he should get more money for education? >> not very likely. i would be surprised if he got the increase he is asking for. in particular, the piece of the department of education budget to watch very closely are pell grants, which are eating up a larger and larger share of the federal education pie as more students go back to college to boost their skills during the economic downturn. jobs require education, and the cost of college continues to increase. we sort of have a perfect storm happening on pell grants and it is going to be hard to get increases for anything else if we're going to get that program stable. >> i think anything will be a politically hard sell given the climate we are in now. >> he talked about education

being the key jobs, but in this economy, jobs are not available whether you're educated or not. >> i think it is a great rhetorical device. it makes perfect sense, given what we're looking at now on the economy, but i do not know if he is going to be able to make the sale in terms of convincing anyone in congress that this kind of investment is going to be what they need to make. >> let me also ask you about the reauthorization of the child left behind. he is very critical of congress not getting to it. it is not likely to happen. what are the politics of the education debate, if they even exist in washington right now? >> education is a funny issue because it does not divide on

party lines. some democrats support merit pay and charter schools that sort of anger liberal democrats or close to the teachers' unions. yet republicans right now who do not see much of a federal role in k-12 at all. it is hard to see them coming to any kind of agreement with democrats or president obama who has arguably strength and the federal role in many ways on education. >> the question i had about the tea party, there in ascendance right now, and their point of view is going to have a big impact on the debate. >> can i ask with your understanding of their point of view is? >> i think they believe it

should be left locally as far as you can get it. a lot of candidates are essentially saying the federal involvement in education is this side of evil. 10 years ago when a child left behind was on the hill, the debate was not anything like that. the debate was, how can we get this thing done? it was post-9/11, obviously, so there was a lot more cooperation going on. >> are there any aspects of no child left behind that there is consensus have worked? >> generally speaking, i think folks like the aggregation of data. seeing how different types of

students are performing and standard tests, english-language learners, special education, minority kids. >> the secretary called for a national debate on the kind of educational system we want. where, in your opinion, does that debate start? >> good question. >> this very diverse country, is that a president that puts a plan for word in the white house? >> a lot of people called for in 2008 and i do not know that it ever got a lot of traction. they spend millions of dollars trying to get education on the front burner. >> i am thinking of your example of finland.

>> we are in an election where jobs and economy are the only real issue. i just think it is going to be a very tough sell. >> i think you will depend a lot on who the republican nominee is. i think of governor perry does become the republican nominee, he is really the anti-obama on a lot of education issues. reis to the top -- race to the top, texas is one of the few states to never applied, a the they're one of five states not participating. i think if he is the candidate, it might make education more of an issue than it has been historically. >> texas is struggling.

they have a low graduation rates, but it is an enormous state and a half challenges that other states do not have. i would not want to -- they do have challenges that other states do not have. i would not want to speak for the entire state. >> do you believe pell grants and other education initiatives will survive the super committee? >> that will depend on how much money the education department has to work with on the year ahead. >> certainly, if they cut domestic discretionary spending significantly, the pie for education will get a lot smaller at a time when state and local officials are cutting education spending to the bare bones. >> thank you very much free airtime.

we appreciate it. nice to have you here -- thank you very much for your time. we appreciated. nice to have you here. >> you can watch "newsmakers" again with education secretary arne duncan at 6:00 p.m. eastern here on c-span. monday, we will hear from the author of a recent article proposing changes to no child left behind. hosted by the brookings institution, the discussion gets under way live at 9:00 a.m. eastern on c-span2. >> the law of social security is so clear that if the scheduled benefits cannot be paid, they will give only the payable

benefit. that may sound like garbage, but that is a real gut-rancher, because that is what is going to hit in 2037. last may, there was less going in than coming out. may. this may. the king get to a point where you will get -- you will get to a point were you a bed payable benefits, not scheduled benefits -- where you get payable benefits, not scheduled benefits, and you can scream and e, but it will not get you anywhere. we worked very closely with the aarp on this.

they have a magazine with ads about how to get something and not pay for it. medicare will pay for it. ads on sexual dysfunction. read the a r arp magazine. i said to the top guy, are there patriots in here or just marketers? that is a harsh statement and i meant it to be. >> watch more from this event online at the c-span video library. >> next, secretary of state hillary clinton and defense secretary leon panetta on possible defense budget cuts and their potential effect on national security. they also look at international challenges facing the u.s..

this conversation took place at the national defense university. it is a little over one hour. >> we're extraordinarily privileged and honored to have our inaugural speakers be the secretaries of defense and state, and the very distinguished friend, frank sesno. please give a warm welcome to these great leaders. [applause]

>> is a great pleasure and privilege to be here with the secretary of state and secretary of defense. with the world watching the

budget gyrations, with the world so uneasy with our wars ongoing, i cannot think of a more propitious time to have you here. some of for we will discuss here today will be, is america a wounded colossus? are these wars winnable? where and how do these two big departments work together? i want to thank national defense university for your gracious welcome today. welcome to both of you. >> thank you. thank you for doing this. >> let's start with the budget, which i know is your idea of a good time. [laughter] the world watched with bated breath as to whether we would default, whether our troops would get their paychecks, which is an incredible thing.

as you face the prospect of budget cuts, what is really at stake here? >> i think this is about the national security of the country. our national security is our military power, our defense department, but it is also our diplomatic power and the state department. both of us, i think, are concerned that as we go through these budget tests the we're going to go through, that the country recognize how important it is that we maintain our national security and that we be strong. we recognize that we are in a resource limitation here and we've got to deal with those challenges, but i do not think you have to choose between our national security and fiscal responsibility.

i want the country to know that we can get this done but we have to do it in a way that protects our national defense. >> you're going to have to cut triggered $50 billion or so. it could be -- cut 350 billion or so. it could be five under billion dollars more. >> the president and bob gates before me decided the parameters we would have to be looking at, and we are within the ballpark with what the congress just did. did they go beyond that, if they do the sequester, the massive cut across the board which would literally double the number of cuts we are confronting, that would have devastating effects on our national defense, on the state department, but more importantly, when we think

about national security, i think we also have to think about the domestic discretionary budget as well, because education plays a role. other elements of the discretionary budget in terms of quality of life in this country play a role in our national security. more importantly, i of made the point based on my own budget experience that if you are serious about dealing with budget deficits, you cannot just keep going back to the discretionary part of the budget. would be the most damaging part if you had to face hundreds of billions of dollars more? >> very simply, it would haul out our force. it would terribly weak in -- weaken our ability to respond to threats in the world and it would break faith with the

troops and their families. a voluntary army is essential to our national defense. any kind of cut like that would literally undercut our ability to put together the kind of strong national defense we have today. >> secretary clinton, you have a harder case to make given public skepticism about foreign aid and where america spends its money. >> i think there is a lot of both misunderstanding and rejection of what is done by both the state department and usaid. what we have done over the last two and a half years is long overdue. we basically said the we are all part of national security team, the american team. we have civilians in the field

with our military forces in areas of conflict. we of civilians in the field on their own in other beria's dangerous settings without the military -- we have civilians in the field on their own in other very dangerous settings, without boots on the ground. we have to make the case as to what national security in the 21st century actually is. it is, of course, the strongest military in the world, that has to be given the tools to do the job we send it out to do. it is our diplomatic corps, which is out there on the front lines all the time, trying to deal with very difficult situations to the betterment of america's national interest and security, and it is our development experts who put another face on american power, who are trying to deliver, as we

speak, aid to 12 million people on the horn of africa who are facing famine and starvation in some measure because of al- shabab, which makes our challenge even more difficult. between the two of us, we have many years, probably more than either of us care to admit, experience in dealing with a lot of these issues, and leon as the chair of the budget committee, director of omb, chief of staff in the white house in the 90's, was part of a process that got us to a balanced budget. this is not ancient history. we're not talking about a time so far back we cannot remember it. the tough decisions were made in 1990's to cut spending, and deal with the entitlement issues and increase revenue. >> seeming taxes. >> absolutely, so that we had

the kind of approach the goddess on the trajectory, had we stayed on it -- kind of approach that got us on the trajectory, had we stayed on it, that would have kept our balanced budget. i know how hard it has ben for the country to see the sausage being made. i happen to be in hong kong a couple of weeks ago, and i said confidently that we would resolve this. we would not default. we would make some kind of political compromise, but i have to tell you, it does cast a pall over our ability to project the kind of security interests that are in america's interests. this is not about the defense apartment, the state department or usaid, this is about the

united states of america. we need to have a responsible conversation about how we're going to prepare ourselves for the future, and there are a lot of issues that are not in the headlines, but in the trend lines. we are reasserting our presence in the pacific. that means all elements of our national security team have to be present and we cannot be abruptly pulling back or pulling out when we know we face some long-term challenges about how we're going to cope with what the rise of china means. we of so many issues that leon and i deal with everyday that are not going to be getting the screaming headline coverage, but which we know, looking over the horizon, are going to affect the economic well-being of our country and the security of american citizens.

>> there was a report yesterday that the pentagon is considering a very substantial revamp of the pension program. is that true? is that the kind of change and depth of change that is happening? >> that report came as a result of an advisor a group that was asked by my predecessor, bob gates, to look at the retirement issue. live put together some thoughts and are supposed to issue a more complete report of the latter part of this month. -- they have put together some thoughts and are supposed to issue a more complete report in the latter part of this month. but no decisions have been made. you have to do it in a way that does not break faith with our

troops and their families. you have to think very seriously about grandfathering in order to protect the benefits that are there. cracks like the people in this room. >> like the people in this room. >> i know my audience. in my view, when i was on the budget committee, when i was the director of omb, you have to look at everything. you have to put everything on the table. you cannot approach a deficit the size we're dealing with and expect you will only deal with it at the margins. >> you and bob gates talked a lot about your budget and the

need for the development budget and how development is cheaper than war. we of that conversation at george washington university. what do you say, secretary panetta, about your budget, your needs, and you're lobbying for more in terms of what he has got and what you need to accomplish? >> obviously, the defense budget far outweighs the state budget, a 10-1. we know the we also are going to have to put the coin everything on the table -- put everything on the table. >> that includes development. >> i'm not saying that we should be exempt and that education and health care here at home should bear all the cost. i am saying that as we look at everything that is on the table,

we have to try to do a reasonable analysis of what our real needs and interests are. it is easy in a political climate, which i know something about, as leon does, to say look, foreign-aid -- if you go out to the american public and ask what the easiest thing to cut in the american budget is, they always say foreign aid. you ask how much they think it is in the budget and they say 15%-20%. you as damage they think it should be, and they say 10 percent -- you ask how much they think it should be, and they say 10%. we know there is a case to be made. the military has always had overseas contingency operations the go to the kinds of investments that have to be made in places like afghanistan

and iraq. for the first time, we have the congress excepting the week too need a contingency budget, because we have a lot of costs that will continue to go down over time because they're not part of our base. we are getting smarter about explaining what we do and what it is going to cost less to do it, but the bottom line is, we want national security to be looked at holistic play -- ly, and we want people to understand what we will be doing in the future is not sending our young men and women into harm's way but trying to avoid that in the first place. >> we all know that we are going to have to be able to exercise some fiscal restraint as we go through our budget. the bottom line is that -- i

hope the congress does not do, what i hope this committee does not do is to walk away from their responsibility to the entire federal budget. the entire federal budget annually is close to four dollars trillion. -- $4 trillion. we have already taken a $1 trillion hit. two-thirds of the federal budget has not been touched. if you want to deal with the deficit, you have got to do with mandatory spending programs and revenue. every budget summit i have been a part of, going back to ronald reagan, it was the balanced package that dealt with cuts and revenues. it was true for ronald reagan, george bush, bill clinton, and it has to be true today if you're serious about dealing with this. >> our first question from the

audience. gentleman right here. >> in an army officer and a student at the college. like many of my peers here i've spent five years out of the last 10 in the middle east and afghanistan. one of the things that concerns me as we see the budget tsunami approaching is a problem with teaching foreign language. how will we deal with that as we lose hundreds of millions of dollars to throw a contract in solutions? are their efforts to senate giants -- are there ways to standardize efforts to teach? >> i think we have to look a creative ways to be able to deal with it. i am a believer in foreign language training.

i think unfortunately this country has not devoted nearly enough resources to foreign language training. we have looked at reading, writing and arithmetic, but we have not looked at the reality of the world we deal with. as cia director, i did not think you could be a good analyst or intelligence operations guy without knowing languages. i believe the for the defense department and the state department. there is a recognition the need to have language in order to relate to the world religion. michael would be, as we go through the budget, -- might goal would be, as we go through the budget, that we not undermine the kind of training that i think is essential to our ability not only to protect our security but frankly, to be a nation that is well educated. >> i certainly say amen to that. i think your suggestion that we look for ways to better

coordinate our language and culture education programs is a very good one. i have begun to do that in the state department, usaid, because they have different platforms. bayh of different i.t. platforms, different language instruction -- they have different i.t. platforms, and different language instruction programs, and when i came in, i did not think it was the best way. i think we are going to have to be more creative. i think this university is a good example of polish government education. -- hall of governments -- whole of government education. we have to get in our minds of a pattern of cooperation both before deployment of military or civilian personnel, and after deployment.

i think it gives us a better results. you may have seen an article in the "washington post" about one of the civilians in afghanistan. because of his facility, the military really looked to him because he was able to communicate informally, colloquially, in a way that really captured attention and cooperation. . .

we can't forget the mission. the mission is that we have to disrupt, defeat and dismantle al qaeda and make sure it never again finds a safe haven in afghanistan from which to launch attacks to this country. i think we have made good progress on that. i think -- i just tucked with general allen this morning. we are making good progress in terms of security, particularly in the south and south west. those are difficult areas. we now have to include the situation in the east, but

overall, the situation is doing much better. we have weakened the taliban significantly, and we're continuing to work on that. we are continuing to build the afghan army and police. they are right on target in terms of the numbers that we needed to develop, so we are working in the right direction. we have to make sure that the afghan government is he prepared to not only govern but to help secure that country in the long run, but i really do believe that if we stick with this mission, that we can achieve the goals that we're after, which is to create a stable afghanistan that can make sure we never again establish a safe haven for the taliban or for al qaeda. >> secretary clinton, what is the conversation the two of you have about the reliability and stability of the karzai government and whether or not you should be negotiating with

the taliban? >> well, we have, as leon just stated, a strategy for transition that we are following, and it is based on, frankly, the decision that president obama made upon taking office that we have lost momentum to the taliban. when he came in to office, the situation that we found was not very promising, and so he did order additional troops. i ordered and fulfilled the more than tripling of the civilians on the grown from 320 to more than 1,125. we put in a lot of effort to try to stabilize and then reverse what we saw as a deteriorating situation. i think we both believe that we are now at a place where we can begin the transition and do so in a responsible way. part of that transition is

supporting afghan reconciliation. we have said that for, you know, a very long time. i gave a comprehensive speech about our approach in february at the asia society in new york. ambassador mark grossman who, is leading our efforts to build a diplomatic framework for this kind of reconciliation effort is proceeding very vigorously, because we know that there has to be a political resolution alongside the military gains and sacrifice that we have put in alongside the sacrifice an suffering of afghan people. we want this to be afghan led and afghan owned. >> can it be with an afghan team regime that you're working with? >> yes. >> do you trust karzai?

>> yes. i mean, look, i deal with leaders all over the world who have their own political dynamics that they're trying to cope with, which are not always ones that, you know, we experience, or that we think are necessarily the most important, but they get to call the shots. they're the ones who are coming out of their cultures and they're trying to implement democracy often in places where that is a very foreign concept. it can be a difficult and challenging partnership. there is no doubt about it, but there is certainly a commitment on the part of the karzai government to this transition process. remember, when we adopted this process that will go through 2014 at the nato lisbon summit, it was in concert with the karzai government making the same commitment.

now, we are also discussing what kind of ongoing partnership, diplomatic, development, military, that we will have with afghanistan. president karzai made a very important statement just this past week. he is not seeking a third term, which is a very strong signal that there has to be an active dynamic political process to choose his successor, so, you know, look, i mean, i dealt with president karzai now for nearly ten years. i'm looking at my old chairman of the senate armed services committee down there, john warner. you know, i dealt with him as a senator, and i have dealt with him as a secretary of state, and you have to listen to him, because all too often, we come in with our pre-conceptions about how things are supposed to be, and he says over and over again, you know, i don't like this or i'm not sure about this. take the private contractor issue. that went on for a long time, because we didn't quite get what

his concerns were, so it's not all one-sided critique here. i think there has got to be a recognition that, you know, we have a dialogue and a partnership and that we both have to work at it. >> question on afghanistan from the floor. >> >> tom nick alyson with the -- tom nicholson. our allies in pakistan are critical of what is going on in our efforts there and as a strategic partner going forward, what are your thoughts on how we continue to enhance that relationship, especially given the difficulties that we have had recently. >> well, let me start by saying that we consider our relationship with pakistan to be of paramount importance. we think it is very much in america's interests.

we think it is in the long-term interests of pakistan for us to work through what our very difficult problems in that relation are, and this is not anything new. we have had a challenging relationship with pakistan going back decades, and we've been -- we've kind of been deeply involved with pakistan as we were during the '80's with the support for the mujahideen, the old charlie wilson's war issue, and if you remember the end of charlie wilson's war, you know, the soviet union is defeated and charlie wilson and others saying, well, now let's build schools. let's work in afghanistan. let's support pakistan, and our political decision was we're exhausted. we're done. we accomplished our mission, which was to break the back of the soviet union, we're out of there, so i think the pakistanis have a viewpoint that has to be shown some respect, you know,

are you going to be with us or not, because you come in, you go out. >> are they our partner or adversary? >> they are our partners but they don't always see the world the way we see the world and they don't always cooperate with us on what we think, and i will be very blunt about this, is in their interests. it is not like we are coming to pakistan and encouraging them to do things that will be bad for pakistan, but they often don't follow what our logic is as we make those cases to them, so it takes a lot of dialogue. >> let's talk about pakistan for a minute. there was a story that the pakistanis are ral lies here -- are allies here and handed over parts of the helicopter that went down in bin laden's compound or gave access to it to the chinese. is that what an ally does? >> as the secretary said, this is a he very complicated relationship with pakistan. >> is that a yes? >> i have to protect my old hat.

you know -- >> it is not a no, though? >> i'm not going to comment, because it does relate to classified intelligence, but -- >> are you concerned? >> we are concerned with the relationships that pakistan has. what makes this complicated is that they have relationships with the ikani tribes who are going across the forces and attacking our forces in afghanistan. it is clear there is a relationship there. there is a relationship with l.e.t. which is a group that goes into india and threatens attacks there and conducts attacks there. in addition to that, they don't provide visas. in the relationship, there are bumps and grinds to try to work it through, and yet there is no choice but to maintain a

relationship with pakistan. why? bought we're fighting a war there. because we are fighting al qaeda there, and they do give us, you know, some cooperation in that effort, because they know it is an importance force in that region, and because they do happen to be a nuclear power that has nuclear weapons and we have to be concerned about what happens with those nuclear weapons, so for all of those reasons, we have got to maintain a relationship with pakistan, and it's going to be -- as i said, it is complicated. it is going to be ups and downs. i mean, the secretary and i have spent countless hours going to pakistan, talking with their leaders, trying to get their cooperation. >> let me ask the for of you to take us into a conversation that you might have together in the privacy of several hundred people. this war that you talk about is largely conducted with drones. those drones are deeply resented and complicate your efforts on

the diplomatic front. how do you balance that? isn't your best asset your worst nightmare? >> no, no. let me take you back to conversations that are not maybe so current but i think relevant. shortly after i became secretary of state, we were quite concerned to see the pakistani taliban basically taking advantage of what had been an effort by the government in pakistan to try to create some kind of peace agreement with the pakistani taliban, and to in effect say to them, look, you stay in one ter tore are ry and don't -- stay in one territory and don't bother us and i won't bother you. i was blunt publicly and privately with my pakistani

connections to say that the people you think you can predict or control are, at the end of the day, neither predictable nor controllable, and i was very pleased when the pakistanis moved into to that region and cleaned out a lot of what had become a lot of pakistani/taliban stronghold, and then they began to take some troops off their border with india to put more resources into the fight against the pakistani taliban. now, you know, as leon says, we have other targets that we discussed with them, the hikanis, for example, and yet it's been a relatively short period of time, two and a half years, when they have begun to reorient themselves militarily against what is, in our view, an internal threat to them. you know, we were saying this because we think it will undermine the control that the

pakistani government is able to exercise, so we have conversations like this all the time, frank, and i do think that there are certain attitudes or beliefs that the pakistanis have, which are rooted in their own experience, just like we have our own set of such convictions, but i also think that there is a debate going on inside pakistan about the best way to deal with what is and increasing internal threat. >> let me just add to that. i mean, the reason we're there is we're protecting our national security. i mean, we're defending our country. the fact was al qaeda, which attacked this country on 9/11, the leadership of al qaeda was there, and so we are going after those who continue to plan to attack this country.

they're terrorists, and the operations that we've conducted have been very effective at undermining al qaeda and their ability to plan those kinds of attacks, but let me make this point. those terrorists that are there are also a threat to pakistani national security as well. they attack pakistanis. they go in to karachi and islamabad and conduct attacks there that kill pakistanis shall so it is in their interest, it is in their interest to go after these terrorists as well. they can't just pick and choose among terrorists. >> what's left of the al qaeda network? >> the al qaeda network has seriously been weakened. we know that. but they're still there, and we still have to keep the pressure on. those who are suggesting somehow that this is a good time to pull back are wrong. this is a good time to keep putting the pressure on, to make sure that we really do undermine their ability to conduct any

kind of attacks on this country. >> will they ever be defeated or was donald rumsfeld right and this was just a long war? >> we can go after the key leadership of al qaeda that i think is largely led this effort, and we have seriously weakened them. we seriously took out bin laden which seriously weakened their leadership as well and i think there are additional leaders we can go after and by weakening their leadership, we will undermine al qaeda's ability to ultimately put together that universal jihad that they have always tried to put together in order to conduct attacks on this country, so the answer to your question is, you know, that we have made serious inroads in weakening al qaeda. there is more to be done. there are these notes now in yemen and somolia, and other areas that we have to continue to go after, but i think we are

on the path to seriously weakening al qaeda as a threat to this country. >> let's talk about iraq for a few minutes and then we will take questions on that topic from the audience. we have seen a terrible string of attacks over the last 24 hours that have claimed at last count nearly 90 lives, hun he dreads injured, leading to great concerns about the ability of the iraqi government to look after its own security. what is happening in that country now? what do you read from this wave of violence? >> well, what i see happening is that there continues to be a terrorist capacity inside iraq. i don't know whether we they claimed credit but it could be al qaeda in iraq trying to assert itself. >> sunni extremists?

>> sunni extremists but at the same time we know there are shia extremists also conducting attacks not quite to the extent of what we saw yesterday but attacks that have killed americans and killed iraqis. now, i'm of two minds about this, frank. i mean, i deplore the loss of life and the ability of these terrorists to continue to operate inside iraq. i also know that until recently, the trajectory of violence had been going in the right direction -- namely, down, and we saw that, and we were feeling that it was headed in the right direction. the iraqis themselves have more capacity than they did have, but they've got to exercise it, and we spend a lot of time pushing our friends in the iraqi government to make decisions

like naming a defense minister, and an interior minister, so that they can be better organized to deal with what are the ongoing threats, and certainly we're in discussions with them now, because, you know, they do want to be sure that they have sufficient intelligence and surveillance and reconnaissance capacity. they want to be sure that they can defend themselves both internally and externally, and that's a conversation that our ambassador and our commander are having in baghdad. >> has it been worth it, and should we stay? >> well, the bottom line is that we are going to maintain a long-term relationship with iraq to ensure that they remain stable. >> militarily? >> i think the discussion they're having internally themselves. >> that is the discussion that we will have with them as to what kind of assistance we will continue to provide, but the

bottom line is whether it's diplomatic, whether it's military, we've got a long-term relationship with iraq. we've invested a lot of lives there, a lot of blood in that country, and regardless of whether you agree or disagree as to how we got into it, the bottom line is that we now have, through a lot of sacrifice, established, you know, a relatively stable democracy that's trying to work together to lead that country. it happens to be a country that is in a very important region of the world at a time when there's a lot of other turmoil going on, and it is very important for us to make sure that we get this right. >> i just want to append to what leon said. the president made a commitment that we would be withdrawing our forces from iraq, and that he would follow the timetable that

was set in the bush administration, which is for our troops to be out at the end of this year, so that is a period. that's the end of that commitment. there is, however, a discussion that the iraqis are having internally and beginning to have with us about what we would do following that, so i don't want there to be any confusion about that. you know, our combat mission in iraq ends at the end of this year. our support and training mission, if there is to be such a one, it was the subject of discussion. >> don't these attacks demonstrate that the security situation is still precarious, that if the iraqi government were to ask for an ongoing military presence, it might well be more than mere training, that there is combat to be played out? >> we don't believe that the iraqis have that on their list of asks. >> do you agree?

>> i think what they want to do is be able to confront counterterrorism within their own country, and we have given them help. we have given them training. we have given them assistance in that effort and obviously that's something as a country they're going to have to confront, but their main goal right now is to get the kind of training that will allow them to improve their capabilities. >> let's turn to questions on iraq. anyone have a question on iraq? do we have the microphone? right down here. yes, sir. stand and tell us who you are rand ask a question briefly. >> keith crain, rand corporation. i was a cpa in 2003 and followed iraq ever since. i want to ask you, don't you see it in the u.s. national security interests to have all the troops leave by the end of the year in terms of the middle east, afghanistan, for the iraqis themselves? i understand what secretary clinton had said in terms we are

leaving, but even to have troops that are training there afterwards, don't you think it sends a strong signal that we're not interested in bases and that we are going to leave since we do not have a training mission there as well? >> as the secretary said and as the president has made clear, we are leaving by the end of the year. our combat mission is over. the discussions now are what kind of assistance can we continue to provide with regards to training, with regards to other assistance that is provided. we do this with other countries. we have done it with other countries in that region, and i think this would be what i would call a normal relationship with iraq if we could establish that kind of approach for the future much. >> that's why i wanted to be very clear that the combat mission is over, and our troops are leaving, and they are, you know, in the process of literally packing up, and that was what they agreed to, and i

agree with you that that is very much in america's interest to keep that commitment, but what leon is saying something also important, you know, if a country comes to us within what we would view as a normal diplomatic relationship, and said, you know, my troops need training. they're not yet what they need to be. i'm going to need continuing help on collecting intelligence, learning how to do it for counterterrorism purposes, i think it would be irresponsible of us not to listen to what they are requesting , and indeed, the iraqis have not made a formal request, but we have reason to believe that they are certainly discussing it internally. you know, we do that in kuwait. we do that in bahrain. we do that in qatar. we do that in saudi arabia, so it would be a little bit, i think, unusual for us to say no, we will not respond to a responsible request. what it is, we don't know yet,

and that's the next phase. >> i think the bottom line is interesting and it's something that the country will respond to, which is that if there is a responsible request, as you put it, a military relationship of some form going forward, not unlike these other countries in the region, in europe and in much of the world, after other conflicts, will be part of the military diplomatic landscape. >> just for the record, this is going to be a process of negotiation. there is going to be discussion and i think the good thing is that what that the iraqis indicated a willingness to have that discussion and we will have that discussion and try to deal with it, but as to what ultimately turns out, we will have to deal with them. >> a couple of other questions in the time remaining. syria, is it time for the united states to unequivocally state that president assaad has to go, should step down? there has been talk that that will be forthcoming from the

administration. it has not been yet. is today the day? >> frank, i'm not a big believer in arbitrary deadlines when you're trying to manage difficult situations and what we see happening in syria is galvanizing international opinion against the assaad regime, and that is a far better landscape for us to be operating in than if it were just the united states, if it with just maybe a few european countries. just think of what has happened in the last two weeks. you have had the arab league reverse positions. you had king abdulla of saudi arabia make a very strong statement and the gulf coordinating council also making a very strong statement. you have turkey desperately trying to use its influence, which is considerable, within syria, to convince the assaad regime to quit shelling its own people, withdraw its troops from the cities, return them to barracks, begin a process of real transition, and yesterday the foreign minister made it

clear that the assaad regime is not following through on that, so i happen to think where we are is where we need to be. where it is a growing international chorus of condemnation. the united states has been instrumental in orchestrating that, and we are pushing for stronger sanctions that we hope will be joined by other countries that have far bigger stakes economically than we do. >> i get all of that, but you know that your critics are saying loading means being out in front, that you condemn the heinous acts. >> we will continue to condemn it. >> will he have to leave? >> i am a believer in results over rhetoric and i think we are putting together a very careful set of actions and statements that will make our views very clear, and to have other voices, particularly from the region as

part of that is essential for there to be any impact within syria. i mean, it's not news that the united states is not a friend of syria's. that is not news to anybody, but it is, i think, important that we send an ambassador back there. i'm very proud of what ambassador ford has done, representing the best values of our country, so i think we have done what we needed to do to establish the credibility and, frankly, the universality of condemnation that actually might make a difference. >> the world is such a cheery place today. libya. we find these very interesting developments where we hear of another defection potentially from the senior ranks of the gaddafi government, and yet we also hear that the rebel forces may be having some very serious internal pressures, tensions, and disputes themselves.

what is your read on the military-type campaign in libya and whether gaddafi is any closer to being driven out? >> i talked to our commanders in the area within the last few days, and the indication is that, you know, that yes, there are these concerns about the opposition, but we've had concerns about the opposition for a period now, but the fact is that the opposition is moving. they're moving in the west towards tripoli, towards the coastline, and moving in that direction. the opposition in the east is moving in the direction of tripoli as well. that pressure is having an impact that the regime forces are weakened. gaddafi's forces are weakened and this latest defection is the latest example of how weak they have gotten, and i think

considering how difficult of a situation it has been, the fact is that the combination of nato forces there, the combination of what the opposition is doing, the sanctions, the international pressure, the work of the arab league, all of that has been very helpful in moving this in the right direction, and i think the sense is that gaddafi's days are numbered. >> we're moving into our final minutes. i would like to take a question. this gentlemen here. >> randy townsend. are the question forces we're sending to syria showing that we are losing our ability to represent ourselves around the world and that we can't afford it? >> i don't think so. i think it's a message that the united states stands for our

value and our interests and our security, but that we have a very clear view that others need to be taking the same steps to enforce a universal set of values and interests, so, i view this somewhat differently than i know some of the perhaps commentary has evidenced. if you look at libya, this is a case for strategic patience. it's easy to get impatient, but i think when you realize that this started in march, there was no opposition. there were no institutions. there was nothing. there was no address even for trying to figure out how to help people who were attempting to cast off this brutal dictatorship of 42-plus years. the distance they have traveled in this relatively short period

of time, and the fact that for the first time we have a nato-arab alliance, taking action. you've got arab countries who are running strike actions. you have got arab countries who are supporting with advisors the opposition. this is exactly the kind of world that i want to see, where it's not just the united states and everybody is standing on the sidelines while we bear the cost, while we bear the sacrifice, while our men and women lay down their lives for universal values, where we are finally beginning to say, look, we are, by all measurements shall the strongest leader in the world, and we are leading, but part of leading is making sure that you get other people on the field, and that's what i think we're doing. similarly as i told frank in syria, you know, it's not going to be any news if the united states says assaad needs to go. ok, fine.

what's next? if turkey says it, if king abdulla says it, if other people say it, there is no way the assaad regime can ignore it. we don't have very much going on with syria because of a long history of challenging proks with them, so -- problems with them, so i think this is smart power and i talk a lot about smart power where it's not just brute force. it is not just this unilateralism. it is being smart enough to say we want a bunch of people singing out of the same hymn book and want them singing a song of universal freedom, human rights, democracy, everything we have stood for and pioneered for over 235 years. that's what i'm looking for us to be able to achieve. >> before we close, i want to ask you about one other place, specifically about the kind of coordinated assistance that your two gigantic departments are

working on. >> who says they're gigantic? >> what you see depends on where you stand, right? >> we may be small but there are those who love us. >> i'm talking about somolia and the gut-wrenching famine that is brought to homes every night. this can and should be a model for how these departments respond. how much is humanitarian? how much is military? would you talk about that for a second? >> that's a good example of the kind of close coordination between the two departments in dealing with the real crisis in that area. i mean, the reality is that it's a very difficult situation in somolia. you've got al shabab, a real threat to that area and thousands upon thousands who are straferring right now as well, and so what we have been doing,

and what we have been doing on the military side is working closely through africa with the state department and with the diplomatic sources that are there, with the ngo's, to try to make sure we're providing whatever assistance we can provide to help in that region. >> logistical assistance? >> that's correct. we are working and doing that on a daily basis. we have made clear that any additional assistance, you know, we're prepared to provide, so it's a very good team approach to dealing with a crisis in that part of the world. >> i would just add a few points, you know. the united states was a principal funder of hughes net, the family early warning system network, and when we began seeing signs of a potential famine, we began to pre-position food and materials and that gave us the chance to be able to get our equipment and our food in to these areas quickly.

we're talking about 12 million people in the horn of africa, in an area twice the size of texas. ethiopia and kenya have been responding very generously, given their own situation, and we have made progress. you know, i remember the last time ethiopia had a famine and i remember those tote terrible pictures that. affected 12 million people in ethiopia but now it is down to 5 million. it is a bad number but we are trending in the area. now the united states has spent about $580 million in helpingth people who are starving and particularly trying to help women and children who are the most at risk. at the same time, the united states has supported the african union mission in somolia, and we have been making progress in driving back al shabab out of

mogodishu. other places are working with the transitional federal government there, and as you know, al shabob left mogodishu. unfortunately, they are still posing an ob stack al in somolia to getting food into the area. i say that because as you look to the horn of africa, you can see the complexity of what we're dealing with and to try and sort out what is the defense role, the diplomatic role, the development role, how do we work with the u.n.? how do we work with ngo's, how do we work with governments? and what i have said, frank, is that, you know, stability in somolia is so much in the interests, first and foremost, in the somalis' interests, but also in the region and beyond, and yet the united states is not going to put boots on the ground. we remember what happened with what started as a humanitarian mission that morphed into a military mission that was, unfortunately, resulting in the

loss of american lives, but what we are going to do is empower africans themselves, provide all kinds of support to them, and enable them to stand up for themselves, and you know, this is the kind of multi-layered approach that we're taking in a lot of complex situations now. >> we're virtually out of time. i know each of you would like to have a moment to pull your thoughts together, the appearance of the two of you here is a commentary in and of itself. perhaps secretary panetta could talk to those in uniform watching around the world and secretary clinton to talk to american diplomats and those serving in this country and watching around the world and the public who sees x span and our other media -- sees c-span and our other media. >> we're involved in two wars. we're in a nato mission in libya. we're confronting other threats from iran and north korea.

we continue to be in a war on terrorism. we're fighting a concern about cyber attacks, increasing cyber attacks here, and we have rising powers, nations like china and india and brazil, not to mention russia, that we have to continue to look at in terms of their role in providing stability in the world, and we're facing resource constrictions, budget constrictions now. as i said, i don't think we have to choose between our national security and fiscal responsibility, but we are a nation that has a special role in the world, a special role because of our military power. a special role because of our diplomatic power, but more importantly, a special role because of our values and our freedoms. the key thing that goes to the heart of our strength ask the willingness of men and women to put their lives on the line to help defend this country. i think we need to learn a lesson from what they do that

the leadership of this country needs to be inspired by the sacrifice that's being made by men and women on the front line, and hopefully exercise the kind of leadership that will ensure that this country remains free and strong. >> i think we both carry that responsibility very seriously, because we understand what this country means. we're both beneficiaries of the generations that came before that gave us our freedom, that gave us the opportunities that we have been able to enjoy, and i want to see that continue. i'm very proud to be the secretary of state of the united states of america, even during a period that is quite challenging, and there is no guide book written for it, and in looking back at history, i have tried to take some lessons from other points when these challenges also presented themselves, and one of my

favorite predecessors is george marshall who held both leon's position and my position, most uniquely in our history, and at the end of world war ii, president truman and george marshall, you know, looked around the world and said, you know what is in america's long-term interests, rebuilding our enemies, you know, creating stable democracies, creating free market economies, and what did they do? well, they said to people like my father, who had spent five years in the navy, they said look, we know all you want to do is go home, raise a family, start your business, make some money, have a normal life. guess what, we're going to continue to tax you to rebuild places like germany. it was a hard sell. it didn't happen automatically. truman, marshall and others went across this country making that case, and we invested in those dollars, $13 billion in four

years, which would be about $150 billion in our own currency right now, and we helped to make the world stable and safe and open for all the postwar decades. we have an opportunity right now in the middle east and north africa that i'm not sure we're going to be able to meet, because we don't have the resources to invest in the new democracies in egypt and tunisia to help transition in libya to see what happens in syria and so much else, and the problems that leon mentioned, the rising powers, we hope are peaceful and successful, but we've got to be competitive. we can't just hope. we have to work, and we have to make a strong case for the continuing loadership of the -- leadership of the united states, so it is my hope that as we deal with these very real and

pressing budget problems, we don't know the cost of everything and the value of nothing. budget documents are value statements, who we are ras a people, what we stand for, what investments we're making in the future, whether we will continue to be strong and be able to project american power is up for grabs, and we're going to make the best case we can that american power is a power to the good, that it has helped liberate hundreds of millions of people around the world, that it has helped to enhance the opportunities for people and to give young girls and boys the chance to live up to their own god-given potential, and we need to make sure we continue to do that, and i think you will be hearing leon and i making that case, and we hope that it will find a ready audience in the congress as these negotiations resume. >> a ready audience in the

congress, and i hope a receptive and listening aged yens in the public, because -- listening audience in the public because they need to understand what is at stake and need to ask the tough questions and get straight answers from you and others. as this dialogue unfolds, this is of immense importance to the country. thank you very much, and to the men and women in uniform and serving the country here and around the world, to those in our foreign service and diplomatic corps, and most importantly to secretary panetta and secretary clinton. thank you very much for a fascinating and inciteful conversation today. [applause] vice president joe biden is on a

tour of china and japan as part of the obama's efforts to intensify the u.s. role in east asia. today he is in china and he is the first u.s. political leader to visit in that city. speaking to a university audience there, he says the u.s. is the single best bet in the world in terms of where to invest. monday he goes to mongolia to meet the country's prime minister and president and then tokyo monday night speaking tuesday and wednesday to japan includinging a visit to the earthquake hit city sendai. he will also meet with american troops. coming up a look at political problems on america's foreign policy and standing in the world and later, the joint deficit committee and ways it could trim

debt. today on "news makers" education secretary arne duncan taubs about the state of the u.s. education system and how u.s. companies compare with other countries in preparing for jobs. we're competing for jobs in south korea and singapore and our children are as talented as children anywhere in the world. i just want to give them a chance to compete on a level playing field. i want to give them a chance to be successful. right now, the brutal truth is other countries are rout-educating us today and they will out-compete us down the road. >> you can see the entire interview on "news makers" today at 6:00 p.m. on c-span and it also available on-line.

knelt on examining the political problems of the u.s. on foreign policy and you will hear from the former ambassador to israel, who is the vice president and foreign policy director at brookings. this is about an hour and 25 minutes. >> welcome to foreign policy of brookings. it's very good to see you all here in the dog days of august. we thought that the topic of today's conversation was so compelling that it shouldn't wait, so we're here to talk about the foreign policy consequences of domestic political dysfunction in the

united states.÷5 it is a subject that has been raising the debt ceiling and the impact that appears to have had on a brand america abroad, awnf brand that has already suffered some considerable tarnishing in the bush era, something that president obama was determined that he would refurbish to enhance our influence abroad but gotten worse. r3s(=ww>wi9i>$mo÷7:"='jtbwo

we will be looking at how america can promote their interests abroad. leet me introduce our panelists. first of all, a top man who is senior fellow in government studies here at brookings. tom is an expert on all things broken and how to fix them. i say that because his most recent book called "the broken branch" how congress is failing america, and how to get it back on track. to my right here is fiona hill. fiona is the director of our center on the u.s. and europe and a senior fellow in our foreign policy program. she is an expert on russian

affairs, and the author of "the siberian curse, how communists plan to lift russia out of theq cold" and she was recently the national intelligence council's officer on russia. next to fee known that is bob kagan, who is also a senior fellow in the center on the u.s. foreign policy. bob is the author of a number of best selling and profound books, history and the end of dreams," and his major work on american nation, america's place in the world from its earliest days to< the dawn of the 20th century." many of you know bob as a

columnist for "the washington post" and contributing editor to "the weekly standard." next to bob is ken leventhal, director of the john l. thornton center on china, and he is, cough,, an -- he is, of course, an expert on china and served on the national security council in the clinton administration and has written a huge number of books on chinese politics and you want to tell us the name. >> "the china challenge. ". >> "the china challenge" about how to do business in china or not to do business in china. @@)r@

he spent his period as a research thinker and has taught economics and and has taught at the university of california berkeley. i want to start with thomas. have you analyzed for us the nature of the dysfunction, and whether you see this is somehowu getting fixed at any time soon. >> i can only smile, martin.

i'm afraid i'm going to start this session off without my normal burst of optimism. you mentioned the broken branch. we're writing a sequel and the working title is "it's even worse than it looks." listen, the signs of dysfunction are all around us. most immediately was the dreadful experience that charles krauthammer has seen as a sign that the american system is working but everyone else sees as truly an embarrassment, a matter of great seriousness and potential damage, but of utterly unnecessary. i'm talking of course, about the hostage taking of the debt ceiling ing crease. that was planned a year earlier,

used in a way that it never has been before, forcing, it was hoped, a set of changes, but in the end produced a paltry payoff that left most observers sickened by the risks that were taken on and very much unimpressed by the results that came from it. you put that together with sluggish growth and high unemployment, projected increase in the debt to g.d.p. ratio and the fact that no action on any of these matters is likely to occur before the 2012 election, and it's not clear how things will get themselves resolved

afterward. the s&p downgrade was part of this, although i think the global rush to treasuries remind all of us that s&p is likely to suffer a greater downgrade than the u.s. i think underlying these specific things are sort of two widespread views about the craziness afoot in america. the first has to do with the contemporary republican party. it's ideological extremism, and a sort of sense to deny reality, whether it's the efficacy of the financial stabilization and stimulus, the utility of the tax

pledge, the non-existence of climate change, this occurring both among prominent leaders and members of the party in congress and among all but one of their presidential aspirants. that sends a signal, i think, across the global that america is in trouble. it's fallen off track, that something is amiss. it's not just sort of a temporary episode of conservative populism, but one of our major political parties is no longer maintained in an adult status, one in which they can wrestle and are willing to wrestle responsibly over legitimate differences with the opposition and have something come from it.

finally, i think coming out of all of this now there is developing a perception of the weakness of our president in the face of all of these difficulties. people see him in his futile search for a negotiating partner and politics to deliver on his promise of a post-partisan politics in government, and see him sort of maneuvered into a misplaced emphasis on deficits an debt at a time when the economy is floundering and there is little sign of the growth and jobs that would actually combined with serious action on deficits allow us to regain our footing and so some traction. i mean, i think all of those contribute to the perception of

dysfunction. if you see what's coming in the next few months, in the time before the election, the only solace you take is, i don't think we're going to have quite the crisis that was contrived around the debt ceiling. it's past the election. we will return to that in 2013. there is basically agreement on the budget for this coming year, some minor adjustments have to be made, but there's no opportunity to really shut the government down over that, so at the very least, it's possible that we won't be put through the melodrama of the last month. having said that, the odds of the so-called super committee, really a joint committee of

congress, 12 members, equal numbers of democrats and republicans, all of whom are viewed as reliable players by their respective leaders, it wouldn't matter if they were all wild independents. they are operating united nationser senate-imposed political rules, the most important of which is no increased tax revenues, that means nothing of consequence is likely to come out of this, so we will fall back on the triggers. of course, those don't go into effect until after the election, so there's still time to ward them off, but i think the safest bet is nothing will happen, and that will contribute to the cent that we can't function as a democracy and as you are seeing, we are in full campaign mode. the media is so relieved to get@

away from the debt ceiling story. it was really hard making it interesting and now they have iowa straw polls and governor rick perry and michele bachmann, and what more do you want? i mean, the campaign is underway. barack obama is on the campaign trail for the better part of this week, and frankly, i see that as a plus, because this congress is slated to get nothing of consequence, positive condone as a result of the objectives of the people who are in a position to drive it, and god knows we need some clarity from the electorate.

that is going to put enormous pressures on those who are in charge and seemed to make our

politics dysfunctional. if the public wants to see something else, if they want to see some real clarity, they will empower a single party and they will lend their support to produce some parliamentary-like institutions that can hold them accountable. we're not there yet. about global economic developments. today we had some very good news

coming out of europe about growth in germany and france. we heard it alluded to at the to solve these problems. what are the ideas for economic growth? >> their limited. we are talking about leadership, and leadership, no matter how you define it, depends on a strong economy. a strong economy is not one where a recession does not happen. recessions happen. a strong economy is one can overcome recessions with scientific approaches. the scientific approaches need to be credible. they have to a certain characteristics like not encouraging -- like not incurring huge debts that are unsustainable.

at the end of the day, what we need in this functionality we're talking about is the ability to adopt scientific policies that are good for the american economy but at the same time provide a long-term plan for fiscal security, and it is the ability to form a plan that is causing these turmoils to the world economy. i would say that to restore the leadership, to make sure that the u.s. economy is a strong economy, we need to provide that type of plan. whether the political system is able to do it is the question. what is happening in the u.s. -- in the world economy?

if things are not working in the u.s., their worst in europe, where the levels of debt are higher, the sacrifices are much greater, and it is going to take a long time before we see fiscal sustainability. facing the reality, the reality of the advanced world, the advanced economies of the world, there is a group of countries, the emerging countries, that has much lower public debt representing a much higher share of growth. >> who are we talking about? >> greece, primarily, but broadly speaking, asia, latin america.

we have heard about the parasite economies of the world as prime minister putin put it recently. an arm and work countries are looking for -- an environment where countries are looking for -- have a legitimate preoccupation, and the world is losing a key engine. and do not believe that is good news for the world economy as a whole. this is why the world is looking at washington with concern. it is not just about the u.s. economy. it is a broader problem about

the world economy and such. >> in 2009, president obama and other world leaders came together for the g-20 and embarked on a course of stimulus to jolt the world out of the recession of 2008. what are the problems with the g-20 being used as a vehicle to overcome some of these problems? >> the stimulus package in the united states went nowhere, especially with that concerns. but there are countries like china and brazil that have the capacity to stimulate the economy with fiscal policies like they did in 2009 and 2010,

of public debt burden low and they can expand public spending jurors without creating the kind of concern we have in the u.s., without downgrading the treasury or worrying about how the market reacts. it is limited in its capacity to steer the entire economy in the direction of growth. i think that would be . the because of the expanded fiscal policies in brazil, china, india, the entire world economy as a whole could get back on track. >> this affects america and the west more generally because of what is happening in europe.

give us the assessment of how things are going there? >> the point made about figures we saw coming in today from germany certainly has increased concerns on the european front. a week ago, we might have been singling on germany as being a major driver in the global economy. debt levels are higher in europe. that is certainly the case in individual countries, but if you look at the eurozone as a whole , the debt levels are not higher, but what europeans are worried about is the contagion effect from the united states. if you lost the aaa rating, what about france?

what about germany? we are east of the greek crisis billing over into italy. -- we already saw the greek crisis spilling over into italy. what about spain? what about portugal? there seems to be a double standard in europe. the crisis in the united states because of the united states and the subprime mortgage, the united states being downgraded because of political dysfunction, the united states has the largest debt, but the same time, much of the commentary we of seen from the we are with a dysfunctional europe and a dysfunctional japan. we are doing a good job of

tarnishing ourselves along the way. europe at the are ones of perception. there is not really a question in europe about the value and importance of u.s. leadership. you're certainly has its own problems with populism, the riots -- europe certainly has its own problems with populism, the riots in london have left a lot of people navel gazing in trying to figure out what went wrong. even in israel, on the fringes of the european space, people are testing austerity measures. populist policies have gone a lot of traction in politics. there are elections coming up in

france and the main competitor for nicolas sarkozy is a new brand of populist politician. we have elections in germany in 2013, and the coalition angela merkel has tried to keep together is definitely fraying. it will be interesting to see how germany is going to go. descension seems to be doing what this function does. -- dysfunction seems to be doing what dysfunction does. the biggest fear is one of perception. how does one staminate and how does one stop the contagion effect a -- how does one stop it and how does one stop the contagion effect? >> how do the chinese view of

this -- all of this? can we rely on china to be the engine to pull us out of this? >> i think the chinese and people throughout asia consider the u.s. still to be by par the most -- by far the most powerful and dynamic country in the world. it is not as if people have written the u.s. off. we have a lot of respect. having said that, i think we're as being a country that does not have a good record of avoiding huge errors domestically. what we do have a good record of is recovering from those errors and emerging stronger than we

were before. the genius of our system is recovery, not avoiding mistakes, but recovering from them. the big question in asia is if we're losing our bounceback capability. has our political system become so dysfunctional that we can no longer reach the kind of dynamic compromises that enable us to mobilize the enormous resources we have to move forward into the future? this is a very big question. the past couple of weeks have added an exclamtion point to that question. i think this has also tarnished the u.s. model of democracy . china is saying you need a more

cohesive state, with a more influential role. i think china has it wrong, but on the basis of the last couple of weeks, you could see how they would feel that way. the u.s. in the past could always be the go to country. we had unparalleled resources. the question is in the future is if we will be a country short on cash who does not have the capability, whether it is global stimulus, peacekeeping, whenever it may be -- whatever it may be. we will have to encourage others to put the resources. it makes them question the perception of the u.s. role in the future. then you think about a trigger

mechanism. that has a strong and nearly half of the savings that are mandated out of our broadly defined security system. that will really force serious changes in serious decisions as to what we're not going to do mice -- otherwise might have done. there's a real question as to what is going to be cut. you can be sure countries around the region are looking to that. as you look around the region, everyone wants to benefit from china's economic growth, and they all are. china is the closest trade partner of every single country in the region. up until the year 2000, we were. that change has been extremely

significant. what they do not want to have is a chinese leverage of economic power to diplomatic and military advantage. so countries are turning to the u.s. to say, protect us from that. perfectly rational strategy. capacity to step up to the plate on the security side, they're going to have more in the direction of china. china itself, there hardin nationalists who argue that the u.s. is clearly in decline in will not recover. therefore, it is time for china to test its longstanding positions on issues of long

standing tradition with the u.s., whether it is weapons sales to taiwan or whatever it may be. are trying to keep them from doing that. they are saying the u.s. is serious in the short run and may be serious in the long run, so we're going to hold back before we make any decisions. the shadow of the future really haunts asia at this point in the shape of that shadow is shifting, and unless we get our act together, is not shifting in the right direction. the irony is, china is likely to continue to do very well. the reality is, that is not certain. they're worried about inflation, bubbles, declining export markets, all kinds of problems

from social tension to potential instability. their level of bad debt and local levels is very high. they are still trying to figure out where they are on that debt. they can manage it, but we are talking trillions of dollars, not hundreds of billions of dollars. we're a much better off if china does well, but let me conclude with one last remark. 2012 is an utterly extraordinary year in the asia- pacific region. we have an election. china has a succession. 70% of their top leadership will turnover.

election in january. hong kong in march. south korea later in the spring. russia in 2012. japan has potential political changes in 2012. there has not been a year in several generations one of the top national leaders will be focused on the politics of succession -- when all of the top national leaders will be focused on the politics of succession. that is a terrible time to have a bad economy. >> let me get you to respond to something david wrote in "the new york times."

president obama was celebrated when he came into office as a man who would end the era of american unilateralism. he will now lead the age of austerity which will inevitably limit american influence internationally. >> we are obviously in a serious crisis. i like a good prices as much as the next person. -- crisis as much as the next person. we want to make sure the other party is to blame in an election season. not only for domestic problems but for tarnishing america's

reputation in the world. we need to ask ourselves in a sober way, how much have they declined, how much can a decline in the future? the bottom lines are these. the united states continues to provide very important global goods too much of the world, including to china, whether it is through its security role, the fact that it has the single largest economy in the world. everyone depends to some degree on the health of the american economy. i think there is no other real competitor for the role the united states plays, and i do not think anyone in the world thinks there is. as i look back over the last 60 years, we can tremendously

overstate how wonderful brand america was in the past. there was a time between the mid-1960's-mid-1970's were the american brand was severely tarnished by the nom, watergate and other things. i think -- by vietnam, watergate and other things. the question really is, are we able to provide the kinds of public goods the united states has been providing in the past? i find it interesting that in the midst of this dreadful crisis, much of the world, especially europe, was still looking to the united states to please use its military power in libya. i must say, coming after iraq,

coming after george w. bush, coming after the economic debacle and the tarnishing of brand america, that the arab league and the europeans were practically begging the united states to use force in libya was rather astonishing and worth noting. what can happen? i think the debt problem is serious. i think the debt crisis is the big crisis. that is what the world is paying attention to. they want to know when we can get our debt under control. but for me, the question in terms of foreign policy is, what is the impact going to be on the american ability to provide public good, particularly in the security area, and if the

consequence of the debt crisis is an entirely unnecessary rating of the pentagon coffers when the world is looking for the united states to continue playing its military role, that is when the decline begins when we -- begins. when we cut our capacity to play the role that the rest of the world expects us to play, that is when we begin to decline. i do not think we need to commit suicide for fear of dying. but think it is very important as we move through this environment that we keep our eye on the ball. i think we're going to recover from this all right. i think it will be either in

barack obama as a second term or someone else's first term. look at american history. but the 1850's, the 1930's. america has to sometimes go through tremendous this functionality before arriving at some kind of solution, and i am fairly certain we will come to a solution. >> the triggers being put into affect have a dramatic affect on the defense budget. do you think it is likely? >> the second part of the debt ceiling increase agreement was a target for additional savings toward the deficit. the first was roughly $900 billion, $1 trillion over 10 years.

the second was about $1.10 trillion. if the congress fails to receive from the joint committee and act followed by a signature from the president of a plan to do that in a rational way, then a backup is a set of automatic reductions, and those are divided roughly evenly between the defense budget and, get this, medicare providers. now, the irony of the last is of course we -- the grand balanced budget agreement of 1997 that everyone is so proud of had as its only cut that to medicare

providers, and we have been fixing at every year so that it does not going to affect, so there was no savings from 1997. as the other party said earlier, this does not go into effect until 2013. i do not think either party or either president could live with that backup mechanism. we will live with something that will replace it. there is some given flexibility in the face of non-negotiable demands. one of the most obvious ways in the short term -- i think deficits and debt are a big problem, but i think everything we have done so far is counterproductive.

what i think has to happen is for obama not to bargain away his most powerful lever for getting something constructive done, which is the expiration of the bush tax cuts in 2012. that is the one thing that makes the status quo unacceptable to republicans who are likely to control one or both houses of congress even if obama is reelected and in and of its self eliminates our immediate problem and allows us to make reasonable judgments of defense spending. there is hope in that sense, but only if the actors who are in a position to do something about

it to not act foolishly and give away the leaders they have -- levers they have for forcing some changes. it is all about taxes and health care. everything else is around there in deficits and debt. we do not want to repeal the affordable care act or disable it. we want to build on and so we can actually deal responsibly with health care costs. >> and it is not going to happen in 2012. one of the aspects of america's itself is that it renews its leadership in regular fashion. you'll either have obama for a second term, possibly with a mandate, or you have someone

else running on a different plan that i think has a better chance than what we have renown. -- right now. i had to live through the monica lewinsky crisis. >> that was not the same. 1998, there were editorials all over the world, what we do while the united states takes this vacation? been through iran contra. talk about dysfunction. >> it is true that the world can wait. it is true that the world has been used to that.

degrees of freedom, but they are not unlimited degrees of freedom, and i think they're changing. today, there is more conversation about others waiting. >> who? brazil? india? >> we're talking about in years. >> ok, well then. if >> let me jump in on this. undeniably, the balance of power is shifting, but the notion that the united states is the preeminent superpower is a little hard to maintain in these circumstances. china is emerging with a powerful economy and a huge budget surplus.

it is not as if the world is just watching and waiting. the world is also acting in ways that we do not have as much ability to control. politically, others will seek to fill the vacuum. when we finally get around to 2013, when hopefully all of this works itself out, we may find ourselves in a situation that is much more difficult for the united states to influence. >> i want to push back a little bit on this in two ways. one is from a historical perspective. war, japan and germany rose to relatively

dizzying heights of economic power while the united states was preeminent. i would say that the rise of the japanese economy and the german economy dwarfed the rise of the brazilian and indian economy in terms of the impact on american leadership. as it turns out, the rise of japan and germany did not, in our view, retrospectively, negatively impact america. there is no question that china is not the china it was before, but when you look back on the cold war, we did not have china. with the soviet union. in the soviet union occupying with massive forces, with real global reach. i would venture to say that we are still better off today, even with rising china as of

preeminent power, than we were during that time. power has been shifting to asia for decades and will continue to shift unless and until concern about china crops up. in 1987 paul kennedy wrote a very smart book about american decline and america being overstretched and it was well supported by facts and history, and what happened? the soviet union suddenly and unexpectedly collapsed. not that the united states proved to be so wonderful, it was that the other guy collapsed. if you had to ask what was more likely, that the united states will stay in terminal decline or that china will run up against some challenge which may seriously shake its system, i think the china challenge is

probably a greater problem and i think the chinese probably due to. -- do too. theet's talk about one of other established powers, russia. there is political dysfunction there. >> that is a great segue from the ruins of the soviet empire and the ussr. the united states is not immune to this despite all evidence to the contrary. russians, this is a very useful narrative, because it shows that it can happen to anyone.

the russians have not only said the we are parasites on the global economy, but that the greatest tragedy of the 20th- century was the collapse of the soviet union. there is a sense of this, and i do not know if the chinese would buy into it, but for the russians, they're trying to spin the narrative that here we are 20 years on from the collapse of the soviet union and the other superpower is in the same position. , . were 20 years on from the soviet withdrawal from afghanistan, and where is the united states? stuck in afghanistan.

they're going to be elections in 2012. there is an enormous leadership transition in asia. 7% of the chinese party -- 70% of the chinese party. i do not think there will be much of a leadership transition in russia, even if there is a shifting of various chairs. we will still have the same people who for the last 10 years have been in charge of russian politics. deflections from your problems at home if you can people. russia will not be able to withstand a double-dip recession because they were hit so heavily the first time around.

their economy is still very much fueled by oil and gas revenues. in terms of political dysfunction, this is a great way of deflecting criticism about the fact that they do not have leadership transitions and that russia has all of these democratic problems the we are so familiar with. diminishing of obama presidency, presidency based on compromise and the partisanship, shows the chinese they need a strong hand, more assertive leadership. if mr. putin does come back as

president, he will feel justified, because look at the chaos in europe, the united states. that. crisis needs strong leadership. this is an extremely helpful narrative for russian politics. it is not really correspond to the reality in moscow. >> can i come back in on china? >> yes, is chinese leadership going to be affected in the same way? are they going to make the same argument over there? >> they have been making that

argument under various guises for the past 30 years. when the soviet union collapsed, they said effectively, look at the chaos over there. lookit the decline in standards of living and increase in mortality, etc. if you want to change our system, that is what it is going to become. that is what the future looks like. we can offer instead is rapid growth and social stability. more recently, they point to the united states. multi-party, free swinging democracy like we have prevents husbanding resources and getting from there to here. keep in mind that chinese per-

capita gdp is still below 100 in the world. we need the capacity to mobilize and focus resources in order to do the tough things necessary to manage urbanization and massive changes in society. they point to the u.s. to say let's face it folks, democracy does not get a lot done. i want to come back a little bit to bob's remark because, you presented this as, will be the u.s. up and china down or china up in the u.s. down.

there was an implicit comparison to the soviet union. being back in terms of the u.s. and the soviet union during the cold war is to fundamentally miss what is going on now. china's advances in recent decades have been on the basis of integrating into the global economy, including into our economy. we're in china and a major way in there in the u.s. and a major way. this is something we cannot of dreamed of with the soviet union. their increase in stature in the world has not been based on military power. if anything, military advances have decrease their stature because people are concerned about them going in that direction. i would argue the we have an enormous interest in china's success.

china's success already brings enormous benefits and enormous opportunity. our worry about china's success will be that if they succeed in their able to shape international practice -- and they are able to shape international practice that works against our interest and the interest of most folks we care about. what we want is based successful china that fits into a global system that continues to operate broadly along the principles that were set up after world war ii. but that system is at risk if the u.s. is not powerful enough to support it, if we're not successful ourselves. our ideal outcome is u.s. success and chinese respect. and that will produce on balance the best overall outcome.

chinese failure will impose costs on all of us that are huge. a chinese-u.s. failure leaves open the possibility the jig a chinese success, u.s. failure leaves open the possibility -- a chinese success-u.s. failure leaves open the possibility that china will be able to impose values that are not in line with u.s. values. >> if you were doing a predictive -- i was answering a predictive question. >> before we go to the audience for questions, tell us about western hemisphere reactions to all of this. >> i already lost the argument.

>> if we think of debt is the issue, and the debt is going from 70% of gdp to 80% of gdp in the next 10 years, if we think the u.s. has supremacy, there is no contender, the next one is miles behind, we can enjoy the summer, we can wait for a bipartisan commission to come in november with a proposal and if nothing comes after that, we will wait for the election. i think that is misplaced. it is misplaced for one reason. not to the contenders. the damage is the u.s. economy.

the economy. with all of those burdens and the current level of taxation, that is not sustainable. i think the motivation for doing something is not necessarily because of losing supremacy. it is because of the weakening of the economy. by the way, back to brazil. countries are thinking, let's find ways of mediating the costs associated with a weekend u.s.

-- weakened u.s. economy. let's promoted dialogue between emerging countries. let's figure out a way of offsetting the sec a recession with more stimulus. those are dialogues taking place in the offsetting a second -- offsetting a second recession with more stimulus. those are the dialogs taking place. >> let's go to your questions. who wants to go first?

>> thank you. i would like to offer a diagnosis of either political hypochondria or congressional munch hasn't syndrome by proxy. what about what we spend on foreign policy? we've spent trillions of dollars on the wars in iraq, afghanistan, troops in asia, libya. we're about to spend the next month looking backward to that 10 years of foreign policy expenses. what do you see happening in the next 10 years? are they going to be part of this debate or is the status quo going to be maintained because most of the money will come from entitlements? >> almost certainly others here

can speak with more authority than me. my own view is that some will inevitably be cut back. the chances of us in gauging militarily again on the scope of iraq or afghanistan without a clearer notion of how come out of it and finance it is pretty farfetched. i think out of this could come some very healthy adjustment and our whole defense strategy and expenditure. that would be a good thing. the easiest cuts are on the non- defense foreign-policy side of the budget. i see those being cut back,

areas initiated by president bush where we really have some leverage to do some very constructive things will be cut back harshly. there are a whole host of irrational cuts being made right now because those are the easiest places to change. i think there are some real adjustments to be had. the entire budget will be scrutinized. the bottom line is, if you are concerned about deficits and debt, the answer is taxes, health care costs and growth. everything else ends up a rounding error as far as concern

about our financial well-being. but the other pieces that it cut here could do real damage. >> bob, do you want to come in on this in terms of hollowing out foreign assistance at a time and it could be critically important to democratic transitions throughout the world? >> it is hard to measure exactly how much is going to be affected, but these are trivial amounts of money we're talking about. they're the easiest low hanging fruit for congress to go after. unfortunately, i actually believe that the president has not helped the case. when the president said in his recent speech on afghanistan that we need to focus on nation- building at home, that kind of

gives people more license than they might otherwise have to say yes, let's by all means -- unfortunately, it is only the administration in power who can make the big case for why the expenditures are necessary. congress will never make that argument. republicans really make that argument. -- rarely make that argument. >> i like bob's optimism, but let me throw out a few other thoughts that might weaken the u.s. role overseas and then have you shoot them down. >> that is my job as the optimist alone. >> declining public confidence in the federal ability to do the

right thing. in the 1950's and 1960's, the public believes, given to the government, they will solve it. that confidence has declined, and therefore the likelihood of the public encouraging the government to be active overseas is not what it used to be. second, our alliances are now with these to be. nato used to be really powerful. it is not there now. thirdly, we solved a lot of global problems in the past by throwing resources, massive amounts of money, massive delegations, overwhelming manpower and people. i do not see as having the kind of resources that we had in the past two throwed international problems -- to throw at international problems. and the last one, declining public interest in international affairs. the focus is on domestic, jobs,

keep the government small, look to the texas model. i do not see growing american public interest in the adventures overseas, especially in afghanistan and iraq. my question is, do these four points need further arguments for less influential american resources abroad? >> the one that is most important is restrained resources. if you have restrains resources, and very mechanical sense, you have less ability to influence the world. weakened tremendously overstate the degree to which we could -- we can tremendously overstayed the degree to which we could snap our fingers and get whenever we wanted over the years. by the way, we did real damage

to our own economy and the global economy as a result. as far as public concern, i have been hearing every five years or less that the public has had it with foreign policy for the last 25 years. the american people are a very interesting, not to say peculiar, people. they always say pretty much that they do not care about foreign policy. they never urged administrations to go off on foreign and ventures. it is usually political leadership in congress or more likely in the white house. there are events americans do not think they're going to care about and an end of to caring about. i would be happy to wager with anyone in this -- and then to end up caring about. i would be happy to wager with anyone in this room about this. sometime in the next five years,

the united states will engage in a moderate military action. it will not be world war ii or require hundreds of thousands of troops, but we have on average, since 1989, engaged in a significant military action overseas once every two years. i believe that the post-iraq, a post-afghanistan delay will probably extend that another two years. they told me if i voted for john mccain, we would invade another arab country. i did vote for john mccain, and that is what happened. barack obama has as engaged in an arab country, however limited. do not underestimate the american people's ability to pay no attention to the world and

then support intervention in the place they had never given thought to. >> i have a question for ken and bob. i think china already has an aggressive foreign policy, aiming to increase its power. [unintelligible] >> i talked last. you go ahead. unless you want to say something i can agree with again. [laughter] >> as you can tell, bob and i enjoy agreeing with each other. if i understand the question,

why is the world worried that chinese military power is being strengthened on the basis of its economy given that china does not have aggressive intent. is that right? for america to have military power is the other part of that. >> it plans for development of its own military our non- transparent. it has become more transparent over the years. it is the most least transparent in asia or the rest of the developed world. secondly, the kinds of things

the chinese military is the best thing in our, in some cases, quite worry some -- worrisome. when you look at carrier killing missiles, when you look at global surveillance capabilities, you have at goes beyond taiwan. it goes beyond the area right around china. china says it has no global military ambitions. on the other hand, we keep seeing china develop capabilities at a fairly rapid pace that can lay the groundwork for power projection well beyond its own periphery. that disconnect worries military people will look at china and say, we need to understand more about what your plans are and what you are thinking is about different regions of the world where you are engaged and how

your military development relates to specific goals. you can find a lot of that information about the u.s. military. you can find out what we are paying for military systems. you cannot do that for china. if you look dead china's military white papers, which they issue -- if you look at china's military white papers, which they issued periodically, they do not break down the entrance by region. you know the military thinks in those terms, but there is nothing in their white paper that addresses things with that level of specificity. that worries people. finally, the fact that china is not a democratic system worry spokes. ks. there is a sense that if you have a non-democratic system, it

does that have the kinds of restraints that democratic systems are self-imposed with by the nature of their decision making. people do not necessarily agree with that, but in terms of popular perception, there is a worry about authoritarian systems that are getting more powerful and developing their military systems rapidly and to not get into detail to explain why they're doing what they are doing -- and do not get into detail to explain why they are doing what they are doing. historians may argue. >> why do people worry about what china is doing? >> i want to go to peter's point about nato. i would like you to respond to the procession that nato is intent on sustaining the type of role in has played in the past.

>> can you also respond to the hearty acceptance of -- >> let's talk a little bit about nato first of all. mistake in believing nato could be something other than what it was during the cold war. what it was during the cold war was a static force in place. the role of nato during the cold war was the role of french, german, british forces -- to stay there and not get beaten to quickly by the soviets. -- i we decided that nato had to get out of business and become a global player. capabilities and

they wanted to go. we are asking nato to do more than it is capable or desirous of doing. that has created tensions in the alliance that were unnecessary. for me, the goal of nato andy e. you should be to continue to -- and the eu should be to continue to create a whole europe. they should concentrate on things in the middle east and russia. to talk about nato as a global power is a mistake. >> bob is absolutely right in asking too much of the european allies.

what we have seen over the last few years is that it has been the ninth-european allies, the canadiens and the australian and many -- has been the non- european allies and the canadians and others. the biggest challenge is germany. who about this very point about european security. we forget how traumatize europe was during its not too distant past in world war ii. there are things that need to be worked through about the use of military force.

it has pride. it is part of the patriotic american. that is not the case in europe. there was a great tarnishing of the role of the military because of the atrocities of world war ii. it was in world war i as well. we are still dealing with the consequences of this. we are asking questions about germany stepped up in of security? where is germany with his economic -- with its economic solutions? europe is still dealing with what the german military did during world war ii. it is an element that has not been resolved. you have no consensus about preventing the outbreaks of conflict in europe.

it is something that we have to have a better conception up when we start thinking about our own security and where we are going to go in the next 2-5 years. >> i would just add that nothing succeeds like success. if gaddafi leaves tripoli, it will be seen as a victory for nato. ok, one question here. >> i am from the university of maryland public policy school. it has been interesting to listen to this. what i sense is lacking is a discussion of the arab spring and the u.s. israeli policy. those have been such big drivers of foreign policy in the past. i do not have a particular agenda our argument to make. i would like to hear comments about our dysfunctional

political system and our economic system and where does that leave us with respect to israel and the development in the middle east? >> i was trying to escape his middle east -- escape the middle east. i do think the dysfunction we have been talking about here affects our ability to be effective in the context of the dramatic changes that are sweeping across the region. just the dysfunction and the deck and the ceiling and that we cannot afford to get involved in another war in the middle east war and other military intervention. -- another military intervention. that we are in iraq and

afghanistan. to take a position that might imply obligation on our part to when it comes to libya, but to syria -- libya is like las vegas. what happens in libya stays in libya. what happens in syria will have profound implications for the border arab world and for the carrot-israeli relations -- arab-israeli relations. they could suffer a decisive blow if the assad regime is not defeated. the fact that we are hesitating

to come out clearly in the support of the opposition when we did not hesitate to do it in the case of egypt or in the case of libya where we did not have much interest in the outcome is a reflection of constraints our preoccupations or lack of the ability to get engaged. it is ironic that uses the - that it is the turks who are starting to threaten the syrians. but we do not have that credibility at the moment because we are not prepared to move effectively. the russians are not willing to allow the u.s. -- allow the

u.n. security council actions. we are getting there, but we are getting there so we. people are dying in the process. there, but we are getting there slowly. we suffer more from a failed theory of the case. what about it trying to resume the negotiations in the wrong way. the degree of difficulty was great given the dysfunctional as among the israeli side and on the palestinian side. given -- given the dysfunctionalism on the israeli

side and on the palestinian side. the failure to achieve the limited goal of getting the resumption of negotiations going again -- even george bush, who did not care about the palestinian problem, had negotiations during his last year in office. president obama swore that he was going to make this a priority. in 2 1/2 years, he was only able to get one month of direct negotiations. that is something that has been going on for the last 18 years. does that affect our credibility? if we cannot be affected in trying to resolve the palestinian problem, which is the hot-button issue in the arab world, then we are badly positioned to play an influential role in these

dramatic developments that are going on now. our credibility has been tarnished. i am afraid we are out of time. i want to thank all of the panelists at bank the audience for a great discussion. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> today on news makers, education secretary arne duncan talks about how the countries prepare students for jobs. >> jobs are: to go where the knowledge workers are. we are not intending for jobs in our districts. we are competing for jobs with india, china, south korea, singapore. our children are smart, talented, entrepreneurial. i want to give them a chance to compete on a level playing field. i want to give them a chance to be successful. other countries are out-

educating us. >> you can see the entire interview on "newsmakers" today at 6:00 p.m. on c-span. it is also available online at c-span.org. >> it is a country fraught with corruption and islamic extremists. >> these assassinations were welcomed and congratulated by many pakistanis. these are not terrorists, not al qaeda, not taliban. they are ordinary people who think the country is becoming too secular and islamic values are under attack and blasphemy

is anything that attacks the profit or islam and something to be defended with your life. >> pamela constable tonight on c-span's "q & a." >> a 12 member panel is charged with cutting $1 trillion in spending over the next 10 years. this is 1 hour and 20 minutes.

>> the biggest surprise to me has been this committee and how we dealt with our debt ceiling in this most recent iteration. here is how we will proceed. i will give a brief description. i will be brief and leave a lot out. there are all kinds of things that make it difficult. i specialize in simplicity and that is what you are going to get. after i describe the deal, we will turn to sarah binder, a senior fellow here at brookings. she is an expert on congress and legislative politics. she will talk about the history of supercommittees. whenever congress cannot make a

decision or force is up to do the right thing, they appoint a committee or a commission. sarah will describe that and talk about this particular committee and how it will operate. then we will turn to bill gale. he works with the tax policy center. he is the author of several versions of the deficit and 10 year projections. he can produce projections faster than congress. shockingly, he is going to talk about baselines. as it turned out, they are a big deal and completely unresolved as far as i can tell. then we will turn to henry aaron. he will say we have been all wrong and the president has it all wrong and congress has it

all wrong. he will tell us what we should be doing instead. finally, we will turn to my good friend, william frenzel. you probably will not be as familiar with bill. he was in congress for 20 years on the ways and means committee. he knows as much about the budget as anybody i have encountered in washington. he is a guest fellow here. he will talk about what i think he can talk about better than almost anybody in town and that is the politics of the budget deal. keep in mind. simple. it is helpful to think about the agreement that has three distinct parts. it raises the debt ceiling. that is all these agreements did. this time, we did two other things. we've reduced the deficit. the crucial part of the deal and

the most complicated. we agree to have a vote in the house and the senate on an amendment to the constitution to balance the budget. that will take place in the fall. the second part of the deal -- the first part of the deal is raising the debt ceiling. that is $900 billion first. there will be $1.50 billion. whatever it turns out to be precisely, it will get us through the 2012 elections. that was one of the main goals of the administration. the second and most complicated part is reducing the deficit. that also comes in the two stages. there is an immediate agreement to $900 billion over 10 years. there are lots of numbers floating around. you can look at the baseline and

you can look at the budget authority or outlays. for the budget authority, is $935 billion. that is the first one. it includes interest. this is an important point about the budget. the more we cut, the more we saved beyond the cuts in programs. interest is getting to be such a huge part about our budget deficit. we are headed toward paying $1 trillion just in interest. interest is a big part of the savings. this is achieved by putting caps on discretionary spending. the first step is discretionary spending, caps on discretionary spending, defense and non- defense. there is a fire wall between security and not-security. that will only last for two --

there is a fire wall between security and non-security. that last for two years. -- that lasts for two years. there is a new device that the leaders came up with and that is the supercommittee, the joint select committee. it it says joints, you know it is important. that will result -- it is says joint, you know it is important. that will result in $1.50 trillion in additional cuts. the committee has 12 members, six republicans and six democrats. they can choose whatever baseline they want. that is an important issue. they can make changes. any changes in spending and

taxes, the text makes it clear that they can change things. they have park lodge -- carte blanche to do what they want. it is not like the president also death as the panel. if you get a majority, you can pass with -- it is not like the debtdent's that panel -- panel. they must vote without amendments. they cannot filibuster in the senate. he said the best rules you can have to pass something through the congress of the united states. it looks like it could be a good deal. if they do not reach an agreement, there is an automatic

sequestration. there, the additional cuts would be $1.20 trillion. there are some complex rules about what cannot be cut. in medicare, only payments to providers can be cut. we have such a strong record of delivering whenever we decide to cut provider payments that we would do it again. there is a 2% limit even in that part of medicare cuts. there are food stamps and medicaid and other programs that are protected from the completely.on that is a brief overview. sarah binder. >> thank you and thanks for including me. i thought i would talk about congressional committees in

general and a little bit about the implications of the membership of the joint committee. specially appointed congressional commitment -- congressional commissions typically fail. the supercommittee differs quite a bit from congressional committees. it is important to talk about why the differences might be consequential. the membership of the committee has a number of applications about what is likely to happen in the fall. i spent time looking at how the leaders made their selections and what we can infer from the makeup. first, why do committees typically fail and what is different this time around and what we can learn -- what can we learn? wire they prone to fail? it is not unusual for -- why are they promise to failed? it is not unusual for congress

to kick the can down the road. there was the simpson-bowles committee. they did not succeed in producing a plan that could be forwarded to congress. even when we do see success, when you look under the hood, the agreement was reached by people outside of the committee. when commissions are successful, such as the military base closing commission, the mandate is narrow. we can come back to be reasons why the defense commission might have succeeded. why don't these solutions tend to work? i like to think of political reasons and institutional reasons and the context in which these commissions are created. deadlocks over major issues of the day encourage congress to

kick the can down the road to avoid blame for failing to be take decision. it is not surprising that the commission sent to inherits the stalemates that created them in the first place. when we think about the -- there is partisan team played that gives the parties' strategic reasons to disagree with one another. parties see problems and solutions different the. even when they can agree on solutions, they tend to disagree just because it is the of the party. political incentives for legislators create these conditions in the first place. commissions find it hard to overcome the problems that created them in the beginning. there are a set up -- there is a set up institutional reasons why these committees do not work.

they are created by executive order. typically, when presidents set up commissions by executive order, they are given a supermajority requirement to officially report. there provisions are rarely if ever protected procedurally. they are subject to filibuster and party control on the house floor. the most successful commission is the one that proves the rule. decisions of the commission went into effect. congress voted to disapprove or reject the recommendations. most of these commissions are hampered by the way they are created. in terms of contextual reasons why these do not succeed,

commissions are rarely created in a time of crisis. it is really a sufficient to compel the party to sit down. how is the super committee different from what we have seen historically to about it difference primarily because of these institutional factors i have mentioned. it has a statutory basis. it only has a majority okay to report. no filibuster from the right. no filibusters -- it only has a majority vote to report. congress has kicked the can down the road. they have re did so we can will explode if they do not reach an agreement -- they have rigged it so we can will explode if they do not reach an agreement. some parties welcome and still make because they may benefit

electoral lead. this time, because the stalemate is much higher. we think it may compel the committee not to deadlock. having said that, the political factors that lead to defeat and failure are still in place. what does the implications of the makeup of this particular committee? two observations. this committee inherits the polarization we see in the house and senate. if you line up the house and senate members ideologically, there is nobody in the center. the closest you get is max baucus. even there, he is a loan to the extent that he is a centrist. that makes their charge -- even there, he is alone to the extent that he is a centrist. all four party contingence offer

third tier party leaders. they offered the tax committee chair, budget committee membership. you may wonder, where is paul ryan? on the democratic side, representation from key democratic factions. why is this important? this committee will operate in the continual consultation with party leaders. the deal is immensely important to party reputations and the electoral brand name. this is not simpson-bowles. this is not a homegrown gain of six effort. the parties have -- this is not a home grown gang of six.

the key question is, do the parties seek compromise in their electoral address in 2012? -- see compromise in their electoral interests in 2012. paul ryan said this is a decision that should be brought to the american people. in other words, this is an issue for the campaign trail. where does this lead us? just like the april budget agreement just like the august deficit deal. this will be a last-minute deal. do not put the turkey in the oven to early for thanksgiving. if there is a deal, it will be leadership endorsed. it will look like the other deals. the ends against the metal. there are many other -- the ends

against the middle. the committee is not the last bite at the apple. >> i would recommend to the audience that they buy their christmas presents early. william gale. >> thank you. talking about baseline's might be on the tedious side. the-talking about baselines might be on the -- talking about baselines might be on the tedious side. it is larger than the cuts the committee has to make. they have a $1.50 trillion question. if you can win the baseline

arguments, you might say, who cares about the $1.50 trillion. i want to give a simple example of what i am going to talk about, the tedious part. the baseline issue is, if you need to cut $1.50 chilean, the question is, compared to what? -- $1.50 chilean -- $1.50 chilean -- $1.50 chilean -- $1.50 trillion, compared to what? there is no guidance in the budget deal in the legislation about what baseline people use. in terms of an example, think of this the following way. suppose you have been eating badly the last 10 years and you

have been gaining a lot of weight and you want to lose 15 pounds. with 1.5 trillion pounds. the question is, compared to where i am now, i want to lose 15 pounds. i want to lose 15 pounds if i continue to it badly, i am going to gained 45 pounds. nobody who is serious about losing weight bills in a 45 pound weight increase and said i will lose 15 pounds relative to that. using one of the baselines would be the equivalent of reducing the deficit by $1.50 chilean and st. i am point to cut its --

$1.50 trillion and say i will cut it by 1.5 -- $1.20 trillion. this assumes all tax cuts that are supposed to expire at fleet to expire except a few, which we will leave aside -- supposed to expire actually do expire except for a few, which we will leave aside. congress is going to make the medicare cuts is supposed to by law, but never does. it assumes things about military spending and is held constant after adjusting for inflation.

that is not realistic base line to use if you want to see where you are headed. it is good if you want to recognize the cost of spending items that congress enacts. it is the equivalent of saying, here's my weight now. i want to use -- what to lose 15 pounds when it to my weight now. congress needs to start where it is that cut but it to the current law. using the current law would be equivalent to say, when you find yourself in a whole, the first thing you do is stop ticking. the-stop digging -- stop digging. i feel some responsibility for this. i have been putting out alternative baseline for a long time. we have been doing this for over

one decade now, even when the government was in surplus in 2001. the current policy baseline, which is the answer to the question, what happens if congress acts in the next 10 years the way it has in the past? the business as usual baseline. it has shown increasing deficits over time. the composite baseline assumes that the tax cuts get extended. it assumes that we do not let the alternative minimum tax to cover the system it assumes we do not spend as much in iraq and afghanistan that we do now. it assumes that congress is incapable of making these medicare cuts over the last in years that it has shown it is incapable of making. it is a good measure if you want to see what path we are on if we do not change our ways. it is the 45 towns banning of

the next day -- the next decade if we continue to it badly. over the last decade has been, we are headed in this bad way and here is the evidence. here's the baseline. you do not want to use that as a baseline if you are trying to reduce the budget deficit. once you reduce the budget deficits -- what he wants to reduce the budget deficit, that is the club let us say, i need to go on a diet. i was not built in 45 pounds or $4.50 trillion before i start cutting the deficit. the current policy baseline has always been a good guide to where we are headed if we do not fix things. it is not an excuse to not fix things. all the committees, bowles- simpson included, the obama administration, the congress, the always want to use the current policy based on because

it builds in all these nice things -- its of the amt -- but it is not a serious approach to solving the budget deficit. it says we will cut taxes by $4.50 trillion, then we will start helping the budget. why don't you just not cut taxes by $4.50 chilean? -- $4.50 trillion? to make it more complicated, it turns out that the republicans want to use the current law baseline even though that means the bush tax cuts at to be paid for it they are extended. the democrats want to use the car potsy baseline even though that is giving away the financing of the bush tax cuts. we can talk about the politics

of that he wants. let me just come up with three bottom lines to think about the bond -- about the budget deal and the base by. the baseline is with the action is. if you can get the $4.50 trillion dollars there, you can forget about the supposed cuts. second is, they should use carlyle as a baseline. third is, none of this means they can and cannot make the best they should use the current law as a baseline. -- they should use the current law as a baseline. if you are talking about doing it from the posse baseline, that involves less revenue than sticking -- doing it from the policy baseline, that involves less revenue. it gets tedious.

keep the weight loss example in the back of your mind. that is the simplest way of thinking of it. >> you can always get up now. henry, what did we do wrong? >> i will use a medical story to start my comments. you are a physician. you encounter a person lying on the street in the process of bleeding out and hemorrhaging of with the place. when you bend over, you tell this person to stop smoking and it better so that they will have a better chance for a long and healthy life. the visa and i am using this example is that i think -- the reason i am using this example is that it is symptomatic of the policy the range and represented

by the debate going on in this city over -- the derangement represented by the debate going on in this city of with the budget. the nation is in the midst of the deepest and most protracted recession we have experienced in the last 70 years. fact two, economic forecasters agree that there is no realistic prospect for a significant economic expansion any time in the near future. that leads me to that. -- that leads me to that -- to fact three. there is an effort by the monetary authorities to be supportive of monetary expansion. fact four, over the past years,

fiscal policy nationally and state and local fiscal policy has become significantly more workingtion aiary, against economic expansion during bad time. -- during that time. there was a nice chart available in a handout outside the room. it shows that 37 of the 50 states of the united states, including all of the large states but one, have seen reductions in spending compared to levels that prevailed in 2008 before the onset of the recession. the one exception, texas. texas will join this group shortly because they have budget cuts, that are going to make them a contractionary fiscal

force as well. nearly half of the unemployed and a slightly growing fraction have been out of work for six months or more. that proportion is also at 70 year highs. there is little or no indication in financial markets that investors are seriously concerned that the united states will default on its debts. the current yield on tax indexed bonds with a maturity of seven years -- the yield on those bonds is negative. people are paying to invest in them rather than requiring a positive rate of return.

i say all of this along with the fact that we face a serious long-term fiscal problems. bill and alan have been pointed out for many years -- right now, we face an immediate problem of great seriousness. that is a dangerous the slack economy. for us to be focusing now on dealing with the law become problem through measures that promise to aggravate the near- term problem is truly weird. it is important even as we consider how this committee is going to function, of the budget process is one to play out that we not forget the weirdness of the priorities that are expressed in that policy. in this circumstance, it would be truly perverse for congress

not to agree to what i anticipate will be president obama's recommendation to extend unemployment insurance benefits again. and to extend the payroll tax holiday that was enacted earlier this year again as well. in my view, the current policy right now would be a combination of short-term stimulus, including investments in the public works that we can finance at historically low interest rates together with longer-term deficit reductions enacted now, but to take effect only when the recovery is well established and unemployment has fallen to certain target levels. that happens to be the policy

that most of us here at the brookings have been urging for a long time. it is the policy that was embraced yesterday in the "financial times." "what is needed is a dual focus on medium-term consolidation and short-term support for growth and jobs." that view is identical to the positions taken by reputable economists with such widely varying political positions as paul krugman and martin feldstein. for purely fiscal reasons, one should youth-bang with deep concern the fact that is laid before -- what should view with deep concern the path that is laid before us. -- one should view with deep

concern the path that is laid before us. if the committee does not agree to cut at least 1.2 trillion through explicit measures, some or all of $1.20 trillion will have automatic cuts. that will reduce discretionary spending and national defense spending to levels that will threaten basic economic interests in the nation. i have a couple of handouts attached to the one i mentioned earlier that are available outside that show the magnitude of the cuts that would occur. i am going to conclude with one assertion about tax policy, which is less sure that bill will come back to. -- which bill will come back to.

one outcome about the debate about whether to extend the bush tax cuts would be about deadlock so that they all expired. at that point we could begin to talk about how to curb tax expenditures, local, called the but you will then use the revenue generated from them to lower rates by some amount. finally, i have one brief comment on possible outcomes based on what sarah describes. a likely outcome is that the supercommittee will agree to some modest cuts, but not to as much as the $1.20 chilean necessary to avoid sequestration. if that occurs, there will be

cuts divided between defense and ninth-defense. they will be so large and so unacceptable that the agreement that was just reached in august with the one that congress returned then reconsiders. >> william frenzel. >> thank you. i have sent. i am and recovering congressman. -- i have sinned. i have been going straight for two decades. i lay that before the courts in the hopes for mercy. i would like to begin by suggesting that this budget area is 1 arena in which the political parties have always tried to establish differences between each other.

it is not unusual to find the party is at loggerheads over a budget question. there have been glorious times in the past in the various summits and under reagan and bush and a wonderful time under president clinton when we actually had some surpluses. times of compromise between the parties. in recent history, both parties have been pretty bigger spenders. now we have the parties locked in this vigorous struggle over what is going to be cut, if anything. the republicans have been scrapping with a bomb and the democrats on the continuing resolution for 2011. we will have been notified in

2012 after labor day. we are talking today about the debt ceiling deal and the budget and the special committee that has been together in the meantime, the democrats are fighting back and have not passed in the budgets. the budget -- obama has put together a framework without any be done it. -- without any meat on its. . the parties have been arguing over domestic discretionary spending. the super committee is not going to change the situation much. the republicans have painted themselves into their little corner, no tax increases. the democrats up painted themselves in their little corner of defending social security and medicare as written. they seem to be the main drivers of our long-term debt

problem. the polarization of the problem and the voters accelerates. the resulting still made causes the can to be kicked down the road in that overused metaphor. parties obviously prefer to wait until after the election so that they have another year to pander to their core constituencies. they're not interested in any media solution. that is politicians of both parties. they have created this budget control act of august 1 which was described to you as being byzantine in nature. sarah describe some of the predecessor committees and their working as well. as far as the constitution of

that committee politically, i didn't think it makes any difference. one of the panelists suggested they are going to represent the leadership. that is my judgment, too. nobody on that committee is going to write a profile in courage by stepping out and voting with the wrong team. they are going to stick together. they will play around again extensively with domestic discretionary adding some defense spending. those players may as well the john and nancy and ari and m itch. that is the way they are going to vote. it will continue to increase. they will wait for an election. the election is likely to grant us a continuation of divided

government. and further political stalemate while they jockey until the next election. in the meantime, a lower economic condition continues to worsen. in my judgment, the right kind of solution is the super committee or the congress itself. they have to negotiate something like the bowles-simpson plant with forcing traders to stabilize the debt in 12 years and reduce it thereafter. our economy needs the certainty. if you need to back a load that a bit, that this -- backload that a bit, that is all right with me. democrats will have to sacrifice some entitlements and parts of medicare that they do not want to happen.

the republicans are going to have to sacrifice some tax reform and throw some additional representative revenue in as well. neither party seems willing to make such concessions. as a result, i believe the supercommittee will achieve its $1.50 chilean -- trillion goal. the trigger mechanism is frightening to both parties. its withnachieve domestic discretionary and tinkering with -- it would domestic discretionary. my political position is business as usual. we will have spent almost a whole here are giving about 50% of the united states' budget and we will be prepared to spend

another year doing the same thing. thank you. >> now i will ask some questions and i will give people in the audience the opportunity to ask a question. here's the first obvious question. can anybody on the panel imagine any circumstances under which republicans would relent on taxes and democrat on changes to medicare? [laughter] >> henry aaron is one to tell us how. >> financial catastrophe. >> i agree. it takes a crisis. the american government has been pretty good in a crisis and pretty lousy at all other times. perhaps that would do with -- would do it. >> shannon is extremely

optimistic. she said her scenario is that the new ingredient is the public revulsion about what happened or what did not happen in the last few weeks, public concern about downgrading and the financial markets and the weakening economy and that could be the spark that causes a bigger agreement to take place. the most optimistic scenario -- don't ask me to assess the likelihood of this -- there is a grand bargain and its involves not only $3.40 chilean -- trillion, but also the stimulus measures that hillary mentioned. they a a