to talk with us. i know that he is tired from the long trek. i would like to have a conversation with you about what exactly that strategic relationship is. at present, it seems like we have a country that acts in rogue ways sometimes. as far as those things that are pressing, strategically, they are not much of a partner. >> if i could just say, we should have a classified moment

at some point in time in the near term. i will arrange that with everybody. suffice it to say that i think that you're question is a legitimate one. it was at the center of discussions that we had. i will tell you, everything was on the table with as much precision and as much depth as i have ever had it. we did agree with some very specific efforts, that i do not want to go into now. it is important for every senator to know what those will be. those will be the subject of executive branch specificity in the next few days and the subject of secretary clinton's visit of the outcome of discussions.

at some point in the future, they will be determined by them. on committeeg in members. i found a distinct importance to this. there will be some responsibility for us to do things to empower that. we will all have to be recognizing this. >> welcome back. i monitor the opening statements and questions from my office. i will not be labour my appreciation for how long duquette served our country. it is a great pleasure to have served and work with you for many years. your advice and counsel is very valuable to us on this. if we are looking at the strategic implications of pakistan in the region, i do not know how we can discuss the

reality of this issue without addressing china's influence, not only in pakistan, but it national interest in the entire region. we cannot examine clearly what our options are. we cannot look at what the region is going to potentially look like without talking about china. those of us who work in this area for a long time, pakistan's long-term relationship with china and the reasons for that, at the inception of the situation with india and shared concern about india many years ago. there are smart people that assert that china enabled pakistan to become a nuclear power. just as i was walking in here, bbc put a newsbreak on indicating that the pakistani

prime minister and landed in china and help china as pakistan's best friend. looking at this from an american strategic perspective, one of the concerns i have had about chinese foreign policy for many years is that we really need china to become more overt in helping solve problems around the world whether it is iran, burma, or north korea. here, they are going to be a big beneficiary of any stability we bring about in the region. they are going to be a commercial beneficiary as well as regional stability. the real question is, how do we get china to be more involved in the solution of these kinds of problems rather than simply taking advantage of things one by one as they go wrong?

>> that is a great observation. it mirrors exactly what my philosophy about where the world is going in the 21st century. hopefully, we are emerging once and for all from the bayh pour were -- a bipolar world of the 20th-century. hopefully, we recognize with the rights of other economic powers like china, india, brazil, the european union as a whole, russia, it seems to me that there is a strong case to be made that for us to make the world a better and safer place and to solve problems like we have in pakistan and afghanistan, whose borders are continuous to china's and russia's as well, they do have an interest in making sure that this region is as stable as

possible as we begin to transition in afghanistan in particular. i think it is well worth the effort as our bilateral relations with china continued to hopefully improve. relations with russia improve as well. that the application of a solution set that includes not just security and troops on the ground, but the economic pillar and assistance in developing the instruments of government and will allow law in these countries so that they can move into the 20th century themselves. there are other ways to help with energy solutions and the like. this is the pattern of the 21st century. if we are not able to create an environment where a country like china and brazil and india

understand that with this great economic power that they are about to have, there comes some great responsibilities in terms of making the world a better place. that we do not have to do that alone, that is very good. >> we do not have many concerns about chinese expansionist activities in the south china seas areas. perhaps this is a situation where we can test the good will of a growing china in terms of using its influence to help pakistan direct its energies in a more positive way. >> any part of pakistan's

thinking that better relations with china in the mad. that is a good thing. that is flawed thinking. we can make sure that the relations cannot get worse as a result of this kind of trip and rhetoric. >> it is greater than greater important point. that is what the senator has left. i will say that aid alone is not the only ballgame here. while it is an important part, they have strategic interests. we will have to work with that with india and pakistan.

>> in order to follow up on this conversation about china, can you give us some publication about what china's expenditures in pakistan, can you give us an idea of comparability of the two countries? >> i do not have that figure, senator. i will do my best to find out. i am not sure that we have that. >> can you give a general sense of that? >> our package is about $4 billion, give or take. i do not know what china's report is like. >> do you know for a fact whether they are or are not doing an aid package like we are. >> i think there is some aid,

but i do not think there is a real competition between us on this. i do not think it rises to our totals. >> thank you very much. senator kerrey just mentioned that it is not all about k -- erry just mentioned it is not all about aid. i have a hard time explaining to people in idaho what we're doing spending billions of dollars in afghanistan. they do not like us. they have this terrible tragedy with the floods. we sent the military in and we say people's lives. after the fact, we spent hundreds of millions of dollars rebuilding the bridges that were washed out. people are asking, why are we spending car kids and grandkids money in a country where they do

not like us. no matter what we do, we do not seem to move the needle at all. we are borrowing 40 cents out of every dollar that we spend. it is a hard sell to the american people that we should borrow 40 cents, a lot of it is from china, and spend it in pakistan. and then pakistan goes to china and stand up and say you are our best friend. it just does not make sense. i would be interesting to see what senator kerry has to say about the items that are non-aid items. i am getting tired and the american people are king tired of shoveling money to people that just do not like us. >> it is hard to explain. what happens in the next few

weeks in terms of this relationship is going to be extremely strategic in terms of consequences. i think that more of the onus is on pakistan. and how they decide and if they decide to take what we think is the logical path and the right path for not only their future relations, but their bilateral issues with us and how they present themselves to the world. is it going to be a state where they tolerate the existence of terrorist organizations on their soil and as an instrument of their foreign policy? if bay reject that and categorically say so and show that they are doing some things to correct that image, then i think the good will of the international community might be easier to explain to your

constituency in idaho. there has to be a change in behavior here. we cannot continue the way we are right now. >> thank you. >> the one thing i would say to you, senator, we have about 100,000 reasons for worrying about our relationship with pakistan. they are our young men and women in uniform in afghanistan. that is important to our objectives of not having an al qaeda, the cetera. i cannot wait until we have a classified session. i cannot wait for us to have this conversation. >> thank you for your hard work and leadership on this issue and for convening this hearing today. i agree with what you have already spoken to. this is a critical moment in

our relationship of pakistan. like several other senators, i am hearing frustrations and concerns. based on my own frustrations, it is clear that the united states and pakistan share a common enemy. they have suffered significantly from extremism in pakistan. more than 80 on the front here were killed. others were injured. many americans are deeply disturbed by a state that plays a double game ad excepts multi- billion dollar aid from us. they are an uneven partner at best. one of the best metaphors is the suggestion that there but firemen and arsonists in this confrontation. i would like to thank you for your service. your council has been very

helpful. how can they be a true partner to america with a department that just passed a resolution condemning the bin laden raid including cutting off supply routes to afghanistan. you said that success runs through the road to pakistan. i think he meant that quite literally, tactically. >> it is quite literal to explain. the passions and the rhetoric that get fired up in pakistan are directed at us very specifically. we do have a very strong dependence on our supply routes coming through pakistan. they have been reduced somewhat. it is about 50% of our logistics' that go through pakistan.

we have to get beyond this point. pakistan has to declare itself forcefully as to where are you? where are you on this? againstt play both ends the middle. you have a common enemy. you have a future. you have needs that the international community led by the united states could help satisfy. there is a better and brighter way to help conductor form policy. we cannot make you do it. if you do not, we will have to reconsider what our strategy is. my former colleagues at the national security council are working very hard on this right now. they are hopeful that we can find common ground to go forward in a much more transactional way. in a much more clear-cut way

towards our common goals. i do not think we are there yet. senator kerrey knows more than anybody else as a result of this trip, as to what the potential is. in his way and other ways, we are delivering that message that says that we cannot go on like this. there is the question that the afghan struggle has been more difficult, long-term, and more costly in terms of our men and women in uniform and the depletion of our national treasure to support that effort. the fact that are safe havens and generally, the pacti a stamped policy with regard -- pakistani policy in regard to terror has been problematic. but there could be conditions to continuing with our strategic relationship would be a good idea to me.

>> declarations of good will. >> what do you think are the prospects that we might get concrete, on the ground material park assistance in taking actions in north waziristan in particular. what could we be urging the indians to do with dealing with position onbic india. i heard from a previous panel that testified that pakistanis are dead set against a setting up a successful afghan the military police force. they currently relied on sustaining a significant afghan national force. if the pakistanis are bent on preventing, they can

significantly inhibit our efforts to do that. this runs right through pakistan. my constituents are enraged at a continuing sustained relationship. in the new." -- "the new york times" this set that a more stable pakistan is a more critical than a stable afghanistan. what can we do with india? >> i agree to you that the indian presence in of afghanistan is modest. from the way i have come to withrstand pakistan's view regard to india, one indian will be too much in regard to afghanistan. there is no way to satisfy that except to continue to be a good

go-between between india and pakistan. they have done and not to alleviate the fear that there might be an indian attack. i think that the prime minister has been a visionary and taking political risks in india to do this. we have had some benefits in the sense that pakistan has taken some of its forces off of the indian border and brought it over to the west. i think that if the pakistanis can seize this moment and we can pivot in a new direction with more direction and accountability, and something good might come of this. it might be difficult. they have not shown, despite many treaties, trips that many

of you have made to pakistan, trips i have made. this is to deliver both public and private messages to try to get beyond this current relationship that often times works against our own best interest. we are simply at that moment where it is so important that we find a path. >> thank you so much for your service to our country. >> thank you, mr. chairman. i recently thanked the general for your service as well. i just wanted your observation on this. somebody that i considered to be semi-well-informed, he said that part of our frustration is how we view our relationship with pakistan. we view it as a traditional alliance between two willing partners working towards the

same goal. he encouraged me to view it almost as a contractual relationship. we put forth a set aid packages towards pakistan. in return, they allow us to get some bad guys, but not others. they allow us transit within our -- within their country. he encouraged me to view it as more transactional. your impression on that in view of the relationship. >> i think that is fair. if you were to have a discussion with the pakistani military they would pivot into the direction where you say that they are strategically important. this is the key to the region and what you want to do in a afghanistan. in terms of the quantity of military aid that we have

received in the helicopters and the instruments that they feel they are in short supply of, we have not done much. they take the numbers that we think are relatively significant, relatively 8 $4 billion package, for a strategic relationship, it is worth a lot more than that. we need that kind of help. we cannot fight the insurgents if we do not have the mobility to transport our troops and move them around rapidly. we do not have it. we provided them with mi28 helicopters. it is 28 or 30. that is about it. given our support packages that we give to other countries are bound world, they do not think that measures up to it.

the strategic imperative that we attach to the relationship. there may be a way to get through that. it is a stumbling point. they are being held to certain conditions for our financial aid. they wrapped themselves around a cloak of sovereignty. it is too important not to give a shot. >> there is some credibility to the idea that there is a price for each level of substance since -- subsistence that they give us? you would enter into this contractual barton with someone. there is some credibility to that view?

>> there might be. one of the problems with dealing with pakistan is that the american people correctly want to know that their money is going to the right end. there are problems with making sure that it does like it deferred into other means. for example, if we give them military aid and some of that shows up on the india-pakistan border, that excites india. we have to figure rock how that happened because it was supposed to go to the western side of the country instead of the eastern side. what happens in the next few weeks in terms of redefining the relationship and having a clear ride, a transactional discussion

of what it is we need to do to get this relationship back on track if weekend and why it is in pakistan's of long-term benefit to do so. >> i am not suggesting that would give them more money in exchange for more help. i am trying to understand the relationship better. a lot of the commentary is about that frustration. it is hard to explain to people. they want to know, why do we spend so much money on a place that says these things about us. the pragmatic realities of what is going on on the ground, i think the answer is going to beno because there are no simple answers are around here. is there any reason to understand why they help us with some things and not with others. is there any way to understand where -- why they will help us with some things and not with others.

is there any way to understand the decision making matrix? is it as complicated as everything else? >> the answer is no. the answer i have heard coming from them on that very question that i have posed several times is that the willsite history as the example. they are fearful. they say that they are fearful of the fact that they will once again leave and their relations with india will be with what ever they are. there will also be the afghan border and the taliban problem and a growing problem in their own country to deal with. for whatever reason, we have not made the case with them that we believe that we are long-term strategic partners. in their care oculus, when we advanced to 2014 as our date

for transition in afghanistan, they say that this is the day with the united states is going to leave. that is when we will have to deal with everything ourselves. it is that simple. to convince them a long term strategic partnership is what it is. it goes beyond 2014. whenever it is that we have to do to get through that almost psychological block is really the challenge. >> you are saying that some of these debates that we are having about what our role is in afghanistan, not that concerned about america's commitment to seeing the afghan effort through co. -- compromises the relationship. >> according to them, i do not think they buy into the idea

that a long-term strategic relationship, we are interested in anything beyond 2014. >> this is my last question. it is your opinion that if the united states was able to convince them and world that we are fully committed to the idea of a stable afghan government and we are willing to see that through, even though it will take a significant amount of time and lives an american treasure, that will potentially improve our bargaining hand in terms of the pakistani relationship? >> the problem is that we have exhausted the vocabulary code for the next -- last few years to make that point. i thought a couple of years ago, with this level of dialogue, we were much more comprehensive. just beans, bullets and bandages

for the military. a much more robust relationship. i thought they would gravitate towards that. so far, they have not done so. >> thank you, mr. chairman. thank you, general jones, for your service and for being here today. i have a very deep concern and have voiced this concern will be for the bin laden incident in terms of what the pakistanis know or do not know. by john with senator corker to make sure that we were getting the response is based on the significant commitments we were making to pakistan in ass istance. in the last five years america

has significantly increased the aid to afghanistan. it has increased by 140% since 2007 to $2.7 billion in 2010. those numbers are pretty staggering. my concern at a time when we are contemplating cutbacks to foreign assistance programs and scrutinizing every program to make sure maximum of effectiveness, is it not so much income groups to provide bart sons to the pakistani military unless we are sure they are making their commitment to meet and distraught terrorist units within their borders. the question is yes. do you believe that the pakistani military is committed,

not just in word, but in deed as well as its intelligence supportingo cease terrorism and its intelligence groups. >> yes, but it has found itself to be a selective engagement. they almost waited too long a few years ago. had they not intervened the way that they did, they could be having problems in islamabad right now. there are a lot of internal issues in that country that causes them to pick and choose their engagement, which frustrates us. it frustrates us because the

exacerbates the problem. we like clarity, we like precision, and we like to know exactly where they are in relation to our common goals. you can have a discussion with them and they say that, of course we reject terrorism. we completely reject terrorism. the next question is, what are you doing about this? we are doing the best we can within our limitations and capabilities. if you'd help us more, we could do more. i hope we can make the case that our initial offers two years ago are still reliable.

it is going to take a demonstration on their part that they really see things the same way that we do. >> selective engagement makes me think about selective assistance. i do not buy into selective engagement because that is about picking and choosing as you think your interests are. unless we are in it together and have a common cause together and agree on the goals and methods to achieve those goals, i do not know that as a fiduciary to the u.s. taxpayer, as well as our national security interest, and nearly $3 billion of assistance can be given based on selective choices. do we not have some sort of benchmark? something that we can ultimately get a sense that we are in

concrete ways. . this goal, so much a of thefaucet gets opened. it seems that there are tangible ways. >> it is not a precise science. that if you give them x, they will doy. we are not -- we know what they're doing and not doing in terms of combating terrorist organizations. we generally have had a productive relationship at certain levels against certain organizations and targets. the problem has ben that there are certain things that they're willing to do and certain things that they are not willing to do. i think some clarity and a

restated mission statement as to what it is we are talking about is probably in order and what the administration is talking about as to how we get to that level of understanding and comprehension. in the shortest time possible. >> are we in a position to really press the pakistanis in a way that will pursue our national security interests when they are our supply route into afghanistan? >> if be pakistanis wanted to conclude that we can squeeze the united states in afghanistan by cutting off the supply routes where 50% of our logistic still flow, i would argue that would be a very short term, maybe feel

good tactic. in the long term, it would be to the great this -- a disinterest of pakistan's national security. pakistan will benefit to have as stable of a country next to them in afghanistan that we would. it would be in their interest to demonstrate that they are, in fact, that they are incapable allies and can do the things that they can do. we understand they cannot do everything. an incremental demonstration that they are willing to do the things that will help us immeasurably, we will be very clear. we might generate more goodwill over here and in different parts of the world. we would then be willing to do the other things that they need in terms of turning the economy around and making better lives

for the pakistani people in the future. >> thank you very much. >> at the outset, i would like to say that i would appreciate the kind of briefing that senator kerry alluded to. thank you, general jones, both for your service to this country and your testimonial. influence on the fight against terrorism, it's role in the region, its nuclear weapons capabilities make it an important and volatile peace in u.s. national security. there are additional witnesses as we hold a series of hearings on afghanistan and pakistan. i realize that a few months ago

you retired as president obama's national security adviser. i appreciate your insights into the situation in afghanistan. i desperately want to believe that the pakistani government is genuine in its desire to be an ally to the united states. it seems that within that government, we do not know what we do not know about pakistan's commitment to fighting terrorism and fully engage in as our allies. it seems plausible that nobody knew anything about them laden's presence within our borders. pakistan is among the world's leading recipients in u.s. aid. by the end of 2010, fiscal year 2010, over the last decade, you

had obtained about $20.7 billion. i want to be clear about how i calculate that number. that includes overt assistance and military reimbursements between 2001 and the end of fiscal year 2010. i wanted to know, is that aid performance based in any way? is it tied to any performance based conditions? >> the kerry-luger-berman package did have performance metrics. yes. there are some aspects that is performance based.

>> in what ways do you think that pakistan has used that aid to do things that have enhanced u.s. national security? >> we have had a steady working relationship and dialogue with both the civilian and military side of their government. we have benefited from the intelligence exchanges. that has enabled them to make some arrests of people in their country. that has enabled us to pull off some operational successes that were in our national interest. >> those are other operations that would not and could not have occurred without that aid? >> we have been able to form a military outpost on different

parts of the border between afghanistan and pakistan where heightened technologies surveillance and real-time intelligence can be derived with both afghans, pakistanis and american sitting side by side. that would be another illustration of productive use of our aid. we have tried to help them with some other logistical problems in supporting the army with some logistical assets to be able to move their troops around as we need to. those kinds of things i think have been positive. >> let me ask you a hypothetical question. what would be effective

temporarily withholding aid from pakistan? this is hypothetical. i would like to know what the consequence would be. could the administration could a 30-60 the colaba on theaid to -- hold on aid to pakistan while we reassessed this. >> i do not think that anything positive could come of that. that may happen as a result. before we decide what to do in the immediate future other than take a decision like that that would have pretty clear consequences in terms of bilateral action, it would be better to go through the process then i think we would go through of try to see where this is and what needs to be adjusted in

order to better communicate the long-term potential that exists for our benefit and for the benefit of pakistan. i would counsel against what might be a very tempting thing to do, but might have long-term consequences that we would have to deal with. >> chinese investment in pakistan has become somewhat of a recurring theme. china is apparently planning to build two new civilian nuclear reactors in pakistan. does this kind of investment from china in pakistan trouble you from a national security standpoint? >> the growing bilateral relationship we have with china and other countries can be put to make good use in terms of

helping countries like pakistan and other countries. i believe is a characteristic of our 21st century that we will have to do more along those lines of working with the wealthier nations to help the developing nations transferring to better economies, battered governments, or adherence to rule of law. and the security package. i think that close with the nature of our new world of the 21st century world. so, you know, i think that if to demonstrates that they are more with us on

these kinds of issues, that is a good thing. >> thank you very much. >> gerald jones, i might say to you and others who are not here right now, this is a very important conversation that we are having. i am going to make the transcript of this hearing available to pakistani officials. they need to understand this further. i just spent two long days going through every single one of these same questions and laying out the realities. it is not simple. 50% of the supplies that go to our efforts in afghanistan go through pakistan. that

the most significant has occurred in the last two years. it has occurred because of some of the things that we have been permitted to do in the western part of the country at their sufferance because they have taken a real political hits. that is accurate, is it not? >> that is correct. >> in addition to that, they invaded and they've taken 5000 casualties, more people lost in their military than ours, and they have killed about 1000 al qaeda folks in that effort. are we getting them to do everything we wanted? no, it is not a perfect situation at all. that is exactly the conversation that we engaged in break from

their point of view, they had asked for some helicopters, some additional aid, additional capacity. they are under very tough imf constraints. we have to look at this thing in its totality. should we expect more? absolutely. is it tolerable that some of these entities are sitting there on the ground? no, it is not great that is exactly the conversation that we are engaged in now. i expect the administration and the next days to be pressing the details of that, building on what we have created as an alkaline over the last couple of days. i think that we can get somewhere. the proof is in the pudding. i made it to very clear. this is no longer a time for a

joint statement issued and everybody goes about their way and four more weeks of delay. we cannot afford that. and they cannot afford it either correct that is the understanding that everybody has arrived at a spread the important thing, -- arrived at. the important thing is to get engaged in this current moment dialogue with great precision, intensity, and see where we come out. and then we have to make some judgments. i think, in general, you would agree with me. let's say the relationship of in atan goes to hell handbasket. the united states of america would be able to protect its interests. we will do what we need to do to do that.

greater they're not be risks of increased to her -- of terror in that region and a greater volatility with respect to india? and greater cost to the united states in terms of strategic interest that we need to protect and other ways? >> absolutely. >> there would be a lot more expensive for us. we have to come through this carefully, but i am hopeful that in the next days, in a lot of this can get appropriately a dedicated in the negotiating process. -- adjudicated in the negotiating process. >> do you want to do any summary? >> is it easier to testify? you did not have to testify when you are -- you were liberated

from that. >> pleasure to be here, mr. chairman fred >> we are very happy to welcome you back. many relationships that you have that benefit us enormously and we are very grateful to you. we stand adjourned. >> up next, remarks from treasury secretary tim geithner on the u.s. economy. after that, a hearing on oil and gas drilling legislation. we will hear from ken salazar. on tomorrows "washington journal, we will talk to in our a president about the organization's priorities for the 2012 elections. senate former relations

committee of mexico will discuss u.s.-pakistan relations. we continue our discussion on homeland security. "washington journal" is on each morning at 7:00 eastern. treasury secretary tim geithner talks about the need to reduce the federal debt in order to help spur long-term economic growth. his remarks at the harvard club where sponsored by the center on the press, politics, and public policy. >> good afternoon. i am the director of the johns center on the press, politics, and public paucity. -- a public policy. i welcome you to this special event. it is special not only because we have the secretary with us,

but it is a memorial. he endowed the center as a memorial to his daughter. a superb journalist who died of cancer before her time. walter wanted her life to be honored by something as a meaningful and dynamic as the life she had lived. i am proud to say that the center will celebrate its 25th anniversary this year. walter was also a great citizen. he cared deeply about his country, and it was his lifelong

custom to look over the horizon and seek solutions. he was especially attuned to its financial affairs and had strong views about how to safeguard the nation economically. were you with us today, the crisis of would have been at the top of this list of his concerns. the family joined with us inviting secretary of the treasury to address those concerns today. please join me in recognizing him and the members of the families who are present. [applause] i would be remiss if i did not publicly thank the staff of the center.

the superb work in putting this together on very short notice. [applause] for two years, three months, and 22 days, tim geithner has been at the center of a fiscal maelstrom. if he did not have a thick skin when he started, and he now resembles a crocodile by now. before becoming secretary of the treasury, he was chief executive officer of the federal reserve bank of new york. as a journalist, he believed in correcting journalistic errors -- as a journalist, i would like to stress that we have never -- he is a graduate of dartmouth college and johns hopkins school of the dance international

studies. he has studied japanese and chinese and lived both places. something that grows ever more important in navigating the world economy. how has he done his job so far? two years and five months ago, he was being lambasted by both the right and left for his fiscal rescue plan. yesterday, the headline said tim geithner emerges as obama's indispensable man. it is not to say? -- it is my pleasure and honor to welcome the secretary of the united states treasury, tim geithner. [applause] >> thank you. that was gracious. nice to see you. i admire so much what walter

did. when my uncle was the director, i was studying at dartmouth college. my parents were still living overseas than. i remember sitting on the floor of this office for many hours, sometimes standing, waiting for him to give me a ride down. what a great cause you are engaged in, which is trying to increase -- improved deep debate on policy questions of our time. i want to talk about the question of how we deal with our fiscal challenges to explain why this is so important. what should be done? the politics and economics and a credible solution. i choose this subject because -- not because it is the only challenge that we face. with unemployment still around 9%, millions of americans still

uncertain about their economic future, we face very a formidable economic challenges, but our ability to deal with those challenges will be determined by our ability to restore fiscal stability. we spent the last decade piling on debt to pay for expensive tax cuts, a large prescription drug benefit, and the two wars. on top of that legacy, we had to clean up the worst financial crisis since the great depression. we face unsustainable a future deficits caused by the dramatic rise in the number of american civil turn 65 in the next decade. combined with the fact that we now live longer and the cost of medical treatment is so much more expensive. today, we have to find a way to return to living within our means. our fiscal problems are so

pressing that they threaten to undermine the foundations of our future economic strength, our ability to protect our national security interest, and our capacity to sustain the commitments made by 13 president over 75 years to provide economic security to support -- economic security to the core and the elderly. our total federal debt burden will be almost as large as the entire output of the american economy within the next decade. we do not have the option of leaving this problem to another day, another congress, or another president. it is true that we were able to fund these deficits at very low interest rates. these rates are a reflection of confidence that we will act, not a justification for inaction. they are unusually low today

because of the relative lack of all other investment alternatives in a world still recovering from crisis. there is no way of knowing how long the financial markets will give the american political system to get ahead of this problem. it makes no sense for us to wait until the force action upon us. as we salt in the 20081 confidence turns, it can turn with the brutal force and with a momentum that is very difficult to arrest. this is a threats we should preempt. if we do not, the economic damage will be much greater. confidence is much more expensive to restore that is to keep. it's really are dead problems unaddressed, those that lend us the resources will eventually

demand higher interest rates. higher borrowing costs for american household and businesses will discourage future private investment. a dollar we cannot spend on more productive investments, like education. for all these reasons, the choice we face is not whether to get our fiscal house in order, but how we do it. to provide some context, consider the following facts. in the united states of america today, 40% of children born each year are covered by medicaid. if you were born today in hard- pressed communities, like detroit, st. louis, or

baltimore, you are more likely to die before your first birthday than if you were born in the tree line up for belarus. in education, we're losing ground. only about half the kids graduate from high school. over the next 25 years, the number of americans eligible for medicare will double. the number of working age americans will increase only by about 10%, putting new burdens on working americans. we still live in a dangerous world with a young men and women fighting and dying to protect our freedom. we spent $700 billion a year on national security and this is only about two-thirds of what we spent during the cold war. the effect of income tax rates for the wealthiest americans is at its lowest level in 60 years.

the effect of tax rates before the bidder rich has declined much further. now it is around about 21%. we have some say -- we have some tough choices to make. to put us on a path, we have to bring these deficits down, gradually and dramatically. we need to cut our annual deficit to the point where the overall debt burden begins to fall as a share of the economy. this requires that we achieve and maintain what economists call primary surplus, which means that we cut what we spend on everything except interest payments to less than we raise in revenues. for the united states, this means a deficit below 3% of gdp. achieving this goal is the

essential test of fiscal sustainability. we cannot do this too quickly, though. it has to be a multi-year process. it does not put at risk and economy coming out of crisis. with interest rates now very low, we cannot count on the federal reserve to be able to offset the contraction their effect on economic growth. if we put our deficit on a path to get them down below 3% of gdp, and we hold them there, which performs that politicians, but to sustain to leave in place, the federal debt held by the public will peak in the range of about 70 or 80% of gdp and then start to fall. the economic and political question is not whether, but how to achieve. the debate we now confronted is

how to cut these deficits while strengthening our ability to grow and compete in the future, protecting our national security interests, and preserving health care and retirement security for the elderly and those with disabilities. but we describe how the president proposes to do this. the president proposes to reduce spending across the government. the president has proposed cutting spending on government functions outside the national security, the social security, by more than one trillion dollars over the next 12 years. these cuts would bring non security discretionary spending to its lowest levels since eisenhower. this will require savings in mandatory programs that have a lot of political support, like agricultural subsidies. on top of this, the president proposes to cut $400 billion in

securities while making sure we preserve the essential capacity to meet our national security responsibilities. the president is putting cut on government spending at the same time preserving the same -- to finance productive investments in things like education, infrastructure, clean energy, things that are critical. these investments in those areas, education, research and innovation, infrastructure, clean energy, they meet to keep tests. they have very high returns in terms of future economic growth and the private markets will not finance these investments at an adequate level without a catalyst of government. the president proposes to remake the corporate tax system so that it does a better job of promoting business investment in the united states.

together, this list of reforms perplex the fundamental realities that the composition of spending cuts is consequential to whether deficit reduction hurts or helps beecher economic growth. -- helps future economic growth the president proposes substantial savings from medicare and medicaid. together, these programs are responsible for about one-fifth of our budget and because of the aging of the population, at the increase in life expectancy, they are the main source, the main drivers of our long-term deficit. for medicaid, the president proposes at least $100 billion in savings over the next decade. he proposes for medicare, an additional $200 billion in savings over the next decade by harnessing the purchasing power of medicare to control spending.

he would build on the fundamental reforms in the affordable care act. requiring the independent payment advisory board to target cost growth and medicare to dp. a very tough standard for controlling cost growth. while social security is not the cause of our current deficit, the president said that republicans and democrats should come together to make changes to the program now that will put it on a solid footing into the future. the president proposes changes to the individual tax cut that will reduce the deficit while moving toward a more fair and simple system. by restoring the tax rates on individuals earning more than to under $50,000 a year, to the level that prevailed during the clinton administration, returning the estate tax to 2009

rates and by scaling back tax expenditures, the plan would generate additional revenue without putting at risk future incentives for economic growth. the reforms in must adopt have to be grounded in realistic assumptions about the path of future policies, the impact of legislation, and economic changes. neither congress or the administration should be able to use on realistic assumptions about future growth or political corrector other forms of magical thinking to minimize the magnitude of the reforms that are necessary. these changes will be difficult, but in a balanced remarks like this, with the burden of adjustment shared broadly, and phased in over an appropriate period of time, the overall economic impact would manageable. to make this spring were credible, we need a mechanism that forces reform. the president has proposed that

congress imposed on itself a debt cap that would lock in the necessary reductions and deficits over the next several years. as a fail-safe, it would require all the cuts in spending if the targets are not met. this is very important. it is the fiscal policy equivalent of trying to take politics out of monetary policy. by making central banks independent with a mandate to keep inflation low. we need a debt cap so that politicians cannot choose to live with unsustainable deficits. it reduces the legitimate area for political debate to how to achieve a sustainable fiscal position, not whether to achieve a sustainable fiscal position. you can tell from the debate in washington that there are big differences among republicans and democrats.

the divisions are very substantial, most pronounced in three areas, how best to promote economic growth, how to reform the tax code, and how to protect health care. given these differences, we believe the most realistic approach is to design a framework that force is necessary political agreements on reforms. to do this, we are trying to negotiate a multi-year plan mark of dead cats and targets with a substantial down payment -- cut of a dent caps and targets but substantial down payment. this down payment has to be substantial relative to the total amount of deficit reduction we need over the next decade. all of the fiscal plans on the table shows that there is broad agreement on the ultimate goal

and timeframe. the components of the down payment have to touch all parts of the federal budget. from defense to medicare and medicaid and they should be balanced by changes in revenue. it should include a mix of specific savings for mandatary programs and commitment to lower future discretionary spending. the more specific the reforms, the more believable and credible will be the framework. these savings would be complemented by an overall cap on future debt and deficits. a strong enforcement mechanism to force action that would deliver the remaining savings. at the beginning of 2013, and every year after that, we will assess the magnitude of additional deficit reduction requiring necessary to bring

down the debts over the following five years. congress would have roughly nine months to enact legislation that would meet that target. if congress cannot agree, automatic cuts in spending would go into effect for the following year. but put us on a path to a meeting that fiscal target. the size would depend significantly on the future of the bush tax cuts. but they will expire at the end of 2012. the president has proposed to extend the tax cuts to benefit the middle class. aladdin is tax cuts to expire -- allowed in that tax cut to expire would reduce the deficit by $1 trillion. taken together, our view is that this is a reasonable plan.

it is a balance of short-term savings and long-term reforms that we do not just pushed all the tough decisions into the future. it is an achievable plant and it needs -- and it meets the critical test. it is better than the alternatives. a few points on the alternative strategies. some have suggested that we set a global cap in spending as a share of the economy at a level that prevailed in the decade before the crisis. the dominant suggestion suggest the target of spending at either 20.6% of gdp or something like 18%. these targets have obvious appeal, but they have no practical value. we cannot talk or reverse the aging of the population. as the baby boom generation retires, the number of americans

turning 65 will increase dramatically as a result, it to cap spending at historical levels, he would be forced to make exceptionally deep cuts in benefits to seniors and the poor. spending caps did not provide the government with a flexibility you need to respond to future national security threats or future recessions. spending caps would not be sufficient to achieve this goal sustainability. spending measures alone would enable future congresses and presidents to try to live with higher deficits by cutting tax rates. we spend as much in special tax preferences in the tax code as they collect in federal income

tax revenue. the house republicans have proposed a plan that has deep spending devotion -- reductions, it devotes savings to keep tax rates low at exceptionally low levels for the wealthy, not just for the middle class. this approach will not pass the congress now or in the future. this alternative proposal would require deep cuts and benefits for the elderly and the poor. it will reduce government spending to what it was before the modern era. more typical of a developing nation. the fundamental reality of our fiscal situation is that we will need to generate more revenue and we will need to reduce the rate of growth in spending on health care and retirement security. both are necessary, and either

alone can carry the full burden. the essential value in the house budget is to show that if you try to deliver fiscal stability, with no contribution from tax reform, you have to make dramatic drastic cuts to these critical government functions. according to the congressional budget office, these cuts would by 2020 to raise costs for an average medicare beneficiary by $6,500 a year. it would eventually reduce the total amount the government spends interest in social security. americans can do better. at one to make it clear that it is the president's plan on this country as a condition for raising the debt limit. they will own the responsibility for the first default in american history.

yes today we reached the debt limit. we were forced to deploy a series of extraordinary measures. they will give us until august 2 before we can no longer be able to meet our obligations securely. as i have said before, congress needs to meet its responsibility to place a. it relates only to commitments we had in the past. it is whether we should pay our passed bills. rather than designing schemes. they are designed to allow us to make interest payments by breaking our commitments to seniors and veterans. we should be working together to narrow our differences on how to solve the causes of our future

deficits. i want to say that if the fiscal agreement is not reached, the debt limit must be increased. it is not an option for congress to obey the basic responsibilities to protect creditworthiness. our responsibility is to seize this moment. when they agree that deficits matter. living within our means is not an option but a necessity. putting this office no longer possible. our objective is to build a bipartisan consensus. this will help restore confidence that washington is up to the many challenges we face. it still helps give businesses and investors what they need. it'll help preserve a strong economic foundation necessary

for protecting our national security and give us the room we need to invest in the future. thank you. i will be happy to take your questions. [applause] >> you have outlined an ambitious and optimistic scenario. you have been able to craete ,-- create confidence in the financial situation and to perfect -- personally. this will have to be sold to a very difficult audience.

are you going to be taking the lead in this effort? and i know this is something that you have stepped out forcefully and as an individual. but it is not just the debt ceiling. it is the economic future. this is something he will be taking a lead in? >> it is central to my role. this is the president's conviction. he has but the vice-president of the united states in charge of negotiating the solution. he has been leading the negotiations. i think they are the most talented team of people. they were the central architects of the best president we had.

i will tell you why we are optimistic this was a massively complicated endeavor. this is not as hard as that. it feels politically more difficult. it is not nearly as hard as that. if you listen to what american people say, they are much more confident. they put it near the top. you see republicans and democrats to join and embrace this. this is the critical moment.

i'm confident about the economy. we need to get ahead of this. we want to take this opportunity to do it. >> are there any secretaries of the treasury stock we look to as models? that you admire for the job they do? quite so many of them. i will read you a quote since you asked me. >> this is not stage. i promise. >> this is about the debt limit.

i am going to read you to paribas. "i should stress that defaulting on already outstanding, that'll hasot obligations greater effects when spending authority. such as when there is a delay in action. a failure to pay what is already do will cause serious harm to our credit. it is not remotely similar to a glassman authority to encourage new obligations. i cannot over emphasize the damage that would be dumb. it is unprecedented. market chaos in interest rates

in the uncertainty would produce a global economic and financial calamity. the chill generations have to pay dearly for the 200 year old trust. >> do you think the rhetoric is [unintelligible] isn't baloney? is it real?

>> they made it clear that they will get this done. they will not take it too long. they will not play politics with it. the real challenge is how to build a political consensus on the way to bring gravity. it is a moment. it is making progress. our expectation is that we can get something serious done. we have decade of the ideological divide. we have a lot of overlap and objectives. -- in objectives. >> do you intend to continue at least as long as president obama -- >> family server long-term fiscal problems? >> yes. -- can we serve our long-term fiscal problems? >> yes.

we have a lot of challenges left. it has been a great privilege for me to work with that group of people. >> is that a yes or a maybe? >> that is an excellent and thoughtful question. i am figuring out a lot of these days. >> do you expect that the legacy of timothy geithner and secretary of the treasury? >> we will be debating for a long amount of time. >> the reality of it will be that when you announced your plan right after you became secretary of treasury you were hammered by practically everyone. that tune has changed dramatically. i think this is the way he presented it. >> i in the same person. >> i think that one of the

questions has all along been is the obama administration able to make its case that is compelling but is not very effectively made? >> can we do better with that? >> i'm not a political person. i did not spend my money -- i can make any simple problem sound complicated. i'm not the right person to ask that question too. >> i admire so much the legacy of walter. a huge part of making economic decisions is being able to explain why the options we proposed are better than the

alternatives. my colleagues accuse me of saying that a plan to beat no plan. -- a plan beats no plan. the hardest thing to do is explain what the alternative does not work. it offers no promise and practice. the big challenge that i can say is to find a way to explain the choices we have to make so that people understand that you have to judge something by the alternative. what is clear is that it is easy to say to people that this is something we have to do. that is just the beginning. we have to invest in the

difficulties. i think this is the challenge. >> one thing they have been criticized for is by bill it too willing to compromise. do you have a sense of how far is too far? >> i tried to save this. i think there are things we cannot do. there things we will not sacrifice. " we cannot do -- what we cannot do is set up a dynamic.

but we try to legislate a agenda. what is at stake is if you think about the challenges we face. there is unacceptable damage. it is our capacity to invest in our future and invest in things to make it stronger. it is not possible to offer people the choice. it is not irresponsible alternative. we have to defend the necessary functions. we have to make sure we preserve that. that is why you need a more balanced by more.

>> >> i like to invite those of you that are here to address a question to the secretary. i would ask if you wanted to do that. identify yourself. >> hello. thank you very much. that is very interesting. you say you are not a political person. assuming a deal is reached on midnight august 1, give me a copy. >> if you leave people with any doubt, and we have to act in a way that protect them from the possibility that we do not act. that has the same basic dynamics. you cannot wait until then. >> what would you predicted the

deal will look like? >> it to have a basic framework that locks in a declining one. it is across the core government. it is a trigger. >> the bill one to lead to much of the plan on the target. >> given the short term, they

are talking of detailed spending. we are going through. >> i think they are pretty realistic. not all of them are realistic. at think the leadership is realistic. >> identify yourself. >> she supported your plan is part of the revenue. >> i did not say i was optimistic. he pretends he used the revenue, then you are forced to

live with cuts that are completely unacceptable. that is why you are not optimistic. it is going to have to,. >> you did say that the republican leadership shows this. we will get this done. >> he was here recently. he made no bones about it. he said new revenue is up the table. how're you going to deal with it? >> it is a challenge. it is better for business confidence. it is better for them to know the precise shape. it would give them a plan to adjust. we cannot do for resolution without a comprehensive approach. we are going to be able to do less of from.

what you have to do is lock in as much as you can. you have to leave open where they are going to come from. they will come from a mix of defense cuts. the mix of that is that cannot be resolved right now. it has to be forced by careful design of a trigger. i think that is the realistic framework. you cannot put the ball on process limits. it has to the things that people can feel and see for it to be believable and credible. that is the difficult balance. you are going to need it. >> how concerned are you about the leadership with the imf?

do you know him personally? whether your thoughts? >> she is not in the position to run it. >> they were formally put in place. a very capables person. >> you know him personally? >> i think it is important. there is a lot going on in the world. >> there have been other policy attempts to try to impose some kind of trigger? i would argue that the debt

ceiling is one such tight policy. >> it has never proved a valuable device? >> you are right to say they do not substitute political will. they undermined them in the past. in play here is a valuable role. just look at the pay-as-you-go rules. look at what happened when they were abandoned. if you do not have the money, and you have to find ways to spend more. you cannot cut taxes without finding a way to raise more revenue.

it is a perfectly feasible discipline. >> it seems like there have been other attempts to tie themselves to the mess paren >> politicians always seemingly find a way to either and do it for -- >> that is the rest. >> thereby a bunch of temporary factors. they are very high. it is different. there is more recognition across the political spectrum. you cannot pull all the burden on their parents he had to do as

much up front to make it believable. we are forced to figure out how it to stillrace th allow was to restore it to the fiscal position. that is why we are debating this. they can help constrain the loss of a virtue. >> hello. if the debt ceiling is not raised by august 2, what is the

immediate consequence? >> i cannot prove on that. i've written carefully about what i think would be the likely consequences. we are not going to experiment with it. we are not going to take that risk. you have to be kidding. coming out of this crisis? not a chance. >> bloomberg radio. nice to see you again. regarding corporate tax reform, what is going to be the basic driver for us? i have been speaking to someone at a big oil company. he is talking about energy policy.

>> the central russian now should be to lower the rate. they make it possible by dialing-introducing a range of tax expenditures that litters the corporate tax code. that is the sensible thing to do. it'll change the tax rates. it is the essential thing to do. why should we want to live with a tax code where every year people do not know what is good to be the tax preference for certain activities? why you want to live with a tax code that determines a key part of the economic steer business? it makes no sense? we argue that this is worth trying to do.

we make it difficult to do. we do not like we are going to do. it is the sensible thing to do. we are going to be divided on some big political issues. we want to find things that they can do together that are not inherently partisan. we have to find ways that we can do that. this is one of them. >> is anything they have like a flat tax? >> i do not think so. >> >> i have questions on corporate tax reform. are you going to seek out an agreement on corporate tax reform as part of the platform? >> not in this next two months.

weird when she tried to get this process moving. realistically, -- we are going to try to get this process moving. realistically, i think this is going to dominate for the next couple of months we get through it. we have been doing a lot of work on how to figure out a sensible design. we would like to move forward. >> i think we would like to take a run at doing this. that means we have to start. we also need to get this fiscal stephanie better trajectory. -- fiscal stuff in a better trajectory. >> i want to talk about the administration. i get asked about this. i have no answer. during the primary season, barack obama took a lot of people from hillary clinton for

saying that he admired the way ronald reagan managed to change the discourse. i think this was unfair. yet, he has not really tried to do that. he is not try to move the yard line down the field so that the debate on economics would be conducted on democratic grounds. he has left itself vulnerable to republicans and conservative arguments. this is what he came into. i am wondering if there is a decision not to use the pulpit to try to move the discussion. >> i think i'm the wrong person to ask the question. >> you know where i am. i'm not a politician. >> if you look at what the

president accomplish, there is in a normal political cross. in makes the most dramatic changes, they care about. it has been attempted and achieved by the time. >> i am driven not by what he astride to achieve -- she has tried to achieve but the magnitude of the reforms. just remember how the spiels. -- this feels. everything was at risk. he did not sit there and say let's have a debate about what to be interesting to do. there has some political cover. there has some political cover.