as we take our seats -- thank you. as we take our seats, all of you are very special. i do hope that you had a wonderful evening. before we close the evening, we are honored to have a very special guest. would you please welcome to the stage mr. stevie wonder? [applause]

[applause] >> thank you so much for coming tonight. i appreciate you. >> thank you. >> it is truly an honor to be here at the beginning of this celebration. the memorial of dr. martin luther king, jr. i want to personally and emotionally thank you, hairy -- hear johnson for me to see the monument. he made it possible for me to go up in a tchery -- cherry

picker and touch the face of dr. king. [applause] what i would like to do before i say anything more is through the wonder foundation commit from the foundation $10,000 a year that will allow as many people that are blind to go up in the cherry picker to see this. [applause] and if that don't cover it, i guess i have to sell some more records. [laughter] but as i touched this memorial of dr. king, i think of what i

hope we all will do. i hope that we will remember the meaning behind the monument . i hope that we will remember, as we touch the base of it, the people who are poor in this country that are suffering, and that our spirits are tall enough, as tall as the monument stands in doing something about that. [applause] as i touch the body, i hope that all of us remember the meaning behind this memorial, the monument, and remember those who are without health care and be tall enough and big

enough, as tall as the monument, to do something about it. [applause] as i touch his face, i want us to remember the meaning behind the monument. i want us all to be tall enough to remember those young and old children, young people that will determine the destiny, ultimately, by how and what we do today, to make sure they have education, and those who don't have funds, will be able to have money enough. me in my life, i have been blessed by the grace of god. as we celebrate the spirit, those >> muslim and those who are

christian, but as you celebrate rahm dawn, all of you from all over the world, christian and other faiths, will remember that it is not about the religion. it's about the relationship. god bless you and thank you. >> thank you so much. [applause] >> thank you, my friend. he twunes play a song. ♪

>> i wanted to do this song. i actually wrote it in 1972 on the birthday of dr. martin luther king, jr.

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[applause] >> would you please thank the great and wonderful stevie wonder. [cheers and applause] >> at this time i would like the ambassador to please come back and join us again for the benediction. >> thank you. from the mountains, to the prayeries, to oceans white with foam, god has blessed america with a wonderful leader, with dr. martin luther king, harry johnson and all of them. two of them marched with dr. king, and they are the reverend jesse jackson and andy young. [applause]

>> once again, why don't we stand? >> to the wonderful king family, thank you for sharing your father, your uncle, your brother with us. we love you so much, to all the king family. take the hand again. shall we pray? >> accept our petition, dear god. forgive us for our sins, for they are many, for the foolishness of our wears. stretch our hearts, know our ways, make us better and never bitter. tonight is an awesome celebration, one who embodied hopes and dreams of unborn generations, transformed america and the world for the

better. we thank you for dr. king's will to be a confronting force, a battering ram for justice. willing to face the bombings of his home and maintain his dignity. to accept stabbings without retaliation, even that we might live. a family that sacrificed a father and a friend. those who live in the aftermath and glow of his life, we thank you. we thank them for their insights and will to serve extend the highest and best in each of us. as we celebrate this week, let us leave with a determination to feed the hungry, help the poor and study war no more. amen. >> thank you, lord. you brought us from a mighty long way. amen. >> apullen. >> goodnight, and god bless you.

[applause] [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> ladies and gentlemen please welcome triple platinum recording artists, i said ya harel.

>> hello, good evening. just arrived from israel on a long flight. a great honor to be here. totally jet-lagged, so good morning to you all. >> good evening. i know you guys have had a long night already. but we have a really special song that we want to share with you if we could have your attention for a few minutes. i sing this right now for my grandmother, who was a domestic

worker until she was in her late 20's, and then educated herself and became a drug abuse counselor in michigan. she saved so many lives. she actually was at the i have a dream speech. i sing this for her now. listen very closely to the words. this song is called gift of acceptance. y'all with me? why y'all at? >> in case you guys couldn't hear very well, this is idan in in raichel. ♪

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[applause] >> thank you. >> the new martin luther king,: national memorial opens this weekend. tomorrow, recognizing several. live coverage at noon eastern. the dedication of the memorial takes place this sunday, which is the 48th anniversary of the march on washington and dr. king's i have a dream speech. president obama and others are scheduled to speak. watch at 11:00 a.m. eastern live on c-span.

>> former first lady nancy reagan invited florida republican senator marco rubio to give a speech at the ronald reagan library in california. tuesday night he spoke about the role of government in america. senator rubio yo escorted mrs.

reagan to her seat before the speech. this event is 50 minutes. >> good evening. for those of you that don't know who i am, my name is geri parski, and i have the honor of being a trustee of the ronald reagan presidential foundation. [applause] rfc before we get started -- >> before we get starreded, i would like to ask all of you to please turn off your cell phones. and if you could all please remain standing for the pledge of allegiance once mrs. reagan is here. ladies and gentlemen, it is my distinct honor to welcome former first lady nancy reagan, escorted by her special guest, senator marco rubio.

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>> now in honor of our men and women in uniform who defend our freedom around the world, please join me in the pledge of allegiance. i pledge allegiance to the flag of the united states of america. and to the republic for which it stands. one nation, under god, indivisible with liberty and justice for all. [applause] >> thank you all very much.

please be seated. i would like to take just a quick moment to recognize some people who are with us today. from our board of trustees, governor pete wilson and his lovely wife and better half, gail. [applause] united states representative elton, and his wife janice. [applause] the honorable ga g-20 y vazzkezz. he was eighth u.s. ambassador to the united nations' agencies

for food and alculture. [applause] >> from the ventura county board of supervisors, peter foy. [applause] all of our representatives from the simi valley and thousand oaks city councils. [applause] and last but certainly not least, i'd like to extend a special thank you to the general electric company, the presenting sponsor of the ronald reagan centennial celebration. mrs. reagan, honored guests, ladies and gentlemen, ronald reagan was known as the great communicator. we're honored to have as our speaker today a freshman united

states senator who -- who one prominent publication called, quote, the most talented speaker in american politics today. [applause] perhaps a new great communicator. the son of exiles from fidel castro's cuba, senator marco rubio learned from his parents the values he has championed in public life. the same values ronald reagan championed. family, faith, neighborhoods, work, peace and freedom. in his maiden speech from the senate familiar, he recalled his early days. quote, i come from a hardworking

and humble family, he cold his colleagues, yet i consider myself a child of privilege. i was blessed to be raised in a strong and stable family and i was blessed to be here in the united states of america. marco rubio graduated from the university of florida in 1993 and the university of miami law school in 1996. after being elected to the florida house of representatives he quickly showed his leadership ability and was elected speaker of the house, the youngest person and first hispanic ever to hold that office. [applause] in 2010, he decided to run for the united states senate.

though bearing a brilliant resume himself, marco rubio made his campaign not about past achievements, but about principles for guiding our nation's future. he called for cutting domestic spending, holding the line on taxes, rolling back federal regulation that strangles economic growth, and a clear, strong, foreign policy. sounds like someone else we all admire. [applause] in washington, senator rubio has stood by the principles on which he campaigned. during this year's debt debate, he defined the issues at stake when he wrote, quote, our generation's greatest challenge is an economy that isn't growing alongside a national debt that

is. and he warned, if we fail to confront this, our children will be the first americans ever to inherit a country worse off than the one their parents were given. ronald reagan once said of the title so many had bestowed on him, i wasn't a great communicator. but i communicated great things and they didn't spring full bloom from my brow. they came from the heart of a great nation. ladies and gentlemen, at a time when many of us worry about how we can attract the highest quality to public office, please join me in welcoming a young leader who speaks for a new generation, a leader in the tradition of ronald reagan, united states senate, marco rubio.

>> thank you. thank you. thank you, thank you. thank you. thank you very much for this opportunity. gerald, let the maung for that introduction, talking about my communication skills so-called communication skills, i appreciate you not setting the bar too high. thanks so much. mrs. reagan, thank you for this opportunity. in a moment i'll talk about what this opportunity means to me in general but to me it's one of the highest opportunities and privileges i've had to talk in this space. earlier i was able to walk

through here and see the exhibits and talk to the people who were affected by this extraordinary man. just an hour and a half of walking thru here and meeting people touched by those contributions, it reminded me what a privilege it is that i get to stand here today and speak. i thank you for this invitation. thank you. [applause] in fact, i have a distinct honor because not many people -- the only two people i've ever walked down the aisle with are here today. one is my wife, jeanette, and the other is mrs. reagan, we just walked down here. i tell people all the time that i was born and raised in ronald reagan's america. i was raised in ronald reagan's america. he was elected when i was in

fourth grade and left office when i was in high school. those are very important years, fourth grade through high school. they were the years that formed so much of what today i believe and know to be true about the world and our nation. ronald reagan's era can be defined, number one, by the cold war and the end of it. ronald reagan didn't just believe that the soviet union and communism could fail, he believed it was inevitably destinned to fail. it was our obligation to accelerate that process. that all we had to do was be american and that would happen. and that defined his presidency and that defined ronald reagan's america and the time i that live -- -- that i lived that i grew up in that era. something else defined the reagan presidency, that was defining the proper role of government. he did that better than any american has ever done before. and -- [applause] and i stand -- it's always been

important for americans and america to do that. but i stand here before you today, all of us gathered here today at a time when defining the proper role of goth is as important as it's ever been. the answer to what the proper role of government is lies in what kind of country we want to have. i think the vast majority of americans share a common vision of what they want our nation to be. they want our neigh to be two things at the same time. number one, they want it to be free and prosperous, a place where your economic hopes and dream kbs accomplished and brought to fruition, that through hard work and sacrifice, you can be who you were meant to be, no matter who your parents were, no matter how much misfortune you had in your life if you have a good idea, you can be anything if you work hard and play by the rules. not all americans share that vision of a free a and prosperous americans.

but they want us to be a compassionate american, a place where people are not left behind. we're not going to tolerate those who can't take care of themselves being left to fend for themselves. we're not going to stand for our children being punished for the errors of their parents. we stand for two things, prosperity and compassion. ronald reagan understood that, perhaps better than any voice i've ever heard speak on it. america's leaders in the last century set out to accomplish that but they reached a conclusion that's placed us on this path. except for the reagan administration, to be quite frank, both republicans and democrats established a role for government of america that said, yes, we will have a free economy. but we will also have a strong government. with regulations and taxes we'll control the free economy and through a series of government programs we'll take care of those in society who are falling behind. that was a vision crafted in the

20th century by our leaders. though it was well intentioned, it was doomed to fail from the start. it was doomed to fail from the start first and foremost because it forgot that the strength of our nation begins with its people and these programs weakened the people. you see, almost since forever, it was institutions and society that assumed the role of taking care of one another. if someone was sick, in your family, you took care of them. if a neighbor met misfortune, you took care of them. you save for your retirement and future because you have to. we took these things upon ourselves and our communs and our homes an our churches and our synagogues. but all that changed when the government began to assume those responsibilities. all of a sudden, an increasing number of people in our nation, it was no longer necessary to worry about saving for security because that was the government's job. for those who met misfortune, that wasn't our obligation to take care of them, it was the government's job.

and as government crowded out the institutions in our society that did these things traditionally, it weakened our people in a way that undermined our ability to maintain our prosperity. the other thing is, we built the government and its programs without any account whatsoever for how we were going to pay for them. there was no thought given to how this was going to be sustained. when social security first started, there were 16 workers for every retiree. today there are only three for every retiree and soon there will only be two for every retiree. program after program was crafted without any thought as to how they'd be funded in future years or the impact it would have on future americans. they were done with the best of intentions but because it weakened our people and didn't take into account the simple math of not being able to spend more money than you have, it was destinned to fail and brought us to the point we are at today. it is a startling place to be because the 20th century was not a time of decline for america.

it was the american century. americans in the 20th century built here, we built here, the richest, most prosperous nation in the history of the world. and yet today we have built for ourselves a government that not even the richest and most prosperous nation on the face of the earth can fund or afort to pay for. an extraordinarily tragic accomplishment, if you can call it that. that's where we stand today. and so, if defining the proper role of government was one of the central issues of the reagan era, it remains that now. the truth is that people are going around saying, well, we're worried about -- let me just add something to this. i think this is an important forum, i know that it's popular in my party to blame the current president. but the truth is, the only thing this president has done is accelerate policies that were already in place and were doomed

to fail. all he is doing through his policies is making the day of reckoning come faster. but it was coming nonetheless. what we have now is not sustainable. the role of government and the role the government plays now in america cannot be sustained the way it is. now some are worried about how it has to change, we have to change it. the good news is it's going to change. it has to change. that's not the issue. the issue is not whether the role the government now plays in america will change, the question is how will it change. will it change because we make the changes necessary? or will it change because our creditors forced us to make these changes. and over the next few moments, i hope to advocate to you, i don't think i have to, given the makeup of the crowd, but i hope to advocate to you that in fact what we have before us is a

golden opportunity for americans. we have the opportunity within our lifetime to actually craft a proper role for government in our nation that will allow us to come closer than any americans have ever come to our collective vision of a nation where both prosperity and compassion exist side by side. [applause] to do that, we must begin by embracing certain principles that are absolutely true. number one, the free enterprise system does not create poverty. the free enterprise system does not leave people behind. people are poor and people are left behind because they do not have access to the free enterprise system. because something in their lives or in their community have denied them access to the free enterprise system. all over the world, this truism is expressing itself every

single day. every nation on the earth that embraces market economics and the free enterprise system is pulling millions of its people out of poverty. the free enterprise system creates prosperity, not denies it. the second truism we must understand is that poverty, that social problem that poverty is not created. poverty does not create our social problems. our social problems create our poverty. if our children -- [applause] let me give you an example. all across this country, at this very moment there are children born into and living with five strikes against them, already, through no fault of their own, they're born into substandard housing, in dangerous neighborhoods to broken falllies being raised by their grandmothers because they never knew their father and their mom

is either working two jobs to make ends meet or just not home. these kids will struggle to succeed unless something dramatic happens in their lives. these truisms are important because they lead the policy to define the proper role of government. on the prosperity side the number one objective of our economic policy, the singular objective of our economic policy from a government perspective is simple. it's growth. it's not distribution of wealth. it's not picking winners and losers. the goal of our public policy should be growth. growth in our economy. the creation of jobs and opportunities, the quality of opportunity through our governmental policy. now, often when i give these speeches to members of the media and others get frustrated because there's nothing new or novel in it. we don't have to reinvent this, it's worked before and will work again. we need a tax code that's fair,

predictable and easy to comply with. like a regulatory framework, a regulatory framework that doesn't exist to justify the existence of a regulator that doesn't exist to accomplish -- that doesn't exist to accomplish through regulation and rule making what they couldn't accomplish through the congress. [applause] it is the proper role of government to invest in infrastructure, yes. government should build roads and bridges but should do so as part of economic development, as part of infrastructure, not as a jobs program. and government should invest in our people at the state level. education is important. critically important. we must education and train our children to compete an succeed in the 21st century. our kids won't grow up to

compete with children in alabama or mississippi. they'll grow up to compete with children in india and china, all over the world. children who are learning to compete and succeed in the 21st century themselves. these are proper roles of government within a framework of creating an environment where economic security and prosperity is possible. and on the compassion side of the ledger which is also important to americans and it's important to remind ourselves of that. i don't like labels in politics but i'll gladly accept the label of conservatism. it's not about leaving people behind. conservatism is about empowering people to catch up. to give them the tools at their disposal to make it possible for them to access all the hope, all the promise, all the opportunity that america offers and our programs to help them should rethrect that. yes, there are people who cannot help themselves. and those folks who will always -- we are too rich and

prosperous a nation to leave them to fend themselves. those who can work should be given the means to empower themselves to enter the work force. we do need a safety net but it can cannot be a way of life. it must be there to help those who have fall ton stand up and try again. and by the way, i believe in america's retirement program. but i recognize that these programs, as they are currently structured, are not sustainable for future generations, so we must embrace public policy changes to these programs. i personably believe you cannot make changes to these programs to people currently in them. my mother -- she gets mad when i say this, she's in her eighth decade of life and she's on both of these programs, i can't ask my mom to go out and get another job. she paid into these systems but

the truth is that social security and medicare, as important as they are, cannot look for me the way they lock for her. my generation must fully accept, the sooner the better, that if we want there to be a social security and medicare when we retire and if we want america as we know it to continue when we retire, we must accept and begin to make changes for those programs now for us. these changes will not be easy. speeches are easy. actually going out and doing them will be difficult. it's never easy to go to people and say that what you've always known we have to change. it isn't. it will be hard. it will actually really call upon the specific generation of americans, those of us like myself decades away from retirement to assume certain realities that we will continue to pay into and fund for a system we'll never fully access. that we are prepared to do

whatever it takes in our lives and in our generation so that our parents and grandparents can enjoy the frutes of their labor and so that our children and grandchildren can inherit the fullness of america's promise. you see, every generation of american has been called to do their part to ensure that the american promise continues. we're not alone. we're not unique. we're not the only one. i would argue to you that we have it pretty good. yet i think it's fully appropriate that those of us raised in ronald reagan's america are actually the ones now being asked to stand up and respond to the issues of the day. for we, perhaps better than any people who have ever lived in this nation, should understand how special america duly is. when i was a boy, the world looked very different than it does now. i remember visibly how many assumed and believed that society style communism was destinned to at least rule half the world and they urged our public policy leaders to accept

that. and to understand that america would have to share this planet with this oppressive form of government that was perhaps destinned to overtake us one day as well. there were many who discouraged our leaders to talk about the inevitably of decline for communism and that it would fail. many encouraged us to accept this as the way it has to be. and to tell us america could no longer continue to be what america had been. the world was too complicated and too difficult, it had changed too much. sound familiar? that's what they told us. but one person at least didn't believe them. and he happened to be the president of the united states. he actually believed that all we had to do was be americans, that our example alone will one day lead to the decline and fall of a system that was unsustainable. because he understood, the

desire to be free, compassionate, though shared by all americans was universal that the desire to leave your children better than yourself was something we desire as americans but so do people all over the world. because he understood that the principles this nation was founded on was not that we, all people in north america, were endowed by the creator with certain inalienable right but that all people were, and that the desire is to live in freedom and liberty and government's job is to protech those rights not grant them to us. this was the natural -- [applause] this was the natural state of man. anything that prevents it is unnatural and comed to fail and

all we had to do was be american, to be prosperous and be free. all we had to do was be a voice for these principles anywhere in the world where these principles were challenged and oppressed and eventually time was on our side and how right he was. when i was in fourth grade, the soviet union was a co-equal power to the united states. before i finished college, the soviet yube didn't even exist. and so many people born since then have no idea what it even was. to me this is extremely speble. i'll tell you why. during the 1980's, politically, especially, the two people that deeply influenced me, one clearly was ronald reagan. the other was my grandfather who lived with us most of the time in our home. we lived mostly in las vegas, nevada my grandfather loved to sit on the porch of our home and

smoke. smoke cigars. he was cuban. three cigars a day. he lived to be 84. this is not an advertisement for cigar smoking but i'm just telling you that. my grandfather was born in 1899 to an agricultural family in cuba. he was stricken with pole yow as a young man, he couldn't work the field. they sent him to school. he was the only one in his family who could read. he got a job at the local cigar rolling factory. they didn't have radio or tv, he would read to the workers. when he was done reading to them, he went out and rolled cigars because he needed the extra money. through all those years of reading, he became extremely knowledgeable about history. he loved to ta about history. my fwraufer loved being cuban. he loved being from cuba.

he never would have left cuba if he didn't have to. but he knew america was special he knew without america, cuba would still be a spanish colony he knew without america, the newt sees would have won world war ii. when he was born, there were no airplanes, by the time i was born an american walked on the the surface of the moon he knew he lost his country and the only thing preventing other people in the world from lose theirs to communism was this country. this nation. it's easy for us who are born here to take for granted how special and unique this place is. but when you come from somewhere else, from what you always knew and loved, you lost. you don't have that luxury. my grandfather didn't know america was exceptional because he read about it in a book. he knew about it because he lived it and saw it with his

eyes. that powerful lesson is the story of ronald reagan's presidency. it's our legacy as a people. until we have a chance to meet again, i think that's important for all of us. because being an american is not just a blessing. it's a responsibility. as we were commanded to do long ago, let your light shine before men that they may see your good work and glorify your father in heaven. well, as we gathered here today in this place, that pays homage and tribute to the greatest americans of the 20th century, we are reminded that for him and our nation, being a light to the world, that's not just our common history. it remains our common depth. thank you. [applause]

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> thank you. >> a pretty good communicator, wouldn't you say? >> thank you. >> the senator has agreed to respond to questions. we collected some from the audience, so i've agreed that i

will read them. >> i've agreed to listen to questions. the response is an option. >> if your mother asks you to accept the v.p. spot, what will you say? [applause] >> did i get heckled at the ronald reagan cent her is there another question there? i will just say this. that's a great honor to be thought of in that way. i have, as i joked earlier today, i have no interest in serving as vice president for anyone who could possibly live all eight years of the presidency. all kidding aside, it's a great honor.

delayed reaction there. i love being in the united states senate at this time in our history. i believe we can make a difference from there. i really do. what happens in poll techs is the minute you start thinking there's something else out there for you, it starts affecting everything you do. maybe you're afraid to take a position on a certain issue because it imperils your opportunity to do something else. the reality is i'm not going to be the vice-presidential nominee, i look forward to working with whoever our nominee is. >> next a young conservative in the audience who followed you from the start of your 2009 senate campaign, his question is, how do you think the republican party can do better to attract people of his age. this is from john thomson. >> we need to be the party of prosperity and compassion, both at the same time. especially people of the younger generation, they all want

prosperity but they want to make sure we live in a society where we don't leave people behind. and you think do both. it's not an either-or choice. there's only one economic system in the world where that's possible, the free enterprise system. there's only one economic system where people who are employees can become employers. where a worker can become an owner. there's only one economic system where you can start a business out of the spare bedroom of your home, yes in violation of the zoning that is the american free enterprise system. that is not just young people, as all people. that is what people want for their future. i wish that passing laws and government spending programs created jobs and prosperity. that is easier to do than asking people to get up and go to work. the american free enterprise system has eradicated more poverty than any of the

governmental programs and the world combined. we need to convince people of that again. if we do, that question will not be an issue before long. >> how do we get hispanics to align their votes to their conservative values? >> i would say to you that americans of hispanic descent want desperately to get their children be chances they never had. my own personal story is typical. my parents, as i have said, had some tough breaks in their lives in terms of losing their country in coming year. i do not know when it was. i do not remember when it was my dad realised he was not going to be able do the things he had dreamt up. it is my mission in life to make sure my kids can do all the things i could never do. i do not know when that day was,

but when that they happened he would not have been able to do that anywhere else in the world. when i come to of the news like this -- a lot of times i speak at banquets -- my dad was a bartender. he worked at events like this. he stood behind one of the little role way bars. why did he do that? he stood behind a bar like that so one day his son or daughter could stand in a place like this. it would be unimaginable for my grandfather 25 years ago to believe that one day i would be speaking in front of nancy reagan and an audience of people at the ronald reagan library. that is not what they wanted me to do. they did not push me to go into politics or anything else, but they did inculcates something it in the simple and profound -- you'll have a chance to do things we never had a chance to do because you are an american and you live in america. that is a powerful thing.

it is the hope and dream for all americans. it is especially true for the community of americans of hispanic descent. the only economic system where that is possible is the free enterprise system. there is a reason why in these countries where big companies -- were big government predominates. hear, an employee can put their boss out of business if they have a better idea and can work harder. the american free enterprise system is the only system in the world where that aspiration that i have outlined it to you has any chance of succeeding. we have to do a better job of communicating that. if we do, and the rest will take care of itself. [applause] >> they get easier. it is ok. in the upcoming budget battle, which position do you take between the defense hawks for

higher military spending and the anti-tax groups. >> our tax code is broken. it is a mess. there are things in the tax code they got there because of good lobbying, not good polyp -- not good policy it has to be reformed. it has to be made with an eye towards economic growth. job creation. that should be the purpose of everything the government does regarding the economy. i believe in tax reform. i -- my opposition to tax increases is not a religious belief or an ideological one. it is common sense. increasing taxes cost jobs. i have yet to have anyone come to me and show a tax increase that creates jobs outside the government. [applause] on the defense side, there has

never been an excuse for waste. if there are ways for contracting practices in defense, we should read that out. but the world is as dangerous as it has ever been. if we think that weakening america's national defence is something we can afford to do, we are sadly mistaken. we cannot. [applause] western europe virtually has no defense budget in comparison to what we do. it has not helped them find the kind of government they try to do either weakening the national defense is not the way to balance the budget in the united states of america. [applause] >> what is the best idea to get across to our liberal friends to help them stay away from spending, spending, spending? [laughter] >> look, i think there are

americans who love their country who want a nation of prosperity and compassion. they think the government is the only institution in society that can do that. the truth is, there is no nation on earth that has been able to do that. it is not because they do not love america, it is because they are wrong. [laughter] [applause] the proof is on our side. in february of 2009, this government borrowed $80 billion and popped it into the economy. unemployment did not go down. unemployment went up. the things they have asked for are not working and they are not going to work. no matter what they do, the policies they are trying are not going to work because they never have worked and they will not work now. the only way to empower our people to truly tackle poverty is to grow our economy.

the american free enterprise system is the only way to do that. i am not sure we will ever convince our liberal friends of that, but i do believe we can convince the vast much -- we can convince the vast majority of americans of that. [applause] >> if you could get the tea party one idea or topic for them to focus on, what should it be? >> i think they are focused on it -- the proper role of government in america. [applause] this whole debate -- all the screaming and shouting back and forth in washington -- the debate about the role of government used to be an ideological debate. now it does not even a debate. it is a mathematical reality. the federal government spends $300 billion a month. at only takes in $180 billion.

you cannot keep doing that much longer. s&p did not downgrade the united states because congressman armey into each other. -- congressmen are mean to each other. they did it because we cannot continue our spending. that is exactly what the tea party movement and a growing number of americans are focusing on. we are not an artist. it is important the government does the things the government should be doing. but when it begins -- begins to do the things is should not be doing, when its role grows beyond its proper role, it does harm. it is doing harm. the regulations in america are killing jobs. our lack of energy policy and common sense are killing jobs. our tax code is killing jobs. as maligned as it may be, the tea party movement has and continues to be a collection of everyday americans from all

walks of life who believe that this is the greatest nation in the world, that it can stay there as long as it was to be, but that is where it is not headed and that is what needs to change. that is what the tea party movement has been about. [applause] >> this person from the audience says, honorable senator rubio, what you see as the purpose of government -- >> developing our citizens is a function of our families and communities. [applause] our schools and our government should be a tool that our families and communities can use, not where we send our kids to be raised. in the real world, there are real problems. there are kids struggling to succeed because of aspects of their lives that are not their

fault. that is the reality of it. it is important for us, as we talk about the proper role in government, if to remind ourselves of the founding principles. one that i really think is powerful and people need to fully embrace is one i have heard from a lot of people and embodies many of the things that president reagan stood for. all rights do not offer our government, our rights come from our god. rights come from god. [applause] government's job is to protect those rights. those are the founding principles of our nation. without that principle in place, the american revolution was just another colonial rebellion. without this principles, it was just a bunch of people who wanted their own country. what made us different is because we said the reason we want our own country is because we believe every human being is born with certain rights, a government that does not correct

these rights is illegitimate, and we want a government to protect those rights. those are the principles of the founding fathers. the more we remind people of that, the better off we will be. [applause] >> this is the last question. it came from the audience. where do we send a check to support your presidential run? [laughter] >> thank you very much. thank you. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> thank you very much, senator.

dinner will be served in the air force one pavilion in just a few minutes. staff and will help escort you to dinner. i would like to ask that everyone remains seated while mrs. reagan and our special guest depart. thank you for a great evening.

>> up next, today's report on the federal budget and the economy from the congressional budget office. then the head of the u.s. special operations command talks about counter-terrorism efforts and the mission that killed osama bin laden. >> what caused the device -- demise of american newspapers? former chicago tribune managing editor takes you besought -- behind the scene of decisions made in "the deal from hell." it is one of the bills we are featuring on c-span2's booktv. on afterwards, more is not always better. ronald bishop talked to a georgetown professor on the lack of moderation in american culture and the media's role in

reinforcing the need to what more. throughout the weekend, author interviews from our trip to frankfort, ky. next month, join us for a three hour conversation with a newsweek editor on racism and the role of the media in america. get the complete schedule at booktv.org. what's more video of the candidates, see what reporters are saying, and track the latest campaign contributions with our website for campaign 2012. it helps you navigate the political landscape with twitter feeds and facebook updates from the campaigns, tended biographies, the latest polling data, and links to c- span media partners. all at c- span.org/campaign2012. >> unemployment in the u.s. will remain at 8% or above for the next few years according to the

congressional budget office. they also say the recent budget deal has improved the country's output. douglas elmendorf met with reporters for one hour and 15 minutes. >> this morning, the cbo released an update. i would like to briefly summarize the report and then my colleagues and i will be happy to try and answer your questions. the united states is facing profound budgetary and economic challenges. cbo estimates the budget deficit

this year will be about one. dollar trillion, which -- $1.30 trillion. that deficit stems in part from the long shadow cast of the u.s. economy by the financial crisis and the recent recession. although output began to expand two years ago, and the pace of the recovery has been slow in the economy remains mired in a severe slump. cbo expects that recovery will continue but output will remain below the potential output, an amount that corresponds to a high rate of use of labor and capital for several years. cbo initially completed its economic forecast in early july. we later updated the forecast to reflect the policy changes enacted in the budget control act of 2011, but we did not have time to include other news,

including a recent swing in financial markets. on the basis of the data available through early july, cbo projects that real, inflation-adjusted gdp, will increase by 2.3% this year and 2.7% next year. incorporating the economic data of the past month and a half would have led us to reduce expected growth in the near term. looking beyond next year, under current law the federal tax and spending policy will impose substantial restraints on the economy in 2013. cbo projects economic growth will slow that year before picking up again in two -- in 2014 and beyond. with only modest economic growth anticipated for the next few years, cbo expects unemployment to fall slowly and employment to expand slowly. the unemployment rate, shown in the picture behind me, is projected to fall from 9.1% in

the second quarter of 2011 to 8.9% in the fourth quarter of this year, and 8.5% in the fourth quarter of 2012. it will remain above 8% until 2014. although inflation increase in the first half of 2011 spurred by a sharp rise in oil prices, cbo projects it would diminish in the second half of the year in state below 2% for the next several years. yet there it -- there is at this is that the uncertainty surrounding cbo's forecast is especially great because of the present business cycle. it has been unusual in many ways. many developments could cause economic outcome to be different. if the recovery continues as we expect and if tax and spending policies unfold as specified in current law, deficits will

dropped markedly as a share of gdp over the next few years. under cbo's baseline projection, which generally reflects the assumption that current law will not change, deficits ball to 6.2% of gdp next year and a 3.2% in 2014. as you can see in the picture behind me, the average 1.2% of gdp in the coming decade. cumulative deficits over that decade will total $3.50 trillion under current law. by the end of 2021, debt held by the public = 61% of gdp. that is less than it is now, but well above what the country has experienced of the passible decades. cbo's baseline projections incorporate the assumption that current law remains in place so they can serve as a benchmark for policy makers to use in considering possible changes in

law. those baseline projections understate the budgetary challenges facing the federal government. changes in policy that will take affect under current law will produce a federal tax system and spending for some federal programs that differed noticeably from what people have become accustomed to. in particular, the baseline projections in this report include the following policies specify in current law. first, certain provisions of the 2010 tax act, including extensions of lower rate and extending credit in deductions originally enacted in 2001, 2003, 2009, and 2010 expire in 2012. second, the two year extension of provisions designed to limit the reach of the alternative minimum tax, he extension of emergency unemployment compensation, and the one-year reduction of the payroll tax all expire at the end of 2011.

third, sharp reductions in medicare payments for physician services take effect at the end of 2011. fourth, funding for discretionary spending declines over time i get real or inflation-adjusted terms in accordance with the caps established under the budget control act. fifth, additional deficit reduction totaling $1.20 trillion over the next decade will be implemented as required under the budget control act. all of those policies are in current law and labeled in our current law projection. if, instead, some of those policy changes did not occur and current policies were continued, much larger deficits and much greater debt could result. for example, it most of the provisions in the 2010 tax act that were originally enacted in 2001, 2003, 2009, and 2010 or

expanded -- were extended, at the alternative minimum tax were indexed for inflation, and it cuts to medicare for providers were eliminated, that is shot in the lower line. it would be nearly $8.50 trillion rather than the $3.50 trillion in our baseline projection for current law. under those alternative policies, the debt held by the public would reach 82% of gdp by the end of 2021, higher than in the era since 1928 create beyond the next decade, the aging of the population and rising costs for health care will push the federal spending up considerably as a percentage of gdp. to prevent that from becoming unsupportable, policy makers will have to substantially restrain the growth of spending, raise revenue significantly above the historical share of gdp, or pursue some combination of those

approaches. thank you. my colleagues and i are happy to answer your questions. >> someone said the cbo did not take into account stock market volatility. could you be a little more specific about that? is the u.s. in a recession now? will the economic indicators to contribute to a higher deficit going forward? >> as a practical matter, we cannot update the forecast every day up to the presentation of this report. if we build our budget projections on top of our economic projections. we must resettle those economic projections in early july. the one exception is that we need to have budget presents it -- budget projections and economic projections consistent with each other. we did update the economic forecast from the budget control

act of 2011. otherwise, we have not been able to take on board the news from the financial markets, the latest data on non-financial economic activity, the annual revision to the end of product accounts that have come out since early july. if we had all that information on hand and were -- when we made our economic forecast, we would have ended up with a somewhat weaker economic growth. that would have met somewhat larger deficits. but we have not done the work we would need to do to quantify that. we still believe, taking on board all the information available to today, that the economy will continue to grow in the second half of this year. as i mentioned, however, and this is a good point to emphasize, economic forecasting is a perilous business. it is particularly perilous

when we had been through a number of years of economic developments that are nearly unprecedented in u.s. history. >> your forecast for the unemployment rate seems to show a very gradual decline back to what americans are used to. been a more precipitous decline. can you give us a sense of the assumptions there and why those are what you think is the most realistic expectations? >> the first crucial assumption to have in mind is current law, fiscal policy. under current law, as i mentioned, a good deal of the lower tax rates and other changes in tax law expire. the tax burden rises

considerably in 2013. additionally, under the budget control act, there will be reductions in spending in 2013 from discretionary caps. in addition, there will be some additional amounts of does -- of deficit reduction that has not been specified. we did not have a way of determining what policies may be undertaken. we get taken a very simple approach, assuming equal reduction in the deficit for the seven years from 2013 until 2021. that amount to accentuate the with all of fiscal stimulus, the extra fiscal restraint in 2013. an important part of what is happening is that we had the next few years -- the next -- the rest of this year and 2012 -- with the forces weighing on the economy will continue to weigh on the economy.

the reduction of household wealth, efforts by households to reduce their debt burden, restrained by credit availability, with this in the housing sector, and so on. it will take some time for this force is to be worked out. in 2013, there is this large amount of fiscal restraint. farouk 2013 we are looking for slow growth in output. after that, once that fiscal restraint has come on board, we think the other forces that have been slowing the economy will be waning. eventually it will start building houses again. households will do more spending. businesses will do more spending. by the end of 2013, we are at a point in our projections where actual output is well below the potential level of output. with some of those other forces

having wayne, we expected that point that the economy will start to recover more rapidly the way that it has after some past downturns. we are looking for more rapid growth in to the 14th, 2015, 2016, and the closing of the gap in 2017. unemployment comes back down symmetrically with that to about 5%. howou're talking about there is a more likely past, but there are things that could change that path, such as the hurricane in florida. what are some things that could change the unemployment outlook? >> that it is a very long list. we talked in our economic chapter about some of the risk the economy faces. there are risks on both sides of our forecast. we try to set forecast for the economy and projections for the budget, but are in the middle

of distribution. there are upside and downside risks. the downside risk include a stronger desire by households to pay off debt and rebuild their wealth. it could include greater uncertainty about households and businesses, the pace of the economic recovery, and government systems as well. with -- the european market has problems with european sovereign debt prices could come down, but they could possibly go back up. there is a tremendous collection of forces that could work to restrain economic growth whether those accumulate enough to create a downward spiral is a different question. >> there are two parts to the

budget deal. one is a discretionary spending. the other is a committee [unintelligible] according to your projections, would there be a long-term difference in the budget picture it the committee failed to do its work? >> under current law there will be an extra $1.20 trillion in reduction either to the enactment of proposals stemming from this committee. the economic forecast would vary depending on the nature of the fiscal policy changes. if, for example, the deficit reduction committee put off the deficit reduction until later in the decade and rather than

beginning in 2013 the way we assumed for this report, that would strike economic activity and unemployment in 2013. if the committee made particular changes to tax policy, we would try to model the economic effects. we have done analysis of the president's budget. we inc. the effects of changes in marginal tax rates on labor supply and saving. but the composition of the policy changes in the timing of the policy changes will leave some imprint on our economic projections. we have to have another set of changes in mind for us to do an economic analysis on those. >> do you believe the committee should go beyond its mandate to find a bigger package? >> it is not the role of the cbo

to advise the congress on what policies they should undertake. the budget picture as we have shown in this report and a collection of reports is a bleak under current policies. if current policies are extended, then we have very large deficits and mounting federal debt. that is not news to anyone in this room or on capitol hill. i think it -- i think it is the concern about the trajectory and its implications to the economy that have led to the renewed focus on deficit reduction this past year. but what the right amount is that deficit reduction committee should aim for is not for us to say. >> you are saying that you did

factor in 2013. that would slow economic growth at the beginning. >> we do say in the report and said on a number of occasions that reductions in government spending or increases in taxes in an economy with a lot of unused resources and with monetary policy having already pushed interest rates down to zero will slow economic growth and reduce employment relative to what would otherwise occur. let me be clear about that. under the economic conditions and the condition for monetary policy that we now find ourselves in and that we project will be roughly still true for

the next few years, reductions in government spending or increases in taxes will reduce output and employment relative to what would otherwise occur. at the same time, those actions, by reducing government borrowing, will lead in the second half of this decade and beyond to higher output than otherwise would occur, and higher incomes. there is a tradeoff there in terms of the effects of deficit reduction enacted and taking effect over the next few years. it is possible, and we have talked about this possibility on a number of occasions, to structure deficit reduction in a way that it does not have a large and dampening effect on employment while still achieving

significant deficit reductions over the longer term. that amounts principally to having policy changes take that back later. that is not particularly an argument for deferring decisions about those policy changes, but in the question of what point in time the policy changes should actually hit the economy, the advantage to waiting is low or negative impact and economic growth in the near term. this advantage is a greater accumulation of debt in the near term. that is the strait of that policy makers confront. >> by explaining the $1.20 trillion, you are assuming have tax increase, have spending cuts formula? how do you get that?

is it going to come from higher taxes, spending cuts, or both? >> ag good deal of the -- a good deal of it comes from changes in the tax rate and the expiration of those provisions. then there is some extra jolt from the caps on discretionary funding in the budget control act. the additional jolt, the additional $1.20 trillion, we have not allocated to spending or revenues because we do not know. we have no basis for making that determination. what the lot does say is that if the deficit reduction committee does not lead to legislation that causes any deficit reduction, there would then be a reduction in spending that would be for the fiscal years that it applies. we have taken that a "reduction.

i should say equal in terms of the tax law changes that builds up over time. we just take that as most neutral choice we could make. because of that, we have not allocated it to spending or revenue. there is a little bit of complication in reading the tables. you'll see a number of tables where there is spending, revenues, and something else before you get to the total. we know that is awkward, but we had no alternative we could pursue. >> your baseline projection is $3.50 trillion over the next 10 years. i understand about two-thirds of the reduction in the budget control act -- how you account for the remaining?

>> most of the reduction in projection deficits relative to a march projection come from the effects of the budget control act. much of what is left comes from the downward revision to our projection for interest rates, both short-term and long-term interest rates. that essentially follows the movements in market interest rates. market rates have fallen further, but our interest rates in this projection are above the rates that are prevalent in financial markets. that is for most of the coming decade. the coming interest rate as a larger affect on the budget deficit. the country as a lot of debt. it seems that more interest rates could save the federal government a lot of money. it also means that higher interest rates will cost the federal government a lot of money. just movements in interest rates will matter much more when debt

is 60 or 70% of gdp than when debt was 30% or 40% of gdp. there is a collection of other changes. we have a very nice appendix beggars to them piece by piece. almost all total revision is either the budget control act or the dollar provision of interest rates. >> we have not tried to estimate the effects or try to. the s&p downgrade itself. we did not take on board any of the financial or other news since early july except for the passage of the budget control act. in general, when we look at constructing our interest rates forecast, we look at models and the prevailing financial markets. it can help to understand how rates got to where they are.

that that is pretty difficult. the downgrade is complicated for u.s. interest rates. for most country's debt, when people become more worried about the state of that country, the* rates on sovereign debt of the country is increased. in our case because treasuries have traditionally been a readies for people up worried about uncertainty in the world -- in our case because interest rates -- because the treasury's have traditionally been -- it is a very complicated set of forces at work. i am glad we did not have to try to decide. >> the question of deficit

reductions -- we have spending cuts verses' rating revenues as well? also, in talking about timing of deficit reduction so that you do not worsen the economic equation, how long do you think congress should wait to impose the cuts without harming the economy? >> you used the word should a few times. should is not a word that comes naturally from the lips of the cbo director. we do not have a view of how the deficit should be narrowed. what we do have is an analysis of the effects of alternative policies. we have done some of this in the budget committee. we did some in our report last year on the cost of deferring action to narrow its future

budget deficits. we have a little bit of this qualitative leap in a letter we wrote a few weeks ago. decomposition of the policy actions to narrow the budget deficit can matter a great deal to the future state of the economy and matter a great deal to what sorts of public and private goods and services this country has. i recognize we talk about the need to narrow deficits in general terms. that is not to be interpreted that it does not matter. when we look at specific proposals for using tax revenue by raising tax rates, we model the effects of those increases on labor supply savings. if one proposes to raise tax revenue by reducing tax expenditures, by widening the tax base, by reducing credits,

that might have a positive effect on the economy by removing some of the distortions and to decision making and having those decisions made based on market signals rather than market -- rather than government subsidies. on the government spending side, the nature of spending changes can matter. it is very difficult for us to model that well. certain sorts of government spending and provide greater investments in the country's future. others are more related to current public consumption. on the timing, it is a widespread view that decisions about how to put the federal budget on a sustainable path are best taken sooner rather than later. uncertainty about government policy is not helpful for encouraging spending, business

investment, and business decisions to hire. we have a tax code, parts of which are due to expire. we have the potential for large exchanges of spending programs without knowing what those details are. again, i think it is a widespread view among analysts that early resolution of the uncertainty would be good for economic growth in the near term and over the longer-term as well. in terms of when policy changes isolate take force, that is more complicated. we think that given the current state of the economy and given the current posture of monetary policy that reductions in government spending or increases in taxes in the next few years will reduce output and employment relative to what

otherwise would occur. unless one made other changes to fiscal policy in the medium-term and long-term. if one coupled near-term increases in spending or reductions in taxes with medium- term and long-term fiscal restraint, then one would have the benefit of the near term stimulus in boosting out time -- in boosting employment. one could more than offset the negative kind -- negative consequences for later in the decade. i recognize that it may sound like a bit of a paradox that the economy can be strengthened in the next few years by tax cuts or spending increases, but to be strengthened in the medium term and beyond.

it does not really a peridots. all it is reflecting his economic policy by the government has different effects under different economic conditions. that is the lesson of the analysis we have done. going back at least when i arrived, or a little before that -- you can look at the recovery act for march 2009, to our testimony to the budget committee last september, and the analysis in today's report about the effects of different policies -- there is in the set of work and in the consensus views among the economies of study these issues that the sorts of policies in terms of the overall budget deficit, overall spending and revenues,

are most advantageous for growth are somewhat difference in the next few years than they would be later on because of the state of the economy. >> on the unemployment rate -- the mets and 5.3%. kleist the table gives a year by year projection for the economy on a calendar year basis and the fiscal year basis. on a calendar year average, the unemployment rate is 7.9% in 2014, 5.4%, in 2016, and 5.2% after that in our forecast. yes. >> i am not sure i quite grasp what you're saying very well. are you saying the assumption

is a dual be $1.20 trillion in deficit reduction? did you allocate that in a more equitable way or something like that? >> let me try to do a better job. the budget control act is conditioned to specific caps on discretionary spending. it called for further deficit reduction from a special committee. the budget control act says the committee should aim to reduce deficits by $1.50 trillion. if in fact it is not $1.20 trillion a cheap, there will be automatic reductions in spending over the course of fiscal years 2013 through 2021. the nature of the policy changes

be committee may decide upon it is something we cannot predict. nonetheless, we did need to take on board that amount of deficit reduction in our budget project -- in our budget projections because it is in current law. we need to do something besides just the 10 year total. we wanted to do the least we could because we do not want to be guessing what specific policies will take effect. what we did was to see that there was no action by the committee, then there would be equal reductions in each of those nine years in spending. we took the equal reductions. we did not classify it as spending because the committee may propose changes in the tax revenue as well. we took the equal amounts by one year, which is specified in the law, but is also a very neutral

sort of assumptions. we did not call is spending or raise fees. you will not find that in the spending or revenue numbers. you will find it in the bottom line for budget cuts. in terms of economic effect, that fiscal tightening in 2013 compounds the tightening that is already under the specific policies and we know about. it is part of why economic growth is especially slow in 2013 in our forecast. >> out the new model that without saying it is revenue raising or stimulus cuts? >> we did not say -- if we have the specific tax proposal, we would take a look at tax rates. we did not do that here. all we are capturing all our demands on aggregate demand and

additional government borrowing, the capital stock, and output. we did not quantify the effects of that particular extra piece. we do report that -- in the economic chapter on fiscal policy -- we estimate that the fiscal restraint stemming from desperation of provisions in the 2010 tax act and from enactment of the budget control act will increase real gdp in 2013 by between 1.5% and 3.5% we only did that experiment once with a body of those proposals. we did not do it decrement by and permit. >> how much would you estimate that could change? as i understand, at the treasury

has a good deal of input on what is actually done with the $1.20 trillion. what could change our estimate. >> exchange for a variety of reasons. one possibility is the committee will agree on proposals that will be enacted by congress. or they will agree on proposals that a cop was part of the $1.20 trillion, but not all it would then be reduced in size. there are lots of possibilities like that. there is also the further question of how the -- of how this will play out. double not be up to us to decide. we have been asked a lot we estimate the effects of this would be on different parts of the budget. we are looking at that analysis.

the effect on the economy, we could think further about that. compared to all the other uncertainties in the forecast, the uncertainty about the composition is not particularly large. much greater uncertainty about the possible changes in law to the tax provisions for the provisions of the budget control act. >> [unintelligible] >> these are request from a number of people on the hill. >> i do not know if this is in the report. what has been the economic impact of the cuts that have already occurred this year?

not the deficit side it's nice, but the economic effect -- economic effect on gdp and so on. >> we say in the report that the waning of fiscal stimulus, the growing restrained from fiscal policy is waiting on an output and employment. in the report, we quantify the affects of the american recovery and reinvestment act. as you know, we've report once per quarter on those effects. we will be issuing another report on that topic this afternoon. we also quantify in the report the effects of the automatic stabilizers, the natural

response to taxes and spending, and changes in the economy for 2010. there'll be smaller in 2011 and 2012. but we do not go beyond that to quantify the effects of all these particular pieces. i think the question is right that we think that with all of fiscal stimulus is one of the factors that is now dampening economic growth. the challenge for policy makers, of course, is that even though there will be withdrawn over the next few years, deficits will still be very large. the debt has risen sharply relative to gdp. one of the consequences of large and growing deficits and debt we highlighted in our issue agreed last summer is that as debt mounts will it did to the size

of the economy, it reduces the flexibility for policymakers to respond to both domestic and international developments. i think that sort of economic development would be a witness in the economy. it is more difficult for the government to respond to that when debt is high. at this point in time, the challenged policy makers face is that this with all of fiscal stimulus is slowing the growth of the economy now. all the other hand, with debt as large as it is, running a larger deficit and accumulating more debt has important risks and if left unchanged over the coming years, would weigh on output and incomes. >> have you ever seen -- have

you ever had to do a projection with this much uncertainty? >> is things like it has been a pretty uncertain situation ever since january 2009. economic forecasting is a hard business. i spent some time doing that at the federal reserve board. we have terrific people here doing it, but it is always hard and uncertain. we report every year on the accuracy of our economic forecast. we are no worse at it than anybody else, but it is a hard business to get right at any time. without a doubt, it is harder when one is experiencing these economic circumstances. there has been no time in the cbo history where we have asked

as severe a recession as we have now. one can look at other countries that have experienced financial crises and see what has happened in their economies in the wake of this crisis and the work of some economists showed that economies tend to be bad for some time after a financial crisis. that does not say exactly what the causal mechanisms are. it is difficult to note how difficult it is to apply to our specific circumstances. we do not have much experience with this in the united states in recent times. it is a particularly uncertain moment. >> does that mean that this report, in particular, may be less trustworthy than other reports at other times? >> i certainly would not put it

that way. [laughter] we have had sections of uncertainty in economic forecast in each of the reports i can remember. i do not mean to suggest this is more uncertain than the one we did in january, last august, or january of 2010, but i think this whole period has been uncertain.

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[captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> we have not tried to estimate the effects of the downgrade itself. in general, when we look at constructing our interest rate forecast, we look at models that we have on interest rates, prevailing financial markets and it can help that process to understand how rates got to where they are. that is difficult. we work out some careful

composition of that. the downgrade is complicated for u.s. interest rates. for most countries' debt, when people become more worried about the state of that country, the interest rate, the sovereign debt of that country, increases. in our case, because treasuries have traditionally been refuges for people who have been worried about uncertainty in the world, greater uncertainty, we move into treasuries, presumably the same time that people are concerned about the state of u.s. fiscal policy. a very complicated set of forces at work and i'm glad that we didn't have to try to assign particular responsibility to particular events. what else? >> yes, sir. >> can we have a view on the -- questions of deficit redetection and -- spending cuts versus raising revenues?

also, in talking about timing of deficit reductions so that -- how long do you think congress should wait to impose -- without harming the economy? >> well, to use the word should, should is not a word that comes naturally from the lips of c.b.o. directors. we don't have a view about how the deficit should be narrowed. meaning a preference. but we do have an analysis of the effects of alternative policies. we have done some of this in testimony last fall in the budget committee. we did some of this in a report last year on the cost of deferring action to narrow future budget deficits and we have a little bit of this in a

letter to the congressman's camp, the composition of the policy actions to narrow the budget deficit can matter a great deal to state of the economy and of course matter a great deal to what sorts of public and private good and services this country has. so i recognize we talk about the need to narrow deficits in general terms. that should not be tempts in that it doesn't -- interprets in that it doesn't matter. raising tax revenue, tax rate, we model discouraging effects on those releases. if one proposed to raise tax revenue by reducing tax pentiondtures by wide tng tax base, the income tax, that might have a positive effect on the me by removing so.

distortions to decision making and having those decisions be made more based on market signals rather than government subsidies. now on the government spending side, the nature of spending changes can matter. it is very difficult for us to model that well, i will admit. it can only provide greater vems in the country's future. other -- investments in the country's future. others are linked to current consumption. on the timing, again, i said earlier, i think it is a widespread view that decisions about how to put a federal budget on a sustainable path are best taken sooner rather than later. uncertainty about government policy is not helpful for encouraging household spending, business investment, plant equipment. we all have a tax code, very

large parts are due to expire over the next few years. uncertainty follows. we have a potential for large changes in spending programs without knowing what those details are. again, i think it is a widespread view among analysts that earlier resolution of the uncertainty about how fiscal policy will play out would be good for economic growth in the near term and over the longer term as well. with terms of when policy changes actually take force, that is more complicated. as we have said, we think that given the current state of the economy and given the current posture of monetary policy, that reductions in government spending or increases in taxes in the next few years will reduce output and employment relative to what would otherwise occur. they would also benefit the economy in the medium term and long term by reducing

government borrowing unless one made other changes to fiscal policy in the medium term and long term. if one coupled near term increases in spending with long-term fiscal restraint then one would have the benefit of aer in term stimulus in boosting output and employment and if done in the right magnitudes, one could then offset the negative consequences for later in the decade. i recognize that it may sound like a bit of a paradox that the economy can be strengthened the next few years by cuts or spending increases but then to be strengthnd in the medium term and beyond would happen more with tax increases and spending cuts. it is not really a paradox. all it is reflecting is that

economic policy by the government has different effects under different economic conditions. and that's, i think, the lesson , the analysis that we have done, going back, i think we'll afford that, you can look at the analysis that we did in the american recovery act in 2009 through the analysis of stimulus options we did in january, 2010 to our testimony last september. so the analysis today's report about the effects of different policies. there is in that set of work and i think in the consensus of views among economists who studied these issues thaw the sorts of policies in terms of the overall budget deficit, overall levels of spending revenues, economic growth are somewhat different over the next few years than they would

be later on because of a particular state we find ourselfs in the economy. >> i don't see the numbers for 2013, 2014, 2015. 5.3%. >> give year by year prosqueakses for the economy. -- projections for the economy. the unemployment rate on a calendar year average is 7.9% in 2014. 6.1% in 2015. 5.4% in 2016 and 5.2% after that in our forecast. what else? yes? >> are you saying -- is a reduction and that the triggers that get polled and -- what

effects that has on the economic assumptions? what did you allocate that -- >> let me try to do a clearer job. the budget control act, the specific caps on discretionary spending, called for further deficit reduction from a special committee. and the budget control act said that committee should aim to reduce deficits by $1.5 trillion. if in fact there isn't $1.2 trillion, then there will be automatic reductions in spending over the course of fiscal years 2013-2021. the nature of policy changes the committee might decide upon and that congress might enact is offings something we can't

predict. nonetheless we needed to take onboard that amount of deficit reduction. we need economic productions that line up with the budget projections. we need to do something besides just a 10-year total. we wanted to do the least that we could. we don't want to be in the business of guessing what policies will take effect. what we did was to see within the laws that there is no action by this committee for long to enact proposals from the committee that then there would be equal reduction in each of those nine years in spending. so we took the equal reductions. we did not classify it as spending. they made changes in tax revenue as well. we took it for one year, which is spent by the law under some conditions but has the potential for being a neutral sort of assumption. we took the year by year. you won't find that effect in

any of the spending or rev numbers. you will find it, though, in the bottom line for budget deficits. in terms of economic effects, fiscal tightening in 2013 commounds the tightening -- compounds the tightening authority for spending and taxes and is part of why -- a further reason why it is not a growth -- it is especially slow in 2013 in our forecast. >> how much will we get back from that? how can you model that -- >> for that purpose, we did not, for example, we have a specific tax po postal and we'll look at -- proposal and look at tax rates. all we're really capturing is the effects on aggregate demand and government borrowing on the capital stock and on output.

we did not quantify the effects of that particular extra piece. we do report in the -- in chapter two, in the economic chapter in the section on fiscal policy that -- we estimate that the fiscal restraint stemming from desperation of provisions in the 2010 tax act will decrease real g.d.p. in 2013 by between 1.5% and 3.5% compared to what it would be otherwise. but we only did that experiment once from the body of that -- we didn't do it increment -- >> how much would you -- that would change depending on what -- what kind of -- actually happened? treasuries were a good deal? what actually is done with the

$1.2 trillion? >> it could change for a variety of reasons. one possibility is that the committee will agree on a proposal that will be enacted by the congress. or they will agree on proposals that accomplish part of the $1.2 trillion. there is a lot of possibilities like that. then there is the further question of how would the se quest ration play out. that will not be up to us to decide. that is up to o.m.b. to work out if it comes to that. we haven't asked what we estimate the effects of see quest ration would be. we're working on that analysis. that is a budget tear analysis. -- budget tear analysis.

i think with all the other uncertainties in this forecast, the uncertainty about the composition and the sequestratio snnch not particularly large. >> can we ask you for your analysis of that? >> the effects for some people, need information as well. there are requests from a number of people on the hill. yes? >> can you say and i don't know if there is a report already. what has been the economic impact of the cuts -- this year -- 2012 until you get -- but

not the deficit -- the economic effects on g.d.p.? >> so we think from our analysis and say in the report that the waning of fiscal stimulus, the growing restraint fra fiscal policy is weighing on unemployment. in the report, we quantify the effects of the american recovery and reinvestment act and as you know, we report once a quarter on those effects and we will be issuing another report on that topic this afternoon. the -- we also quantify in the report our -- the effects of automatic stabilizers, natural response to taxes and spending and changes in the economy for

2010 and think we'll be smaller in 2011 and 2012. but we don't go beyond that to quantify the effects of all of these particular pieces. but i think the question is right that we think that that withdrawal of fiscal stimulus is one of the factors that is now damping economic growth. the challenge for policy makers is that even though stimulus is being withdrawn over the next few years, budget deficits will still be very large and the de debt has risen sharply relative to g.d.p.. one of the consequences of large and growing deficits and debt that we highlighted in the issue last summer is that as debt mounts relative to the size of the economy, it reduces the flexibility for policy

makeers to respond top both domestic and international developments and i think we're -- economic development would be weakness in the economy and it is more difficult for the government to respond to that when debt is high. so at this point in time, the challenge that policy makers face is that this withdrawal of fiscal stimulus is slowing the growth of the economy now. on the other hand, with debt as large as it is, running larger deficits and accumulating more debt, has important risks and if left unchanged over the come years, would weigh on output and incomes. >> have you ever seen -- have you ever had to do a projection with this much uncertainty --

wiggle room for everything -- >> well, when i arrived in january 2009 here, it seems like it has been a pretty uncertain situation ever since then. i mean, it is not -- forecasting is a hard business. i spent sometime doing that at the federal reserve board and we have other people here doing it, but it is always hard. it is always uncertain. we report every year on the accuracy of our economic forecast. we think it is an important piece of our transparency. we are not worse at it than anybody else. it is a hard business to get right at any time. without a doubt, it is hard when one is experiencing tough economic circumstances. there is no period of time when we had as severe a recession as we have had now.

one can look to other countries that have experienced financial crisis. and see what has happened in their economies in the wake of those crisis and the work of several shows the economies tend to perform quite badly for sometime after financial crisis. but that work doesn't say exactly what the causal mechanisms are so it is difficult to know just how to apply those general lessons to our specific circumstances. we don't have much experience with this in united states in recent times. so it is i think a particularly uncertain moment. >> does that mean that this report in particular maybe -- may be less trust worthy than other reports at other times? >> well, i certainly wouldn't put it that way. i mean, we have had sections,

similar section about uncertainty in our economic forecast in each of the reports i can remember. so i don't mean to suggest this as more uncertain than the one we did in january or last august or january 2010. but i think this whole period has been uncertain. what we're trying to do here is to provide for the congress the best assessment we can and for practical cal purposes that involves writing down very precise numbers with -- at the decimal place but we're also trying to be very transparent about the uncertainties that are here and trying to encourage everyone who reads this document or many of the things that we write to recognize that there will be a fairly large band of uncertainty. yes? >> one and a half questions.

one technical, one general. the fed said they will be holding steady for another two years. was that in your forecast? also, the discussion about long-term unemployment, that they may hurt job skills, equal employment in the future, so one -- where do you guys stand in that debate? >> we did not take on board the federal reserve's recent announcement. that is i think one of the reasons why markets interest rates are lower than what we have in this projection. we continue to think hard about the role of cyclical forces and structural forces in the high level of unemployment that we see, and we have in this report offered some quantification of those factors.

if you want to check later, this is on pages 45, 46, and 47 of the report. what we say there is that, after emphasizing uncertainty, is our assessment is that total increase in unemployment, about one percentage point, stems from structural factors with the remaining roughly four percentage points now rising from cyclical factors, and we talked about some of the specific structural factors we have in mind. one is the effect of the enhanced unemployment insurance benefits. another is the difficulty of -- i guess we figure the mismatches between the skills and locations of available workers and the requirements of particular jobs. and we talk about the difficulties that the long-term unemployed have in finding work. we wrote in issue brief last year about the effects of job loss during recessions, and it is a discouraging story. people who lose jobs,

especially in recessions, would focus on -- have difficulty finding work. when they do find work, they often earn much less money than they did in their previous jobs, and not just in the short term, but for many years to come. in this projection, we think there is a fair amount of unemployment due to structural forces now, but much more due to cyclical forces. over the next 10 years, we expect that the cyclical unemployment will come down. we also think that much of the structural unemployment will fade. the unemployment insurance benefits are -- the extra ones are in the course of expiring. these mismatches between skills and locations of job seekers and the requirements of jobs will tend to be worked away over time as it has been in past expansions by retraining and moves and so on. we do think by the end of the decade there will be some lingering effect of people who

have lost jobs and have been unemployed for a long time having difficulty finding work. so even by the end of the decade, the unemployment rate that we have in this projection is a little higher than what we have traditionally thought about as the longer-term level of unemployment. do you have a question? >> i believe about this time every year, there are projections on the highway trust fund. is it getting worse, getting better? or what? >> i think the particular issue is the authority to collect the gasoline tax and the authority to spend money out of the highway trust fund expire at the end of next month. i do not know if we have more specific projections of the balances in the trust fund available or not. let me say i do not have available in front of me -- i am not sure if we have those available.

we will certainly check for you. >> another technical question. do these numbers forecast -- the tax exempty bonds cost the federal government -->> our baseline projections incorporate effects like that. i do not think it is one we have isolated, and it is a separate, quantitative way. no. i am sorry. are there other questions i can answer? >> overall, would you say this is a better or worse amount, the same outlook? >> let me talk about the economy first, and then the budget. i have sat here now twice a year for a few years, and had discouraging economic news

every time that i have come, including today. we have a picture in the update of the gap between potential output -- that which we could achieve with a high rate of use of labor and capital, and actual output. the cumulative gap since the recession began now stands at about $2.50 trillion of lost output because we have not kept our labor and capital resources more fully employed. the projection of the under current law and if our forecast is right is for a cumulative gap between now and 2017 of another $2.50 trillion. so the losses in economic output from this downturn are just in that. moreover, those losses are not shared evenly. they are born very disproportionately by people who lose their jobs or have

businesses fail or have been thrown out of their homes, and look at the unemployment rate forecast, you see a very similar pattern, which is that a tremendous amount of extra unemployment over the past few years, a tremendous amount still to come. a great deal of the pain of this economic downturn still lies ahead of us. and whether that forecast is a little better or a little worse than it was in january or a little better or worse than it was a month and a half ago, is, i think, a lesser point than recognizing just how discouraging the economic outlook is now and has been on many previous occasions when we have sat here together. on the budget side, the budget control act makes a difference in the budget outlook. we have marked down projected deficits over the next decade

by about $2.1 trillion because of the budget control act. that is a very substantial amount of money, even by the standards of current -- the current federal budget. so i guess that is good news. i think the challenges that remain, though, are very large. part of that is that a very big chunk of those savings from the budget control act have not really been worked out yet. they are rising from instructions to a deficit reduction committee and a fallback plan, but there is not really a set of policies that the members of congress have all agreed or even the majority have agreed to in specific terms. so that is still a challenge ahead for the congress to decide just what policy changes it wants to use to achieve those savings. the cutbacks in discretionary

spending through the caps are more specific. we have specific levels set by law, but the actual appropriations to meet those levels have not been decided upon. we have a proliferation near the end of the budget chapter in the report about some possible paths for defense spending and non-defense spending that are consistent with the overall caps. be on those first few years, they're set in overall terms for all discretionary funding. we do not know -- nobody knows yet -- how that might play out, but we tried to offer some alternatives just to illustrate what the possibilities are. however, those -- the allocation of those savings, what parts of -- what the federal government is currently doing that it will not do in the future as a real spending comes down has also not been specified and remains as a challenge to this and future congresses. and beyond that, of course, there are -- this expiration of very large pieces of our tax

code. some at the end of this year. some of the end of next year. where many members of congress have been very public in their view that we should maintain current tax rates and current tax rules rather than following current law in which those provisions expire, and as we show in the report, extending all of those tax provisions would widen the budget deficits relative to our baseline projection by trillions of dollars. so there are just a tremendous number of issues that are unsettled that already look important in this document. beyond that, we still have debt which is higher relative to g.d.p. than it has been at any point in my lifetime. that creates dangers for the economy, and we have a trajectory beyond the coming

decade where the further easing of the population and further increases in health-care costs per person will make the budget even harder to bring into alignment and put on a sustainable path. so i do not want to diminish what has happened. at the same time, there is absolutely no doubt that there are profound budget challenges and economic challenges that remain. yes? >> hear that the reduction, the reduction in debt and the deficit is not nearly enough to make an impact in the long interpret. in other words, one of the members put out today that the super committee should be looking at $4 trillion in reduction in real debt that the $2.1 trillion is really nothing.

could you -- i know you don't want to get into a debate with politicians but just in terms of real reduction -- it -- is this package large enough, the $2.1 or the $1.2 that is coming coupled with what has already been done? >> well, i would not call $2.1 trillion nothing. but as i have explained, even taking that on board, if we continue current policies on both the tax and spending sides of the budget, we will end up with much larger deficits than would occur under current law, which underlies our baseline. because current law involves changes in various policies. so there is a good deal of work left to do, and it just is not our place to say how much any the dealer committee or

congress should do differently. yes? >> i mean, you look at this picture of the unemployment rate on the bottom of the cover, and look at where the volume line is between the actual history and what we project. there are other pictures one could use and other numbers one could look at, but i think that makes the point. >> there were some things that were holding down the economy in the short term. tendency towards deleveraging and stuff. in the short term, if that is what is driving -- economic growth, or unemployment, is

there think room for policy in short term to have a significant positive effect on that, or is that something will just have to work out and weather the storm? >> we think that fiscal policy could boost output relative to what would otherwise have been. we did a lengthy analysis in january 2010, looking at a range of options and tried to estimate the effects that those options would have on output and employment. we have not redone that analysis. it would be a little different if we did it today because the economy has shifted in some ways, but i think the basic lessons of that report still stand, but we think there are a number of ways in which congress could reduce taxes or raise spending relative to current law that would raise output and employment during the next few years.

as i said before, the challenge then becomes what to do be on that. it is possible to make those changes. in some ways, we need to make those medium and long-term changes because under current policies, the deficit is on an unsustainable path. one can combine short-term stimulus and longer-term restraint in a way that would boost the economy in the near term and not prove to be a drag in the medium-term and long-term, but it requires somewhat complicated policies. what may look like a paradox at first glance is not really, and i think is consistent with the consensus of economic thinking but that is what our analysis shows. depends on what one does and

how much one does. what we looked at in that report was general policy in a sense, meaning not focused on the housing sector in particular. there were a number of ideas proposed, a number of ideas tried to resolve some of the problems in the housing and mortgage area. we have not done a comprehensive analysis of those ourselves. i think the general point to remember is that we have an economy that, although small, is still very big. output right now is about $15 trillion at an annual rate, so it is going to be hard to move that very much without applying a fairly large change in spending or taxes. but the specific effects of specific policies we would have to look at. >> are there any changes with medicare being a huge driver of future debt, is there any change in your projections

of medicare cuts in the next decade? >> we have changed our medicare projections a little bit. if you look at -- well, if you look at appendix a, which talks about the revisions, it talks about the revisions to medicare over the coming decade. i do not know if we know the number -- yes, they are not particularly large. they are downward revisions, projected medicare spending, but not particularly large ones. people have questions. we can talk more about that. but the thing people emphasize is that the number of people over the age of 65 in this country would be about 1/3 larger 10 years from now than it is today. the most important factor driving of medicare spending over the next decade is a greatly increased number of beneficiaries. given the current law for medicare, including both the

sustainable growth rate mechanism for payments to doctors, and the reductions in payments to providers and active in last year's health legislation, medicare spending per beneficiary was not growing especially fast during decade. whether that current law remains unchanged is a different question, but in our basement projections for current law, medicare spending for beneficiary is not growing very fast. what you are seeing mostly is a surge in the number of beneficiaries from the retirement of the baby boom. this is, of course, not news now. this is the sort of thing that the c.b.o. has been writing about for its entire existence, but it is now of one us in force. yes? >> i know that this is in the paper work, but i hope you can describe it anyway. can you describe the difference in size between expiration of the tax cuts that might happen and the deficit reduction that

was agreed upon? basically if the tax expires or does not could particularly negate the agreed upon -- >> there are a couple of numbers that i would highlight for you. we estimate that the budget control act reduces deficits over the coming 10 years by about $2.10 trillion. another number in the report is that most of the expiring tax provisions were extended, and we describe which ones are in the report. if the alternative minimum tax was indexed for inflation, and it medicare's payments to doctors were frozen rather than falling sharply as under current law, the deficits over the next decade would be about $5 trillion larger than in our baseline projections. if all of those changes in law took effect, if all of those

policies were extended indefinitely rather than widen, they would widen the deficit by about 2 1/2 times. >> this without changing the 2010 tax act? >> that is what i mean. 10-year numbers. we explain to you exactly what that means so you can read the details, which are important, but yes, it means extending the -- what most people think of as the 2001 and 2003 tax provisions. this is discussed in a number of places in the report. in the summary in chapter one, there's a table which looks at a number of alternative policies and our estimate of the budgetary effects, and we do this in every outlook and update, and one could look at

the pieces of that and see which are large and small and any other questions? >> very quickly, is the gap between output and, you know, what could happen, what could be the output -- is that largely because of big corporations sitting on piles of cash? >> it is because of all the factors that are causing us -- that caused a sharp fall in g.d.p. and have led to a weak recovery. if you look at this, this is the first chart in chapter two of the report. it is an estimate, not something we know is a fact, but we think it has continued to rise. actual output fell below that and has risen, but roughly in line with potential. we have not closed that gap in any important way, so why the

gap exists is really the same question as why the recovery has been so weak, and that is a hard question that we obviously give a lot of thought to. again, though, i think the empirical evidence suggests that weak recovery with these following financial crises that we have had are not surprising, but that is not the same as knowing all the causal mechanism is. part of it is probably loss of household wealth and household desire to save more. part of it is typical concern about the amount of debt they have and trying to deleverage their debt.

it makes you for cautious than about buying things from me. that can weigh on the economy as a whole. we have constraintses relative to the situation before the financial crisis. fannie and freddie and other guarantees are low. some households do not qualify now that would have before. some smaller businesses are having for trouble getting credit than they ever have before. we also have a very weak housing market. if the level of home construction and other pieces of residential construction in income accounts were at the level it would be in a sustainable way for this country -- so, a level that kept pace with the growing population, the gap

between where it is and what it would be on the sustainable base is itself about 2% of g.d.p., but all else equal. but all else may not be equal. that is not an estimate of the effect. there are an awful lot of factors that may be at work, and how involved they are relative to each other and how quickly the factors will wane is, of course, the important question, to which we have tried to give one general answer here, but we wish we understood that better. >> where do you get your numbers frr troop reduction? >> if you're looking at -- which table are you looking at? table 1-18 the one that looks at the budgetary effects of selected policy alternatives, and apart from the caps on discretionary

spending, the way the c.b. sombings generally instructed by law to discretionary spending baseline is to take the latest level of funding provided by the congress, assuming that continues with adjustments for inflation. that is what we do normally on a discretionary baseline. the caps don't apply to war funding. funding for iraq and afghanistan or related activities are not covered by the caps. for that sort of funding, what we have done in this report is to follow the traditional approach of growing with inflation. some people, of course, have noted that we don't expect to be fighting in those places at the same level of intensity in years to come, so one of the alternatives we have tried a number of times to illustrate is how much difference it makes ft level of funding for that type of overseas operation goes down, so we picked a hypothetical path

here. this is not meant to correspond to any particular strategic approach to u.s. national security. it is just trying to illustrate how much difference it makes it the level of the funding comes down. i think this is the same scenario we did in a previous report. again, not take the specifics as analysis of defense strategy. it is just meant to illustrate how large those numbers are. of course, we have been doing a good deal of war funding, so if one tapers that off, one can save a good deal of money relative to our baseline projections. this particular scenario we look at reduce discretionary spending by $1.1 trillion over the decade with about $200 billion of debt service. we also note in the report that there are a variety of ways in which the levels of spending we would project with inflation would be lower than maintaining

current government policies we talked about. we talked about pell grant, veterans' benefits, and so on. people should understand these discretionary benefits are really very mechanical extrapolations of current funding. it is not meant to reflect the need for funding or the cost of maintaining specific current policies through any part of discretionary spending. this operation is one example. with the rest of spending capped, it is the only part of this report as a discretionary spending that is growing with inflation. in general, our projections, and the discretionary caps, of course, aren't specific about what the money will go to and what that will mean in terms of programs or services that will be available, including for defense. >> for your projection, you assume current policies will continue?

>> for these wars and things like them, the caps do not apply. we follow our traditional method specified by law to grow that funding with inflation. for all the rest of spending, the caps apply. we show in the report what projections we would have had if the caps did not apply so that people can see how much difference the caps make but the projections for everything else fall short of the levels. even for defense spending, it is complicated. we did an analysis a few months ago of the cost of implementing the policies -- the actual national security policies, the defense department in the future years defense program earlier this year, and that would be more expensive than our baseline projection. this is not war funding from the defense department. they have set up specific plans for things they want to build

and to do, and we have a full report, which is our independent estimate of the costs of that, and that program would cost a good deal more by our estimate, they would be inflated baseline. again, an example of how the regular baseline projections that we do for discretionary spending do not necessarily correspond to any particular set of programs or plans in the future on the defense or non-defense side. have you had enough? thank you very much. if you have other questions later, you know where to reach us. please give us a call. thank you.

[captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> up next on c-span, we'll bring you knight's -- last night's memorial martin luther king incident . -- dinner. also we'll get an update on libya and talk to steve forbes about the economy. watch more video of the candidates. see what political reporters are saying and track the latest campaign contributions with c-span's website for campaign 2012. easy to use. it helps you navigate the

political landscape with twitter fees, updates from the campaigns, candidate bios. all at c-span.org/campaign 2012. >> the official dedication to have martin luther king jr. memorial this weekend. a number of events are scheduled this week to look at the legacy of dr. king. coming up, we'll hear from former secretary of state madeleine albright and musician stevie wonder. this is hosted by the m.l.k. national memorial foundation project. >> ladies and gentlemen, please welcome our mistress of ceremonies for this evening, nbc news chief foreign affairs correspondent and host of

msnbc's andrea mitchell reports, andrea mitchell. [applause] >> good evening. good evening and welcome to this very, very special occasion. for all of you who have moved from the building museum and created this beautiful space here, with less than 24 hour's notice, i just want to say congratulations to all, for all the hard work and flexibility. a funny thing happened while we were all -- i was anchoring the news and other people were just gathered doing their business in washington. an earthquake. but as harry johnson said, when dr. king comes to town, things really shake, rattle and roll. [applause] good evening and welcome to the first event in the celebration of the dedication of the martin

luther king jr. memorial. i can't tell you how humbled and truly honored i am to be with you this evening as our city, our nation and people around the world come together to remember a prophet, a preacher, a man of peace and to dedicate a stirring memorial which will remind us forever more of his lasting legacy. for many people of my generation, dr. martin luther king jr. was the defining leader of an era. to my high school class, his dream was our awakening to the crucial political and moral questions of our time. he taught us as he said in his nobel prize acceptance speech, civilization and violence are concepts and nonviolence is a powerful moral force for social transformation. in my hometown, one of my most

beloved high school teachers was anne schwinner. our high school grieved as a community when her son mickey and his friends were murdered by the klan. so on this beautiful august night, so many decades later, it might be easy for those of us who were not dr. king's brothers and sisters in the march, to forget just how radical his ideas were 48 years ago. after all, at the end of the 20th century, dr. king was one of the most admired people in america. according to gallup, he ranked just behind mother theresa and ahead of j.f.k., albert einstein and helen keller, but that was not the case years earlier when he delivered the speech at riverside church

entitled "beyond vietnam, a time to break silence, a marijn dekkers -- a declaration of independence from the war in vietnam." in that riverside church speech, dr. king told an overflow crowd of more than 3,000 people that many persons had asked him why are you speaking about the war, dr. king? why are you joining the voices of dissent, peace and civil rights don't mix. dr. king said those questions greatly saddened him because they meant that the inquirers had not really known him. his commitment or his calling. that is why this memorial that will be dedicated this weekend, that is why this memorial matters so much. not only for our generation but

for future generations. through his words and the powerful gaze of his eyes carved from the stone of hope, we can all try to know him, to better understand where he was trying lead us, to a revolution still unfinished nearly a half century later. and now it is my special honor to welcome some of the distinguished guests who have joined us tonight from all over the world to pay tribute to dr. king and to other global leaders for peace. first, i would like to recognize the premiere of bermuda and members of her cabinet. [applause] also with us tonight, the prime minister of trinidad and tobago. washington, d.c. mayor vincent gray.

the ambassador from the state of his rail, michael orin. and to deliver invitation tonight, please welcome dr. suzanne johnson cook, ambassador at large for international religious freedom. secretary clinton described ambassador cook at her swearing in as a passionate ath advocate for the god given rights of people everywhere, no matter which job. ladies and gentlemen, ambassador cook. [applause] >> thank you, andrea. members and all who gather here, mr. johnson and all the organizers, i bring you greetings from president obama and secretary clinton. yolanda king was the eldest child of dr. martin luther king and we were best friends and we promote his peace and nonviolence techniques. mrs. king was my second mom.

she and mr. king would be happy that you all gathered today for this weekend. i ask that you might take the hand to have person at the table next to you and that you might hold that hand as a circle and a symbol of peace and strength and love. lets us pray. thank you for this day that your hands have made. we ask your blessing upon those who celebrate this season and those around the world who have come to join together to celebrate a man and a mission and a mandate for peace. we ask your blessing upon this time we share together. we thank you for the organizers who have a dream for this weekend to happen and so we ask your blessing upon every event and every day of this weekend. god bless the food that we're going to have, the fellowship, the friendship, bless that time we share together. it is in your name we pray, amen.

>> i still have a dream. that one day this nation will rise up. we'll hold this truth to be self-evident that all men are created equal. i have a dream that one day sons of former slaves and former slave owners will be able to sit down together at the table of brotherhood. i have a dream. one little black boys and black girls will be able to join hands with little white boys and girls as sisters and brothers. i have a dream. are you r >> the unveiling of the marti