under, despite the fact the organization has determined all products from any age qualifies for safe export from the united states. my amendment requires that a ring gauge their counterparts in both countries to reach out for resolution. >> is there a discussion? >> i support the amendment. i cannot agree more this needs to be addressed and we accept the man that any other discussion? sir robert has raised a the point. they do not allow it to be imported to the country. japan has sent in restrictions, too. we had a very difficult time getting correa to open up a little bit.

it was a huge issue. it was my home into not only nudge correa but china and other countries. it should be a good leverage. we still have to adjusted very significantly. i'll do not want to take to much of your time. a good number years ago, they were opposing trade barriers into korea. they would keep their ships of american be out at sea for may be weaker to before they can dr. it. the beef was rotten.

the cans on the shelf for expire many many months. many of us were quite upset with this p. we sent letters to the president at the time saying we know you are coming to the united states to address a joint session of congress. they explain how unfair you are to your country. guess what? in two or three weeks, they backed off. they started allowing beef in. it is interesting. how do we be effective here? it is not just beef.

no country alger mr. gray will raise a trade barrier -- altruistic a will raise a ted barrietrade barrier. we have to meet and discuss it. we have to work harder. we have trade laws. -- loss. this is an issue. i would like to ask if you could just tell us, give us an update in team the meeting with china and japan over the next 120 days. what is your plan?

>> thank you. we share the frustrations of many of you about this and market access for our beef and beef projects. as well as taiwan. this is a huge priority. this is something we are working on a daily basis. we can commit that we will continue actively stepping up our efforts to work in collaboration with the usda to get china, u.s., taiwan, and our partners to accept a u.s. beef. >> i might say that i know there will be very [unintelligible] it he is very tough. he is formally my trade council. he is very effective in trade. he is good at what he does. based upon the word, i do not see why this would be there.

>> this is not going to advance. class that ask the gentlemen when was the last time that he met with china and japan? >> we raise this issue with their chinese and japanese cash for parts -- counterpart said every opportunity. , let it could be used as an important catalyst to having at least say let's discuss this. all i'm asking for is a meeting. i do not know why there is any

opposition. we had meetings here to have meetings. this never has a flavor of more meetings. i want results. >> i do not know leverage your talking about. maybe you and i can sit down. it seems to me that this is a good opportunity to bring this up and say let's give it a shot. >> there is still a practical effect of nothing happens. i appreciate the relative concern. we have all the amendment. >> do you want to roll call vote? >> i think expressing congressional support is a good start. they could go with that. more especially with the trade pact. i would like it. >> >> mr. chairman, this

amendment requires the u.s. d a meet with china and japan to discuss and relays -- unresolved issues. that hurts. that a senator from michigan, this practice hurts. a lot of people do not know that florida is one of the largest beef states. to unity doing this? >> we will meet with our japanese japanese counterparts to discuss these issues. >> that is good enough.

i think we share the same concern that you have about what is happening there. i want to make sure that we have an ironclad commitment that this is going to have been in you will continue to focus on this. i appreciate if the inch -- chairman does not want to add this. me will monitor this. we will follow up this parent this is incredibly important to many of us. >> they indicated they will go forward. at least have a provision in there.

this is important. i do not quite get it. it is in regard to this requirement. they will phillips paid in this congressional intent. there is a deadline. let's go to the chinese counterparts. i want a record vote paired >> a tally vote. >> no by proxy. no. no. no by proxy. pass.

no. no. no by proxy. no. no by proxy. aye. aye by proxy. aye. aye by proxy. aye. aye by proxy. aye. aye by proxy. aye by proxy. aye. aye by proxy. no. >> vote? the finall tally is [laughter]

[laughter] -- 11 ayes. >> insufficient for a vote. >> i have filed an amendment numbers 20. as i said in some opening comments. i am concerned about fishermen and shrimpers having the ability to get trade adjustment assistance because of technicalities in the law. i will help them address the increased import competition by providing technical assistance

and grants to help them improve this. this is what they are all about. this is all over the gulf and the atlantic. they have face significant hurdles and not attaining the benefits under this program. it is important that several eligibility rules are clarified to ensure that the program works as intended. it does not include any cause for the program. it is so that fishermen and shrimpers are intended and it is understood in the farmers program the department of

agriculture does not maintain regional county level information on the prices. the department of commerce does. if the usda does not maintain this price information, what in the world are the farmers the shrimpers, the share -- the fishermen going to do to demonstrate their eligibility under taa that traditionally has been for the farmers? >> thank you. i fundamentally agree that we need to treat our farmers and fishermen the same by providing them equal access to the program. individual farmers and fishermen have three options are now.

there to other options available. the second one is to allow them to show that their production decline compared to the previous year. the third option allows them to show that the price for their product decline compared to the average price in the previous three years. they do not need to depend on the usda data that can provide their on quantity or price information to qualify for the benefits. i agree with the. it introduces an administrative burden. i commit to you that the administration will continue to work with those fishermen to demonstrate their eligibility to the >> program -- to the taa program. >> what do you think?

what do you think? >> it seems to me that based on this and make sense again. i just think with the extra efforts, they will find the right data. i do not know we call it. >> yes. >> man finish here? i would feel to the center.

it seems to me that it is a no brainer. the existing law says you use usda data or the individual shipper or fisherman data. it seems like we ought to change the law so that baghdad said the u.s. government has can be used by the shrimpers and fishermen. what do you think of that? >> to what degree will they get the right? ted? -- get the right data? >> it does pose an image of the burden.

it helps them access the data and produce the dad did they need so they can demonstrate eligibility. this took a long time. >> it would be good for farmers and fishermen to do this. this is something we should collectively work on. >> i will like to ask, does that mean that the gentleman, the ambassador, that you would -- in your present position, that you

would call ambassador? does that mean that you would support that technical minor change in the statutes which usda would be able to recede the department of commerce information that is already within the bosom of the united states government to help out these poor little shrimpers and fishermen? >> we would support the substance of what you said. there are other contexts that we would be able to address them right here now. we do appreciate it.

but you really care about is getting results. i will work with you. we will make sure we get the right results. >> i want to thank you for that. that is the definition of farming income. under this program, farmers and fishermen cannot have more than $750,000 in adjusted gross from income. it is my understanding that usda considers fishing income as farm income. mr. ambassador, is that correct? would the $750,000 cap applied the same for fishing income? >> yes. that is correct. the administration interprets fishing income as farm income. the adjusted growth is captive

senate the thousand dollars. with the cost of fuel and larry king, they may be sure they have assistance. i appreciate the insurance. >> i will repeat this. >> we will come back and forth. >> i just wanted to ask this.

are you saying it should include gulf oil spills? it is very limited assistance. it only goes to farmers that have cat fish, shrimp, lobster, or blueberries. that is a small part of our farming industry. let me take a crack at it. >> this is from the gulf. schrempf was displaced by trade. it displaces shrimpers.

the other product she mentioned are in the same category. it is different from other farmers. shrimpers -- ever there was company -- which country blueberries come from but it is much more identifiable. >> tell me just have to do like we did it the cat finished at -- like we did with the catfish? >> i just want to emphasize what you said. we have seen our farmers surely decimated. there are very specific trade links to the categories that are included. >> mr. chairman, i do apologize. -- i do oppose this amendment. i will tell you why. florida is trying to achieve

equity. i wanted some assurance. i will make my point then. i do appreciate your feelings and what you are trying to get insurance on. one of my biggest concerns is that it is not equitable. by the very nature, some get better benefits than others. this is the problem as ronald reagan saw it. the purpose is to help these workers find jobs in our economy. there is nothing wrong with that. because these benefits are paid, normal unemployment benefits, we wind up paying better benefits to those who lose their jobs because of foreign competition

than we do to the friends and neighbors that are laid off due to domestic competition. anyone must agree that this is unfair. this is fundamentally unfair. i find it interesting that this is where the administration chose to draw the line in the sand her and. nothing contrast governing philosophy. it seems to me that it is better taa. their attitudes about i think will be better off if we simply eliminated the program and found a better way of doing it. >> ok. no mmm. -- no amendment. >> it is my understanding the

amendment if it passes, would have passed. >> to be attained in an agreement. >> it could do whatever they wanted. >> is there any reason why we could 9 not passed this are have a vote on it? we often do this. >> let me ask. let me make one other point. it is not in the agreement.

it is not part of the legislation. niece to be clarified. >> -- in needs to be clarified. >> i am not aware of any amendment that will pass. we can have a lot of chatter about it. it seems to me that it would be both. if we were to do what we often did, it might accelerate the process. >> we are proceeding.

vote amendments. >> mr. chairman, thank you. i cannot believe the senator from massachusetts is not think he will be persuaded by the alamance paid -- elements. i can see the arguments about this.

south korea is a very relevant one. they have a significant amount of beef production. this is why it is so important that we we did this. they negotiate future trade agreements. everyone knows the most recent one expired in 2007. it was near the end of the last ministration. this administration had to 0.5 years to impose this. this would extend the trade agreement through december 31,

2015. the administration goal depends on finalizing this. it is highly unlikely that foreign agreements will agree to any meaningful trade. if they are not included, it is unclear if there'll be an opportunity before the 2012 election. they have been successful in providing market access. other than the agreement, singapore, australia, the dominican republic, they were enacted. the trade agreements were signed. that includes an extension of

the trade package. it is every bit as appropriate. it has no direct linkage to the panama/columbia agreement. they will move together. an aggressive trade agenda is important for u.s. exports. these are the 17 nations of which we have agreements. they enjoyed a surplus. what i would say is that if we are serious we've got to give them the authority to negotiate

these trade agreements absent that you will be locked out by so many opportunities around the world. we have american businesses and agricultural agreements. they can win that war if they have a level playing fields. i think this is a perfectly relevant amendment and opportunity for us to get trade promotion authority extended. it would do that through 2015. i would urge my colleagues to support the amendment. >> adding it is a very appropriate subject. now is not the time. let me ask of the administration is treating this? >> as you said, this is very

important. at some point, they will want to work very closely with this in committee to grant the authority. now is not the time. >> it takes time, to negotiate this. they will negotiate out. there were proper gate positions. that would take a long time. this is the current context. it helps the addition that would open up this led to speculation -- led to speculation. >> i am sure you give me that.

>> what you want to do? >> we were having boat on these three trade agreements, it to be one thing. the system that is being incorporated is in the course of the korea free trade agreement. it is historical. it strikes me if we are going to have a debate about trade adjustment authority that makes a lot of sense. if there was some hope we would get to this in the not too distant future, it might make sense. it affects our ability to affect businesses. we will not get that done. i do not see a window to get this done if we do not do and now have between the 2012

elections. we go without a for 12 years. when we do that we lose out on significant opportunities. i would like to see this. i would hope that you would too. >> it seems to me the ambassador is a green this. i do not know why should not be brought up right now. authorities are the norm. congress first authorized the authority in 1934 to help pull them out of the impression. it is renewed 11 times. 1974, congress had disappeared.

they have sought this authority, everyone. it enables the united states to play a leading role in negotiations. president carter says this solidifies the position in the international community. ronald reagan extolled the virtues. the serbs are economic interests. he noted the extension was in vital national interest. as we do not seize those opportunities, and they will.

strategy is unacceptable. president bush can make a case. congress granted the authority. in negotiated 11 trade agreements. they have been virtually silent. 81 said we are going to do this. wait till we get into this election process. i think they have all the positions standards.

they consistently that the issue. this is exactly what is happening. this is unacceptable. bases for markets. wish to do everything in our power to create jobs. 95% of consumers led out. we have to see the value of its. it'll be good for the president to know how we do with that. >>, me ask you this.

should they have trade promotion authority? will they have this? how like an answer to this. >> i will be engaged with the negotiations with the partnership now for over a year. we have had very successful and of those haitians thus far with a lot of momentum. they are often consulting on negotiating conditions. i am confident we will continue to make this. president obama hosts the apec leaders later in november. >> the c one trade promotion authority? that is what i want to know --

does he want trade promotion authority? that is what i want to know. >> we do not need to do it right now. we do not believe that what we are in right now is the appropriate venue to have this discussion. >> it is the only context you have. >> we have a very active job- creating trade agenda. we have been working very closely with this committee as a mover trade agenda. it is very helpful. we are getting things done for the ministration. >> this is the one chance you have. this is the only administration i know of. i do not need this at the minutes. what many now are the others.

i have supported this for everything in the past. there is more to its. there is a whole lot of experience about how we do it stronger. all this is important. i'll do the proper deliberation. you will not as though it is in here. >> very quickly, he has been my partner on the trade committee. i want to work closely with him.

the last time this was dealt with was 2002. the economy has changed very to medically. there are a couple of areas with enormous potential for more family wage jobs, and virginia environmental goods. i think the point is that we need time to really think through how to make sure these clear instructions for 2011 are of dated from a sense of what they were in 2002. i'll let you to know that i'm very interested. >> all in favor? >> it was confident we would get involved it it it would be one thing. otherwise, we are missing this.

any begin a debate going. >> you say not now. most of the negotiations was with other countries. a lot of people and not supported. that is what they had for six years. it is an embarrassment. vicious goes on and on. this is like a big hat and no

cattle. i am tempted to say could you do it? and i'm not going to do that. what would he say to the distinguished senator from utah in regards to when you will see this. engine that think he will get a trade pact without that authority. it would be kicking the can down the road to 2013. goodness knows what that would bring. one of the things we have been doing is we have been up here a lot trying to work in a bipartisan way. >> i know you have. >> that will help us when it is time to seek trade promotion authority. we are working together to identify what the objectives will be.

in 2002 it took a long time. >> you are not negotiating with the congress first? >> we are working for is to develop our objectives. it is appropriate to do it. hopefully it'll make their work easier in determining what they are. >> and then we had a pretty good discussion here. >> we should vote, >> from what i can see, we have maybe four or six more minutes on this side. it should go relatively quickly. we can accommodate all of our colleagues in the we can get out of here. is anybody know any more? >> do you have another one? and you have one? are those included?

we have included that number. no. no by proxy. no. no. no. no by proxy. no. aye. no. no. no by proxy. no. aye. aye. no. aye by proxy. aye. aye. aye.

aye. aye. aye by proxy. no. no. >> tally the votes. >>11 ayes, 13 nayes. >> no these's have it. not agree to repair cracks can ask how many amendments to have on your side? >> my understanding is that there are two on my side. >> this is off. >> it could be zero. >> i have a couple of amendments i wanted to bring up. i wanted to get your view on it. the amendments of committee

numbers 5 and 6 are here. number five is sensitized to get more resources to the trade representative. i know there is a great drum beat in washington these days. we have to cut spending in the size of government. this is one area where we are being foolish by trying to operate in the trade representative's office without adequate resources. that has been my view for a very long time. it is still mine today. it seems every time we continue to get more and more heavily dependent upon trade and at the same time we do not do near what we should to help trade

representatives. this is something we agree to around here. their job is to prosecute and defend the u.s.. there are many disputes. they are respondent. it is also a third party. they attract our interest. our amendment is very straightforward. it would provide $50 million for the next three years. it is from the merchandise fees. it is said that a trade

representative could hire additional people to enforce the agreements that we are talking about. that is the first amendment. i like a chance to briefly talk about it. >> thank you for your concerns. it is not germane. we are not the appropriations committee. i would have to rule the amendment if you were the president. >> i have been informed that he would take that position. we have adopted similar positions appropriating money in previous agreements. i do not know where we got the authority to do that. it is in the books. i can point that out.

the may speak briefly about item number six. i also think it is a meritorious proposals. the issue here is, we pass this trade agreements. we do not ever come back and figure out what has been the effect on our economy of these trade agreements after they have been fully implemented. this should be a provision that would essentially correct at the international trade commission. this is with regard to each trade agreement. tell us what has been the effect on our economy? has it created jobs?

when the biggest difficulties in the way we deal with whatever is right down. this is a thoughto fight off ths feared it would give this a basis to determine whether or not we have done the right thing. i'm interested in your thoughts as well. this place is very short term. we passed measures. we tend not to pay much attention to the affected down the road.

it is some of the nature of this organization. i think it is appropriate to figure out what has worked and not work. it is a good effort. i will not save the others are not as good. >> you think about things. we think very clearly about all of public servants. i appreciated very much. >> i can always asked the national trade commission for this. my thought the senate may be better to get at it.

i would rather not require it. i want to work with it. this is the amendment here that they keep saying. i hope this is not in imminent he would do this. i would request it. >> let me thank you for your comments. i do think this implementing language that we are working on here today is going to the administration by what they should include when they send them to congress. >> i would hope that we would

send a message to the administration that we believe they should include a provision that says 10 years after a report will be prepared by the international trade commission advising on the economics. there are economy wide effect on the trade agreement. i think that would be a good signal to give the international trade agreements. in know they will have to make accounting. there might stimulate more enforcement. . will defer to you fo i do hope the illustration most consider in -- i do of the

administration will consider that. >> it is appropriate for us to urge this in ministration. >> will the senator yield briefly? >> what about five years? >> can you say in 10 years to inform us? >> i am not sure who will also be involved? i do think that most economists this part of this. they do not become fully of rubble for seven or eight years down the road. perhaps a five-year time frame makes more sense.

he can read the report. >> allah be looking at what the report says. >> let me talk about the senator who just spoke and his contribution. >> absolutely. i realize that we are concerned about not adding an amendment out of respect for what you are trying to accomplish here. i have amendments that will deal with issues as well. and you want to support what he said. from my standpoint, there is great benefit to trade. we have the only trade surplus in agriculture. it is important to create those

markets appeared on the manufacturing front, there are challenges. is whether not they are picked up and sent overseas for a variety of reasons fate where in espada that it matters. the ambivalence that many feel is the objection to moving forward. it is because of the fact that they do not feel as confident that we are as aggressive as we need to be. we are standing up for our workers. i want to commend this administration for a number of important things. there is still more to be done. it is whether there are small businesses dealing with currency manipulation.

as well as making sure these trade agreements are fair. it is fair for our people and communities. we are debating it today. their businesses such are displaced. it is part of putting together it something that works for the united states for our workers and businesses. i wish to look at this. we make sure that we are keeping the jobs here. i hope it is the goal of everyone. it is a very reports and peace.

we will feel the there on this side. >> any more on the discussion? >> thank you. i offer committee amendment numbers 26. this is what they propose extending t a. i think we should strike any reference from the legislation. the setting to do with the trade agreements. specially giving damage to the fiscal administration.

it has been linked only once to a pending free-trade agreement. it was expensive late specific and hoehling to trade with canada. the single example has become the basis for arguing that the olive is willing to have him take agreements.

minutes. >> good mornineverybody. welcome to the international monetary fund and to the first press conference of our new managing director, christine lagarde. we also have the first deputy managing director john lipsky, and i want to let you know that we have simultaneous -- so english is on channel 1. french is on chael 2. spanish is on channel 3, and arabic is on channel 4 and you will have headphones. i also wanted to let you know that we have some of mike's and they would be helpful if you would mo up to ask questions. we have three mics in the room. because there is so much wireless technology now, it works better if you go to the microphones which are the equivalent of land line phones. madam lagarde will begin with

opening remarks and then we will take your questions. >> thank you very much. bonjour, good morning to all. it is very very nice to be back in washington. my personal will has gone from washington to paris, from paris to chicago, from chcago to paris and back to washington so it is lovely being that. i thank you all for turning up and being there for this first press conference. what i will do, i ask for your indulgence. i will concentrate on a little bit of the states of the world as i see it at the moment and as i take this job with great pride, great humility as well and some trepidation giving the incitement of the jo and i will give you in a nutshell where i see the key priorities in terms of the france mission.

before i do that i would like to pay tribute to the fund at large, to the nice lady who is bringing me some coffee. [laughter] and to the man sitting to my right, and. john lipsky as you knows the firsmanaging director. he will be completing his term on the 31st of august and he has been throughout his term a fantastic first deputy managing director. i was able to see that from a distance from where i was as if shareholder, client and a member of the firm. i represented france on many instances and other seminars and i can tell you john has been a fantastic advocate, spokesperson, personal charisma and joy in the last two weeks. ..

wherever you always turn, wherever you are located, whatever your articles will be, there are issues, there are concerns, and and when we look at the status of the world, we have clearly come over the

financial crisis that hit all economies in the fall of 2008 anwhich continue troughout at least one to 2,009 in some countries well into 2010 and saw my or do it is cntinuing given the growth potential has not been restored in many countries and that unemployment is still very high in many corners and therefore a lot nes to be done by the economy players. now obviously recovery has taken its course as well, and when we look at our focus for 2011, 2012, we are clearly on the rebound and things are improving and getting better. if we compare with the situation as it was an 2,009 and the height from the crisis, but that recovery is as people will say he will comment on the uneven. if the focus is in the range of

4.5%, looking ahead it's clearly unbalanced in the sense they are in the range of 2.5, whereas merging markets are more in the range of 6.5, some of them such as india and china getting higher marks, so we are facing a turnaround which is very uneven with country's leading the charge and not those that were historic leading the charge and others advanced economies that are lagging behind in a way given the status of development. in the midst of that, we have clearly the two categories different issues to address but if ware to provide service and guidance, advice and recommendations and if and when necessary and if asked support. those are on the one hand the issues of sovereign debt and concerns all advanced economies

ranging from japan to the united states, but clearly with a focus as you write about it as we know with a focus on the year autozone and in particular a country such as greece. on the other hand, when we look at emerging markets we have in some corners the risk of overheating, and we obviously have the risk of inflation as well, and sometimes particularly in the low-income countries the risk of imported completion that results from a high prices of commodities and including commodities obviously both oil prices in general but of course agricultural products as well which is critical for the incoming countries. so that gives the fund a landscape to really excel in terms of giving advice, recommendations and analysis, ringing e alarm holmdel aain and obviously roviding support when necessary. so we are facing a landscape that is n a better shape than two years ago but was an uneven

process of recovery and specific issues of a divided nature given the division that we are seeing between the advanced economy on the one hand and that emerging markets on the other, and the least it looked countries or high income we won't call them good specific issues and yet a path to recovery that is of the pronounced. let me now turn and i assure you will have questions and i will be happy to take your questions, humble saying you don't know what i don't know because as you deciphered on the job in member of the fund i was a shareholder of the fun on the receiving end if you will find myself a managing director clearly on the sending and the giving and because we are here to serve the

membership of the fund that is 187 members, for those of you who were eventually in doubt. the fund should focus on all i will address them in two chapters, if you will. when the concerns the external election of the fund and the inside issues of the fund and i will take the later and second because i regard them as important but not as a key priority. certainly my wish is for us, the fund, that is the executive director board, the management and the south, which i have ggested in the tn hall meeting is the key asset of this institution, we need to focus on the outside. we need to focus on what we can provide. we need to be available for the membership and look at our bellybutton and wonder how we

can best do this or do that. we will. but there is a lot to e immediate priorities in my view. and of those three extra chapters, if i ay say, all began with a c which reminds me the order i want to take them. the first has to do but cut back stiffness. we have seen during the crisis that all countries, all sectors, industries, services highly connected with each other and among themselves. and we need to address that interconnectedness, the interconnections, however you want to call them, with a view to refining, enhanci and improving the serves to our members. for those of you familiar with the fund weave the bilateral work and to take a very

traditional symbol of the article for review, the substantive work done to the fund to really analyze the quality of the economy and make recommendations. but we do not necessarily take into account this interconnectedness that is so obviouto us and has been clearly it devised by the crisis. so first of all, let's focus on those connections and connecting points between economies within economies and make sure our services and advice are actually properly including that particular. my second c is credibility. the first one was connections, connecting points. the second is credibility. for the fund to be credible, its analysis, its work needs to be candid, needs to be credible, needs to be even-handed. there is no one category that

deserves a special treatment and another one that will receive harsh treatment. even the level playing fields are worth what you will hear me say over and over. the third one is the comprehensiveness, in other words it needs to be connected, credible and comprehensive, and by that i mean we can not only analyze the economy by looking at some of these traditional standard criteria is, we cannot be jordan by the hope to reduce fiscal deficits and organized fiscal consolition and a different way make it sustainable. those are the key criteria as and the path that has been clearly opened to include such

matters as employment, social affairs, peripherals components of the traditional economic look at the situation of the country needs to be taken on board as well. i'm not suggesting it should be turned into a specialized boutique on the employment and the best way to reduce the employment. we need to rely on other institutions that exist and the work that has been undertaken together needs to be pursued, the same together with the wto. so the comprehensiveness of the approach must be enhanced. because ultimately we should never lose sight of what we are about. the international monetary fund is here to serve and provide services to its 187 memers with a view to what?

help restore stability where there isn't stability and there's plenty of that around. to help make sure the economies of the world work better to provide a better welfare for people come and clearly oan plant is a key issue whether you look at the the evidence economies or emerging markets the issue of employment is a critical one and one that actually determines a stable social chemistry or the society so we should not lose sight of the overall main goal of the fund. i told you there were about three chapters that were my three priorities, connectedness, credibility, comprehensiveness. the two chapters concerning the internal affairs of the fund that reflect on the external as well where the substance are

very closely interlinked the same is true for the fund what we do externally reflects on how we are billed internally and vice versa. to that end, we must continue to improve the legitimacy of the fund and that touches on the government's, it touches on the appropriate representation and representative this of all members, which does not exclusively, fleet into quotas or seats of the board not to say that we must not quite to the contrary we must complete the reform approved in 2010 and i will see to that and i left and made sure our increase was wrapped up in the parliamentary process approved by my parliament so we must complete the 2010 reform and governments on the quotas must be adjusted to reflect the architecture of the world but that's to those

who reflect the unemployment policies in ourtraining policies and the way in which we build teams and the way inwhich we organize recruitment so people are not clones of each other and that the second aspect which to me is very impornt in addition to legitimacy, diversity is actually properly taken on board. it's not just gender diversity for those the would worry about and feel excluded. it's about including, not excluding. it's about reaching out, about engaging, breaking down the barriers, removing the obstacles so that all participants can actually be at the table and it touches on geographical origins, it touches on culture, touches on the background, so as i said, we can to give vantage of the differences that we all bring to the overall table of the international monetary fund.

with that, i will unless you would like to ask anything we will then open the floor. >> thank you very much. as i said it would be great if you could prove to one of the microphone to idntify yourself and your news organization and please, one question each. >> good morning. i am from brazil. for what you've seen in this very short period what time to get acquainted with the imf what would you reew the most?

>> it's been a force. [lghter] and i've had eight hours of eaching and was 24 hours so little sleep in the meantime. you have the pressing immediate issues that perhaps dewitt sovereign debt. anas i said, it's broader than just of the year ozone. there's a tendency to focus on the year ozone because it is a mixture ofarious components that make it more critical and sensitive to add more difcult to address because of this sovereignty, yet the lack of political sovereignty in one single capital. but it's a very broad based sue that needs to be looked at

as a tter of urgency. the second one coming from brazil you will be particularly aware of that is the capitol flow, and the fact that as a result of sovereign debt issues and concerns and doubt and suspicion by investors there's a massive investment to areas of the world that re not wanting the and to spend or are not prepared for it or fearing the effect on the economies, so i think it is a combination of these two that are of immediate concern and that are pressin issues. >> thank you to read over here the microphone. >> [inaudible] i would like to ask about your personal feelings. this would be your second or third time leaving the area and high school and now you came

back here as the head of one of the most prominent international institutions. did you imagine those kind of things, and what is your sense right now and expectation as the head of the institution? >> thank yo for the personal question. you remind me of something which is to recruit, the passing of time. while i look back i was here in '73, '74. washington did not have an metro. washington was a very reasonably quiet capital with not a lot of activity, lovely country club's. clearly the world has changed massively in the meante. was i expecting i would return to d.c.?

no. i knew i would have something to do in the world on an international basis because my american field service experience brought me up with a wide horizon than my home town or even my country, and i'm delighted to be back to reviving the international monetary fund has exactly that set of both technical focus, rigor of expertise and analysis and willingness to confront and the eight delete to delete and be specific and controlled with very international background because it's not so much the smile on my like the background at really speak for the fund and its international nature. but for all of the young girls

in school of the moment, iwould like to say they should each consider that everything is possible. >> thank you very much. >> congratulations on a new job. you are obviously from the right from what i believe is the socialist should we expect any changes in the spirit, the letter or the priorities of the policy to north africa in the middle east. >> you know, i tend to be very practical not to be as dearth and were labeled by particular certifications and i think you have to judge people by what they do what they propose rather than what they say, and if you ok at the map of the world and

look at the international cialists' around the world you have a massive range of views and opinions from the old marxist leninist to the much more free-market oriented so to speak socialists. so i think it's certainly not with that sort of cut occurs asian and mind that i address the challenges ahead, and i believe that no one should be earmarked with a particular label. they started in our excellent reforms, and i would certainly consult on them and be very supportive of continuing the them. i think i've given you an example fr instance when i speak of the comprehensiveness we should adopt embracing the employment and social issues as well as the economic trends that are more traditional, the

reforms that he has started and that have culminated in 2010 are good reforms and must not only be implemented and forced in all corners of the world, it's not just matter of paying some principle but back at home the principles are implemented but also pursued. the world is going to continue to change. we have this plant that is moving at thmoment and that needs to be reflected in the government's and employment and i would continue that. >> thank you. over here? >> from china media. about the spillover report recently i just want to accept for the current what else you plan to bring into imf to monitor the important country and what else. >> you're right to mention the

spillover report as one way to address my first c, the connectedness, connection and the fact one particular policy will have willful affects and consequences outside its territories, and the fact the idf has embarked in addressing and describing and analyzing them ii think it important. we need to take stock. we need to see how hopefully is, what we can offer to the members as a result of the effect. second, in terms of how can we constaly improve to the fund. as you know, my colleague and friend, the minister of finance for singapore to the imf see suggested and i've supported the proposal that many reports,

whether you talk about the standard article or whether you talk about the financial report or five spillover report, it's better in aggregated so that there is a comprehensive analysis that can be offered to members. i fifa would be a very important improvement. john is also suggesting he's right. >> there's the civilian report is coming up very shortly which will also help us determine to improve and drop, not against dropping it, for your information and is one of the common stocks we share with not only the management but the head of the department to work cohesively doing for many years

and it's been like at so let's continue i will say if it is not useful or providing value then let's drop the and focus our immense resources and massive capil power on what's going to be useful for the members. so that i began the job. >> thanks very much. >> fir imf world meeting what is your strategy to the issue for the euro and my french question in france tthe coverage -- >> what is your feeling regarding the latest events in this case?

>> on the first one, there is an imf board meeting which is scheduled for friday at which we shall consider the fourth review the payment of the fifth tranche so that may be -- that is scheduled as a set for friday and he will appreciate that i am not going to share however i appreciate the quality of the television channel, the conclusion that will ultimately take place. on the second question, as i said, the most important thing for me is to make sure that the institution actually is proud of its achievement, it has reasons to be proud of its achievements under theprevious managing director and nder the first one to acknowledge the quality of

the work and the reforms that have taken place, and as to the rest we shall leave it to the legal cause it should take and i'm not going to comment on that. >> thank you. over here. >> i want to wish you all the best in your new job. >> thank you. >> ayman correspondent. i would like to ask you what are your anticipations, what are your expectations from the government and major opposition political parties increase, and the social reactions if it would like to answer the objections of many analysts would say the primary spending is out compared to the last year they seem to support this creation of deficit. thank you very much for your attention.

>> without anticipating what will be discussed for the board scheduled on friday, i would like to say simply that i hope the greek political parties altogether are in government or opposition can be inspired by the courageous decisions made by political party in portugal. there comes a time when individual interests, political rivalries should be set aside when it's in the national interest of the country, and that was clearly demonstrated both in the case of ireland and portugal. >> in relation to the analysis conducted by the imf, and you can rely on me that the imf in

its judgment will remain its dependence. >> thank you very much. leedy in the white. >> i'm jessica from german tv, and i would like to ask how might a possible default in restructuring of kris's debt harm euopean banks, ad is this something -- how likely is it you would support such an approach? >> i'm afraid i'm going to disappoint you because you have a lot of questions on increase and i'm ing to either diluted the responses of these areas very sanitized simply because the matter is under review the

board meeting is scheduled on friday. i have a briefing this afternoon on greece, and many issues and matters are under development as we speak including paris in the private sector involvement that was fought by germany in particular of other members of the heroes own. so let me comment actually on the questions. it's clearly a matter that is high on our agenda and one that we will continue to work on the troika basis was now, and clearly with mind the ultimate purpose we all pursuit which is to restore the competitiveness of the country. >> thank you. howard snyder from the "washington post". >> won broad question if i

could, now that you sort of switch perspectives, do you think the ec has been overstating the risk of an orderly before restructuring of sovereign debt throughout the continent? the feel like this would set the dominoes rolling. they've also got a lot of their own assets to play in the rescue some wondering if you think because of devotee of overstated to risk and secondly, briefly i can't resist. do you think they are close of each other? do you think the staff here are clones of each oer? [laughter] >> well, dealing with your second question, of course ot. i attended the town hall meeting yesterday which you should have seen the room. your room here is full but the room yesterday was just amazing and what is even more amazing is e diversity that was clearly obvious in the room.

but iiss is the diversity as multifaceted. it's not just about gender, color, religion, sexual preferences also about culture and economic background and i think that we need to draw on their resources and te intellect developed in many corners of the world because the will make it better and richer. now, on your first one, have very clear recollection of the first days of september, 2008, and the last day of september, 2008 when some people at the beginning of the month pulled its okay it will teach those guys a listen. at the end of september was not quite on the same page, it doesn't hurt to be navy overly

concerned but to try to anticipate consequences of any of the measures being considered i think we have been burned once, better be shaunna this time. >> thanks. i'm going to take a couple of questions. spec thank you. >> u.s. is highest diversity several times. my question is in terms of the management reform, could you elaborate on the time line for this framework of management to reform how should we expect real change? thank you. >> i will be clear on that. and it's a twofold response. number one, about management style, and it's no criticism of

my predecessors but my style is about opening up, reaching out in teaching people as a team. i can't do it alone, they can't do it alone. we have to prove the institution to get there and engage the stuff to make sure people are not only satisfied with the work, but prowled with the results and happy with their work. so in terms of -- i'm not suggesting they were not happy or were not right, but my way to try to organize that is by working as a team so there would be the delegation of work, there would be regular meetings of the team so we can be on he same page and i mean the management team, the deputy managing directors but also the heads of th department. now in terms of physical

changes, as you note the addition of the management tractor was being considered, not a bad idea and i'm going to consult the nex few days on this matter. >> thank you very much. >> from the financial times let me ask a couple of issues i'm sure you've not expected to come up. [laughter] as a lawyer how we counter accusations that you are one, not qualified to take positions on economics and to, but of interest with french banks and taxpayers at heart on issues like greece rather than those of the imf. >> you always ask such nice questions, allan. it's always a pleasure. [laughter] you know what, i'm not going to write about my qualifications or lack of qualifications. i think the true meeting as you say and we will see how it goes, but it comes to the job with an

open mind, liability to draw their resources and willingness to contribute from all not going to second-guess on going to ask questions, i'm going to evaluate and rely on the advice of people who know well thir area, and u know, without being too political about, not all conductors know how to play the piano, the harp, the violin or the cello. so i would like to be a good conductor. as to the biased i would have to favor one or the other, certainly don't expect me on that particular. i will not be biased. >> it's too bad all of you couldn't have joined us at town hall to that scene and the

enthusiasm of the staff in welcoming our new managing director. she brings many firsts,s i said many people say she's the first woman managing director, but she used to my mind a woman of firsts with a great experience, leaving large international organizations, experience in both the private and public sector, the staff is 30 welcoming and very enthusiastic about the leadership christina's wing to provide the imf. >> thank you. >> the very long experiences as a lawyer, getting your experience as a lawyer in the u.s. are sometimes wht lessons do you think ought to be drawn from the way the u.s. leal system handles the case -- >> the way the u.s. legal system

handles its arrest in the subsequent proceedin and would listen to all the media learned from that and in a related question you talked several times about how it would power the certain reforms made what to consider that would differ? >> you will appreciate why not to comment on the comparative study of the judicial versus the continental system as we call it. >> different systems and backgrounds and different ways of reaching what is critical in my view and i speak of a former . .

espinel quote lessons to be drawn on the media concern's the presumption of innocence, something that is highly valued the world over sometimes protected, sometimes respected and i think it would be the altar of the media to respect that as well and more broadly actually this huge appetite the media's ve in general for the new announcement, the new bit that you will be able to capture and made headlines with sometimes blurs the overall judgment that is often required to analyze for instance an economic or fiscal proam. there are obvious examples that we can use. when a program is designed for instance, when the agreement is reached, the results cannot be

acknowledged and computer the following day so the passage of time i was referring to early on which makes us look a bit older which lightens our hair is also something of use to better analyze the situation. >> how might you differ on a policy basis at the high yen after mr. shrontz con? >> one difference that comes to my mind from the start this the management style because indifferent person and probably more inclusive and team reminded in terms of substantial issues allowing me to take stock and be properly briefed and appreciate the debt and the substancef some of the matters that are on our plate in the coming weeks and i will come back to you. >> i'm sorry, the --

>> i want to follow on the case -- if if you plan changes in them in light of the controversy over mr. strauss and is there too much pastoral inthe building would use a? >> could you just described, give your name -- thank you. >> i thought i was making it clear that the diversity and the value of diversity was the top of my list of priorities as far as the fund was concerned. together with diversity comes respect for everybody, and it's been the case in the past people have been respected and i will

make sure we continue to be respected no matter what the differences are, and that goes to both of the substance of the analysis but alsothe individual says the stand. apart from that, i wi very shortly be taking the training program on ethicsand i think it's a very good thing. i have instituted such a thing in my law firm prior to my government life and i look forward to that. >> who's next? >> over here and this is the last. >> it's not the first time we see a french managing director and american deputy director. there's been talk about the will of emerging economies. what you consider changing the status quo right now, would you consider managing director from the emerging economy can i put

that question to both of you? >> i think i addressed the question earlier indicating that the matter had been under consideration under my predecessor and i would consult on this and consult rapidly on this matter. otherwise i don't plan to change my nationality. >> thank you very much indeed. [inaudible conversations] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> president barack obama and congressional leaders from both parties held negotiations on debt reduction yesterday. we will hear from the president

next. followed by house minority leader nancy pelosi, and then senate republicans. the british tabloid newspaper "new of the world"announced it would shut down operations, following reports that there reporters hacked into the cell phones of people. that's coming up next. >> every saturday this month, if historic supreme court or arguments on c-span radio, about 14 amendment cases on equal protection. this weekend, the 1996 case, the u.s. versus virginia and the the virginia military institute, on single-sex admissions. >> whether the states can support single-sex education. >> 6:00 p.m. eastern on c-span radio on saturday.

the white house and congress remain far apart on how to reduce the federal deficit. president obama and congressional leaders met 90 minutes. another meeting is scheduled for sunday. following today's meetings, the president spoke briefly with reporters. hello, everybody. it was a very constructive meeting. people were frank. we discussed various options available to us. everybody reconfirmed the importance of completing our work and raising the debt limit ceiling so that the full faith and credit of the united states of america is not started. -- scarred. we decided that staff and leadership will be working during the weekend and that i

will reconvene congressional leaders here on sunday with the expectations that at that point the parties will at least know where it touches bottom lines are and will hopefully be in a position to best start engaging in the hard bargaining necessary to get a deal done. i want to emphasize that nothing is agreed to until everything is agreed to. the parties are still far apart on a wide range of issues. but i thought that all the leaders came in the spirit of compromise and spirits of wanting to solve problems on behalf of the american people. everybody acknowledged that the issue of our debt and our deficit is something that needs to be tackled now. everybody in the knowledge that in order to do that the

democrats and republicans are going to be required in each chamber. everybody is acknowledged that we have to get this done before the hard deadline of august 2 to make sure america does not default for the first time on its obligations. everybody enologist that there is going to be pain involved politically on all sides. -- everybody acknowledged. our biggest issue is to make sure we are doing the best thing by the american people. growing the economy and make sure more and more people are put back to work. i want to thank all the leaders. it was a very constructive meeting and i will see them back here on sunday. a lot of work will be done between now and then. all right. >> now reaction from house

minority leader nancy pelosi on the debt negotiations. she attended the white house meeting and spoke briefly with reporters after her return to the capital. glaxo, everyone. good afternoon. our regularly scheduled thursday press availability will be held on friday because of votes and the meeting at the white house. i did want to talk to you about that meeting. as the president indicated, it was a very constructive and productive meeting. our goal is to have a balanced bipartisan agreement to reduce the deficit without doing harm to the economy. to that end, i came to that table as leader of the house democrats, a very special group, a group that 50% of our members of the caucus are women or minorities out of 100 altogether.

women understand the impact of any changes in medicare, medicaid, and social security in a very clear way. i have said and i continue to say that although i want to try to agree to contribute to achieving a big --how does the president reference it -- a , i want him to have the ability to do that. and i want him to have full clarity on where democrats stand. we don't support cuts or benefits to social security and medicare. any discussion of medicare or should be looked at on its own table. don't consider social security a

piggy banks to give tax cuts to the wealthiest people in the country. we are not going to balance the budget, on the backs upon americans and people with disabilities. we will meet again on sunday. between now and then there will be staff work and member conversations to take us closer to a balanced bipartisan agreement on how we reduce the deficit and help the economy grow. many say one more comment. the debate on the budget is a traditionally controversial measure. it is different value systems we bring to the table, different priorities. so it is partisan in its nature. it should not be partisan as to whether we will honor the full faith and credit of the u.s. government. unfortunate that these two

issues have come together in this way. it is very important that we remove doubt in anyone's mind that we will not default on past debt. this is not about leaving room for future spending. that is not what this is about. this is about paying past debt. >> what is your understanding, $4 trillion, $2 trillion? what would you be willing to accept when it comes to entitlements? >> one of the points i made at the meeting, i thought it would be really important for us to define our terms. what is the baseline, is in january 2011? what is the lack of time? 10 years or 12 years? -- what is the length of time?

are there fire walls between domestic versus defense spending so that we don't run into a situation where there's no defense cuts? and what is the total amount? that is up to the president. we need to have a definition of our terms so that we know when we have reached success and not move the goalposts. >> is said social security should not be on the table. using the consumer price index to calculate benefits, does that qualify in defining your terms of under the rubric of the benefits change, with an acceptable? >> we did not get into that level of detail at the meeting. aat i have said is if there's table that goes to security is on, it's on its own table. any savings should be put back

into making social security strong and the same applies to medicare as well. >> they would be to gather? >> the comprom -- they would be together? >> some changes are applicable? >> the changes would compromise the vote. democrats are not supporting -- house democrats are not supporting any cuts in benefits for social security or medicare. we are concerned about the transferring of responsibility from medicare to the states. we want to make sure -- the need does not go away. these are three areas of concern. >> what about the white house offering negotiations?

>> i don't know that the white house did that. i know what we have read in the paper. as far as our meeting was concerned, i can report to our caucus that their views have been heard and very strongly so. if the president were doing this by executive order, what with a look-alike? would it look the same as if it had to get 218 votes here? i think the president wants a bipartisan bill. the democrats stand ready to help, but we want to do so without hurting our seniors and people with disabilities. >> did you tell the president that democrats will not support a package with medicare or social security savings affected? >> that was not the nature of the conversation. the nature was what is the plainfield we are on, what is

the length of time, and so on? -- what is the playing field? we want to think big about how we can reduce the deficit and never have ourselves facing a treason like this again. this is about past debt. it's not about making room for future spending, but we did not get into that level of conversation. >> done owner says he thought there was a 50-50 chance we would see a big deal in the next 48 hours. >> i am glad to hear that he said that. >-- john boneoener said. guest: utah's senator mike lee talks about a balanced budget proposal. this is 20 minutes.

>> thanks to everyone for joining us today. we are here to announce that we , along with 21 co-sponsors among republicans in the senate, are introducing filing this afternoon a piece of legislation we are calling the cut, cap, and balance act. a proposal to raise the debt limit by $2.40 trillion. it would make the increase in the debt limit conditioned on the occurrence of three events. first, significant, immediate spending cuts that would take effect through and a top line #, the same number that was found in senator patton me's legislation recently -- senator

toomey. and would make it conditioned upon the passage by congress and submission to the states for ratification. a balanced budget amendment to the constitution, one that is either based on or closely resembles the balanced budget proposal that has been co- sponsored by all 47 republicans in the u.s. senate. this is a big step forward and a move we believe is absolutely necessary, because many of us believe that we cannot bind a future congress. because we cannot bind a future congress through a simple legislative statutes, a promise to cut $3 billion or filler billion dollars -- or $4 billion right now is a promise that could become illusory if not accompanied by something else. one way that we can bind a future congress is through a constitutional amendment.

today we are identifying that this is one way we could raise. the debt raise some of us have signed a pledge saying that we would not raise the debt limit unless these conditions have been satisfied. i am one of those people. others have not signed it at the moment, but have indicated that they would be willing to raise the debt limit in this circumstance. senator blocks from missouri, i thank him for making suggestions, a few weeks ago to consider doing something like this. it was in response that i and others decided to move this forward. we have 21 co-sponsors in the senate. we look forward to picking up more in the next few days. we are very optimistic that this is a solution to this awful crisis we find ourselves in that could find support in both houses of congress and in both political parties. i will turn over to my colleague senator toomey.

>> thanks for your leadership on this. i appreciate that very much. i think everybody has figured out voting to raise the debt ceiling is not a popular votes. many of us acknowledge the failure to do so would be quite destructive. i use that word intentionally. failure to raise the debt limit by august 2 would not cause us to default on our debt because it the treasury has enough to ensure we don't default on our debt. it would amount to a partial government shutdown. that is something i would like. to like that's why i'm willing to raise the debt limit. -- a government shutdown is something i would like to avoid. this bill makes substantial

increase in the debt limit possible, but contingent on the kinds of disciplines i think we badly need. the elements of the bill, the spending cap levels and the balanced budget amendment have separately enjoyed very broad support among republicans in the senate. we had all but three republicans in the senate vote for my budget on the senate floor and the cap levels are taken directly from that budget. we have had every single republican senators signed on to a balanced budget amendment to the constitution. we know the public is very supportive of reaching a balanced budget and reining in spending to do so. i think that this is the right approach. it's a very sensible approach. the elements have had very broad support within the conference of this particular bill and has garnered a great deal of support

within the conference. for some of us and myself in particular it is a way to convey to the president that we are willing to raise the debt limit, but we have to fix the fiscal disaster that's unfolding so we can have the strong economic growth and job creation that requires a sustainable fiscal profile. thank you. >> last week the president and chastises congress. i assume that was chastising republicans and democrats, to cancel some things,, and do some work, so we did. we insisted that they cancel the recess. we came back expecting to work and do something about the debt ceiling and about the debt crisis. unfortunately, the other side moved to another issue which was not the debt crisis. we defeated that vote. the vote was canceled because we are going to win the vote on monday. or on tuesday. none of us wants to raise the debt ceiling. none of us thinks it's a good idea to spend money we don't have. we think it's a problem that we

have been doing it for so long. but we also think that there would be some circumstance under which we would borrow more money. that circumstance is you have to have a real plan, a binding plan that says we will do things differently, that we can be trusted with the taxpayers' money, that we can be trusted to balance the budget. for me that means we have to have an amendment to the constitution. i see no objective evidence that congress is otherwise proving themselves to be trustworthy. we have updated pay-as-you-go and evaded callings. we have not done a good job. -- we have evaded hollings. this is the only path to go. i wanted to show today republicans can be for something. for some reforms and for raising the debt ceiling as long as we get a balanced budget amendment. i would like to introduce senator blunt.

>> thank you. i was one of the people that did not want to sign a pledge spot says what i will not do, but this bill says what i would do. this bill does the things that begins to create the structural changes that we have to have if we are not going to pursue business as usual. my view is that the debt limits the in needs to be increased and will be increased, but i've said repeatedly that this thing worse than not lifting the debt limit would be lifting the debt limit and not changing behavior. we have to change behavior, we have to have structural change. this approach would do that. it cuts discretionary spending back to an 2006 level. it cap spending in other areas and generally increased in almost area specified with a cap by law and most importantly

pushes forward the necessity of a balanced budget amendment. i support all those things. those are the kind of structural changes we need to have. i might be able to be for other things as well, depending on what happens over the next few days. but this is a plan i would like to see. it creates the structural change i would like to see. i don't intend to vote for debt limit that does not have some significant structural change. this bill would be one of the ideas brought forward that i think would give us the change we need to move forward responsibly. there's no question that the government in the last 2.5 years has acted irresponsibly. we have at its 35% to the national debt in 30 months. we talk about things like corporate jet depreciation. if you accepted the president's

proposal, it might save $3 billion. we are borrowing $4 billion today. we're not going to solve the problem by making your big discussion points roughly 16 or 18 hours of borrowing and that's what you say the real problem. that is clearly not the real problem. hopefully, we will see structural changes, we will not continue with business as usual, and this debt ceiling moment creates the opportunity, hopefully, for the government to do its job, to do the right thing. senator johnson from wisconsin is one of those who came to do the right thing. >> thank you, senator. the only reason i ran for the u.s. and it was because we were bankrupting this nation. the only way to prevent that is the two steps. first, we have to enact the hearts of discipline, spending caps. we need a constitutional

amendment to limit spending and balance the budget. that's what this bill does. it cuts spending the first couple years to lower the base line. the caps spending over 10 years, puts us on the glide path toward a balanced budget. and it's as we are responsible and we will increase the debt ceiling as long as we fix the problem and as long as we get certification that congress has passed a constitutional amendment cut spending and balance the budget, we will increase the debt ceiling. that's reasonable. i am happy to let the states decide if they are willing to put that fiscal discipline on washington and on all americans. i'm willing to let the american people decide whether we will continue down business as usual at in washington or whether we want to pull ourselves back from the brink. this is about letting the

american people decide. thank you. >> this is akin to having a cousin and has a huge credit card problems and he says i need you to come down to the bank with me to get a higher limits or to get an 8th credit card. that's not a solution. the solution is doing something meaningful about the underlying spending and borrowing problem. that's what this approach does, cuts, caps, and balances, making that a requirement in terms of an increase in the debt ceiling, a responsible way to attack the problem as well as deal with the immediate situation. i strongly support it. >> thank you. i congratulate my colleagues for the work to have done on this. we have to change the way we do business. we don't have the money to continue spending as we are. we simply do not have the money. it's not going to be protected

to come in anytime soon. so we have to do the things families and businesses and states and cities are doing all over america. and that is to rein in. we need not only to reduce spending, but to create a structure that helps us stay within those limits. this is a good way to do it. i am pleased to support it. >> we thank you for coming today. and so on the floor to questions. senator hatch from utah wanted to be here. he is a ranking member on the finance committee, stuck in a markeup. >> senator lee, one of the hard issues you might have to tackle our entitlements. a poll dropped this morning saying 60% of respondents want to preserve social security and

medicare benefits. it's more important to them than resolving the deficit. how do you respond to that response from the american people in terms of that poll --ar pure research pugh poll? " my first response is i should make clear that the balanced budget amendment, which is sometimes attacked on grounds that it might be deemed hostile to entitlements, is agnostic to where the cuts come from. we are laying down the gauntlet by saying we are going to balance our budget. what the balanced budget amendments take effect, and congress will have to do that, and as the season about to take effect, it will have to make the arrangements to do that. the budget has to be balanced. americans do overwhelmingly supports that.

it's not surprising americans overwhelmingly support the balanced budget amendment. they recognize cuts will have to come from many places. where exactly those cuts come from is not decided by the balanced budget amendment or by legislation in any way. we are crafting the first part by saying we have to get to the point of balancing. and my second response has to do with the fact our current course is not sustainable. the medicare trustees have a knowledge that program is going bankrupt very quickly greeted fairly quickly. ore say by the mid 2020's as soon as 2017. the obligations that have been made, if they remain unchanged, are not obligations that can be honored in perpetuity unless we bankrupt ourselves and the entire country. much as we might wish the status quo were an option, it isn't. >> what would you do about is?

upsetting the status quo is not acceptable, what is the path forward? -- to say the status quo is not acceptable. >> that's where they toomey legislation and ryan legislation comes in. that's part of what this legislation takes into account. there are a number of things we could do to get us on that course. some have suggested converting our current medicare system into a premium support model instead of a defined benefit small, which we are on right now. >> what they think of the constitutional argument that the 4-d amendment would allow the president and treasury to create that without having the debt limit?

>> the treasury secretary is mistaken. when he makes the argument that section 4 of the 14th amendment somehow authorizes the executive branch unilaterally to bring about a debt limit increase. what section 4 says in essence is that the civil war debts of the u.s. government would be honored and held invalid and those of the confederacy would not. the language is not limited to a civil war debts, it applies more broadly than that. instead of saying what the secretary has insisted that it says, what it actually says is that the secretary of the treasury lacked the authority and the executive branch as a whole lacks the authority to disregard financial outstanding obligations such that a default would be unconstitutional. a default in the sense that if the debt limit increase is not passed by congress, he would like the authority to withhold

funding to make sure that the u.s. government or current on its debt service obligations, on paying its debt interests. the debt service payments are a small fraction. the treasury secretary has to make sure those get paid first. he likes the discretion under section 42 with all those funds and senate and elsewhere, because he must honor the debt obligations of united states. -- section 4. it says "as approved by law." in congress that makes the law. article one gives congress the authority to incur debt. he cannot do that. the canada incurred the debt of

united states -- he cannot incurr debt without the approval of congress. >> [inaudible] >> i would have to see what they are talking about. there's a distance between revenue raisers and tax increases. there are ways of raising revenue without raising taxes. if it's a tax increase, that is something the republicans in the house and in the senate are not going to support. >> no way of closing loopholes? >> if there closing loopholes so that they can lower marginal rates, which in the and would result in increased revenue, i think you would find a very receptive audience among most republicans. i will not speak for any of my colleagues. i will allow them to answer. revenue hasys said

to be part of the solution. i want that through tax reform and not just jacking up rates. its revenue by streamlining the code and producing growth, i am all for that. that's a lot different than a tax hike. >> revenue historical averages 18% of gdp. the last three years it's been under 15%. does that have to do with bush tax cuts? no. 2007 or 2008, 2009, 2010, they were below 8%. if you need more revenue, you have to get the economy going. raising taxes or increasing regulation is hurting the economy and not helping. >> have you gotten senator mitch mcconnell to support your

legislation and what about the rest of the leadership? >> i would be happy to read the current list of co-sponsors. senator mitch mcconnell has not signed on, but we have so far as co-sponsors, ayotte, barossom hatch, isaacson, johnson, toomey, etc. >> speaker boehner left a little more optimistic after the meeting with the president. and did you leave with that impression? [inaudible] give us a sense of what he told you. >> i have probably been in

hundreds of meetings with speaker boehner before he was speaker. he is always an optimistic man and was optimistic today. so i think that if you are a glass half full kind of guy, you heard that with optimism. if not, you heard that with less optimism. but i do think and probably the right answer to anything about revenue or anything else is the president has publicly says he is going to have the same group come back to the white house on sunday. there is a substantial belief that whatever is going to happen is likely to happen in the next few days. i intend to wait and see what happens rather than try to say how liked about what might happen. i think it's either going to happen or not a pretty quickly. my sense is that was one of the messages, working hard to make something happen, but nothing has happened yet. there's no deal yet, nobody

knows what the deal less. we will see how genuine everyone is in trying to get there. i think they do get there, they will get there pretty quickly or they will not get their. >> will you be pushing for a vote on this proposal or on the balanced budget? or is there an agreement for the white house talks? >> i will push for votes on this proposal. how that interacts whisper the white house proposals it is difficult or impossible to ascertain at this point. i would like this proposal to received a vote at some point between now and august 2. the timing of that is impossible. thank you very much. we appreciate it.

>> , a british newspaper announced its closing this weekend, following allegations that reporters hacked into the cell phones of crime victims. that's next on c-span. with the upcoming launch of atlantis and the end of the shuttle program, we look at the future of space flight on this morning's "washington journal" at 7:00 eastern. the house is back for more work on 2012 defense spending debate. live coverage at 9:00 a.m. eastern. >> c-span has launched a new, easy to navigate web site for politics and the 2012 presidential race, with the latest fifth and events from the campaign trail, a biographical information on the candidates, to order seeds and facebook updates from candidates and political reporters, and links to the c-span media partners in the early primary caucus states. -- twitter feed.

did rupert murdoch's news international announced today that its shutting down the british tabloid "new of the world." the newspaper is accused of hacking into the cell phone messages of british politicians, crime victims, and families of service personnel killed in iraq and afghanistan. if before the newspaper announced it was closing, members of the british house of commons held an emergency debate on wednesday to discuss whether a full public inquiry was needed to look into the phone hacking. you're the first hour of that debate with remarks by the british attorney general and the labor spokesman for home affairs. >> we come to the emergency debate on phone hacking at the news o >> the housethe house will obsen the light of interest, i have imposed a seven minute limit on the back bench contributions.

it'll take effect after the contributions. it'll depend on early contributions. to open the debate, i call mr. bryan's. in were hacked by the news of the world. >> one family member spoke today. another has been in touch with me and several others. the police are looking at not

dust wireless phones of these families but the family of mcca hn.the charge is even longer. this is particularly worrying given the long third trial. scandalously, it also seems it targeted some of those police officers who were at various times in charge of the investigation into the news of the world itself. we can only speculate why they would want to do that. he is a not just the amoral actions.

they are the in moral and almost certainly criminal deeds of an organization that was appallingly lead. they lost sight of any side of of this spirit is to never have become a commodities. the vast majority of journalists would agree with that. if you want to understand the complete failure, it just listen himself.rld' there was relentless pressure. to be honest, it is the ethics

that is the big issue here. it is just as much as whether the law itself is broken. the private investigators should be ashamed of what happens. those around the newspaper. this is tantamount to this. it is my idea that if she had a shred of decency she would resign. god knows if it were a minister in the spotlight, she would be demanding this parent sure is not the only magician in the dark arts. in 2006, they produce a devastating report that detailed hundred and thousands of dubious acts by journalist or agents of national newspapers.

at the mail on sunday alone. i say with sadness. earlier this year, add the new commissioner we feel that many patient records are far from secure from the prying eyes of journalists. that is the most private. i am very grateful. >> will you agree with me? there is the question of this excellent report.

regardless of politics, it is shameful that the government of the day did not take action when that report was published. >> i will come on later to what i hope will be more mark lee agreed upon. i believe the whole country has failed in this spirit i have paid my own share. i asked rebekah a long time ago about this. the whole political system did not take action. i am aware that many others want to speak. nor is this just about this. there is the behavior of the metropolitan police. in the course of the limited investigation, which led to the conviction, the police secured a vast amount of information.

they could and should have interrogated that. they could have approached all those who were affected. they cut have contacted the mobile phone companies to ensure they are better protected. they did none of those things. >> i put down a written statement on july the 14th. in the end, it is written at the time. they have confirmed it does not consider anything else extensive in related to the evidence. as uncomfortable as that may be, does that not justify an

investigation? >> yes. >> be honest truth is that the lot of lies are being told to a lot of people. when police tell half-truths' to ministers of the crown and the parliament is misled, that is a major constitutional issue for us to face. i hope there will end of being able investigation. at the moment, what hangs around is a very dirty snow. >> says the reason nothing happened have to do the closeness between the police and be "news of the world?" we knew the assistant commissioner now works for news

international. we know that senior officers were wined and dined by senior executives at the very day they were making key decisions about whether any further investigation should proceed against the organization. we know that "news of the world" pays for information. i say that categorically. rebekah003, i asked bsky whether she paid them for information. she said we have paid police commission in the past bit. we operate within the codes. it is within the law.

i do not believe we can pay police officers within the law. you cannot. it should stop. earlier this year, rebekah brooks was asked to clarify that. i was responding to a specific line of questioning on how newspapers get information. my intention was to comment on the belief that payments had been made in the past two police officers. if i gave the impression i had knowledge of specific cases, i can assure you that this is not my intention. who even more worryingly, only last night we discover that they had handed over copies of documents that appeared to show

that the former editor authorized a series of payments to police officers onto tens of thousands of pounds. the truth is, they were doing it appeared that cannot be allowed to get away with it. i know "news of the world" seems to be hanging. surely, the buck stops at these to top. >> i agree with what is being said appeared can we agree that we must not have the possibility of successful prosecutions of people who did these things? >> i will try to prove this. i think it is absolutely essential. my hope is that people who committed criminality is will end up going to prison. the last thing i would want is for it to hampered the police

investigation. he is right. i am not going to carry it there are many who wish to speak. some argue that there cannot be a public inquiry while there is this. i think they are wrong. it is vital that the police investigation is supplemented by a public inquiry. some issues that need addressing a not a criminal. they do not strike at the heart of what an ethical code should look like. i fear that they could still have it from under their feet at any moment. there is no certainty when the investigations will be completed. many of those involved may have areedded the evidence pu

discovered selective amnesia. that is why they have full power to some witnesses. they have to get this under oath. it cannot said in public until the investigation is complete. in this do judge can easily manage the relationship between a police investigation and an inquiry. it to be possible to prepare evidence and secure witnesses without compromising investigations. i'm confident the prime minister agrees with this spirit -- agrees with this. he appointed to other members. he said he hoped it was dark by the end of last year and be completed within a year. he pointed out that he was doing so despite the fact that

criminal investigations were still ongoing. they have received a letter from the inquiry. it makes it very clear that they had not yet started as a rear waiting the to related leave investigations. prepared charry -- prepared matters are in hand. >> i am thankful. well my friend also accept that the inquiry under peter gibson enter the talks have already been able to do a huge amounts of work in private so that if the investigation is completed

the public part can start immediately? >> we make the point i was glad to make myself. i hope that he will make the same point as well. >> he has certainly taken in the wind out of my sails on one point. i agree with him that it was possible. there are other proceedings that may take place. this is one of the reasons why they have this. i sizzling in the comments he has made. in may not make much process until the investigations are over. >> i'm grateful to this. i think it is important.

this is a big concession. it is important that we make progress. sometimes when it comes to an inquiry, i think they will have to look through the this story and of all of that. they made sure it is garnered them. them. . . should immediately even if the will not go on to take it. sympathetic.tremely an inquiry of the kind he suggests would require that any individual in his interest was affected by it would have to be

legally represented. any such individuals would have to be advised that he/she not answer any question that may incriminate them. were these to be completed, there be no such opportunity for witnesses to refuse to answer questions. >> >> i set the tone in which he is making his remarks. i think we have hesitated to long. it is not that want to rush to justice at all. i want to make sure that justice does and that being done. documents could be seized now. there are many elements of what the investigation will look like. in needs to be hammered out. they could have proof for discussions. it would make sure that it was available. >> i also