general. thank you for being with us. guest: thank you very much. host: appreciate your time. that does it for "washington journal." and reminded that president obama will be holding a news conference in the east room of the white house at 11:30 am eastern time with live coverage on c-span, c-span radio and xm channel 119. but the senate commerce committee now talking about maintaining and securing personal information and whether or not current law adequately protects consumers. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> we see senator john kerry in the room of the russell senate office building. yesterday he fled the foreign relations committee -- he chairs that committee -- and today it is with the commerce committee, looking at how companies nonprofits maintain information, whether current law will adequately protect consumers. among the witnesses scheduled for today, julie brill, who heads the federal trade commission, and some of the top lawyers at the commerce department and federal communications commission. we expect it to get underway shortly. we want to let you know that our plans to carry as much of this as we can, and that at 11:30 eastern we will take you to the white house. president obama all the news conference this morning. we will carry that live for you. the senate is in session this week, the house is not. the senate gambling in this morning and an eclectic and will

resume consideration -- gavelling i this morning and will resume consideration of streamlining the confirmation process for presidential looks like chairman rockefeller is coming into the room, so we will get ready to start. .> we got to begin guest this hearing will come to order. this is the third hearing on consumer privacy that we have had in this committee in one audit 12th congress. as i repeatedly emphasized, americans are often unaware of the vast amounts of information that are being collected on the them and used often to their

detriment. i have focused on the need for companies to provide evidence consumers with a clear understanding of what information they are collecting, where the information is going, and how it is being used. i also ask companies to give consumers an easy way for them to stop the collection processes. i don't think this is too much to ask of companies that are making a lot of money, and a lot of money that comes out of consumers' personal information . that should not happen in america. this is a new cost of doing business in america, and people should understand that. poll after poll shows that americans are increasingly concerned about loss of privacy, and the same polls show that americans don't know what to do about it. meetings in my state -- i am

sure that senator kerrey and senator toomey have had, also -- as chairman of the committee of jurisdiction, and i say that clearly for many to hear, to change all of this. i want ordinary consumers to know what is being done with their personal information, i want to give them the power to do something about that. that is why i have introduced s. 17, that do not track online act of 2011. it is based on a very simple concept, the within easy click a mouse, consumers can tell all of my company's they do not want their information collected,. . -- can tell all online at companies that they do not want that information collected, period. senator kerry has introduced a bill, the commercial bill of rights act of 2011, which is a very comprehensive piece of

legislation that governs many facets of all of this and of the economy, indeed. it is a very good piece of legislation. other members of the committee of the simile was strong interest in privacy matters -- have similarly voice is strong interest in privacy matters. i believe this bill the basis for a bipartisan consensus and doing something about it today's hearing is also bad data security, which implicates the consumer privacy. we are reminded of this, i'm afraid, every day in the headlines. the recent security breaches at sony and citibank showed that people are in prison the concern about compromising the safety and privacy of our -- increasingly concerned about compromising the safety and privacy of americans. when criminals back into a database and steal credit card numbers, a social security numbers, even e-mail addresses, they can use this information to collect identity theft, which

can have devastating consequences for the victims. that is why senator pryor and i have introduced once again this year s. 1207, the data security and bridge notification act, the same bill introduced last congress. it would impose an obligation on companies to adopt basic security protocols to protect sensitive consumer data, and would be -- for the require these companies to notify affected customers in the wake of a security breach. again, a cost of doing business in the new world. the bill would also require greater transparency for something called data at dutch broker industry, not one of my favorite subjects -- to talk or think they get-broker industry, not one of my favorite -- data- broker industry, not one of my favorite subject to talk to think about. they make a lot of money for people who most people don't know they exist did they have no

idea that their privacy is being invaded, sold and marketed. there is a broad consensus that federal data security legislation is necessary. the administration includes average notification certification similar to the provisions of s.1207 in the cybersecurity proposal in order for this bill to be ready for floor consideration as part of a larger security ever did i will work with senator pryor and all my colleagues to make sure that this works out. i now call on senator kerry. i warn you, we have the votes at 11:00. >> indeed, and i will try to be very quick, because we have about five votes coming up. first of all, thank you for holding this hearing and for the meeting we had the other day to discuss not just our bill, but the whole approach of the committee. a pledge to work with you as closely as possible as we try to find a broad-based and hopefully

consensus approach to the challenges of this issue. what we're discussing today is really the ability of people to sort of control or have some impact on profiles about them, digital profiles, or multiple digital profiles compiled on almost all of us, and then sliced and diced and traded in the marketplace where many people are not, as you have just remarked appropriately, in control of what happens to them. we are here to discuss the need to establish uniform standards for the security of private ourorks that wihold information. when i am talking about privacy, i talk about the ability of people to exercise choice and control over how their information -- i repeat, there information is collected, used

and distributed. data security is a subset of that issue, and how companies can secure the information they collect on people and what they need to do in the case of a security lapse. both are serious matters. when a company is fact, an inflammation of hundreds of thousands of their consumers -- when a company's fact, the information off hundreds of thousands of their consumers is taken, when it is revealed in any number of ways, but particularly to harm them, the company that is hacked is exposed to reputation all damage and harm relations with its customers, and establishing uniform procedures for how to react in the case of a security lapse and increasing incentives for having a strong security procedures is, i think, and as a legal, well dressed in the data breach legislation -- is, i think, a necessary goal, while addressed in the data breach of

legislation you and senator pryor introduce. but data security alone will not give people authority on how their information is collected or used in this tradition. data security is just one piece of the overall privacy puzzle. after working with senator mccain and others for some months on this issue, you mention to the legislation, mr. chairman, a moment ago that we have introduced and i appreciate your comments about it. we need to find a way to meld the various approaches that are out there and to build, obviously, a consensus within his committee. i agree with you, committee of jurisdiction -- in order to be able to protect people. beyond accountability and security, i think the legislation we contemplate is going to give people meaningful and specific explanations and control on how their information is being collected, use and distributed, as well as

importantly, the power to opt out of those practices. i think senator rockefeller's approach is a good one, a strong one, important one. but it is one, -- it is one component of it, but i do think that beyond that, we have to deal with this question of choice of how your information is managed even if you do consent. i think that what we have put forward is a comprehensive bipartisan proposal as a starting point. mr. chairman, i think it is critical to work with you, senator kay bailey hutchison, senators now, others on the committee -- senator snowe, others on the committee, to bring more people of the table, and i look forward to doing that. i do want to point out at the moment, it is at the center of this debate -- coupled polls, but in the center, you have companies like intel, microsoft, and hewlett-packard, as well as

consumer advocates presented by the consumers union and others who are helping us to try to focus this in the right direction. finally, we have expert agencies represented today. the federal trade commission, the department of commerce, federal communications commission, they have all been doing what they can to protect americans using the legal tools available to them and using their ability to convene stakeholders and experts and then educate themselves and consumers on the changing practices and it is rapidly moving and ever evolving world we live in. the fact is, at they don't have all the tools necessary. that is what this discussion is so important. i look forward to working with you, mr. chairman, making sure we have a complete picture of what is going on in the market today. from which we can draw the best conclusions about how to

proceed, have a smart baseline commercial privacy protection put into law. i thank you for focusing intently on this important issue. >> thank you, senator kerry. senator toomey. >> thank you, mr. chairman, for holding another hearing on this very important topic. i appreciate that, and i agree with senator kerry's characterization that data security is one subset of consumer privacy, which is itself, though, a very broad topic. on data security, there seems to be broad support among industries stakeholders, consumer advocates, many members of congress, for a national standard, and it is an issue that congress is likely to address legislatively in the near future. in recent years, there have been a number of high-profile data breach is affecting consumers nationwide, and establishing a single federal standard for notifying victims of date of bridges and protecting sensitive information is something i do think we should consider seriously.

i look forward to working with the chairman and other members of the committee i hope felipe addressing this in a constructive and bipartisan manner. on the broader issue of privacy, however, i am not sure there is yet a consensus on how to best protect consumers or whether it legislative solution is indeed the best method for doing so. before congress considers a comprehensive privacy legislation that would have a significant impact on businesses large and small, and on consumers, i think we need to adjust the really examine this issue and make sure that we don't apply a solution in search of a problem. i am interested to hear from our witnesses today on what specifically is most concerning to consumers when it comes to privacy, what consumers' expectations are regarding the privacy, and what, if any, real harm as occurred from on-line data collection and how to best address any such arms. in a world where millions of people voluntarily share their personal information on what sites like facebook and twitter on a daily basis, i am not sure

exactly what consumer expectations are when it comes to privacy. but i am pretty sure that given consumers have different expectations about privacy. i'm not sure was best or even qualified to make the determination. should it be congress, should be that federal trade commission, or neither? perhaps industry and consumers should set standards by mutual consent in their interactions. these are issues that i hope we will carefully examine and make some progress on the them today. my colleagues who have introduced legislation in this field are certainly not very well intentioned and thoughtful legislations, but i am not -- are certainly very well intentioned and thought legislations -. the internet has filled it tremendous economic growth in part because government regulation has not yet occurred. american innovation in this field far outstrips innovation occurring in other places,

including europe, where much more extensive regulation currently exists. the internet clearly has changed the way we communicate and do business very much for the better, and we should be careful about imposing new rules and regulations that might unnecessarily harm future innovations. i am sure no one on this committee wants to bite the internet or limit many of the popular on-line services -- no one on this committee wants to break the internet or limit many of the popular on-line services. i just urge that we all proceed with caution. one very brief example -- for instance, overly restrictive regulations for online advertising would likely result in consumers' having access to fewer free online services and applications. not sure that we are qualified at this point to make the judgment of what that trade-off ought to be. i want to protect privacy online, and i want consumers to

feel comfortable using the internet. but until we have a clear picture of the harm we are trying to address and have looked at a cost benefit analysis of any new privacy legislation, i have reservations about moving forward with the legislative mandate. that said, there are a number of ideas that have been put on the table that i do find appealing. one example is the idea that maybe we ought to consider consolidating privacy enforcement and oversight into a single federal agency rather than multiple agencies. on this and that the entire range of topics, i look forward to working with you, mr. chairman, other members of the committee. again, i thank you for holding this hearing, and i would like to ask consent to have a statement prepared by the national retail federation included in the record. >> thank you, senator. now i turn to -- we have julie brill, the commissioner of the federal trade commission -- one of the commissioners -- and

austin schlick, general counsel of the federal communications commission, and cameron kerry, general counsel of the u.s. department of commerce. three pretty good witnesses. ms. brill, if you wish to proceed. >> thank you, mr. rockefeller. i'm julie brill, commissioner of the federal trade commission. i appreciate the opportunity to present testimony today. that amounts of information about consumers are collected and used by many different types of businesses. employers, retailers, advertises, data brokers, lenders, insurance companies and many more. imagine a cash crop mother working -- cash strapped mother working as a substitute teacher and awaiting an opening bid to tide them over between paychecks, she gets a payday loan. she then goes to the drugstore and buys diapers and children's tylenol with her loyalty card. soon after, in the mail, she

gets coupons for diapers and children's motrin, and an offer to refinance her mortgage on terms that seem too good to be true. in the evening, the mother goes online to spend time on a social networking site. she notices she is receiving at tysons for toys and children's cough medicine, as well as -- advertisements for toys and children's cough medicine, as well as more loan officers p. could that a lender have sold information about her need for money to other lenders, at an regenerators, both online and offline, for offering microloans? the the fact that she has any mother be sold to potential employers? the answer to all of these questions is yes. some of the things i've described can offer real benefits. the mother probably wants coupons for diapers. but the vast majority of consumers are completely unaware that their purchasing history, their particular financial

situation, information about their health and other personal information is sold to the gator brokers -- data brokers, regenerators, and others. most consumers are unaware of the gate up -- data deluge about them being collected and sold and used online and offline. i am concerned about how privacy is impacted by these practices. at the federal trade commission, we are focused on solutions that provide more information about these practices while allowing industry to continue to innovate and thrive. the ftc in forces laws protecting consumer privacy and security, educating consumers and businesses, and engaging and policy initiatives. our written testimony highlights are many recent significant enforcement efforts related to privacy and data security. including our latest action

announced just this week against a company that solicits about financially distressed consumers -- sold lists about financially distressed consumers to marketers. they agreed to comply with the fair credit reporting act and pay $1.8 million civil penalty. privacy and security continue to be front and center on the commission passed a policy agenda as well. the commission has not taken a position on whether general privacy and due-not-track legislation is needed, but a majority of commissioners, myself included, support wide spread implementation of do not track mechanisms. more generally, the commission supports strong privacy protection. our preliminary staff privacy report recommended that industry build privacy protections into their products and services at the outset simple choices presented to consumers about privacy, and improve the

transparency relating to data collection and use. on data security, the commission supports the enactment of a federal data security and breach notification legislation. i am pleased the legislation proposed in this committee aims to accomplish all of these goals. thank you for your leadership on consumer privacy and data security. we look forward to continuing to work closely with you on these critical issues. >> thank you, ms. brill. welcome, mr. ckerry. >> thank you, chairman rockefeller, senator thune, members of the committee. i bought them the opportunity to be here today and discuss with the -- i welcome the opportunity to be here today and discuss with you how we can best protect data privacy and the digital age. this is an issue that affects everyone. at this committee's hearing on march 16, the obama administration urged legislation

to establish basic commercial data privacy protection for all u.s. consumers. what we recommended an had three elements. the first is baseline privacy protection in the form of a consumer privacy bill of rights, adapted from widely accepted fair information practices principles. the second is for government to convene a multi-stickle the processes to encourage the private sector -- will be- stakeholder processes to encourage the private sector to develop context-specific code of conduct that apple and the bill of rights -- implement a bill of rights. the third is to grant explicit authority to enforce the privacy bill of rights and to grant safe

harbors for evolving codes of conduct. we are encouraged that members of this committee and others in congress have introduced several bills to address significant data privacy issues. the administration looks forward to working closely with members of this committee and congress to pass legislation that would protect consumer interests and provide businesses and consumers with a clear and consistent set of rules of the road, both within the united states and internationally. our conclusion that the time has come for comprehensive data privacy protection is a product of the work of the department of commerce, internet policy task force, and the national science and technology council subcommittee that i co-chair. it reflects two tenants. the first is, very simply, to

harness the full power of the internet, we need clear rules that allow for innovation and economic growth while protecting trust and respect in consumers' legitimate privacy expectations. consumer groups, industry, leading privacie dollarsy scholr -- is a leading primacy scholars agree that americans cannot understand what information is being collected about them or cut bait and can control its use. second, as we establish guidelines, we need to avoid a regulatory environment that restricts the regulation and free throw -- free flow of information that have been drivers of economic growth and expansion of information that stretches the boundaries of human knowledge and creates

social and political change. legislation should not add duplicative or overly burdensome regulatory requirements to businesses that already been here -- already adhere to strong privacy principles or are subject to existing regimes. legislation should be technology-neutral, so that consistent with a signed principle -- baseline principles, from south flexibility to adapt technology to comply into -- and to adopt business models that use data in ways not contemplated today. our work continues as the administration faces a white paper on commercial privacy. at the department of commerce, we will engage with stakeholders on the development of code of conduct. we will work on data security and work with other agencies to

ensure global interoperability. this is an aria for congressional action can have a significant impact. two weeks ago, i was in budapest speaking with the data privacy commissioners. comprehensive legislation will send a strong message of u.s. leadership that could form a model for our partners, prevent fragmentation of the world's privacy laws and undue restrictions on businesses that connect international trade. we look forward to working with you, the committee, stakeholders, the ftc, other federal agencies for its enactment of legislation in the field. i ask that my written comments be included in the record, and i welcome any questions. thank you again for this opportunity.

>> your statement will be included in the record, and thank you for your testimony. mr. schlick. >> good morning, chairman rockefeller, members of the committee. thank you for the opportunity to discuss the federal communications commission. i am pleased to be joined by two strong partners in that effort. the fcc has decades of experience and the amazing the statues. -- experience implementing these statutes. these include provisions to protect consumers against unwanted telephone solicitations. at the same time, increased use of personal data in connection with new on-line and wireless applications is raising serious privacy and security concerns. as the sec recognizes in the national broadband plan, addressing these concerns will be critical in increasing adoption and deployment of

technologies that benefit consumers and government and the economy. the commission historically has focused on three privacy-related goals -- ensuring that personal information is protected from its use and is handling, requiring providers to be transparent about practices, and enabling consumers to make informed decisions. these goals remain our primary focus as we implement various sections of the communications act that directly impact privacy. for example, section 222 of the act requires telecommunications carriers and interconnected protocol providers to provide customer proprietary network information, cpni. it includes call records and all information rid under section fcc has adopted rules to prevent a texting, under which another ice third-party attempt to get access to telephone subscribers personal information, and weavers of

difficult issues such as one of in an opt out notifications are or pri, data sharing rules, notification to law enforcement and consumers in the event of data breaches. in just the last six months, the commission issued 28 warnings and notices of apparent liability for parents cpni violations --. for apparent cpni violations. the number of consumer complaints the fcc has received has declined steadily. of this section also protect personal information. these provisions provide requirements for satellite and cable television providers on their subscriber's personal identifiable information. these include limiting disclosure of personal data, remedies for subscribers who suffer a violation of these provisions. working in parallel with the ftc, the fcc adopted do not call

regulations under section 27 of the act. since 2009, we have issued nearly 151 citations and other actions for do not call violations. the sec and cftc collaborate on a implementation of an act with the sec adopted rules that prohibit sending unwanted -- fcc a popping rules that prohibit sending unwanted messages without notification. but the fcc it supports consumer education in the areas of privacy and security. an online initiative that by the ftc helps consumers brought against theft and avoiding e- mail and phishing scams. just yesterday, we held a workshop with the commission on

location-based wireless services and privacy issues that they raised. at this webcast event, t whichhe ftc participated, we gathered information from wireless carriers and business and academic leaders about services. industry best practices for protecting personal information. and what consumers and parents should know about protecting themselves when using these services. we heard about the many but the benefits of location-based technologies and the challenges of educating consumers in protecting privacy while using new products and services. the ftc brings expertise about technologies and services. protecting privacy is a necessary part of providing communications services. so, too, is it part of the fcc passed a mandate to provide a healthy marketplace that meet consumer needs. thank you for this opportunity to testify today, i look forward to your questions. >> thank you, mr. schlick.

we will proceed to the questions. as for myself, we will be rather rapid. we do have the votes at 11:00, and that is very disconcerting to me. the majority failed to check with me about the convenience of the commerce committee, so i will do the best i can. i will ask these fairly quickly. commissioner brill, as you know, senator pryor and i have introduced s.1207, the data security breach notification act. what are your thoughts on this bill, quickly? >> sorry -- the commission supports strong federal legislation dealing with data security and breach notification like this bill. this does satisfy the requirements of such a strong protective bill. >> thank you. our bill gives the federal trade commission will making authority to require companies with large databases to adopt security protocols that protect consumer

debt. do you think companies are doing enough to maximize production of the databases? >> companies can do more. we have brought many data security cases over the past several years, we have invested it. many more -- we are not with -- we have investigated many more. we have not seen many close calls. these companies are falling down on basic security measures. yes,, is carefully do more in the area of a -- data security -- security can at -- companies can do more in the area of data security. >> can you talk about how senator pryor's and my bill will, your existing enforcement efforts? >> it will complement our efforts very well. not only does it set for the basic security processes and procedures like having an officer it focused on privacy, having companies process --

excuse me, an officer for his on security, and having a place -- having a test processes to deal with a sitter, but it gives us brought rulemaking authority, which is helpful. most importantly, it gives civil penalty authorities which i think will incentivize companies to improve security practices before they ever have to do with us. >> thank you. you'll keep your building. don't worry about it. [laughter] the department of commerce also calls for a national data security legislation. and you have opinions on the bill that senator pryor and i have introduced? >> senator rockefeller, the bill certainly response to the need for national legislation. one of the important drivers in the area to privacy is the adoption of breach notification ofs law of by states. there are 47 states that have

them. in order to make those consistent and to drive the issue nationally, there is a need for national data breach notification laws. it is part of the administration's cybersecurity package. i thank you for your leadership in helping to drive that issue. >> thank you, sir. commissioner brokaw, how does the fcc -- commissioner brill, how does the ftc work on these issues under current law at? i'm not finished. do we need to grant justice more authority than it already possesses? >> it is important for the department of justice to all the tools it needs to go after folks for acting into -- hacking into

databases. to the extent they need more tools, we support that. at the same time, is important to recognize that we will never be able to catch all the criminals, all the factors. what is critically important, and what your bill does for well, is it ensures that companies are going to shore up their data protection practices in the first instance so that they are not affected by hacks to the extent we can prevent that. that is why we appreciate your bill and what it does in incentivizing companies to have the strong programs in place -- for instance, through the civil penalty provision. >> commissioner brill, many companies are offering consumers the ability to use a web browsers that have to do-not- track mechanisms on them. however, when consumers use this feature, no one is honoring his request except for one company, which happens to be the

associated press. as of now, do you think the ftc can take actions against customers that do not honor the do-not-track request? >> actually, against companies that don't honor it? if a company promises to honor a consumer request, or network promises to honor our consumer request, then we can proceed fairly easily if it they breached the promise, through the enforcement jurisdiction. but if the company does not make a promise to adhere to a consumer's request, then our jurisdictional test is a little bit more difficult to meet. week fall under the on fairness jurisdiction, and there is a challenge in meeting the test under the scenarios you describe. >> thank you. senator kerry. >> thank you, senator rockefeller. i was struck by the opening

comments of senator toomey, ranking member of the subcommittee but it is important, if those questions are being raised, that they be addressed here. i was not planning to, but i want to use the time, because we have a problem in trying to get a general consensus and pass legislation if there is not a baseline level of understanding or acceptance of what we're dealing with. as senator toomey, who, in fairness, is at another hearing that he has to be in the banking committee, but i want to reflect the answers to this at night will have staff make sure he sees them -- he raised the question of whether or not this is a solution in search of our problem. in addition, he wondered what the harm is out there. i think it is important for the three of you to address that really directly to it is their farm, or isn't there are? -- address that relate directly.

is there harm or isn't there harm? i have been on this committee for a long time now, and i've fought diligently to protect the open architecture -- not to tax, and that neutrality, all the things necessary. -- net neutrality, all the things necessary. but i believe it is imperative to have some kind of standard by which all people are acting here. since a regulatory agency is particularly under fire on this, and then the communications and commerce department, if we harm, is thisheir fa a solution looking for a problem? >> i don't believe that privacy protection is a solution looking for a problem. right now, consumers are very aware of what is happening with

the information -- a very unaware of what is happening with their information. with respect to privacy notices, one example, and mobile technology, there have been studies that have shown apps that a lot of young people using, teenagers, young adults, many of them don't even have any kind of privacy policy whatsoever. to the extent that they to have privacy policy, it does have consumers click through literally over 100 screens in order to read the privacy policy. this is not reasonable to expect consumers to be able to do that in this modern technological age. we need to come up with some solution that fits the new technology and gives consumers information they need about how the information is being used, and giving choices about it. >> senator kerry, there absolutely is a problem. we have seen that in section 222 -- >> also, is there harm?

>> to give a concrete example, pretexting. a center came to us a few years ago and mentioned the problem of debt being insufficiently secure, -- being, --data being insufficiently secure, being taken out through false pretences and sold partially to the heart of consumers. this was one instance where we conducted rulemaking and were able to adopt rules to limit and end that practice. the national broadband plan looks beyond harm it individuals and harm to the economy. the key finding of the broadband consumers doif not understand the rules for protection built into the system, the adoption by consumers, the deployment by network operators of broadband technologies will be harmed. we saw this in our location- based service for yesterday --

4, yesterday, where consumers and industry agreed that there is any clear rules of the road so that there will be -- i need for clear rules of the roots of the there will be the ability to use these services for the benefit of consumers as well as industry. >> senator, let me say that our support for legislation comes from an extensive exchange with members of the public, members of the business community, who brought to come across the spectrum of the business community -- broadly, across the spectrum of the business community, as well as companies engaged in international trade, said to us that there was an ned for government action, privacy protection. it is unusual for a government agency to propose ledgers -- to

propose a regulation and have a wide spectrum of the business community, as well as consumers and others, endorse the proposal. but that is precisely what occurred when we put out the commerce green paper in december. it states the critical need for trust in this sector. let me tell you about a policy conference i participated in a few years ago, people from business, government, academia, across the political spectrum, given the exercise to identify keep risks and key drivers to the digital economy and development of broadband. working in four separate groups, looking at some areas, every single one of them came up with the same risks, some drivers, and every single one of them, independently framed it in the same way as trust.

if we look today at the wave of breaches that senator rockefeller alluded to, we are facing a higher risk a scenario in which trust is eroding. there are a lot of companies that have good practices and understand the importance of trust to their business models, their survival. there are malicious actors, outlier is will exploit the trust. >> thank you, senator. senator wicker. >> i will yield my time and hope we get to the second panel but with a series of votes demonstrate. >> we want, but we're coming back. we have no choice. >> i understand that, and i yield my time. ayotte.senator i

>> mr. kerry, i understand that the department of commerce has led this internet policy task force. could you also explain for us what the role of the department of commerce it would be? do you envision any enforcement role going forward? i am pretty clear as to what the ftc and fcc's is. >> sen. ayotte, no, we do not envision enforcement role. ftc is a critical policy maker and the enforcement authority over a broad area rather than specific regimes like communications and health records. we believe that that role should be strengthened. the role of the department of

commerce is as a convener, a policy leader for the executive branch. it is important that the executive branch has a voice in the process. that we be part of the debate as we are today. we've worked closely with the ftc in developing policy in this area. we will continue to do so. >> thank you. commissioner brill, i wanted to follow up -- i know you share a history -- >> exactly. >> so welcome. i wanted to ask about the enforcement peace, for example, the proposal for the do-not- track legislation. particularly when we get on areas on the kind of technology,

given that the changes we see in the technology field, a, how would you anticipate that the enforcement mechanism would work for something like a do- not-track registry, number one, and secondly, do you have any concerns that the do-not-track policy could take away some of the tools that consumers have? there have been some studies that show that this could harm online advertising. i wanted to get your thoughts on those two issues. >> sure. just be clear, it would not be a registry. but we're talking about is the technology-driven solution that would be generated through a browser companies or advertising networks themselves or advertisers themselves. in terms of enforcement, we do want to see a strong enforcement component, whether it becomes a mechanism or mechanism set up by industries itself, or whether it gets set up through legislation. the key component in the

enforcement mechanism is that those who receive messages from consumers about the choices that they are making will honor them. once we are short either through self-regulatory mechanism or legislation that the receipt of a header or cookie or one of the bech -- or whatever the technology is, when they was it that message, they will honor it, then we will have enforcement tool. that is a critical piece, and something we are looking to see happen in the industry-driven efforts that are under way. your other point about could take away benefits -- there has been discussion about whether an overwhelming number of consumers would participate in the drive away, the free content available on the web. my view is that actually, what will happen is that consumers will have much more trust in

what is happening on the internet if they understand that the choice is available to them to make a granular choices about what will happen to their information, how it will be used and collected. i don't expect we will see a whole lot of consumers often into the system, choosing to participate. but what it will do is it will, i think, just engender a huge amount of trust that will actually cost the industry to fight even more. -- to thrive even more. that is the critical component that i have not heard a lot of discussion about. >> just to be clear, in terms of issues -- for example, the do- not-track issue -- you envision that this could be implemented by industry as opposed to in congress. one of the issues in terms of the implementation is for us to come up with a solution that will work in applications.

it is a difficult task, to come up with those solutions. >> it can be done by industry. i have been 8 particularly vocal proponent of industry -- i have been at the particularly vocal proponent of industry participating in a self- regulatory matter. it has been slow. since we started making specific calls refor do-not-track, industry has moved and there has been significant progress on the part of industry. i am worried, though, that we might not be able to get all the way there because of the way the industry is structured. advertisers and ad networks are disparate. there are lots of them. until we get them to uniformly agree that they are going to participate and under consumer's

request, i am not sure that the self-regulatory mechanisms can work. i am worried about the way it is structured right now, the industry's structure, as to whether we can get away there. >> thank you very much. >> thank you very much. before i get to senator klobuchar, we have a major problem to work out here. there are five of votes that are starting at 11:05. i am trying to get it moved to 11:10, which means we could spend another 15 minutes here. we have another panel. we have senator klobuchar, senator pryor has just walked in. now, you can decide what you want to do. my recommendation would be that senator klobuchar, you ask your question, because you have been here awhile. senator pryor, whose subcommittee is all over this, is extremely important. but somebody has to sacrifice. what we need to do is let

senator klobuchar asked a question, at it responded to quickly, we call the other panelists, let them give their testimony, and then we submit questions in writing and then all scrambled to the senate floor to vote on heavens knows what. is that acceptable? it is not to you, i understand. is that acceptable? >> ready to go. and thank you very much, mr. chairman. this issue can create divides, but we all know that there is some line in the sand here. for me, when you order books on the kindle and they come up with recommendations of books similar to what you ordered, that is fine, actually helpful and not harmful. on the other hand, when you hear stories of companies that compile what they call "sucker lists" of consumers that may be susceptible to different kinds of fraud, that is a problem.

one of the things i wanted to ask you about, commissioner brill, is children's online privacy protection act, and unfair and deceptive conduct clause. it is not clear what regulations prohibit sharing of information on mobile phones. for example, if there is an application geared toward adults that has no user agreement or state privacy policy but shared vacation and other mobile information with the third-party advertiser, without taking in sent from the user, are there any enforcement mechanisms that the ftc can use? >> are you focused on children or mobile? >> no, this is on the mobile. >> if the application does not have our privacy policy, and it is correcting geolocation information, that is your question, is there something we can do about it?

we are, as i mentioned a few moments ago, in a world where we are no longer potentially dealing with deception, because they are not -- they have not said anything that they are not following through on, and rather, in the realm of unfairness. it depends on the circumstances, how they are using it. we might be able to make an argument that the way the location was used might be unfair. there also might be the argument that failing to have a disclosure to consumers about the way in which geolocation was used, if it harms the consumer, would also be unfair. but it is a tougher task. >> back to the children's issue. under the children's online privacy protection act, companies offering websites services intended for children under 14 are prohibited -- under 13 are prohibited from collecting information. i think is a good provision, but is there any practical way

for the ftc to distinguish between websites and online services? >> the children's online privacy protection act applies when you have a website that is either directed at kids or a web site knows is collecting information about kids. my kids, is kids under 13 -- by "kids," it is kids under 13. we look at the totality of circumstances. are there carton's being used? we look at issues in the mobile space. where is it being sold? what part of the app store is it in it, the part for kids or a different part? those other factors we look at to find out whether a website or mobile application is focused on children. in terms of whether or not a general audience website or application is collecting

information about children, if the website actually receives information from a teacher or parent, that there is a particular kid involved, they obviously now. we also do undercover work. we go on line, can we are 13 or 12 or 11 and the websites collect information. >> one last question, to mr. kerry. i have been working on this cloud of computing bill, as you know. one of the issues here is that we are trading partners internationally. we talked about this before in judiciary, but the need to establish a sub is a gritty and cross border data flows and -- birds. cybersecurity and cross flow -- across the boa -- cybersecurity and cross the border data flow standard. >> one of the key tenets of

what we are trying to do is establish global interoperability so that companies can trade, so that data can reside transparently in different locations in the file. we try to bring the global privacy standards closer together, an important part of our support of comprehensive legislation. >> thank you. we are now on this rather quickened pace. i thank all three of you very much. i want to introduce senator begich. i will explain this to you on the way to a vote -- [laughter] how you have been abused. the second panel, mr. scott taylor, vice president of hewlett-packard, stuart

pratt, presidency of consumer data industry association, ms. ioana rusu, consumers union, mr. tim schaaff, president of sony network entertainment international, and mr. thomas lenard, president and senior fellow of the technology20 minue of you to give testimony. that is a challenge, but you are exceptionally bright and well educated people, so you should be able to meet it. we will start with you, mr. pratt. the questions will be submitted from the committee members to all of you.

>> chairman rockefeller, members of the committee, thank you for the opportunity to appear before you today. my name is stuart pratt, -- >> we know that. get to the point. >> whether it is cut tourism efforts, locating a job that has been kidnapped, preventing a violent criminal from taking a job, or entering the soundness and safety of lending decisions, our software and analytical tools are critical to how we manage risk in the country to protect consumers from becoming victims from the island and white-collar crimes. but these kids some of the examples in the record and skip to the key points. i think this committee has a tremendous opportunity before it today. first of all, it can fill an important gap in current law by ensuring all u.s. businesses

which are not already subject to data security for personal information are in the future. cdia is on record for securing personal information and we are pleased to have this opportunity to affirm this position again today. second, congress can complete good work of 48 states which have enacted data bridge notification laws which make sure consumers are treated in the same way, no matter where they live. cdia is happy to support such an enactment, and where such information has been stolen or lost, consumers exposed to significant rest. new law regarding data secured and bridge the petition should be designed to align with current laws which are already robust and effective. members are financial institutions under the gramm which bliley act and are subject to put standards to standards. it isn't for the new law not interfere with or alter the sick

are rules and enforcement guidance that has evolved over a decade of the north and actions, examinations, and regulatory guidance. the same principles apply to the other sections of the economy. this new law should fill gaps insuring all of sensitive personal information is protected. similarly, where sectors of the economy are subject to a federal data bridge data petition standard rule of law, regulation, or rules, these sectors should be exempted from a new federal standard. in the past, bills have tried to eliminate the problems imposing duplicative duties. however, these exemptions often fall short by using in compliance rather than subject to construction. getting these right is important as the new duties for data bridge securitization enacted as we work for creating duplicative law. congress must avoid creating a 51st state law in acting duties

for securing personal information and data bridge notification and is only a success if it creates a true national standard for u.s. businesses. this is especially true for small businesses. finally, we would exclude the committee to exclude privacy issues which are not a big to data verification. cdia members live with a variety of laws that regulate their business today. we urge this committee and congress to not comment of privacy concepts such a provision would propose to regulate entities to find information brokers with the duty to secure personal information and provide notices to consumers rather has been a breach of their data. as discussed more completely in my written testimony, privacy can interfere with the development of data. let us move on a clean data security dative securitization

bridge which will notify consumers by establishing a national standard and insured u.s. businesses can comply, which is their high school. >> thank you. ms. rusu. >> thank you, chairman, members of the committee. i think we can all agree that technological advances over the past decade have created incredible, fantastic tools for consumers to use. however, privacy is still important and relevant today. even in today's age of extensive sharing, if you would agree that every piece of liberation about them should be available to everyone for any conceivable purpose. in fact, in a may 2011 consumer reports poll, 82% of respondents were concerned customers could be passing on their personal information to third parties without their permission. such consumer distress is a barrier to the adoption of new technologies, which in turn, arms commerce and discourages innovation. consumers union supports the data security bill that are the

focus of today's hearing. the commercial promise to bill of rights put in place standard that would give consumers more control over their personal information. the bills from work is rooted in fair practice principles such a timely notice about data collection, accuracy requirements, and the principle of privacy by design. we support the bills focus on sensitive information, including the commission about health and religious affiliation. company's handling such information must first get a consumer's consent. this would protect a young woman suffering from bulimia, for example, from wearing that joining it an eating disorder support for, her personal information will be sent to a marketer for with loss. while the legislation leaves out an important foundation for better privacy practices, we

also look for to strengthening the measures so it provides consumers with even more transparency. we support provided consumers with an opt out, not only for unauthorized use of information, but also for its collection. we would also like to see more authority granted to the ftc to update the definitions in the bill. in addition, we are concerned the language of the provision could force out state laws that seek to percent -- protect consumers beyond the intended scope of this bill. consumers union also supports the do not track on my act as an important part of online privacy policy. public support for a do not track option is particularly high at this moment. according to the same poll i mentioned before, 81% of respondents agreed they should be able to permanently opt out of internet tracking. some industry actors have already developed to not track tools directly into browsers, but unfortunately, marketers can

and to ignore their choices. this is why this is a much bigger component. consumers union believes the do not track online at and the commercial privacy bill of rights act, taken together, would give consumers strong privacy protection and meaningful choice in the way their information is collected. current protecting consumer privacy also means supporting data from authorized creases. this would protect consumers by requiring strong data security practices as well as notification in the event of a breach. we are particularly pleased with the provision that instruct information brokers to maximize the accuracy and accessibility of their records, and to provide consumers with a process to dispute information. the consumers union would prefer that consumers are notified in any event of a breach, similar to the notice of breech lock for

the in place. however, we urge this committee not to further weaken notification requirements. thank you for your time. i will be happy to answer any questions you have. >> thank you. mr. schaaff. incidentally, i want to apologize to everyone for this travesty of scheduling. it is not fair to you, for us, for people lined up to get into this hearing. we are all being shortchanged. we usually make one vote a day. now we are going to have pipe and it is members of this committee. my name is tim schaaff. i am president of sony network entertainment. we employ approximately 700 people in five offices around the state. i am chiefly responsible for the business and technical aspects of sony's place dish network and qriocity service

that allows consumers to access movies, television shows and the games. millions of our customers were recently the victim of an increasingly common crime of summer attack. regarding the attack on sony, initially anonymous, the underground group associated with last year's wikileaks attacked called for a massive denial of service attacks against numerous sony sites in retaliation for sony bringing an action in federal court to protect its intellectual property. in that time, hackers infiltrated the petition network and online entertainment system. so network entertainment and sony online entertainment have always made concerted and contended -- a substantial efforts to improve the data system to utilize. rehire respected and experienced cybersecurity firms to enhance our defenses against

mile of service of attacks. unfortunately, no entity can force -- can deter every threat. we did tell the time line from the first discovered the brief -- breach. i will not go over the details today. over this time, we've got a keen sense of responsibility to our consumers. we shut down the networks to prevent another rights activity. we notified our customers promptly when we have specific, accurate, and useful information. we thank our customers for their patience and loyalty and addressed their concerns arising from this bridge with free identity protection and insurance programs for u.s. and other customers, as well as a free subscription to games and other services, and we worked to restore our network with stronger security to protect our consumers interest. let me address one of the specific issues you are looking at today, notices when data

breaches occur. law and common sense call for companies to investigate breaches, gather the facts, and reported a loss as publicly. if you reverse that order and issue they can speculate statements before specific information, he said false alarms. we therefore support balanced didn't reach legislation. by working together to enact meaningful cybersecurity it a decision, we can eliminate the threat posed to all by simultaneously moving on data bridge policies and legislation, we can ensure consumers are powered with the necessary tools to protect themselves from these cyber criminals. >> thank you. mr. lagarde. >> thank you, members of the committee. i appreciate the opportunity to testify. i would like to stress two points. first is the importance of having reliable data and

analysis for policy making in this area. second, privacy and security are different things and should be done with sec produce separately. the privacy debate has engendered strong opinions but little analysis. in order to make informed decisions, policy makers need facts about the practices prevalent in the marketplace. to my knowledge, the most recent systematic data on website promise to practices are from 2001. in addition to basic data, the benefits and cost policy proposals need to be evaluated to ensure they improve consumer welfare. for example, some proposals are likely to reduce the value of the internet as an advertising medium, both for firms and consumers, and will reduce the amount of content supported for all users. the principal benefit is to make these trade-offs explicit. some proposals also may not produce the intended results. for example, the idea for a do

not track mechanism comes from the telemarketing do not call list, which has been popular, but the effect could be different. do not call produces a unwanted solicitations. do not track could have the opposite of that with consumers receiving a greater number of ads that are less well targeted to their interests. >> could you retreat -- repeat that sentence? >> to attracted them to opposite affect with consumers receiving a greater number of ads that are less well targeted to their interests. security prisons different issues. people might be comfortable with the intended uses of the reformation the word about unintended uses and what their information to be secured. identity that is their primary security concern, although recent data show total lead of the fraud in 2010 was at its lowest level in eight years. regulating the collection, use

of information does little for firms to determine this an excessive control of the commission may increase the risk of a debt of the theft by making it more difficult for sellers to determine the particular as of the potential buyer. there are two general spots is to data bridges in fraud. improve security to reduce the likelihood that such events will happen, and notification of the victims in the event that they happen. both are addressed in current legislative proposals. data breeches and then in the frauds are extremely costly to the firms involved which gives companies a strong incentive to spend money on data security. it is, therefore, unclear government action in this area is warranted. incentives for notification maybe [unintelligible] would make people better off is therefore an unfair question beard wanted to be concerned about is that if consumers receive more notices, they may

become afraid to do business online. this would be an unfortunate response because on-line commerce is safer than offline commerce. perhaps the most of the the benefit of federal data security and a breach of notifications would be pre- empting the patchwork of state laws. for that reason, enacting a carefully crafted federal bill could protect consumers. the briars and security and data security debates are extremely important to the future of the digital of economy in its division in the united states, but unfortunately, they are taking place largely in an empirical of vacuum. without better data analysis, there is no way of knowing whether proposals currently under consideration will improve consumer welfare or not. thank you. >> thank you, mr. taylor. >> members of the committee, h.b. commands the committee on its approach to balancing

consumer privacy interest worth of business reality of an internet-based economy. i would like to talk about technology trust and privacy and how they converged to create new opportunities but also a set of challenges. we are living in a time when reliance on technology is ever increasing. our business and personal lives are starting to emerge. consumers are more dependent on mobile devices and they have a growing expectation that companies are going to be accountable steward that respect and protect information that we protect, use, and maintain. hp believes our ability to succeed in the marketplace depends on earning and keeping our customer's trust. hp takes active steps to implement organizational capabilities throughout the country. we believe companies need to do more, and when asked or requested, to be able to demonstrate their capacity to of all the obligations and commitments they make to that end, we have built internal programs that houses our privacy

twill which integrates all of our commitments into a tool that helps to guide our employees. this tool looks at privacy requirements, risks, and other considerations. that helps ensure we are able to hold every employee is accountable. the concept is known as privacy by design, and is one of the fundamental elements in the legislation put forward. hp is a strong proponent of the omnibus legislation. we believe it is time for the u.s. to establish a comfortable, flexible legal framework that works to protect consumer privacy. we believe consumers are expecting it, businesses need it, and the economy will be better for it. while we possibly been effective corporate self regulation, one of the innovative programs as outlined in the bill, the patchwork of state laws and statutes in existence today confuses customers about their production

in any given context and also forces companies to contend with differing and often conflicting regulations. this is why we support the initiatives, which would set a national pre-emptive standard. we believe the adoption of new innovation depends on companies acting in an accountable and responsible manner that anticipates consumer expectations. no one is served by a lack of confidence in the security and privacy of personal information. at hp, we believe consumer transparency comes from trust. we continue to urge policymakers to examine ways to establish baseline federal legislation that will clearly articulate expectations for all organizations. as more and more services are delivered through mobile

devices, such as applications, it will become even more important we have a consistent baseline standard that will strengthen that chain of accountability. and unify the beverage and regulations currently in existence. simply stated, hp recognizes consumer trust is a volatile commodity that must be upheld through programs and leadership. this can establish a unified baseline standard for organizational accountability as well as improved consumer protection. we believe it is a win for consumers and for the industry as a whole. >> thank you. that was clear and well presented. i want to apologize once again. this has not been the order of what has happened. you have a committee hearing on a subject as important as this.

many of you have come far distances, and you give your testimony. let me give you some solace. getting written questions from members, and then you having the chance to answer them at length, or not, at your choice, sometimes works better than us asking questions and then the five-minute rule of messing everything up. so take some hope in that. otherwise, accept my apologies. please. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> in the committee gabbling out. they have a series of votes. here on c-span, in just a few minutes, we are going to take you live to the east room of the white house. president obama is said to hold a news conference. that is scheduled to get underway at 11:30 eastern. we will have the news conference when it gets under way. we will also be live at 12:30 eastern as president obama's counter-terrorism director john brennan talks about the campaign against al qaeda. the former cia director john mclaughlin will moderate a discussion.

that will follow the presidential news conference. also, more coverage from capitol hill as a senate homeland security committee holds a hearing on diplomatic security. a recent report says diplomatic security service is not prepared for terrorist threats. that hearing is at 2:30 eastern, here on c-span. >> again, the president is due out in a few minutes. he will talk about the economy and a few questions about afghanistan, particularly in response to the attack at the

intracochlear -- intercontinental hotel in kabul. we spoke to a journalist this morning on "washington journal" to get an update. .ere's a front-page story gunmen stormed a luxury hotel in afghanistan. what happened? guest: it looks like it was nine insurgents from the taliban, several of them wearing suicide bus, who attacked the hotel -- suicide veests. roof.of them or on the grow they were indiscriminately killing hotel desks. they only were able to find one foreigner to appeal. it took the police over five force to subdue them. host: who has taken responsibility for the attack?

guest: the taliban spokesman has taken response ability. but the attack caras' a hallmarks of something carried out by the all connie network -- al qani network. host: why is this so tell significant? is the biggest old hotel in kabul. it was the only place foreigners could stay. there are newer hotels now. it is owned by the government and is extremely heavily guarded. it is on an ill -- on a hill. it is a place that appears to be in very well secured. host: how were they able to get in and?

guest: they are still sorting out the details. the accounts we're getting so far, almost everybody is commented on what a poor job afghan police did. in some cases and really several cases they have fled when the first attack broke out. there's always been a problem with adequate training for the afghan police. they are very poorly paid. although and underpay has improved very much in the last year or two, they still earned on the order of $200 per month. they did not do a very credible job. host: what are the implications of that, given the debate in washington over withdrawing troops and handing over security to afghan soldiers? guest: today was the beginning of a two-day conference on

transitioning of security -- of control of security from nato to the afghan government. they are beginning with seven places around the country which will be completely under afghan control. one of those places is kabul, the capital. not only did they equip themselves very poorly in this test, which will clearly timed by the taliban to embarrass them again beginning of transition, but in the end they had to call on nato to help kill last of the terrorists on the roof. host: the two-day conference discussing this very fact, what did you hear in response from the pope karzai government -- the karzai government? guest: he says this will not affect the transition.

they are saying that their forces handled the crisis very quickly and effectively. quickly and effectively. the standoff lasting 5.5 hours is nothing anybody can brag about. who will you be hearing from and looking for in the always going forward? always going forward? guest: we will talk to witnesses and talk to people involved in the transition process to see if there's any feeling that this is something that maybe should be delayed. a lot of people are saying that, although the officials involved in this are very committed to it. that's on the afghan government side and on the nato side. host: who says this should be delayed? guest: many prominent individuals. people like provincial council members and members of parliament and so on.

host: rod >> we are back live in the east room of the white house for a news conference from president obama. politico says that this is his first full-fledged news conference in 15 weeks. we will stay here with live coverage. after the comments, we will open up the phone lines for your thoughts and comments. following the conference, we will take you over to his counterterrorism and homeland security adviser. john brennan talking about terrorism and al qaeda. the president later today and vice-president will be meeting with senate democratic

leadership at the white house this afternoon. he and vice-president biden will have that meeting as debt talks move to the white house this week. of course, the president meeting with senator reid and senator mcconnell.

>> we are hearing some of the comments from the network correspondents. president obama should begin his comments momentarily. zachary goldfarb writing, the news conference coming as the deadline comes for federal borrowing nears and negotiation between democrats and congressional republicans on writing in the debt have stalled. on wednesday, the president may push for new stimulus measures, including extending or expanding the payroll tax cut, in a final deal to reduce the debt. vice-president biden will meet with them as they meet with senate democratic leadership.

>> this will be president obama's first full-fledged news conference since march. after the news conference, we will open up the phone lines for your comments as well. then we will go to john brennan, who will be talking about the campaign against al qaeda. certainly, a lot of talk about the debt, debt ceiling being reached on august 2. alexander bolton of "the hill"

saying that said democrats say that the president is willing to use his bully pulpit. most do not understand issue and will face a catastrophe if the debt ceiling is not raised. while democratic lawmakers share the blame, they say, obama has not used his media power aggressively to inform consumers about the complex issue. again, president obama holding a news conference today. later that day -- later today, he and vice-president biden are set to meet with senate democratic leaders.

the group priories usa founded by two former top obama aides announced today it would run ads on cable television for two weeks in colorado, florida,

north carolina, and virginia. just a reminder, on c-span.org, videos available of michelle bachmann. >> good morning, everybody. have a seat, please. i want to say a few words about the economy before i take your questions. there are a lot of folks out there who are still struggling with the effects of the recession many people are still looking for work or looking for a job that pays more. families are wondering how they deal with the broken refrigerator or a busted transmission, or how they are going to finance their kids' college education, and they are also worried about the possibility of layoffs. the struggles of middle-class families were a big problem before the recession hit in

2007. they were not created overnight, and the truth is, our economic challenges are not going to be solved overnight. but there are more steps that we can take right now that would help businesses create jobs, here in america. today, our decision is tried to take those steps, so we are reviewing government regulations so we can fix any rules in place that are an unnecessary burden on business. we are working with the private sector to get small businesses and startups the financing they need to grow and expand. and because of the partnership we have watched with businesses and community colleges, 500,000 workers will be able to receive the right skills and training for manufacturing jobs in companies across america. jobs that companies are looking to fill. in addition to the steps that my administration can take on our own, there are also things that congress can do right now that will help create good jobs.

right now, congress can send me a bill that would make it easier for an entrepreneur is to pass a new product or idea because we cannot give innovators in other countries a big leg up when it comes to opening new businesses and creating new jobs. that is something congress can do right now. right now, congress can send me a bill that puts construction workers back on the job of rebuilding roads and bridges. not by having the government pick a project, but prep -- by providing grants to local states based on merit. that is pending in congress right now. right now, congress can advance a set of trade agreements that would allow american businesses to sell more of their goods and services to countries in asia and south america. agreements that would support tens of thousands of american jobs while helping those adversely affected by trade. that is pending before congress right now and right now we can

give middle-class families the security of knowing the tax cut i signed in december will be there for one more year. so there are a number of steps that my administration is taking but there are also a number of steps that congress could be taken right now on items that historically have had bipartisan support and that would help put more americans back to work. many of these ideas have been tied up in congress for some time, but as i said, all of them enjoy bipartisan support, and all could help grow the economy. so i urge congress to act on these ideas now. of course, one of the most important and urgent thing we can do for the economy is something that both parties are working on right now, and that is reducing our nation's deficit. the vice-president has been leading negotiations with democrats and republicans on this issue and they have made real progress in narrowing down the differences.

as of last week, both parties have identified more than $1 trillion worth of spending cuts already. but everyone also knows they will need to do more to close the deficit. we cannot get to the $4 trillion in savings we need by just cutting the call% of the budget that pays for things like medical research and education funding and food inspectors, and the weather service. and we cannot justify it by making seniors pay more for medicare. so we are going to need to look at the whole budget, as i said several months ago, and we have to eliminate waste wherever we find it, and make tough decisions about where the priorities. that means trimming the defense budget while meeting our security needs. it means we will have to tackle entitlements as long as we keep faith with seniors and children with disabilities by maintaining the fundamental to carry that medicare and medicaid provide. and yes, we are going to have to

tackle spending in the tax code. there has been a lot of discussion about revenues and raising taxes in recent weeks. i want to be clear about what we are proposing here. i spent the last two years cutting taxes for more ordinaire report ordinary americans. i want to extend those middle- class tax cuts. the tax cuts i am proposing we get rid of our tax breaks for millionaires and billionaires. tax breaks for oil companies and hedge fund managers, and corporate jet owners. it would be nice if we could keep every tax break there is, but we have to make some tough choices if we want to reduce our deficit. if we choose to keep those tax breaks for millionaires and billionaires, choose to keep a tax break for corporate jet owners, oil and gas companies making billions of dollars, then

that means we have to cut some kids off from getting a college scholarship. that means we have to stop funding certain grants for medical research. that means that food safety may be compromised. that means medicare may have to bear a greater part of the burden. those are the choices we have to make. the bottom line is this. it any agreement to reduce our deficit will require tough decisions and balanced solutions. before we ask our seniors to pay more for health care, before we cut our our children dedication, before we sacrifice our commitments to the research and innovation that will create more jobs in the economy, it is only fair to ask an oil company or a corporate jet owner that has done so well, to give up that tax break that no one else enjoys. i do not think that is a real radical. i think the majority of

americans agree with that. so the good news is, because of the work that has been done, i think we can actually bridge our differences. i think there is a conceptual framework that would allow us to make progress on our debt and deficit, and do so in a way that does not hurt the economy right now. and it is not often that washington sees both parties agree on the scale and urgency of the challenge at hand. nobody wants to put the credit worthiness of the united states in jeopardy. nobody wants to see the united states people -- default. we have to seize this moment soon. the vice president and i will continue these negotiations with leaders of both parties in congress for as long as it takes, and we will reach a deal that will require our government to live within its means and

give our businesses confidence and get this economy moving. so with that, i will take your questions. i have my list here. starting off with ben, associated press. >> thank you, mr. president. i would like to follow up on the comments you just made as he tried to reach a deal on the debt limit and cut the deficit. you keep saying there needs to be a balanced approach of spending cuts and taxes, but republicans say flatly -- >> they do not want a balanced approach. >> the house speaker not only does the support that, but they say it will not pass the house. my question is, will you insist ultimately that a deal has to include those tax increases that you just laid out? is that an absolute red line for you? if it is, can you explain how that can get through the congress?

>> i think, what we have seen from negotiations in washington, a lot of people say a lot of things to satisfy their base or get on cable news, but hopefully, leaders, at a certain point, rise to the occasion and do the right thing for the american people. that is what i expect to happen this time. call me naive. my expectation is leaders are going to lead. i just want to be clear about what is at stake here. the republicans say they want to reduce the deficit. every single observer who is not an elected official, who is not a politician, says we cannot reduce our deficit in the scale and scope we need to, without having a balanced approach that

looks at everything. democrats have to accept some painful spending cuts that hurt some of our constituencies and we may not like it, and we have shown a willingness to do that for the greater good, to say, there are some good programs that are nice to have but we cannot afford them right now. i, as commander in chief, have to have difficult conversation with the pentagon saying, there is fat here that we have to trim. bob gates has already done a good job with cuts, but we are going to do more. i promise you, the purpose of the pentagon would be not to cut anyone. so we are going to have to look at entitlements. that is always difficult politically, but i have been willing to say, we need to see

where we can reduce the cost of health care spending and medicare and medicaid in the out years, not by shifting costs onto seniors, as some have proposed, but by actually reducing those costs. but even if we do it in a smart way, it is smart politics, but it is tough to do. so the question is, if everyone is willing to take on their sacred cows and do tough things in order to achieve the goal of real deficit reduction, and then i think it would be hard for the republicans to stand there and say, tax breaks for corporate jets is sufficiently important that we are not willing to come to the table to get a deal done. or we are so concerned about protecting oil and gas subsidies for oil companies that are making money hand over fist, that is the reason we are not

going to come to a deal. i do not think that is a sustainable position. the truth of the matter is, if you talk to republicans who are not currently in office, like alan simpson, who cochaired by a bipartisan commission, he does not think that is a sustainable position. pete domenici says he does not think that is a sustainable position. you cannot reduce the deficit to levels it needs to be reduced without having some revenue in the mix and the revenue we are talking about is not coming out of the pockets of middle-class families that are struggling. it is coming out of folks who are doing extraordinarily well and are enjoying the lowest tax rates since before i was born. if you are a wealthy ceo or

hedge fund manager right now in america right now, your taxes are lower than they have ever been. lower than they have been since the 1950's, and you can afford it. you will still be able to ride on your corporate jet. you just have to pay a little more. i just want to publicize what i said earlier. if we do not have revenues, that means there are a bunch of kids out there that are not getting college scholarships. if we do not have those revenues, then the kinds of cuts that would be required by compromise the national weather service. it means we would not be funding critical medical research. it means food inspection might be compromised. i have said to some of the

republican leaders, talk to your republican constituents and ask them, are they willing to sopromise their kid's safety that some corporate jet owner continues to get a tax break? i am pretty sure what the answer would be. so we are going to keep on having these conversations and my belief is that the republican leadership in congress will, hopefully sooner rather than later, come to that conclusion that they need to make the right decisions for the country, that everybody else has been willing to move off their position, they need to do the same. my expectation is they will do the responsible thing. chuck todd. >> thank you.

there have been questions about the constitutional interpretations of what if you decisions you have made. so i was simply ask, do you believe the war powers act is constitutional? do you believe the debt limit is constitutional, the idea that congress can do this? and that marriage is a civil right. >> well, that was a hodgepodge. we should assign you to the supreme court. i am not a supreme court justice, so i am not going to put my constitutional law professor hat on here. let me focus on the issue of libya i want to talk about the substance of libya. there has been all kinds of noise about process and congressional consultation and so forth. let's talk about what has happened, really. muammar gaddafi, prior to osama

bin laden, was responsible for more american deaths and just about anyone on the planet, was threatening to massacre his people, and as part of an international coalition, under a u.n. mandate that is almost unprecedented, we went in and took out air defense systems so that an international coalition could provide a no-fly zone, provide humanitarian protection to the people on the ground. i spoke to the american people about what we would do. i said there would be no troops on the ground. i said we would not be carrying the lion's share of this operation, but as members of nato, we would be supportive of it. it is in our national security interests and because it is the right thing to do.

we have done exactly what i said we would do. we have not put any boots on the grant, and our allies, who we have historically complain are not willing to carry enough of the loan when it comes to nato operations, helped carry a bigger load when it comes to these operations, and as a consequence, we protected thousands in libya, we have not seen a single u.s. casualty. there is no risk of additional escalation. this operation is limited in time and in scope. so i said to the american people, here is our narrow mission, we have carried out that narrow mission in exemplary fashion. throughout this process, we consulted with congress. we have had 10 hearings on it. we have sent reams of information on what the

operations are. i have had all members of congress over to talk about it. so, a lot of this fuss is politics. and if you look, substantively, at what we have done, we have done exactly what we said we would do under the un mandate, and we have protected thousands of the process, and as a consequence, a guy who was a state sponsor terrorist by america, is pinned down, and the noose is tightening around him. when you look at the history of the war powers resolution, it came up after the vietnam war, where we had 1 million soldiers there, tens of thousands of lives lost, hundreds of billions of dollars spent, and congress

said, we do not want something like that happening again. if you are going to start getting us into those kinds of commitments, you have to consult congress before hand. i think such conversation is entirely appropriate, but do i think our actions, in any way, violate the war powers resolution? the answer is no. so i do not even have to get to the constitutional question. there may be a time -- there may be a time in which there was a serious question as to whether or not war powers resolution act was constitutional. we have engaged in a limited operation to help all lot of people against one of the worst tyrants in the world. somebody who nobody should want to of -- defend.

we should be sending a unified message to this guy to step down and give his citizens a chance to live without fear. suddenly, this becomes the cause celebre for folks in congress? come on. what are the other two parts? >> [inaudible] >> let me start by saying this administration, under my direction, has consistently said, we cannot discriminate, as a country, on the basis of sexual orientation. we have done more in the two and a half years that i have been

here than the previous 43 presidents to uphold that principle. whether it is ending do not ask, do not tell, making sure gay and lesbian house -- are as can visit each other in the hospital, making sure federal benefits can be provided to same-sex couples. across the board. hate crimes. we have made sure that that is a central principle of this administration because i think what we have also done is we have said the defense of marriage act is unconstitutional. we have said we cannot defend, the federal government fokine -- poking its nose into what states are doing, putting its thumb on the scale against same-sex couples. what i have seen happen over the

last several years and what happened in new york last week i think was a good thing because what you saw was the people of new york having a debate, talking through these issues. it was contentious, emotional, but ultimately, they made a decision to recognize civil marriages. i think that is exactly how things should work. i think it is important for us to work through these issues because each community is going to be different in each state is going to be different. in the meantime, we filed briefs before the supreme court that say we think any discrimination against gays, lesbians, transgendered is -- we think it

is unconstitutional and what the states are doing, the courts are doing in the action caretaking administratively are how the process should work. >> [inaudible] >> a think what you are seeing is a profound recognition on the part of the american people beg gays and lesbians and chance gendered persons are brothers and sisters and cousins, friends, co-workers and that they have got to be treated like every other american. i think that principle will win out. it is not going to be perfectly smooth. i have discovered since i have been in this office that the president cannot dictate

precisely how this process moves. in a think we're moving direction of greater equality and i think that is a good thing. >> thank you, mr. president. are you concerned at the current debate over debt and deficits is preventing you from taking the kind of decisive and more balanced action needed to create jobs in this country, which is the number one concern for americans? also, one of the impediments to job growth is the business community regularly cites a regulatory environment. do you think the crowd -- do you think the complaint against boeing is an example of the kind of regulation that chills the job growth and you yourself have called just plain dumb?

>> think it is important to understand that deficit reduction, debt reduction should be part of an overall package for job growth over the long term. it is not the only part of it, but it is an important part of it. as i mentioned at the top, it is important to let their rebuilding transportation infrastructure. that could put people back to work right now. and it would get done work that america needs to get done. we used to have the best roads, bridges and airports. we don't anymore. that's not good for long-term competitiveness. we could put people work back -- we could put people back to work right now and make sure we are in a position to win the future as well.

i think it is important to look at tax code and figure out are there ways we can simplify it and build on the work we already done, for example, saying to small businesses that you don't have to pay capital gains when you are in startup mode because we want you to get out there and started business. that is important. making sure sba is helping to get funding to small businesses. i think these trade deals will be important. right now, south korea has a better relationship to our trading deal that we do. part of the reason i want to pass this is to see a lot of korean cars in the united states but you don't see american cars in korea. let's rebalance the trading relationship. the range of things we could be doing right now -- deficit and

debt reduction should be seen as part of the overall process. if businesses feel confident we have our act together in washington, not only is the government not going to default, but we are preparing for a future in which the population is getting older and we will have more expenses on the medicare side -- of the medicare cited social security that businesses will feel more comfortable about investing in the united states of america. i do not think there contradictory. in my job and congress as well, they have to be able to walk and chew gum at the same time. we can focus on jobs at the same time we're focusing on the debt and deficit reduction. one of the things my administration has talked about is is there in fact a tangle of

regulations out there that are preventing businesses from growing and expanding as quickly as they should? keep in mind that the business community is always complaining about regulations. when unemployment is at 3% and they're making record profits, they will still complain about regulations because they want to be able to do whatever they think is going to maximize their profits. i have an obligation to make sure we are upholding smart regulations that protect our air, water, food -- if your plight -- if you are flying on a plane, you want to make sure there are regulations that ensure safety in air travel. there are some corps regulations we have to maintain. note administration has done this before -- i have said to each agency, don't just look at future regulations we are proposing collets the backcourts of look regulations on the books

and that they don't make sense, let's get rid of them. we are in the process of doing that and have already identified changes that could potentially save billions of dollars for companies over the next several years. you asked specifically about one decision made by the national labor relations board. this relates to boeing. there was a finding that boeing had not followed the law in making a decision to move a plant. it is an independent agency. it is going before a judge. i don't want to get into the details of the case, i don't know all the facts. that will be up to a judge to decide. what i do know is this -- as a general proposition, companies need to have the freedom to relocate, have to follow the

law, but that is part of our system. if they choose to relocate here in the united states, that is a good thing. what i think defies common sense would be a notion that we would be shutting down a plant or laying off workers because labor and management cannot come to a sensible agreement. my hope is even as this thing is working its way through, everybody steps back for second and says if jobs are being created in the united states, let's break -- let's make sure we are encouraging that. we cannot afford to have labour and management fighting all the time when we're competing against germany, china and other countries that want to sell goods dollar on the world. the airplane industry is an area where we still have a huge vantage. i want to make sure we keep it.

>> thank you very much, mr. president. yesterday, the admiral testified before congress he was concerned there was not a clear procedure to be followed with a terrorist were captured alive abroad. the industry as being clear it does not want to continue to said suspected terrorists to guantanamo. what message do you have for american men and women in uniform undertaking missions like the very risky one to capture and kill osama bin laden about what they should do in the event they capture some alive? doesn't lack of these clear procedures rated risks that forces might be more inclined to kill suspected terrorist in the field rather than capturing them alive, depriving the u.s. of the intelligence they could provide?

>> my top priority in each of these cases is to make sure we are apprehending those who would attack the night states. we're getting all the intelligence we can out of these individuals which -- in a way consistent with due process of the law. that we try them and prosecute them anyway consistent with the rule of law. frankly, there are going to be different dispositions depending on the situation. there are going to be sometimes one military commission may be appropriate. there may be times when article 3 courts are appropriate in terms of prosecution. we do have a process to work through all the agencies, the department's defense, the department justice, the fbi, anybody else who might be

involved in these kinds of operations, to think through on a case by case basis how a particular individual should be dealt with. when it comes to our men and women in uniform and might be carrying out these missions, the instructions are not going to be based on whether or not the lawyers can sort out how we detain them or how we prosecute them. their mission is to make sure they apprehend the individual and do so safely with minimum risk to american lives. that's always going to be the priority. that message is sent consistently to our men and women in uniform any time they start carrying out one of these missions. it is important to understand and the american people need to be assured that any time we initiate a mission like this,

our top priorities are making sure this person is not able to carry out attacks against the united states and we are able to obtain actionable intelligence from those individuals. that mitigates against this danger you are suggesting that our main goal is going to be to kill these individuals as opposed to potentially capturing them. >> thank you, mr. president. last week, when you get your afghanistan drawdown speech, the word a victory was not in your speech. i'm wondering if you can't find for the hundred thousand troops you have in harm's way in afghanistan victory in the war, and for their families as well. >> i did not use of victory in my west point speech either. what i said was we can be

successful in our mission, which is narrowly drawn, and that is to make sure al qaeda cannot attack the right of states of america, our allies or our interests overseas and to make sure we have afghan government and the afghan people can provide for their own security. we are being successful in those missions. the reason we are in a position to drawdown 10,000 troops this year and a total of 33,000 troops by the end of next summer is because of the extraordinary work of our men and women in uniform. they have been able to severely cripple al qaeda's capacities. osama bin laden obviously that the most attention, but even before that, we had decimated the middle ranks and some of the upper ranks of al qaeda. they're having a great deal of difficulty operating,

communicating, and financing themselves. we're going to keep the pressure on. that is in part due to that men and women on the ground in afghanistan. we have been able to ramp up the training of afghan forces. we have an additional 100,000 afghan troops, both army and police, that have been trained as a consequence of this search. that's going to give the afghans more capacity to defend themselves because it's in our national role -- in our national interest to make sure you don't have a collapse of afghanistan and a way where extremist all of could flub as of again and al qaeda would be in a position to rebuild itself. what i laid out was a plan late which we're going to be drawing down our troops from afghanistan after 10 very long years an enormous sacrifice by our troops. but we will draw them down in a

responsible way that will allow afghanistan to defend itself and will give us the operational capacity to continue to put pressure on al qaeda until that network is entirely defeated. >> [inaudible] >> keep in mind that the drawdown has not begun. we understood afghanistan is a dangerous place and the taliban is still active. there are going to be events like this on occasion. the question is, in terms of overall trends, as afghan capacity increasing? kabul has been largely policed

by afghan forces for some time. they have done a reasonably good job. the city is much safer that was and afghan forces are much more capable than they were. that does not mean they are not going to be events like this taking place. that will probably go on for some time. our work is not done. as i said in my speech, the tide of war is receding. we have shifted to a transition phase. much like we of seen in iraq or we have drawn out our troops, the remainder of our troops will be coming out by the end of this year. but iraq has been able to maintain a democratic government and tamp down violence. we think a similar approach makes sense in afghanistan. even in iraq, you see the

occasional attack. these are countries digging themselves out a lot of war and conflict. they are dangerous places. they're not going to be perfectly safe, even if we were there. but we can improve the chances for the afghan people to defend themselves. >> you are aware senators kerry and mccain have legislation on the floor as far as libya. he said this would be limited in time and scope. are the american people prepared to continue for a further year and isn't -- and is there any other definition of success rather than muammar gaddafi being removed from power? >> a slight correction -- what i told the american people was the

initial phase of where the americans were leading would take days or perhaps weeks. that's exactly what happened. after a little less than two weeks, we had transitioned where nato had taken full control of the operation. promise made, promises kept. second, when you have the former republican nominee for president, john mccain, and the former nominee for president of the democratic side, john kerry coming together to support what we're doing in libya, that should tell you this is important and i appreciate their efforts. third caller comes to our definition of success, the un mandate has said we're there to make sure you do not see a

massacre directed against libyan civilians by the libyan regime. the libyan regime's capacity has been greatly reduced as a consequence of our operation. that has already been successful. well we have seen in the east and west is opposition forces have been able to mobilize and get organized and people are starting to see the possibility of a more peaceful future on the horizon. what is also true is as long as muammar gaddafi is presenting himself as the head of the libyan government and as long as he still controls large numbers of troops, the libyan people are going to be in danger of counter offenses and retribution. there is no doubt muammar gaddafi stepping down from power is, from the international

community's perspective, going to be the primary way we can ensure the primary mission of libya's people being protected is accomplished. i just want to point out -- the international criminal court identified muammar gaddafi as having violated international law, having committed war crimes. we of seen reports of troops in beijing in were black, including potentially using rape as a weapon of war. when you have somebody like that in charge of large number of troops, it would be hard for us to feel confident the libyan people are going to be protected unless he steps down. what that means -- whether there is the possibility of libyans are arriving at some sort of political settlement, i think that is something the libyan people are going to have to make

a decision about. the international community is there in service of the broader goal of a peaceful libya. >> which you have to have him involved for a success on the american perspective? >> i would accept him stepping down so he is not directing armed forces against the libyan people. he needs to step down. he needs to go. >> thank you, mr. president. in these talks, which like to see tax breaks aimed at stimulating the economy even though that would add to the deficit itself? i would like to follow up on letter answers about sejm's -- about same-sex marriage. you say is a positive step that states like new york is moving toward it. does that mean you personally

support same-sex marriage? >> i'm not going to make news on that today. good try. with respect to the deficit and debt talks and where we need to go, i do think it is important since we are looking at how do we reduce the debt and deficit in a 10-year window as well as beyond a 10-year window. to understand one of the most important things we can do is to grow the economy. if there are steps that in the short term may reduce the amount of cash in the treasury, but in the long term mean we are growing at 3.5% instead of 2.5%, those ideas are worth exploring. that is what we did in december during a lame-duck session. democrats and republicans can to get rid we said a payroll tax

cut make sense to boost the economy. unemployment insurance make sense to boost the economy. all that stuff puts money in people's pockets at the time they're still struggling to dig themselves out of this recession. the american people have an extra $1,000 on average in their pockets because of the tax cuts we initiated. that has helped cushion some of the tough stuff that happened in the first six months of this year, including the effect on oil prices but the consequence of what happened in the middle east as well as what happened in japan. i think it makes perfect sense for us to look at can we extend the payroll tax for example by an additional year. other tax breaks for business investment that could make a big difference in terms of creating

more jobs right now. what we need to do is restore business confidence and the confidence of the american people that we are on track. we are not going to get their right away. this is a tough slog, but we're still living forward. it makes sense as we are looking at an overall package to see are there some things we can do to sustain the recovery? so long as the overall package achieves our goals i set out which is $4 trillion in a 10- year window and make sure we're bending the cost of health care over the long term. >> [inaudible]

>> i think this has been asked and answered. i will give you the same answer until i give you a different one. that will be today. [laughter] i thought you would like that one. >> thank you very much, mr. president. if you receive [unintelligible] on fast and furious, members of congress and the government of mexico are still waiting for answers. are you planning to replace atf leadership and one can we expect results on the investigation?

>> of the second question, as you know, my attorney general has made clear he would not have ordered gunrunning to pass through and to mexico. -- into mexico. the investigation is still pending. i have made it very clear my views at that it would not be an appropriate step and we have to find out how that happened. as soon as the investigation is completed, i think appropriate actions will be taken. with respect to e-verify, we need comprehensive immigration reform. i have said it before, i will say again, i will say it next week and six months from now -- we have got to have a system that makes sure we uphold our tradition as a nation of laws and we uphold our tradition as a

nation of emigrants. that means tough border security cola going after employers who are illegally hiring and exploiting workers, making sure we have a pathway for legal status for those who are living in the shadows right now. we may not be able to get everything i would like to see in a package, but we have to have a balanced package. e-verify can be an important tool if it is not riddled with errors and if u.s. citizens are protected because what i don't want is a situation in which employers are forced to set up a system that they can't be certain works. we don't want to expose employers so that day and a projected a qualified candidate for a job because the list says

the person is an illegal immigrant and it turns out they're not. that would not be fair for the employee and would get the employer in trouble as well. the goal right now is to continue to see if we can perfect the system and make sure we have safeguards in place to prevent the kinds of scenarios i talked about. but also not lose sight of some of the components of immigration reform. for example, the dream act. kids to grow up in the u.s. and think of themselves as americans and who are all legal through no fault of their own and who are ready to give back to our country and go the school and fight in our military commissar businesses here. let's make sure those kids can stay. we need to have a more balanced approach than just a verification system.

>> [inaudible] >> i do not have an answer as to whether the investigation is complete yet and it would not be appropriate for me to comment on the investigation if it is not yet completed. jessica, congratulations, your first question here. no pressure. you are going to do great. [laughter] >> your administration has laid out for different dates by which you say the debt ceiling would be raised or the u.s. would face potential buyer consequences. three of those dates have come and gone and we have not faced financial calamity. some of your critics argue these are scare tactics to force a deal.

why should the american people believe the august 2nd deadline is the final deadline by which a deal must be raised? would you spell out what you believe will happen if the debt ceiling is not raised by that date? >> let's be clear -- we have not given out for different dates. we have given out dates that are markers for us getting into trouble. it's the equivalent of you driving down the street at the el light starts flashing. the yellow light is flashing -- it has not been a red light yet. what tim geithner has said is that technically speaking, we are in a position now where we have to do all bunch of things to make sure our bills are paid. by august 2nd, we run out of tools to make sure all of our bills are paid. that's a hard deadline and i

want everyone to understand this is a jobs issue. this is not an abstraction. if the united states government for the first time cannot pay its bills, if it defaults, then the consequences for the u.s. economy will be significant. and unpredictable. that's not a good thing. we don't know how capital markets will react. but if capital markets suddenly decide that the u.s. government does not pay its bills, so we're going to start pulling our money al. -- pulling our money out. then we have to raise interest rates to pay off our bills. that means higher interest rates for businesses, higher interest

rates for consumers, so all of the headwinds we are experiencing in terms of the recovery will get worse. that is not my opinion. that is a consensus opinion. that means job growth will lead further stymied. it will be further hampered. that's point number of one. point number two, one to address i have been hearing from some quarters which is maybe this debt limit is not that serious and we can just pay interest on the debt. this idea has been floating around in some republican circles. this is the equivalent of me saying i will choose to pay my mortgage, but i'm not going to pay my car note. or i'm going to pay by car note or i'm not going to pay my student loans. a lot of people in tough

situations are having to make those tough decisions. but for the u.s. government to start picking and choosing like that is not going to inspire a lot of confidence. moreover, which bills are we going to decide to pay? these guys have said we just pay the interest for bondholders, so are we really going to start paying interest to the chinese to hold treasuries? we're not going to pay folks their social security checks? or we are not going to pay veterans for their disability checks? which obligations are we going to say we don't have to pay? the last point of want to make about this -- these are bills congress ran up. the money has been spent.

the obligations have been made. this is not a situation -- the american people have to understand this -- this is not a situation where congress is going to say we will not buy this car or we will take this vacation. they took a vacation, the bought the car -- they bought the car. now they're saying we don't have to pay or we don't have to pay as fast as we said we were going to. that is not how responsible families act. we are the greatest nation on earth. we cannot act that way. this is urgent and it needs to get settled. >> [inaudible] i'm the president of the united states and the one to make sure i'm not engaging in scare

tactics. i've tried to be responsible and somewhat restrained so that folks don't get spooked. august 2nd is a very important date. and there is no reason why we can't get this done now. we know what the options are out there. this is not a technical problem any longer. this is a matter of congress biting the bullet and making some tough decisions we have identified what spending cuts are possible. we have identified what defense cuts are possible. we have identified what health care cuts are possible. we have identified what loopholes in the tax code can be found. the question is are we going to step up and get this done? my daughter's generally finished

their homework a day ahead of time. one is 13 and what is 10. they don't wait until the night before. they are not pull in all matters. [laughter] they are 13 and 10. congress can do the same thing. if you know you've got to do something, just do it. i am very amused when i hear comments like the president needs to show more leadership on this. let me tell you something. right after we finished dealing with the government shut down, averting a government shutdown, i called the leaders here today -- call the leadership together until we have to get this done. i put vice-president joe biden in charge of the process that has made real progress.

these guys have worked through all the issues. i met with every single caucus. for a hour to an hour-and-a-half each. republican senators, democratic senators, republican house, democratic house, i have met with leaders multiple times. at assert -- at a certain point, they need to do their job. this think, which is just not on the level, where we have meetings and discussions and we are working through the process and when they decide they're not happy and some point you have to make a choice, the all step back and say the president needs to get this done. they need to do their job. now is the time to go ahead and make the tough choices. that is why they are called leaders. i have already shown on willing to make some decisions that are

very tough. that will give my base of the voters further reason to give me a hard time. but it has to be done. there is no point in procrastinating. there is no point in putting it off. we've got to get this done. if, by the end of this week, we have not seen substantial progress, members of congress need to understand we're going to start having to cancel things and stay here until we get it done. they are in one weekend out one week and then they say obama has to step in. you need to be here. i've been here. and been doing afghanistan a osama bin laden and the greek crisis. stay here.

let's get it done. i think you know my feelings about that. [laughter] >> thank you, mr. president. you talked about the payroll tax holiday and possibly extending it. are you worried that adding short-term measures about the economy and long term deficit reductions may complicate things and make it harder to pass the debt limit? >> let me put it this way -- if we've got a good deal on debt and deficit reduction that focuses not to stun the 10-year window but also on the long term, we will get it done. then we can argue out some other things. i think that's very important. i will say precisely because

tough votes in congress are often avoided, that it may make sense to also deal with something like a payroll tax cut at the same time. it does have budget implications. the american people need to know we're focused on jobs and not just deficit reduction, even though that helps to serve the job agenda. they want to have confidence we have a plan that is helping right now. i do not think it should be a complicating factor. if mitch mcconnell and john boehner came to me and said we are ready to make a deal, here's a balanced approach to debt and deficit reduction, but we want to argue about payroll tax cuts later, they are not set to

expire until later this year. if that was the situation they presented, i think we would have a serious conversation about that. i would not discount that completely. i do think the steps i talked about to deal with job growth and economic growth right now are vitally important to deficit reduction, just as the deficit reduction is important to grow the economy and create jobs. creating jobs and growing economy also helps reduce the deficit. if we just increase the growth rate by one percentage point, that would drastically bring down the long-term projections of the deficit. people are paying more into the coffers. fewer people are drawing unemployment insurance. it makes a huge difference and this may be a good place to wrap up.

every day, i get letters from folks all around the country. they show incredible resilience, incredible determination, but they are having a very, very tough time. they are losing their homes, some have lost their businesses, some have lost work and have not been able to find jobs for months, maybe a year, maybe a year-and-a-half. they feel some desperation. some folks who are working are having a tough time paying the bills because they have not seen their wages or incomes go up in 10 years. the cost for everything else has gone up. every day, that weighs on me. every minute of every day, that weighs on me. i ran for president precisely to

make sure we righted this ship and we start creating a situation where middle-class families and people who aspire to be in the middle-class are working hard and living a better life. these structural changes in our economy that have been going on for a decade or in some cases longer, they are not going to be solved overnight. but we know what to do. we know if we are educating our kids well, they will be more competitive. we know if we are investing in things like infrastructure, it pays off. i was in alcoa in iowa -- one of our most successful companies. they took a big hit, but they still invested $90 million in a plant that makes airplane wings and parts for automobiles.

they bounced back and have hired back all of their people and our increasing market share because they made those investments. just like a company like alcoa, america has to make investments. we know we have to get control our deficit. there are some things that are not going to solve all our problems, but can make progress right now. the question is whether democrats and republicans are willing to put aside the expedients of short-term politics in order to get it done. these folks are counting on us. they desperately want to believe their leadership is thinking about them and not playing games. i think if all the leadership here in washington has the faces and stories of those families in mind, then we will

solve this. we will put in place steps like a payroll tax cut and infrastructure development. we will continue to fund education. we will hold true to our commitment to our seniors. these are solvable problems. but it requires getting out of the short-term and frankly selfish approach that sometimes politics breeds. we have to think long term. thank you very much, everybody. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> president obama, wrapping up a wide-ranging hour-long news conference at the old lighthouse.

his first since march. we will give you another chance to see it this evening at 8:00 on c-span. you can also see it shortly in our video library. we're going to take you to an event with the president's counterterrorism director at the school of advanced international studies in washington where he is talking about the u.s. campaign against al qaeda. he is being introduced by john mclaughlin. this is live coverage, here on c-span. >> becoming in some ways, more elusive. with the death of osama bin laden two months ago, the united states has arrived at a milestone of sorts. many are asking what does this mean? how do we assess the threat now? what work remains to be done? what strategy is most appropriate for this new phase? here to discuss this with us today is someone i know to be one of the nation's most

dedicated public servants, john brennan, assistant to the president for homeland security and counterterrorism. it is hard to imagine anyone better prepared for these responsibilities than john brennan. prior to joining the president in 2009, he had a lengthy career in government and in the private sector. counter-terrorism has been a thread running through his career since the early 1990's. a graduate of fordham university and the university of texas at austin, he served for 25 years at the cia, beginning in 1980. during that time, he held major responsibilities in analysis, overseas operations, and leadership at cia headquarters. he served as chief for the cia station in a major middle eastern country and then as chief of staff and deputy executive director at the

agency. foreshadowing his current responsibilities, at mid decade, he designed and built the nation's first national counter- terrorism center. following his cia career and prior to joining the obama administration, in the private sector, he was the president and ceo of the analysis corp. and chairman of the intelligence and national security alliance, an association of public and private sector national security leaders. but for anyone who knows him, there is something greater than the sum of these parts. stated simply, the nation does not have a harder working, more tireless public servant. a person of absolute integrity, dedicated to keeping this country safe. it is my pleasure now to introduce to you john brennan. [applause]

>> thank you very much everyone and thank you for being here. thank you for your warm welcome and your decades of service at government institutions and here. it's a special privilege to be introduced by john mclaughlin, a friend and colleague for many years and one of our greatest intelligence professionals. while at cia, he was referred to as the world's smartest man and was frequently introduced that way and no one ever debated point. he is also the world's nicest man and maybe a lot of people don't know, he is also the world's greatest magician. if you have not seen his magic, you are missing out on something. it's a pleasure for me to be here. this is an institution that has instilled in generations of public servants the pragmatic approach a problem selling which is essential for effective conduct of foreign policy. i especially want to thank the

center for strategic studies for its emphasis on national security and joining with the office of the director of national intelligence to introduce students to our intelligence community and inspire the next generation of intelligence professionals. it is wonderful to see somebody friends and colleagues i have had the privilege to work with over many years. you have devoted your life to helping protect this nation from many threats, including the one that brings me here today and the one that has claimed the lives of some of our friends and colleagues -- the continued -- continued terrorist threats from al qaeda. today, we are releasing president obama's national strategy for counter-terrorism, which formalizes the approach we have been pursuing and adapting for the past two and half years to prevent terrorist attacks and insurer al qaeda's demise. i am pleased we are joined today by dedicated professionals across the federal government helped shape our strategy and it

worked tirelessly every day to keep our country say. thank you for being here and thank you for your dedicated service over many years. i want to point out that the unclassified version of our strategy is being posted to the white house website and there'll be copies made available to the public in the coming days. you can go to the white house website today. in the time i have with you, i would like to put our strategy in context. i would like to outline the key goals and principles and describe how we are putting these principles into practice to protect the american people. i want to begin with the larger strategic environment that shapes our counter-terrorism efforts. this starts with the recognition that this counterterrorism strategy is only one part of president obama's larger national security strategy. this is very important. our counterterrorism policies do not define our entire foreign policy.

rather, they are a vital part of and are designed to reinforce our broader national security interests. since taking office, president obama has worked to restore a positive vision of american leadership in the world. leadership defined not by threats and dangers we will oppose, but by the security, opportunity and dignity america advances in partnership with people around the world. this has enhanced our national security in many areas against many threats. at the same time, many of the president's broader foreign- policy and national-security initiative sought to achieve a more focused counter-terrorism goal. they do so by addressing the political, social, and economic conditions that can fuel extremism and push individuals' into the arms of al qaeda. for instance, when our diplomats from with the peaceful resolution of political disputes and grievances, when our trade and economic policies generate

growth that list the blood of poverty, when our development experts support good governance that addresses people's basic needs, when we stand up for universal human rights, all of this can also undermine violent extremists and terrorists like al qaeda. peaceful political, economic and social progress underlies the claim that the only way to change is through violence. it can be a powerful antidote to the disillusionment and sense of powerlessness that can make some individuals more susceptible to viral and ideologies. our strategy is recognizing that our counter-terrorism experts -- at time depend on broader foreign policy efforts, even as our strategy focuses more narrowly on preventing terrorist attacks against our interests at home and abroad. this, obviously, is the first counterterrorism strategy to reflect the extraordinary political changes sweeping the

middle east and north africa. it is true these changes may do -- may bring new challenges in the short term as we are seeing in yemen. it is also true that terrorist organizations and nations that support them will seek to capitalize on the instability that change can sometimes bring. that's why we're working closely with allies and partners to make sure these malevolent actors do not succeed in hijacking this moment of hope for their violent dance. as president obama has said, these dramatic changes mark a historic moment of opportunity. so too for our counter-terrorism efforts. for decades, terrorist organizations like al qaeda have preached the only way to effect changes through violence. that claim has been thoroughly repudiated and has been repeated by ordinary citizens in tunisia, egypt and beyond, who are changing and challenging their governments through peaceful

protests, even as they are sometimes met with horrific brutality as in libya and syria. moreover, these citizens rejected the medieval ideology of al qaeda that divides people by faith and gender, opting instead to work together. muslims and christians, men and women, secular and religious. it's the most profound change in the modern history of the arab world. al qaeda and its ilk have been left on the sidelines, watching history pass them by. meanwhile, president obama has placed the guided states on the right side of history, pledging support for the political and economic reforms and universal human rights people in the region are demanding. this has profound implications for our counter-terrorism efforts. against this backdrop, our strategy is precise about the struggle we face in the goals we seek. one of the most dangerous forms of human error is forgetting what one is trying to achieve.

president obama is adamant we never forget who we're fighting or what we're trying to achieve. let me start by saying our strategy is not designed to combat every single terrorist organization in every corner of the world. many of which have neither the attend our capability to attack the united states or our citizens. -- be it the intent or capability to attack the united states or our citizens. iran and syria remain a leading state sponsors of terrorism. hezbollah and hamas threaten israel and our interests in the middle east. we will continue to use the full range of our foreign policy tools to prevent these regimes and organizations from endangering our national security. president obama has made it clear the united states is determined to prevent iran from acquiring nuclear weapons. we will continue working closely with allies and partners,

including sharing and acting upon intelligence to prevent the flow of weapons to of moss and hezbollah and protect our citizens and interests. -- weapons to hamas. the network that poses the most significant threat to the united states is al qaeda, its affiliates and its adherents. we use these terms deliberately. it is al qaeda, a core group founded by osama bin laden, as murdered our citizens in the bombings of our embassies in kenya and tanzania to the attacks of the u.s. as coal, to the attacks on september 11th, which has also killed more than citizen -- more than -- killed citizens of more than 90 other countries. groups that are part of its network or share its goals that have also attempted to attempt our homelands. it was al qaeda in the arabian

peninsula, based in yemen, that tended to bring down an airliner over detroit and which put explosives and cargo planes bound for the united states. it was the taliban and pakistan s sent a man on a failed attempt to blow up an suv in times square. individuals, sometimes with little or no physical contact to al qaeda had succumbed to its hateful ideology and have a engaged in or facilitated terrorist activities in the united states. these individuals are spurred on by leaders in yemen who speak english and preached violence. we have seen the tragic results of the murder of a military recruiter in arkansas two years ago and the attack on our service men and women