good again. the troubles i have now are epa regulations, congress, and the nlrb. i do not trust the insider politicians in washington. they have no idea on how things work, and have no real work experience. i am honored to introduce you to a man who has real experience making things work and has a real plan to get america working again. ladies and gentlemen, the next president of the united states, mitt romney. [applause] >> thank you. nicely done. quite a story. thank you. thank you. thank you. thank you. thank you, john. that is an american success

story. i appreciate the chance of being in this extraordinary facility, where a lot of hard work occurs. it is in bill bullion, -- it is ennobling. as people work hard we can afford a strong economy whose military can defend us. we love and care for those people in the service, and thank you to the congressman for welcoming us here in his district. we appreciate his election and appreciate looking forward to many more. this is gone to be a conversation today. i do not have a text written. you can see what i have got. i have some notes of some things i want to tell you. i will not be reading.

i use a teleprompter from time to time. ournt to talk of about economy and what is going to take to get america back to work again. over the next couple months, and over the next couple decades. i want to describe to you division i have of what -- of some i want to describe to you the vision i have what america should be over the next couple decades. let us say our people should be the best people -- best-paid people in the world. number 2, it should be good to be in the middle class in america. you should not have to wonder -- [applause] how you are going to meet your bills or for college for your kids or take restrictions you have been prescribed. america should be a job machine.

jobs are being created all the time, people looking for employees to join their enterprises, the people coming out of colleges and vocational schools able to get jobs right away, even people in high school knowing there are jobs waiting for them. we should see the world buying the things we make. we should be proud of the fact they buy as much from us as we buy from them. [applause] i see america been on the leading edge of innovation. time and again, when there is a new invention, a new economy, a new era, innovation and being the innovation leader of the world is the best leading indicator of what the future will be. with those elements of our vision in place, we know one thing -- we will never questioned whether the future will be brighter than the past.

we will know we are leaving to our kids a legacy of prosperity and liberty as america will remain as it has always been -- an example to the wrong, a shining city on the hill, and i hope of the earth. that is the vision. [applause] now, to john, and a few of the older folks in the audience, that sounds a bit like things were in the 1950's, 1960's, and the 1970's, and you might say can we go back to the way things were back then? a lot has changed in our economy globally over the last few decades. i hope we recognize just how much has changed and the fact that so much has changed says the right course ahead is to it here to the principles that made us a powerful nation we are economically, but also to update our strategy, our economic

policies in such a way we can conform to the new realities of the new global economy. you know some of these changes. 30 years ago china are represented a 1% of the economic conditions of the world. now they are 10 times as that amount. 30 years ago, america was overwhelmingly the largest manufacturing nation in the world. this year, china is slated to passed us as the largest manufacturing nation in the world. about 30 years ago, as the nobel prize awards, americans or people affiliated with american institutions, won 3/4 of the nobel prizes. today it is less than half of that amount. 20 years ago, you want to make a phone call to the airport, you took out a quarter and went into a pay phone and you put it in the pay phone.

today he got these things, all right? you have a smart phone. a pay phone, you put your quarter in, a lot of time you had an operator come on, telling you to put in more quarters, and you're connected to another person and you spoke voice to voice. if you connected to a machine, like a fax machine caught you remember that screech? [inaudible] this is an entirely different economy than the one we knew in the 1950's and the 1960's. our economic strategy has to be brought up to date and to make sure we are able to provide the vision that i described. the right course for america is to believe in growth. growing our economy is the way to get people to work. the right answer for america is

not to grow governments or to believe that government can create jobs. it is instead to create the conditions that allow the private sector and on to for norris to create jobs and to grow our economy. growth is the answer, not government. [applause] over the last several months, my team and i spent a lot of time talking about what things we think we ought to do the update america's economic strategy for this century. we put together a plan which i will describe in a moment, and we have gone with an analysis to look and see what the impacts of this plan would be on the american people. let's put this in context. in the first four years, if i'm lucky enough to be president, this will grow the economy at approximately 4% per year for each of those four years read it will las.

it will add 11.5 million jobs in america. let's talk about how much the economy has changed globally and how we need to change our policies to take advantage of the changes. back in the 1950's, 1960's, every business in the world wanted to be located here. this was the place business was done. this was the largest market in the world. nothing else compared with the markets in the united states. government could charge this is what ever they wanted to in taxes because where else with the businesses go? this is where their capital was. their blast furnaces, their assembly lines, there transfer lines all here in the united states. today, there are markets outside the united states that are growing very fast. america is not the only market in the war.

-- in the world. we now compete for enterprises. it is no longer what a wise decision for us to have the highest tax rate for employers in the world. our taxes are higher than any other nation besides pitchman -- besides japan. the average is 25% in other nations. ours is 35%. we need to bring that level down and i will do that in day one. this was from the mindset of the past. what we sat in the past was if you are an american company and you make money over in some far country, and you have a bunch of money you made there, if you want to keep the money there and invest in that country, we will let you do it tax free. he did not pay in the u.s.

taxes. if you want to bring money home and invest here, then we are want to tax you at our 35% rate. this does not making sense, does it? we have to end this repatriation tax and get money to come back to america to create jobs here and invest in america. [applause] we also have to help the american people, not just employers, but the american people if we're on the help grow this economy. if i were to ask you who are the people in this country that have been hurt most by the obama economy, i guess is you would see the middle class. i would start right there. that is why as i look at changes that our tax policies, the place i want to make a difference is for the middle- class. one way of life to do that is help people in the middle class be able to save their money. how do you do that? i will eliminate any tax on your

savings if you are the middle- class. the tax on interest, dividends, or capital gains. -- no tax on interest, dividends, or capital gains. in the past, you could put all sorts of regulatory burdens and burdens and bureaucratic burdens on american business, and where else are they going to go? so they just swallowed it and stayed right here. today they can go the other places. it is still important that regulations tr. we have got to stop this extraordinary we have placed on small businesses, particularly, and middle-sized businesses, because they will not be able start or they will move elsewhere. do you know how much the burden is to be you know how much we

pay taxes each year as a people? if you take all the people in america and all the companies in america and add up their income tax, the government collects $1.10 trillion a year. the government does a calculation of what the cost is of regulations per year. do not forget the total tax burden is $1.10 trillion. do you know what the burden is put $1.70 trillion a year. this is not just some side issue. it is burdens on enterprises from growing and expanding and starting in america, and if i'm in the white house the first thing i will do is say all those regulations that were put in place by president obama? by the way, his rate of adding regulations is four times greater than president bush's was. all those regulations he put in

place, i'm going to stop and those tracks and say any of those -- [applause] any of those regulations that cost american jobs we are going to get rid of. we're going to say to every department government, if you have a new regulation you are going to enact, yet to remove one of equal scale. we're going to make sure congress gets in on the act. what i need is some regulator wants to put some grandees scheme in place, i want congress to be able to vote it up or down. i want people to have a word to say other regulations that are placed on american employers. [applause] in past, our market was king.

everybody wanted be here. this is that i knew was -- were thinking about international markets as gravy, icing on the cake. this is where the real stuff happened. today, some of the fastest growing economies in the world are outside the united states. do you realize that the world, the global middle-class, is going to more than double over the next 10 years? markets for our goods and services are expanding extraordinarily. we have to rethink trade. there is also a reality associated with a nation that is a high productivity nation. we use that term and a lot. what does that mean? americans are the most productive workforce in the world. productivity means output per person. how much stuff each person does on average in america. we are the highest in the world. people in this country can do more and more stuff per person, the question is going to be, why

are we going to need so many more people? how are we going to find so many jobs as the ones we have are making more and more stuff per person? we're finding more jobs for our people if we can sell our jobs -- our goods to other nations. it is good to have trade. as long as the people we have trade with played by the rules. over the last 2.5 years, the european nations and china have been putting in place trade agreements with other nations. we have been sitting as if nothing is going on in the world. no trade agreements negotiated, signed. that puts us behind. as nations that established as linkages with other nations distribution, consumers in those markets get used to the brand names, and when we come in 10 years later, there is no market for us. i will dramatically increase the interest and the effort in our nation to establish trade relations with other nations.

i will establish some but i would call the reagan economic son. i will say to those nations around world that want to trade on a fair and free basis, we will honor our intellectual property, our patents, card designs, are no all, if they will honor those things and flowed their currency and not she, they can come in this reagan economic zone , and will trade in more places and american goods will be seen around the world. one more thing i will do, and that is i will clamp down on the cheaters, and china is the worst example of that. [applause] they have manipulated their currency to make their products artificially inexpensive -- [inaudible] i will go after them for stealing our intellectual property, and they were allies

if they cheap there is a price to pay. we cannot have a trade war or a trade surrender either. we have to make sure we have fair trade with nations that are willing to live by the rules, and we will insist on that with all of our friends. [applause] you recognize in the energy world, do you know we are an energy-rich nation? we're living like an energy-poor nation. we have established in washington barriers by politicians who think they know better than the american people and american markets that establish barriers that make it harder to use coal, to get natural gas, it possible to establish a nuclear power generation facility. i believed in wind and solar, except where all the green jobs? a lot of them cost more -- other jobs. i want to take down those

barriers and get energy companies back to work, including the energy we need at a price we can afford, and i will do that. [applause] let me mention one more thing. i got a long list here, so i will not go through all of them. if you want to convince businesses -- what is a business? it is john. here are going to convince people like john to take my life savings and good to my family and friends and say, would you loan me some of your money and i will start a business? maybe it is the companies that want to build a factory somewhere, and they are deciding whether to build it in a nation in latin america or in the u.s. or somewhere else. if you want people to convince people to invest in america, they need confidence that america's currency and america's government are stable and they're not want to find

ourselves in a greece-like trash. it is essential to get that economy going long term to stop this incessant practice of spending massively more money than you can. you have to ultimately balance your budget. [applause] so my economic plan lays out how i will ultimately get government to shrinking, grow our economy, balance our budget so that investors in new jobs, enterprises, will have confidence in america. now, this is a pretty complete volume of the work we have had over the last several months. it is about 150 pages with 59 different policy ideas. there are a lot more where these came from. we have one of these for each of you. if he did not happen to get one of these in your hand, good to

amazon, kindle, i do not know if it is free. you can get one of these and look at it. it is in color on kindle. you can look at the civic 59 steps i will take. this is an effort to update our economic strategy for this century and the next century. this is recognition that the old ways have principles that will work forever, that growth is the foundation of an economic prosperity, but our tactics and strategy need to be updated from time to time. i am asked now and then, why is not obama working? why is the obama and economy to tepid? how has it failed so badly to put americans to work? he is giving a speech in a

couple of days. they are not working. the reason is -- [applause] i mentioned a moment ago that we are now using smart phones, not pay phones. president obama's strategy is a payphone strategy and we are in a smart phone world, so we are going to have to change -- what he is doing is stopping quarters into the payphone and cannot figure out why it is not working. it is not connected anymore, mr. president. it is not working anymore. we are going to hear about another stimulus and more quarters, trillions of them, getting stuck in that payphone, and i know the results. they will not be getting america back to work, they will not be updating our economic foundation

so we can have the kind of jobs we need, a middle-class that is prosperous, kids coming out of schools getting great jobs, leading the world in innovation, continuing to do so. these kinds of outcomes, that vision, requires a dramatic change, not more quoins in a pay phone strategy. -- coins in a pay phone strategy. this is not just one silver bullet, not just one idea in here. there are 59 of them, and i bet on every one of them to get our economy going. it is practical. it is not created by a professor working alone in academia. nothing wrong with that. this is a product of somebody who has spent his life in the private sector and has done business competing with businesses around world. it has been done with my team. i have a lot of folks on my team that helped write this. this is the result of practical

work, a practical plan to get america back to work and strengthen the foundations of our economy. it is also the media to. this is not something that will take years and years to put in place. from day one, i have five executive orders i will put in place. i wonder if that works. let's see. there we go, look at that. the magic of technology. day one, i will put in place five executive orders. the first one, is going to direct the secretary of health and human services to grant a waiver for "obamacare" for all 50 states. the second will put all of president obama's regulations on hold until we see if they cut jobs, and if they do, we will get rid of them. the third one is open up production of energy across this country and get americans back

to work. the fourth one is going to send a signal that while we love free trade, we're going to open trade in a way no other president has done it history, we will plan on china for not living by the roles they signed up to live by. we will make sure that they get sanctioned. finally, we will say to america houseworkers, we will protect you with the right to a secret ballot and will not have money taken out of your paycheck to go into political campaigns you disagree with. we'll protect america's workers from day one. i will also file five bills on the first day and looked for congress to get them enacted by 30 days ricks. we will open markets, sine

immediately the agreements that are outstanding with other nations like columbia, canada, and south korea, and we will open markets around the world and get american products around the slow. number three, domestic energy, we will pursue legislation that will allow us to take advantage of drilling in places across this country that are now closed to drilling. we want drilling for all well and gas that will creigh energy -- that will create energy. retraining -- the you know how many programs there are four job training? we note training for jobs for tomorrow is a poor. do you know how many federal programs are for job training? 47. 47 programs, eight different departments, managing 47 different programs. only five of them had been evaluated, and those were seen

to be of very limited help. i want to take this 47 programs, cost them down to one, and turned them back to the states. the state should be running these programs, not the federal government. it says that there come a down payment of fiscal sanity. i will propose a bill and ask for to be passed within 30 days that will say we will immediately cut all federal spending by 5%, except in the military and entitlements. all discretionary spending will be cut immediately by 5%. this is a business plan for the american economy. we have to recognize our nation is in competition with other nations around the world. if we want to create jobs we the best planthave and the rug. this nation cannot be stopped.

the meeting seven us now is government and we are right to say, stop, the government, and let's start crowing again as a nation. [inaudible] that is the plan is not more than 25% of what has to be done. if we are going to get america going to again, we have to rely on other things. one is the american people. we will have to work hard and smart. we will have to tell our kids to get the best education they can, whether in vocational school, high school, college, to push them as hard as they can. we cannot think we are entitled to the great wealth we enjoy it. we have to work hard. [applause] we are going to have starred

demonizing other americans. one of the places where the president has disappointed me the most is the way he has attacked other americans and found someone to scapegoat for any kind of problem that exists. united we stand, united we stand hit if we disagree with other people, fine, talk about those, but do not turn other people into an unease. even the president is not a bad guy. he just does not know how the economy works. he never worked in the country. -- in the economy. i look forward to coming back into a real economy. let me mention something else. that is when you have a plan like this, and yet people ready to go to work hard and to pull together as a people, you also have to make sure you have leadership, leadership that is what they're doing and knows how to leave. just having a plan -- a plan can be written by anybody, but it takes people and leadership to

know how to execute a plan to make it work for the american people. i remember looking at companies like general electric back in the 1965 s, 1970's, apple computer, apple, what a company, even starbucks. there are stories there about the enterprises that have been led by individuals. what happen if there were competition between general election and a second-year business students describing what it takes to turn a visitor around? my guest is the student would win, but they would not have a clue of what to do in reality. there was a time when steve jobs was removed from apple computer. steve jobs was the real deal. he was a leader. he is a leader. he knows, he has done it before. that is the nature of real leadership. i do not have all the answers to all problems that exist in america and around a world, but

i know how to find the answers, and i also know how to lead. i was in the business year world for 25 years. i remember one of our very first investment opportunities in my company was to decide whether to put over $1 million of our investors' money into a new idea called staples, an office supply superstore. my team went around asking what they thought of the idea. every person we talked to said it would not work. they said people will not leave their offices to go by office supplies for a few bucks less. they want convenience, delivery, staples will not work. we proved them wrong. sables now employs over 90,000 people. -- staples now employs over 90,000 people.

i went to the olympics. as i came they're eyeing went there in 1919 and -- as i came there, i went there in 1999. this people can together and i was part of that leadership team, and we were able to turn those games are around. dick ebersol said those are the most successful a little gay -- olympic games ever. i came to massachusetts after that. we had a $3 billion budget gap we had to fill. most people said you cannot do that without raising taxes. i said we've got to do it without raising taxes because that hurts people and kills business, and we were able to do it. we balance the budget every year $80 billion rainy

day fund for the next governor to use, and he has. [laughter] i have been in rooms with people who do not thing the job can be done. i have experience with the real world solving real problems. i know unity is key. republicans and democrats have to work together. democrats love america, too, just like we did. there is common ground. we want to get americans back to work again. i will use every ounce of my energy and every element of my devotion to get america back to work. i am concerned about middle income americans, families all over this country that have suffered under the obama economy. he is not a bad guy, but just as not have a clue of what to do. part because he has never done that before. and i have. i have done it before, i will

use of that experience to get america were taken, and i will make sure you will never have a question in your mind about whether the future is brighter than the past. it is, that is part of the american heritage. we will keep that american heritage alive and leave a heritage the world will always remember. thank you very much. i appreciate you having me here today. ♪ [applause] [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute]

♪

>> close the border, close the border. >> in my book, i talk about immigration. take a look at that. how are you? >> republican hispanics, we're with you. >> sard. one minute. >> there we go. that works. how are you? >> you are wonderful. >> thank you. [unintelligible]

>> thank you, oh, thank you. thank you so much. hi, how are you? it is good to be back again. hi again, how are you? there we go. oh, thank you, appreciate it very much. [unintelligible] >> good to see you. >> i wish you very good -- very much success. >> we are behind you. >> thanks. you bet. all right. ♪

great to see you. thank you. thank you. ♪ [unintelligible] >> policy in my e-mail because you will like it. >> thank you. thanks for being here. >> thanks, buddy.

>> appreciate you being here. thanks, guys. >> we will work hard to get you elected. >> thank you. thank you. very kind, good to see you. hi. could be here. thank you for your help. -- good to be here. thank you for your help. thank you. >> house minority leader nancy pelosi and other democratic leaders also outlined their jobs plan today, emphasizing american-made goods and rebuilding infrastructure. if they spoke with reporters for about 40 minutes. -- they spoke with reporters for about 40 minutes. you are back.

welcome. a day early, but none too soon to get back to work for this congress. once again democrats are calling for this congress get back to work and put americans back to work. in august we had an extended opportunity to listen to our constituents. their top priority is job creation and economic risks, protecting medicare, medicaid, and social security, and to strengthen the middle class. i will be very brief. there are a number of members to hear from. we had a strong meeting of our leadership on how we go for it, how we go to you with excitement about the optimism we have for our three very disnguished members who represent us at the table of 12, congressman -- assistant leader clyburn, and

ranking member cresaptown holland. we wish them wl. we sent to the table with the highest expectations with the best goodwill and without drawing any lines in the sand. we look forward to the president's speech tomorrow night, but we continue our own initiative on job creation. we think it is getting back to basics about abc's. leader -- will get it right yet,, steny. a, sics as the abc's -- making it in america. mr. hoyer will elaborate on that. it is important to our spirit

for the the blood of our small businesses and to -- it is important economically to our national security that we are self-reliant, that we have the tools of production to defend the american people. building america's infrastructure very important. mr. cliburn will talk about that. that would be building america plus interest charges come and they will be talking about both of these basics, but we believe the spirit of keeping america number one of not putting people to work, will be well served by addressing the trillions of dollars invested in our infrastructure. c, community recovery corps.

that you had seen in the past few months, east coast, fires in texas, storms in louisiana and the gulf coast, there is a lot of rebuilding that needs to be done, and many of our members have told they think it wi be very important for us hire youth, and people, it might be senior citizens whcan help in the rebuilding of communities. we think it is important andan be an economic boom that jobs created where people are hired from that community did do some of the recovery. in that spirit democratic, -- in that spirit, were to come from our ourwhip, mr. hoyer. >> thank you very much. all of us have just returned from the summer breaks, a lot of

us that not get breaks, per se, but we visited with a lot of people, both in our district and throughout the country to. it is no surprise they are very, very concerned about our economy, about jobs, and they continue to be concerned about the fiscal posture of their country. we need to address jobs a fiscal responsibility. in terms of jobs, we have had an agenda you see referred to as make it in america at jeddah. we have talked about that, but it is not just talk. it is substance. it is saying we want to make sure everybody in america has a sense, an expectation of success, that theyre want to make it, and they're on to make it because they can get good- paying jobs and we are expanding our economy, not contracting our economy. economists tell us the best way to do that is to expand our

manufacturing. america still is a manufacturing giant in the world. but our place is not where it ought to be, and we have lost some 11 million manufacturing jobs over the last two decades. those were good paying jobs and they resulted in other jobs being created as well. three items in particular we want to focus on. first, the manipulation of currency. manipulation of currency by china and by others that make their goods cheaper to sell in america and american-made goods, quality goods, expensive to sell in our trading partners' countries. that is not consistent with roles for it is not fair to our workers, and we want to make sure we turn that around. we want toave a strategy, a plan. every team that wins the so

because they have a plan of how they are one to win. what plays they are born to run, who is on to do what, how we create an environment in which manufacturing can expand, so we need a manufacturing strategy. we have suggested legislation to ensure that we have that inquiry last, but certainly not least, over the 30 or 40 different league -- bills we have in the agenda, the infrastructure bank. the infrastructure bank -- we need to make sure we leverage significant amounts of private sector capital along with public alcohol in a partnership to expand and invest in infrastructure, which american needs if we are gone to grow our economy and compete with international competitors. i expect the president to deal

with that in his speech tomorrow. lastly, let me say that we have mr. clyburn, mr. van hollen, who are going to participate in the debt reduction committee. without any reference the taxes increasing, therefore bringing down the deficit. i believe very strongly that this committee must be successful. if it is successful, i think it will grow confidence in the private sector, and it will grow confidence in the international community, that american in fact can meet its challenges and make them successful. i hope all my colleagues, on either side of the aisle, and i know my three colleagues on the committeeill see that end.

so let me now yield to the assistant leader of our party, mr. jim clyburn, to discuss and researcher and how we growth that and grow jobs in america. >> thank you, mr. whip. for those of you who have visited charlesto south carolina, in recent years," you probly have seen a magnificent new bridge. it is a talking point up and down the east coast. that bridge was made possible by a state infrastructure bank. the money is gathered by that bank and was leverage to secure a loan.

it is a man of isn't structured, but in addition to getting rid -- it is a magnificent structure, but in addition to getting rid of a toll bridge, we were able to heighten this man and widen the alleys so now megaships can come into charleston and create jobs ad itum. that concept should be employed at the federal lel, creating a natural -- a national infrastructure bank, to be able to leverage moneys into the private sector and allow us to build roads and bridges, and i would hope it would be infrastructure brought about for

water and sewage programs as well. those are pretty big ticket items, but there are other infrastructure projects that we ought to be pursuing that will create jobs at the state of local levels. that is why two years ago i introduced the energy savings program that has been nicknamed -- star. that program was made possible by an incubator that took place in my congressional interest, and it was coordinedy four or five rural ruralcoops, a magnificent program if it were to be broadened to the nation,

it would create 60,000 jobs, renovating the retrofitting homes. in rural communities, many of the homes are basically >> it would allow the homs to be insulated, put on windows, and new doors. it would cause at the local building supply stores as well as put bricklayers,oofers,

electricians h. mack people back to work. --hvac people back to work. it will allow all these families to pay back the loans at last cost than they were experiencing before the retrofitting took place. this same principle, more urban communities. we believe that it will leave it to a significant, up to 25% deficit reduction, with these kinds of programs. it will sustain these over the long run. we areery excited coming back. i often hear peoplealking about the summer break. it is not always a vacation. i held town hall meetings during

this break. i am particularly impressed by the town hall meeting i had at a college in my district where the unemployment is 17%. these people did not want to hear me talking about cuts. they did not want to hear anything but jobs. they want to see us focus on jobs. they believe that if they can get a job, they will be able to pay taxes. their confidence will rise, and they will be able to help with deficit reduction and a way that will make all of us proud. i am pleased to be back here to get along with this work, and i am pleased to be joined with my colleagues on this committee. but i caution all of you, we are an appointed committee. the three of us appointed by the leader, not the chosen 12.

we will be limited by what we can do legislatively. with that, i yield to the chair of our caucus. >> we have just heard from james the apostle, one of the chosen 12. actually, and our caucus when jim clyburn speaks, we listened with great interest and intent as we have this. we have been heless thing to our colleagues. i bring perspective from the northeast. the dean of our delegation is back in the state where we suffered tremendous losses along our shorelines within the heart of connecticut amongst our farmers and some of the worst business interruption and power outages -- even greater than gloria.

ether it is texas fires, whether it is hurricanes in the gulf coast and mississippi, the devastation we have seen and i are members of to reap -- reporting the altering of their communities. we witnessed in paterson, new jersey where the president's trip has underscored an important agenda item that w have in terms of putting this country back to work and focusing as jim and steny and nancy have said for putting people back to work. they are most interested in seeing congress take action. with every catastrophe like this, it is underscored by the need for action. with that comes opportunity.

we believe that the opportuni here is for the recovery corps to take place. that means putting people -- not trading any new bureaucracy, putting them back to work under fema. putting them back to work under the department of agriculture. putting them especially back to work in our rural and urban communities where work is desperately needed. especially amongst our young. call it a civilian conservation corps, but we think it is important that we reach out in this manner and p america back to work again. this sunday will mark 10ears since september 11. we all remember because we gather together on the steps of this capital and came together as a nation. i say that because this is precisely what is needed at this point. not positions from either party, but coming together of america. we are proud to lead the way and

note that our members that have been selected to be part of the 12 have got a tremendous assignment as the leader has underscored the needs to succeed. the public wants it to succeed. we understand explicitly that job creation equals deficit reduction. nobody understands that better than my colleague of the airbus sarah, who is our next speaker. the jig xavier baccera. >> it is time -- i firmly believe the 12 of us who are privileged to serve on this joint committee understand that. perhaps our most importa task is to put america back to work.

each and everyone of us has an obligation to commit almost to a bottom line that says anything we propose must lead to job creation. that should be the standard. if what you are proposing loses a job in ameri, we should not be moving on that. if it will create a job in america, let's take it to the congress and the president for a vote. there was a time when america created morehan enough jobs for its people. we need to return to those days. there are americans today through no fault of their own trying to figure out how to balance their budget. it is hard to believe that america will figure out how to balance its budget if there are 14 million americans out of work try to figure out how to balance their budget. once they are back to work and they are doing their fair share as americans to pay their taxes, america will be put back on track. we send a message to the

president. mr. president, in two days, be bold. hit it out of the park. the american public is waiting for that leadership that tells us once again that we are ready to lead, not just the united states of america but the entire world back from this of this. whether it is on the select committee or whether it is right there in the white house, it is time for us to be bold and understand that our bottom line must be treating a job. one final point, too many people forget that the place where we are seeing job creation today, one of the sectors where we continue to see job creation -- the health-care sector. who would have said given all the talk about jobs destroyed reforms that were enacted last year that we would see job creation occurring at this dismal time in the health-care sector? the facts are, health ce today is creating jobs.

one of the things many of us believe is driving the decoration is a platform that give some stability to the tureor what people could expect from medicare and health care in genel. if we are smart, we will look at what medicare can do with not just providing americans decent health care in their retirement but also what they can do to continue trading jobs. in the health-care sector, we are in many cases the result of this health care reform last year, trading jobs in america. it is time to do right by medicare as we do right by the american workers who are ready to go back to work. let me introdu our ranking member on budget. thank you. it is great to join my colleagues. as has been set two days from now, the president will come before the congress to deliver a speech on how to get the economy moving and how to get america back to work. i know he is going to need a

partner in the united states congress to get that were done. i know everybody up here plans to work with the president to do exactly that. i hope our colleagues throughout the congress, including the leadership of the house, will join the president as partners in that effort. i think it is very appropriate that earlier that same day, there will be the first meeting of the joint committee. the committee that is passed to look at the economy, and looking both at the short term and long term. i think it is a program that they meet the same day because as my colleagues have said and as we have laid out in legislation that has been introduced, the fastest and most effective way to redu the deficit is to put america back to work. if you look at the most recent congressional budget report, they have indicated that for every one-tenth of 1% increase

in the gross domestic product, you reduce t deficit by $310 billion. the project over the next 10 years, the average gdp will be 2.9%. what those nbers tell you that is if you got a growth rate by half of 1%, he would reduce the deficit by 1.5 trillion dollars, which is the target layout in the legislation before us. my point is this -- a serious and debt reduction strategy has to include a major jobs component. it also has to include a balanced approach to reducing the deficit over a long period of time because we know that the challenges large. you need both, and you need jobs. both the simpson bowls report pointed out how important it is

to make sure get this fragile economy moving again, both to put people back to work against a the get care for their families and have economic security but also as a critical part of reducing the defici these things go together, and i look forward to working with my colleagues on the committee, and the caucus, in the congress, republicans and democrats alike to do exactly that. >> thank you very much. thank you my colleagues. i am always dazzled by the commitment, the depth of knowledge, the degree of dedication that our colleagues have to try to make the future better for everyone in our country. as a talk about the abcs, making

any america rarely accomplishes that. mr. hoyer is other meaning of make it in america so the american people can make it in america is captured the route all that we are talking about right here or at the table to create jobs to reduce the deficit. none of it can really work unless we have -- address the human interest charges we face. we must have an educated work force, we must have work safety. these are public jobs. the public space must be respected if we are going to succeed and if we are going to keep america number one, if we are going toonor our commitment to the american people. so we are looking forward to the president's speech. some of the thing he has said over the past few weeks give us some ide were he may be going. one place i want to associate ourselves is his commitment to america's veterans.

they make us safe, and the home of the brave and the land of the free -- the land of the free and the home of the break. [laughter] i have to singt. in any order, his commitment to our veterans whether it is tax credits or encouragement to the private sector or whether it is an example set by the federal government. or if it is as i would like to see, sandy-that has taken the lead on urging the federal government to honor its commitment to contract in for our veterans as we honor them to women and minorities as well. there is a lot we can do -- that congress can do in a very short time. i think that is what we will be hearing from the president. we stand ready to help, we stand

ready to compromise. i hope we can all make a difference. >> i wonder what you will do about chinese currency manipulation. the you have new legislatioon that, or hard you attend to address that? >> we do not intend to speak about that today. >> have had legislation on that. the senate did not move on it, we hope to either have legislation move on that in conjunction with their republican colleagues who will of course now control the agenda. but because that was supported overwhelmingly and because clearly, american workers making american products or selling services for that matter what products, have been disadvantaged by the manipulation of currency prices not driven by the market but driven by uncompetitive and we believe by relatives of international rules. but we also believe that the senate will move on that as well.

we also may have the opportunity to offer amendments on that issue. >> excuse me, the legislation does not deal with a specific country. clearly, china we believe is manipulating its currency. chinese goods are cheaper here and american goods are more expensive there which undermines our workers. but the legislation itself is not country specific. it says that any trading partner that manipulates their currency to the effect that and will be sanctioned under legislation. >> the discharge petition which i think all house democrats have signed, you'll have more on this on thursday. >> you said you wt the

president to go bald and show hileadership. you have to get down to the nitty gritty and talk about entitlement and some of these different equations that have to be offered propelled gold and will the public perceive this to be when they see is a change to their benefits and for the cuts have to come from? >> my old personal opinion is we have to be bold and the super committee as well. if we are going to get america back on track, you cannot just fiddle on the edges. you have to really take on the sacred cows. if we take a close look at what drove us to these deficits, what turned us from having record surpluses in 2001 to have a record deficits in 2011? if we go after the main drivers of the deficits, we can not only put america back on track, but if we do it the right way we will put americans back to work. be bold, mr. president.

the cold -- the goal, congress. we have done it before, there's a reasone should not try. >> i have a follow-up to that to members of the super committee. if the president's rose out infrastructure projects, those come with the cost. will that make your lives on the super committee more difficult? >> no, not at all. one of the things we have been trying to say here is that it is absolutely essential to put america back to work if you want to reduce the deficit. again, just about every economist o there will tell you we need to do two things. we can walk and chew gum at the same time. we have to focus on getting america back to work. every day that the economy is stalled is another day that not only americans are not able to

provide for their family but another day the deficit grows. you have to get the economy moving again. the infrastructure projects, putting people back to work, repairin bdges and schools and roads and all those kinds of things are a very important part of it. has to be in context of a plan, i longer-term plan to reduce the deficit. that is going toe the charge of the committee to do those things. to recognize that they are mutually reinforcing. the faster you put people back to work as i indiced, the cbo says that you reduce the deficit at the same time. that is going to be a ctical part, i think, of the work of the joint committee just as it will be important to find a balanced approach overtime to reducing the deficit. i think all of us the question was asked about going gold. i think all of usould like to set as target for ourself even more than $1.5 tyrillion.

the bipartisan commission's up of four trillion dollars over 10 years. the action congress just took an early august was about $900 billion over 10 years. if we are looking for the four trillion dollar mark at the end of 10 years, we had a lot of work to do. but it begins by putting people back to work. >> frankly, the president is focused on the message that he spoke about. not only do i think he will make it more difficult, i think the president showed over the past six months as we dealt with the debt extension and the deficit reduction of fiscal responsibility how committed he was to that objective. contrary to what the premise of the question is if it will make it more difficult, i think congress, republicans and democrats, have a real ally in the president of the united

states to moving to a fiscally responsible outcome and a vote which will occur in december. >> part of the jobs plan [unintelligible] i am just wondering what the solution is? >> i think the has been a message that the president will be talking to the american people a way to not only trade jobs but to strengthen, again, our infrastructure. whether it is water supply, broadband -- it is not just roads and bridges. it is other things as well. as mr. cliburn talked about, it is other initiatives that will create jobs immediately. so again, the basic premise that mr. quarrier and everybody talked about here and mr. larsen

has been totally relentless on is that you reduce the deficit by creating jobs. you create jobs, you have to make some investments to do so. what is special about infrastructure as you heard mr. hoyer said, you could leverage your public dollars -- federal public dollars for a bigger purpose. so this is an exciting opportunity for us. i hope it will not the best. infrastructure has had a bipartisan support in the past. i hope at this very present time -- at this very urgent time, it will as well. >> let me just use as an example -- that program as it is currently being undertaken in my district allows for $7,000 per family.

we are doing a 10 year program. this program allows the $7,000 to be borrowed, and you have to pay it back within the tenure. . you pay it through the co-op. if you're paying $600 a month in utility costs today, and that gets reduced to $280 a month, i only have a $200 repayment on your loan, the family benefits between hundred $50.200 dollars every month. with a net tenure. , you have people going back to work. you are purchasing goods and america, you're putting in bricklayers, electricians, back to work. there are paying taxes.

you look at that overall, it is a tremendous impact on deficit reduction. it is all done within a tenure. -- a 10-year period. it is being done right now, we are trying to take a nationwide. >> "national journal" camel with a couple of ex excellent articles. 11 ways to put people back to work without impacting the deficit whatsoever. 18 ways to invest in america and make sure we are both growing that the economy and accomplishing the goals that chris van holland outlined. this is an enormous opportunity for congress. let us be frank about this, when the general public's confidence in congress is at an all-time low. this is a chance for us to rally

together much like we did on the steps of the capital back in the aftermath of september 11. it is a time for us to seize greatness. that is why i think the opportunity is here. it is bipaisan. we are proud as democrats to lead the way and to have a president that is out there continuing to be an ally to both sides to make sure it is an america that we move forward to this time of crisis. >> in further response to your question, congresswoman is going door-to-door in her district following up on the damage from hurricane irene. i am sure she would be available at any time to let you know how the infrastructure bank leverage is public dollars in a way that represents a real savings to us. it is 100 days approximately until the -- what, november 23. mr. larsen of force -- mr.

lawson and force me 100 days, 40 legislative days. you have to make everyone of them count. you have to make them count in terms of growing our economy, to reduce the deficit, to create jobs. we have to make them count and demonstrate leadership of our country moving all doubt that we will be responsible as we prepare for the future. again, we are very proud of the president, we look forward to his remarks in a couple of days and we look forward to working with them to have success at the table of 12. that is absolutely essential, and we are all committed to that success. thank you very much.

>> president obama offers his plan for creating jobs to a joint session of congress this thursday. in a few moments, a look ahead to the 10th anniversary of the 9/11 and tax with, and security -- attacks with, and security secretary janet napolitano. then rudy guiliani on the american security says 9/11. then a hearing on the financial future of the u.s. postal service. >> a couple of events to tell you about tomorrow morning. the center for strategic and international studies close a

forum on intelligence and the terrorism threat. it begins with remarks from the janet napolitano at 8:00 eastern on c-span3. on c-span, and they consider the sherman.on of wednendy >> in 1844, henry clay ran for president of the night states and lost. he changed political history. he is one of the 14 men featured in the series "the contenders.' it is friday at 8:00 eastern. >> now janet napolitano and mike rogers futures the house intelligence committee interviewed about the 10th anniversary of the 9/11 attacks by political list -- mike allen.

this begins a janet napolitano. napolitano. >> good morning. thank you for coming out so early on back-to-school today >> good morning. thank you for coming out so early on back-to-school today here in washington for the first double header. we will have the homeland security secretary janet napalitano. following her, we will have mike rogers. he will be giving us a great tour of the world that we are very excited about. great tour of the world that we excited about. i like to think of america for our continued partnership. these breakfasts have been fun. begin to interact with newsmakers, and is a form for us to use in washington. are grateful for her support for that. hello out there in life's dream land. we are grateful for you.

if you are following us on twitter. you can suggest questions and critique and rebut your cells. two special guest today. and obama administration official, we are happy to have colbern here. he is a rired army colonel. and somebody who has been to every single play but breakfast. she is a graduate student at george washington. and, she is a post and can get you to the top of the list. that is tara. we appreciate your supporting the breakfast. we look is a good morning to secretary napolitano.

[applause] >> good morning secretary. thank you for coming out. thank you very much for joining us. >> thank you. >> different parts of your job, fema, and aggression, customs, tsa -- i feel like things can only go wrong. what is that like? >> it is absolutely a fascinating job. almost anything that happens in the united states somehow cut into the department of homeland security treaty on the mentioned a few of the components, you have the coast guard, customs and border protection, ice, we have and intel and analysis section. we have cyber section. we have an office of health affairs to deal with pandemic. it is a very broad range

department, and the challenge is to manage that and it to manage it in such a fashion thawe are doing all that we can to make sure that america remains a safe. >> your only the third homeland security secretary. do you still find yourself convincing people that you should have a department of homeland security? >> not so much that we should have a department but that we should stay with all of our relevant components. it is very interesting. when i was being prepared to be confirmed right at the beginning of the administration, there was a movement to remove fema from the department and have it independently report to the president. the decision was made that, no, it should stay within the department. it turns out that was the right decision. we have been able to by making changes with the month really improve the delivery of services, working a lot with state and local first responders which we have to do in other categories as well.

it just leverages other works that we are doing. >> are you glad that you kept if the met? that must be taking a lot of your time lately? >> lately because mother nature has been awfully busy. we have seen in the last two and a half years, we have seen earthquakes, a tsunami, hurricanes, floods -- record floods, we have seen just about every national disaster you can have. and then you have to deal with it. >> it is too easy to ask you how you were handling these differ from katrina. i will ask you, how are you handling them differently from the oil spill? >> well, the oil spill, first of all, was a very different statute. there is actually an oral caused pollution act that governs how you respond to an oil spill. the star from a different place. when you are under the stafford act, fema comes in from behind

locals and behind the states. we come in when their resources are overwhelmed. the major change we have made in feed that over the past several years is not to wait until states or local governments get overwhelmed to but doing our best to predict when they will be stressed. we are sitting at the table from the beginning as a team to get the timeline. you can move quickly. it is really a local to state to federal handoff. in the bp instance, it is all federal and it needs to be. no states has the ability to deal with a multistate or else go from a mile underneath the ocean with technology that nobody possesses. the lead agencies are different. you manage it differently. >> it was not really gov. jim dolls the. he wanted to -- it was not really governor jindal's the.

for a while the one to handle it himself. >> all of the states had management plans for their own coastlines. none of them had a plan that would really cover the entire gulf coast. that was what bp really encompassed. we worked with the governors, we worked with the parishes in louisiana. we worked with the communities in mississippi and alabama. now, a year later as we look at the results of that war, which seat by and large the oil was kept off of the shores. there were resources there that cleaned it up immediately.

>> if it had moved to a mall to the west, and he would see it hit directly into manhattan which is what people were preparing for. in general, the path of the hurricane was forecast very accurately. what was not a forecast part is accurate is what is the intensity of the storm. i think we had carefully prepared that this was going to be two defense. he would have the coastal hurricane, then you have the inland flooding. it turns out the flooding has caused the most damage. >> how long are you going to be thinking about joplin? >> yes, although school has started. here is a city that was decimated ba tornado. we are lucky it was not on a hool day because it took out two elementary school, a middle school, and the high school. and pulverized them. if there were students in there, there would be a lot more fatalities than what we had.

to joplin's credit, really a can-do spirit there. they are up and the school started on time. >> there was a partnership that schools are getting computers so they can have textbooks, do they still have needs or monetary needs or is it just the recovery and families regenerating? >> when you have a storm like that that is that destructive, monetary goes on for quite awhile. we have joplin, tuscaloosa, birmingham -- >> those were all tornadoes? >> the overall tornadoes from the spring. you have other needs appearing. you have irene, lee, katia perhaps, and then there is another depression forming off of the west coast i could come our way in the next few weeks. i never watch the weather as much as i do as director of homeland security. i was the governor of arizona.

i left arizona and it was like 75 degrees. it was in the third week of january and i got here and it was minus 20 degrees. remember how cold it was the inaugural week. i had to buy a coat. anyways, i would get a morning briefing. part of that is the weather. it would very kindly give me the weather in arizona compare to the weather in washington, d.c. so i could see. >> five days until the 10th anniversary of the september 11. how worried are you that there will be another attack? that anniversary will be used as an occasion to attack the united states? >> first of all, we do notave specific or credible information that an attack is pending. that is not to say that there is not. we have to lean forward working with localities throughout the united states, working with the

states. we now have the infusion centers and all of the states. these are centers where we have locals and defense and nicole located center where we can exchange real-time information and get information back. we have a lot more of an architecture, a structure throughout the united states by which to convey information and get information back. >> what have you been told about the likelihood either psychologically, historic clique that somebody will try to take advantage? >> we know from the information obtained from been latent -- of some of been layton's compound that he was focused on that day as an iconic date. we do not have much more than that. there is no specific or credible threat. it is a possibility. is also a possibility that we will have a lot actor or lawn will decide that this is a great day to get some attention.

i will do something. that will put even more emphasis on local first responders. people remaining vigilant. that is what we ask the public to do. remain vigilant as we go through this time. even as we commemorate the almost 3000 people could die in the tacks of september 11. >> is the next september 11 likely to be a lone wolf? have people sketch for you what the next september 11 might be? what do you worry about the most? it is a container? what is it? >> yes, yes, and yes. there are multiple ways and multiple kinds of threats. threats are ever evolving and changing. the kind of attack was on september 11 would be very difficult to carry out given the changes that have been made that are intel, better information, better checks on v says, --

visas, better security on airports, better targeting of passengers that need to receive additional screening, better hardening of cockpit door so you cannot get into where the pilots are. those are somof the few of many changes that have occurred since september 11 that would act to interrupt such a plot. >> with scalled spectacular is someat unlikely? >> i would say that kind of a spectacular is unlikely. theig complicated plot that arises from overseas would be much more difficult to accomplish successfully now given the many layers of protection we have built sen. >> a better listening? >> and no guarantees, but much more difficult to carry out. but we now have the rise of the so-called homegrown terrorists or extremist that might be inspired by al qaeda or some

other distorted ideology. that requires local law enforcement to be on their toes. it requires the american public to be on their toes in order to maximize our opportunity to interrupt something. >> you mentioned homegrown terrorists. you had a report about this early in the administration. he had a lot of blow back about that. have you pulled back a little bit from those sorts of warnings? what is your message about homegrown terrorists? >> we got criticized about how that was articulated. the criticism as i go back and look at it knowing now what i did not know that was that the process for producing the report had not been completed before was put out to the public. we have a process before we put out something, and you need to because lots of folks are paying attention to things that emanates and the department of homeland security. so we fix the process, but we had not shied away at all from

recognizing the at home crown plots, homegrown terrorists are very real threat to the united states. >> said he would not put out the report today? >> not as it was articulated. but the same kinds of reports we have been putting out and have been putting out very consistently during my tenure as secretary. >> tell us what homegrown and means? >> is exactly what it says. somebody who was in united states. we do not really grasphat turned on the trigger, but they moved from being kind of interested in it, boost to the point of committing violence against their own citizenry. >> so this is what would be like the attack on the federal building? >> like in oklahoma city. that is a homegrown terrorists. >> of things we worry about, where is that now? where is homegrown terrorism

now? >> is a key concern. it would rank right up there. i think the individual actor so there is no plot to interrupt, that is a concern. different kinds of big different ways of carrying out a plot. you have explosives, you have different types of potential biochemical -- other ways of trying to injure or kill a bunch of people the human mind is a very trade of mine. unfortunately, sometimes it is treated in exactly the wrong way. >> i hear you sing that a homegrown lone wolf would be high on the list of big threats? that is hard to detect by definition. >> it is. that is why there is such a -- >> a person is not the day visa. >> exactly. what we do look for its tactics and the techniques. things that are early warning signs that something is going

awry. >> give me an example of that. >> we interrupted a plot with the fbi, there are a key partner in the counter-terrorism center. we have some key partners in the homeland security enterprise. they interrupted a plot -- we together interrupted a plot that involves explosives hidden in backpacks. explosives were based on hydrogen peroxide. >> where was this? >> it was a plot that originated in colorado in the perpetrators were traveling to new york where they were going to let the backpacks. >> you have the similar christmas tree lighting in portland, oregon. that was also interrupted. >> right. let me go back to the colorado one because it demonstrates what we loofor. then we send out a message to all of law enforcement to the fusion centers and say, hey, you

may want to drop by your beauty products supply stores or what have y in your area to see if there have been any other unusual purchases of hydrogen peroxide. we know you do not need that much, really for its normal intended purpose. so it is that kind of information flow to and from that maximizes our ability to interrupt even a non international, notcomplicated plot. >> so unusual materials -- what are the other things that we look for? unusual quantities of materials? >> unusual travel patterns. if somebody has been gone for six months to somalia and they come back. if that information is shared, that is something out local law enforcement can askome questions about. >> so i am curious, if i am an

american citizen and i go to somalia, what can law- enforcement do? >> just ask and to snow. that is all. do want to be conscious of civil liberties and civil protections and we are. but that does not prevent a good law enforcement from looking for unusual patterns, tactics, techniques. things that we know our kind of triggers within the world of the violent extremists. >> there is a guy most people in this room have not heard of, he runs a website. some of you may have heard of it. >> i have my own nickname. it is kind of a deal. you know if you have made it when you get a nickname. i think my name is "big sis." i do not think he means it kindly, actually xxx to we get some red letters -- >> yes.

i think what he means is we are watching too much, kind of an orwellian view. he is just wrong. >> why? >> first of all, we do not do anything without running it through our own civil rights and privacy office. we are one of only two departments in the federal government that has a presidentially appointed privacy office and officer. >> you and who else? >> justice. we run all of our programs, our technology, all of those kinds of things. we think about privacy and went too much is too much. but on the other hand, our responsibility is to maximize our ability to prevent something violent from becoming successful. we are always striking that balance. we think we have hit it pretty right. >> what i thought you were going to say, i thought you had a

nickname or him? >> [laughter] maybe. no, i think we should try to keep our discussion at a high lel. in any event, that kind of concern, there is too much intelligence gathering, there is too much of this, i think is overblown. the plain fact of the matter is, we live in a very complicated world where there are different sources of terrori, of violence and extremism. we have to because it meant of all those forces, the ever evolving threat. we have to be changg what we do in order to maximize our abilities to prevent a successful attack. >> we were having coffee earlier, he is just back from london where they have cameras everywhere. could we be heading that -- >> a lot of cities do have cameras. it depends on the locality.

chicago, for example, new york city. they have lots of cameras. they have a screening room where they can watch different cameras at different times. they are a very helpful methodology, particularly in areas where we knowhere are constant threats. >> as the timeline there will always be more surveillance protection after 911, what you call them -- the things you put in front of a building, the concrete columns for car bombers? >> yes. >> does somebody know what those are? so are you always going to have more, or will we be potentially be able to do its smarter and pull back on visibility and

spending? >> our goal would be to pull back. to reduce the amount of inconvenience people in their ability to go through one building and out the next. we are dealing with the world were you also have lots of intended attacks on museums, the holocaust museum last year. government buildings of all types, what ever reason. i think the arican people with few exceptions would rather be safer than sorry. we will have a baseline that is an elevated risk that we will always have to assume. we have something specific and credible, they were raised the alert.

>> the man had planned on the chicago tribune which the meum has posted a big beautiful -- the main headline is it is part of their september 11 series. the headline is "aviation security full of hassles and witnesses." why have you not made this available to the american people about their for screening? quick to think in geral we have. i would disagree with the headline. the technology is getting better and better. we move to the new atm mhines. why did we do that? because the terrorists, who continue to focus on aviation, this is a continued focus of attack. >> that is very interesting. how do we know that? >> mostly abroad.

>> they continue to focus on -- >> aviation, because aviation succeeded in the past. >> specifically u.s. airlines? >> and western. western europe and the united states. >> western planes remain big targets? >> yes, they do. to stick the christmas day bomber and 2009. -- take the christmas day bomber and 2009. we need to help detect these materials. originally, they had a very smudged version of a person. the new ones are the new software that is going in is kind of a stick figure that identifies where there are anomalies that need to be checked out. why do we do that?

we know the technique or the tactic trying to be used is to get into a passenger compartment of a plan and the cargo department as ll. we know from the attempted yemen , non metallic explosive material that can take the plane down. we hope we will be able to make it easier for travelers. he will n havto be able to take off so much, your shoes and your belt as you go through the machine. >> i do not mind the shoes and belts. you can make me a better person. what i mind is ait is much more irritating and time-consuming. how many people have done that? you have to hold your hands like this. if you hold your hands like this they will stop you and tell you that is not the proper stance. >> you have to do with the right way. >> you take everything out of

your pockets. usually when you find out you're going to go through the ait, , unusual or what kind of feedback you get about it? >> actually when people use them correctly they like them. particularly people who have artificial joints to always get pulled aside if you are in the regular one. they do not have to worry about that anymore. you're right to see better technology over time that will allow us to reduce the amount of stuff you have to take off over time. secondly, the other thing is we are moving toward an intelligencend risk-based approach to how we screen passengers. it is also background. but non passengers who will pay a fee, and with that fee we can check out their identities and so forth.

they will be able to go through much more quickly. we will in a sense have prescreened them. we have a program called global entry that started very rently. some of you may have global entry cards. anybody here have one? if you travel internationally, you really ought to. it makes life a lot more -- >> would you agree? we are moving towards those kind of techniques which allow us to separate passengers from we have already prescreened and we have information from those we have not. that will facilitate people moving to the airports as well. >> i find this minimization very encouraging. what do you hope in time will be able to change? what is on the drawing board? i am sure you have seen the 22nd century screening. what we have toook forward to? >> we but love to have a

screening portal that you just that in d, boom, it has everything. it is painless and very quick. the technology is not quite there yet, and it will not for a while. i think one of the first tngs you will see over time is the ability to keep your shoes on. one of the last things you will probably see is reduction or removing the limitation on liquids. identify what is actually in a liquid and doing it quickly so you know it is not an explosive material, that technology is still in development. >> i will not beat this horse anymore, last question about this is, what of the current standards do you most hope to change? d.c. things out people in wheelchairs, mothers who are nursing. what about the current system do you hope and expect to change on your watch? >> i hope we will see more and more people with prescreening

with an identity card that will enable them to go through airports very quick. when you say things like wheelchair's or mothers with blanketwe can't adopt exusions -- >> of course, because then named -- >> and the exclusion is exploited by those who seek to do evil. whenever i hear late-night comics kind of commenting on this sort of thing or i see it in the blogs or whatever, i just have to help remind the american people -- we do not do this for the heck of it. we do this to make sure our airline system remains the largest and the safest in the world, which it i >> injustice that we will bring in editor in chief of the washington post with a question. is the screening different from the old trusted traveler or is it similar?

>> it is still the same concept. >> is that something the government would do where is the contract it out? i can imagine this being a huge bureaucracy. how do you do this and how you get it done in the next few years? >> in the last year we did 1 million. it is really a matter of scaling up. there was for a while a contract it out company they went belly up. that did not work. right now, it is within the department of homeland security. >> right now, what do you have to do to qualify? >> actually, you can go on to our website and download of the information at vhs.gob. >> so people could go on line and look at that? >> is. >> the that the speech to the lines, what happens? >> you get to go through lines more quickly and some lines you

do have to go through at all. which will bring in editor in chief to the "washington post." >> just following up on what you were saying, is more likely passengers will be able to walk through security with their shoes on bulk liquids are more difficult. this whole idea that tsa said years agotoarry your liquids th, you are suggesting that is different? >> i do not kw what you are referring to. this is a combination of a human effort in the airport andhere are multiple layers before you get to the checkpoint. it stars before you get to the airport with looking at your record as a traveler, specifically for a international travel. there are undercover behavioral officers around the airport. there are canine teams.

there are extensive use of cameras. you have all of these players that occurred before you even show up at the gate. when you show up at the gate, you have to take off your shoes, i take your computer out of your knapsack. you are limited to the smaller bottles ofiquids. in terms of what we see coming in the months and years ahead, it will probably be easier -- and it looks like it will be to deal with the shoes issue. >> you testified on the hill that the cost of people bringing their carry-on is through morerity was getng on expensive. you suggested the airlines

should work out some predict either they should be penalized -- what was it? something about allowing them to check more bags. it did not get a lot of pick up. >> let's try again. the airlines, by crging you to people aredg, trying to carry on more. so we're having to check on more before you can get to the gate and board a plane. that has a cost associated with it in regard to personnel and time. it was roughly $270 million we were absorbing because of this changed practice of the airlines. i was testifying. one of the things we have asked congress to consider was raising

the security fee associated with an airline ticket to include the cost to make sure airline passengers remain safe. the goal is to take known risks from intelligence that is gathered about threats to aviation and to deal with those in the best way we can. the threat to aviation has not gone away. we continue to work in that field. we work with the airline, the passengers, at the airport authority, but the goal is to make airline travel as seamless as possible. we recognize there are some inconveniens' associated with this. there are not some that are associated with the work we have to do. the solution to many is better technology. >> to take a quick tour of the

department here, another place things can go wrong is immigration. you are credited with having more border enfcement and occurred during the bush administration. is that tru >> we put a record amount of infrastructure at the southwest border in particular. we also have a plan for the northern border. a get less attention. let's talk about the south was border. congress appropriated initial money in a bipartisan vote that has enabled us to really do the things at the southst border that i as a former u.s. attorney general have been asking for for a number of years. >> what is the biggest change that we can see at the border tax now there is a use a

fingerprint from local -- border? now there is the use of a fingerprint model from local authorities. what can be used to make it more efficient? >> one is what isoing to happen at the port of entry were illegal travel and trade has to occur. legal travel and trade has to occur. there are jobs dependent upon the port and the border working efficientl you will see more technology. there is a lotf a port construction. the amount of commercand traffic has really increased through those ports of entry. many were built 20-30 yea ago. they are archaic. you do not have the space you need to move through quickly. that sort of thing.

you will see more of that over the next few years. between the port of entry is illegal traffic. you will see more manpower and more technology. when i became secretary, we did not have comple coverage of the border by air. now we have complete coverage of the border by air. we also have a number of agreements with mexico for some things they will do on the southern side of the border. >> so the concepts are port of entry -- >> port of entry, being as efficient and smooth as possible, a lot of trade, lots of traffic needs to go there. >> the secret service now has an electronic funds addition to the mission. can you talk about that? >> the president is only one

part of the secret service. it is the mospart most associate with it. they deal with the bank fraud tie crimes for a long -- type crimes for a long time. they have moved into computer related crimes like money laundering and that sort of illegal activity using the international monetary system. >> we have heard about the commemorative activities around 9/11. what has been done of a racially to prepare? >> and many things we did many things have been put in place -- many things have been put in place. we want sunday to be a day of commemoration and remembrance. we wanted to safe. not just dhs but a lot of other

state and local governments are making sure we are as safe and secure as we can be. >> awe say goodbye, a kid in my church whose family roots for arizona, and he went to arizona state. you have probably had that war. are you arizona or arizona state? >> it is a very good school. there you go. they are all great. i love them all. >> you have remained a diamondbacks fan. >> ps. they are doing very well. i try to get to a game while they were here but we were busy. i always try to catch a few baseball games. >> i was told that you are into

opera. >> yes. >> tell me about that. how is it d.c. opera? >> arizona has very good opera. watch out. i grew up in new mexico. i grew up with the santa fe opera. that is about the best summer opera there is. it is one of those things i grew up with and loved it. i go to the opera here. i think i have seen every production at the kennedy center. >> what are a couple of your restaurant here in d.c.? >> i am not sure i should get any particular place. >> there is a restaurant near my favorite bookstore. i like smaller and quieter places. >> do we expect toee you in terms of two? >-- term two?

>> this next week will occupy my attention. by the time we get their 9/11 and the storms after coming through and working on the congress with disaster relief, i think my plate is full. >> what are the chances of a term two? >> i think the president has been doing a great job. he has been dealing with so many things simultaneously. when you get to the actual election and peoplrealize all the things that he has dealt with successfully, i am very optimistic. >> you are optimisti that he will be reelected? >> absolutely. >> you know geoaphy better than anyone. what are your worries? >> i have to manage the most complicated department and the federal government. that is what is on my pte. >> could you imagine running for

office? >> i love being in office. i have a big job. at the number one task is to make sure i do that job awell as it can be done. >> thank you very much. it was kind of you to join. >> thank you. [applause] quickre going to do a costume change here and greet the chairman. if i could have -- he would like to ask a question of mike rogers, the intelligence chairman? we will talk about pakistan and libya. is there someone you like to ask him a question? does anyone have a question they want me to ask him?

ok. that is good. ok. ok. that is good. awesome. thank you so much for doing this. we appreciate it. welcome back from labor day. this is mike rogers. thank you for coming in. >> i appreciate it. >> no. my staff director was mike allen. it was very confusing. >> between us, it just about anyplace we go we can pick up

names. >> that is a good way to get into meetings. we will have to watch out. >> on the front page this morning, the efforts by u.s. to spy on israel. it said overheard in eavesdropping by the israeli embassy were american supporters of israel and at least one member of congress. did that report surprise you? >> anytime there's turml in the world, it the cia's job is to go out and get information. every once in a while they may stumbl across a u.s. citizen. there are procedures in place to deal with that. it is my understanding they are doing the procedures according to rules and regulations. >> do you have access to stuff like that? >> as chairman, there is not muche do not have access to. it is certainly over the coue

of time. in order to do the proper oversight of the committees and budgeting, it is important we get access. >> talk about what the committee does. its passage was interesting to me in dick cheney's book about when he was a freshman house member. he would go in there and sit down with the members a the "teach me everything but " it worked. -- and say "teach me everything." it worked. you were an fbi agent in chicago. what did you do to learn the world? >> exactly that. it is a tremendous amount of reading. if you want to understand current you have to understand the history. i did bregion. i thought that was the best way to educate myself, per region. and then travel.

this is one of the few jobs for its is critical that you have to show up in interesting places. to ask questions, to understand their missions. i decided at one point i was going to follow -- i took a report. i said i want to understand how an analyst came to that conclusion and what information was developed from the field. i followed it from the field. i wanted to follow it all the way through. i disagree with to this place, followed people on the -- i physically went to this place and followedeople on the ground. i found that to be one of the most beneficial things to get me up to speed ia hurry on the detailed operation of intelligence. >> you know all the secrets. there question for you was what do you fear most?

>> what we do not know scares me most. we know there are a lot of threats of both strategic and terrorism focused. we spent a lot of time focused on the terrorism threat. you cannot say too much. it was such a real threat and it is still ongoing. you need to spend that time and allocate the right resources. we have othertrategic threats. we still have nuclear nations pointing missiles at the united states. we still have cyber threats that are growing daily and pose a huge challenge to the united states. all of those things we have to deal with at the same time we have to deal with the counter terrorism threat. one of the things that keeps me awake at night is the capability -- the cyber- capabilities against the u.s. that we are not prepared for, nuclear and biological -- at

least al qaeda of attaining that. we know there are materials out of the osama bin laden raid. backing keep somebody up at night. >> i am interested in what specifically worries you about cyber. could we have eight cyber pearl harbor? >> the cyber pearl harbor is a rhetoric to get people's attention. the real threat today -- and i'm not saying it cannot happen -- is theft of data at rest. >> what does that mean? >> that means intellectual property that is sitting on someone's computer that is pretty valuable, either from an intelligence or intellectual property perspective, that the

enemies would love to get their hands on. it is the new s&p and not of the next generation. h -- espionage of the next generation. they can steal something and remove it from the building. all of that still happens. their ability to reach in and still that information sitting on someone's computer is real and dangerous. it is not just government secret but commercial secrets. tens of thousands of times a day our government to get a ta -- gets attacked. we do not have a good number on the commercial times, but i guarantee it is at least as high if not higher. the value of that kind of

information to the chinese or russians were they can put it back into production quickly is invaluable to them. thats money they do not have to spend and research and development. that is the biggest problem that i am not sure about. we're doing ok. >> who is "them?" >> russia and china. there are others. there are other nations states engaged in cyber espionage. they are good at it. thewo main threats are china and russia when it comes to cyber espionage. >> you talked about your travel. one place you traveled west to pakistan. -- you traveled was to pakistan. i was disturbed by the story

that said they looked at the chinese look at the remains of the fields. is pakistan looking better? >> pakistan is an army that has a country and not a country that has an army. when you do with pakistani have to do with the matrix that they are military structured and not civilians structured. the raid was a humiliating and embarrassing events for the establishment of their services. a ticket personally. >> do we believe they didn't know he was there? >> i have said publicly that i believe there are elements with; and the government -- within the government of that new. -- within the government that

knew. this is as diverse an organizations you can imagine. there are lots of taliban sympathizers with in their ranks. there are sympathizersith in their military structure. we know that. they are ting to manage a structure that ty know has the sympathies toward the groups and there has been a strategic position on behalf of pakistan in the past to use the relationship to their advantage. and they like instability along the afghanistan border. that is not something they thought was a bad idea. they thought it was a good idea. they tried to use those things. i have said frequently and i have told them personally that it is very important if we're going to fix this problem that pakistan realizes that there's no such thing aa good terrorist. until they come to that

conclusion, we will have difficulties. they are not there yet. >> what do you think it will take? >> time is important. this was a solid indication that they aretill interested in improving the relationship with thenited states. i took that as a good sign. it is going to take a lot more than that. if they have engaged in some really bad behavior as of late, making it difficult for our diplomats perform functions in their country. they have cooperated in some and not in some. full access to detainees has been an issue. they're making the job difficult. some of our diplomats are having a hard time getting visas in the length of time.

it took far too long to fix that problem. it was a conscious decision. they are making a conscious decision to make li difficult for our diplomats. that does not make for a good relationship. >> another place to have been is libya. you supported aggressive u.s. action in libya. he provided a pretty muscular defense of its. -- you provided a pretty muscular defense of it. >> some things went well. this was a nato victory some people would argue. it was important for nato to get into the game. i'm very concerned about the future health of nato. >> they're flexing arm muscles. >> we played an important role because we brought unique capabilities.

i was not advocating for boots on the ground. there are other capabilities we have the ability to bring that we did not. i argued that some are being left off the table today in pursuit of the weapons systems. that was my biggest argument for getting in. we believe the weapons systems are moving around. that is dangerous. >> you said the u.s. should use its capabilities to what the weapons that can bring down airlines. >> this is a big military. we have the ability. we have special qualified individuals who can go when, identify, account for, and render safe a types of weapons systems. the anti-aircraft missiles are

incredibly lethal in the hands of bad actors. >> where do we think they are now? >> we do not know exactly. we know where some are. >> how many? >> thousands. multiple thousands. it is disconcerting. there will be a black market. as this disintegrates, the next thing that will happen in the libyan economy, they will be on difficult financial times. that means everybody will suffer. the people who have access to this stuff, now it becom a commodity. if you are hungry and whato feed your family and to have access to stuff that is free, it makes for a good cash transaction. al qaeda and others have

expressed an interest in getting in and getting their hands on it. that is my concern. the longer we wrestle around with you should be in charge of it and it does it qualify for boots on the ground if you send a small specialized team, we are doing a horrible disservice to our own national security interest by not taking a more aggressive posture. let's get our handsn this stuff. >> what specifically should be done? how would you address this? >> i would allow our teams in conjunctionith our nato allies who have been giving is great intelligence information and to have a good handle on weme areas on the ground, need a more specific mission. >> is this military or special forces? >> whoever qualifies to have the

special capabilities. it could be a combination of both. this is not the military. their sole mission should be to help the national council rid themselves of this problem. whatever government follows, if this proliferate, let's not make the same mistake we made in iraq. it caused a horrible problem for us in the insurgency. we know that. we know how it works. we know the time line of how it forms. we know have the capital forms. -- how the capital forms. i do not know why we would not want to be more up front. it is not just libya. we know several would love to have that. we know al qaeda has said they want to get their hands on it.

there are other organizations. organizations will lead to smuggle that threw into egypt. that is fact. i do not know why we are taking theime that we are to sol this problem. >> there were reports that gaddafi was part of a motorcade that went into niger. what have we heard of that? >> none of that has been substantiated. you will hear a lot of "w here's waldo" scenarios. it is important for our ability to get a handle on these systems and trying to cause some stability to cut off any insurgency that may be growing are developing. >> you're trying to avoid an iraq situation. what needs to be done there? >> t black-market weapons is

both a domestic problem andn extra no problem. i argue that --nd an external problem. i argued that from the beginning. you do not want those anti- aircraft and missiles. how do you get stability on the ground where you can get money flowing, not ours but theirs? we can help them through commercial interest and get that going. that gets them resources. --and there were problems like that in iraq. how do we get that cash into the hands of individuals who will put thatoney to use so that you have some sense of governance and progress? if you do not get it by the

libyans, you will run into the same kind of problems with a growing insurgency. in other places, you are likely to have insurgent elements. >> when you make the case that you just did to the administration, they say whitat? >> it is a work in progress. >> you said two or three weeks of the critical? >> i argued that. it is already tilting that way. one thing that is keeping all th ethnic groups and tried together istribes that they wt gadfi gone. when he is gone, that falls apart. they start to realize, now what do we do? when that starts to happen, all of the problems will surfac in

moving to the next place. if we take this opportunity to fix the problems of our national security interests up front, we have that surge of diplomacy to help them so they do not run into the same kind of problems. >> the indications are that gaddafi is alive. >> i would argue that. i believe he is in libya. >> where will he go? >> he is likely to go to a place where he will have a very loyal defenders. he is very proud of his nomadic rouots. he used to entertain visitors by pitching a tent and walking across the horizon to meet them in the tent. it was very dramatic. i believe that will be his natural instinct, to go back to

the areas where he believed he will have enough people around him. what do you think he will make a dramatic exit? >> it is hard to tell. circumstances would dictate that more than anything. there is a major effort to keep peeling back peopl who are loyal t gaddafi and making sure they understand they will have an some role in leadership. we've learned that in iraq as well. be careful that you do not go through -- not everybody he was a member of the nazi party was really a nazi. that is the way you survive. those people need to have a way to get out and be productive citizens. we will continue to work on that with our nato partners.

they are working on those problems. how many are left that are really willing to die for gaddafi? that is the question. >> as you look ahead to the 10th anniversary of 9/11, how worried are you that some will take advantage of that to attack the u.s.? >> the fbi sent out warnings on general aircraft. >> is that what we call private planes? >> they want people to start paying attention. one thing we knew from the materials taken out of the compound was fixated. we knew that but to see it written out. it is an anniversary for us and we're taking it as a significant anniversary. so are they. they have aspirations of dense,

things they wanted to accomplish. -- events, things they wanted to accomplish. we saw a lot of aspirational events. this translates into lone wolf activity . arrear trying to be safe. we will air on the side of fashion -- err on the side of cation. -caution. >> what constitutes that? remind theying to sectors that this is something they talked about. you need to be on right. -- watch. >> where will you be? >> i will be at a speaking

engagement in my home town. >> what became of the college library that they found a? >> it was removed for analytical purposes. it was collapsed on by experts and analysts. they are meticulously going through this information. it was done in an interesting way. is there something we need to be a worry about? they did an exceptional job of collapsing on this information. the first one was to make sure something bad is not going to happen tomorrow. is there some operational plan that we do not know about in the works? they are going through any intelligence value. >> it looks like a little less

than meets the eye. a lot turned out to be rantings. >> he was an aspirational leisure. to some degree and operational l-- he was an aspirational leader and to some degree an operational leader. he was bringing in new organizations. there is a relatively new addition to al qaeda. they were trying to school the new organization's about -- here is what your target focused need to be. that made him dangerous. he had the stature to deliver that message. it was incredibly important. the fact he was actively delivering that message told me how people in danger as he was and why it was so important to take him off the battlefield. >> we have a friend from london

who had a question for you. welcome. >> when secretary of napolitano was here, she talked about the renewed focus on home from terrorism. that is something in europe and london we have been focusing on for most of the decade and far right terror like we saw in norway. what lessons have you learned from the european experience that what do you think they are getting right experience -- what lessons have you learned from the european experience? what do you think they're getting right? >> we were making sure our system of accountability met up with the accountability and transparency issues with great

britain and other liaison partners. we have no better liaison partners and our british allies. nobody is as close. they rank up there with the canadians and australians. our services work closely together. in some instances, we had trouble sharing information across the pond because we have different rules r transparency than our british friends have. the are issues we are still ironing out. aside from that, we have learned about operations they have had and how we can apply that and their analytical project got them there. -- product got them there. it has been valuable.

we have learned from some of the things they do. the staggering problem for great britain is the sheer number o travelers to and from pakistan every year. it is an issue of concern for great britain and for the united states, because we know of the terror training that has happened in the tribal areas of pakistan. once they traveled to pakistan, somewhere in the order 400,000 a year, it is huge. i am sure it is a small percentage that are, but that is a difficult task for them to try to get their hds around. where do they go when they get to pakistan that are they going to the tribal areas? -- where do they go when they get pakistan? are they going to the tribal

areas that we will only ctinue to improve that relationship. >> we're talking about that transparency issue. you talk about the different systems in place over there and here. do you mean that means things have to be disclosed and american intelligence is not being respected in the way that you need a? what are the transparency issues? >> disclosure is an issue on both sides. sometimes they give us information that they say is so sensitive it is not ready to go for prosecution that might end up in court. that goes back across the other way. it is a difficult proposition. some of these investigations you saw with the july bombings developed over a long time. it could be afforded to have

been disclosed ely. any disclosure might have interfered with the next round. it is both ways. our systems are just enough difference that our intelligence services have to be very cautious about how they share pieces of an information. it might be disclosed. >> the "l.a. times" did an article looking at, and security spending and whethere're spending too much to keep us safe. they quoted a professor who says that maybe a few hundred people outside of war zones each year are killed by muslim type terrorists. it is the same number of people who die drowning in a bathtub

each year. is the u.s. spending money in the wrong ways to keep us safe? >> when you look at the economic impact of 9/11, we are still feeling that. we lost 3000 innocent civilians. that was a pretty devastating attack. some estimates are that it took a trilln dollars out of the economy. it was a time when the bridge as teetering -- when were were jus t teetering if we were going upp or down. if you look at the sheer cost, it is hard to argue to me that when you have a dlaration of war on the united states by al qaeda and what happened when they were that successful, i would argue -- we have not had an attack since.

something is working. in the intelligence business, this is why this debate happens now. we do have a debt problem. we will have to find savings everywhere, including intelligence. however, we did the dividend where we closed down almost a whole continent to our ability to collect information about what is going on including places where there is a guy named osama bin laden roaming around freely. the world was changing rapidly. it is becoming dangerous and ples that we had not predicted before we need the information to take action or at least understand what is coming so we can try to deal with it in a diplomatic way.

we better spend every penny to do that. >> intelligence is becoming more important in milary uses. they are almost all joint. if we have to find savings and intelligence, where should the government look? -- in inlligence, where should the government of? >> on the day of the earthquake, we thought we caused something bad. five minutes later, the whole building started shaking. we think we can find some efficiencies. we will mergsome services. we will merge some training options. we think there are programs where we think we can get efficiencies by merging activities. at the end of the day, we are going to save a significant

amount of money. some of it is painful. it is the pride of ownership and someone does not want to get it up. because of the integration of the intelligence community, we think we c find the savings. i will not do it if i think it impact the mission. i will fight with my last breath if i think we will impacted the mission. i think we have come up with a good savings package that still allows some growth in some sectors that allows us to do research and development, allows us to improve technology, and sas money from last year's budget. not a sexy work. it is incredibly important. intelligence is becoming more important. we forget how important it is. george washington complained that he needed more intelligent if he was going to win the war. this has been a debate since our

founding. people are coming to the awareness of how important it is and how it can be such a value added to prevent trouble and to deal with trouble when you see it. >> as you look ahead -- i know what it is. a week from today, next tuesday, you are having the first joint house/senate hearing since 2002. you are looking at how these structures have worked post- 9/11. what is the most important thing you hope to learn or find out that >> we can always improve ourselves refined output -- important thing you hope to learn find out? >> we can always improve ourselves. are there places we can get out?

in the old days you use to adjust your carburetor -- you could adjust your carburetor a little bit and find out what is working. what is not working we should not have any authorship claims not to try to fix it. >> having a director of national intelligence, you are not looking at changing something that they? >> i do not think we will come to that conclusion. dni has done some things well. it has done some things that need improvement. there s a mix of personalities. e changing of the post did not he it. you're taking the president daily brief and putting it into dni. it allows the dni to reach to

other agencies to get different opinions. now it is not just the cia, even though they may be the largest driver of that document. it allowed dni to get a second opinion. that is a healthy thing. i looked at that as a powerful thing for improvement. when you spend that much money that quick, that is where we can get out and make significant differences in the burearacy of any organization that is this big. >> is the country clearly better at connecting the dots? is the jury's still out? >> we are definitely better. we're not where we want to be. the christmas day bomber is the greatest example of that. there is information out there. i am not sure it would have stopped it.

it may have stopped it. there was a review about no-fly list and how we get information to the right place. we had information but not in the rit place. that was a failure for the intelligence business. for the luck of a heavy finger on the syringe, that would have been a different outcome. they looked at that as a successful terrorist event. they found someone, and trains mebody, -- trained a somebody, bought them on the airplane. -- they found somebody, trained somebody, and got them on the airplane. >> real quick, how was leon

panetta? >> i thought he was good. we had a rough start. i came to respect his ability. i thought he did an exceptionally good job. we have a great working relationship. we talked multiple times in a week. he repaired a lot of mistrust between the cia and congress. from both sides of the aisle, i thought that was an incredibly important thing. he put the cia back on a positive track of focusing our engy on improving getting better versus the fighting about the cia being a bad organization. >> what advice would you have for general petraeus as the transitions in to be the director of the cia? >> transparency is important. do not go back to the old days of hiding ings. i will find it.

>> what do you specifically mean by transparency? >> not things necessarily to the public but we have a lot of dialogue and things that we track the dail it is a part of our oversight responsibility. every single member takes it incredibly serious. it is a big responsibility. it is classified. we better get it right. the challenge for general petraeus is clearly brilliant. he will do aine job. the biggest challenge is that he spent the last 30 years in the military wearing a uniform. that culture is very different. when you're in that environment as a combatant commanders, you get to pull al the levers every time you say. >> what worries you? >> i am not sure it worries me. it'll be interesting to watch him make th transition.

it is a difficult transition. he will do it fine. >> you were given credit for straightening out some of the oversight which was wrinkled before. what did you change that wise it running more smoothly? you change?ed you changedid why is it running more smoothly? >> when it happened inside the committee, itas horribly unproductive. i was concerned. it was taking its toll on the intelligence committee. >> what do you mean by partisanship? >> all the added to crept into

the committee. we need to go get into this and we need to investigate them for this. if there's something that needs to be investigated, i am for it. it is our job. to make it so public and come to conclusions before wead even finished the investigation was a horrible thing. i developed a great relationship. i trust him. he trusts me. we can disagree. we can do it in a way that is not unproductive. that is how you ce to conclusions. that was incredibly important. we read engage the entire committee with the intelligence theunity -- we rengage-engaged entire committee with the intelligence community.

they have committed their lives to this. nobody wants to be called a traitor or a criminal or a liar after doing all of that. we were able to repair it on a personal level, reinsted the oversight responsibilities. we missed a lot. a quarterly review of all intelligence activities redid i cannot tell you the last time that happens. -- a quarterly review of all intelligence activities, i cannot tell you the last time that happened. for the first time in six years, we passed a real authorization bill for the intelligence committee that they were craving to have. a because of partisanship, we cannot get it done -- we could not get it done. hopefully by friday we will have another one.

our credibility is back. at their credibility is back. >> next question. i believe the unemployment rate is 10.9%. i wonder what the outlook is for thpresident's reelection. >> bid tend to be a very blue states - it tends to be a very blue states. we are in manufacturing state. i was talking to a small manufacturer. the last round of epa rules cost him $58 million in final costs to cply. he does not know what this next one will cost. he has no idea. his productivity fell.

it sounds great here but it has real implication to people who are trying to build things. unless he comes out and says he is ending his declaration of war on the american enterprise and have day moratorium for any new rules and regulations and have a plan that produces american energy a i will not raise your taxes, that would allow these companies to make decisions based on what they know versus what they think might happen. >> they thought it would save them. >> it'll take more than that. the pressure they're putting on manufacturers is incredible. he is a very good chance to lose michigan. as campaigns go, between now and election day is a long time. >> are you wried about republicans losing the house?

>> i think we will pick up r numbers. they cannot untwine the policies they have done. thenger, as great as it was leading up to this election, this is their job. this is theiability to feed their family. it is being challenged. >> i want to thank bank of america for making this dcussion possible. thank you for coming out early. thank you 48 fantastic conversation. >> thank you for lowering your standards and letting me on. [ctioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

i am especially grateful that he is accepted our invitation. please give a warm national press club welcome to rudy giuliani.

>> thank you very much. thank you. thank you very much. he is the 104th president of the press club ani'm the 107th mayor of new york city. i am very pleased to be here. this is always a difficult subject for me, because the whole recollection of and thinking about september 11 is very complicated. very complicated because it was the worst day in my life, where state and a life of my city, and to some extent, i imagine the country. and in some ways it was the greatest day, the most glorious day, because of the display of bravery and fortitude and strength that people showed. and i have been given a lot of honors, of various kinds,

including being knighted. i do not use the title sir because my friends back in brklyn would be me up. [laughter] if i tried to use it, and if i ever have any he of running for any office again, i better not use it very to appropriately use the title, you have to pronouncer citizenship. ain't no way. [laughter] a lot of the praise, honor, whether it was being knighted or awarded by mrs. reagan, which i'm very proud of, i feel very humbled by that because i was standing on the shoulders of giants, of people who really did the brave work in the difficult work and the courageous work. and two of them are with me today because they worked in my administration with me. one is former deputy mayor rudy washington, one of four deputy mayors in new york city. he organized our effort to bring

in heavy equipment that day to try to save lives, organized our effort to recover, he was totally dedicated and work 24 hours a day, probably, for four straight months. he has suffered some ailments as a result of that -- being at ground zero so often. he is one of the people that was affected by that. respiratory system affected by it, he has handled that with consonant bravery. and he has recently made the news or some trouble, if you want to call it that, by urging at they incle a religious leader or religious leaders as part of the september 11 memorial next saturday. [applause] the commissioner of the mayor's office, richie have a long history of being with a fire

department and police department. have intimate knowledge of the in -- of the comnications system and the response. he is one of the people the prepared new york city for whatever emergencies he could possibly think appeared we had 25 emergency plans and would practice them all the time. and we would try to continue to improve our situation. on the day of september 11, it was ready and richie with me when we were trapped in a building and it took us 20 minutes to get out. on reflection, we could have lost our lives. at that time, you did not think that way, but whei went home and watchedt, i said, oh, my goodness, we were so close. we were 2.5 blocks away from the first building coming down. it hit our building. -- remained tremendously, and responsible. he led the recovery effort effort, which many people do not to understand -- i am not going

to say as complicated as the immediate response, but almost as complicated and dangerous. everyone that worked there for the next three or four months had their lights at risk with the buildings that could easily have fallen down, the fires below the ground, the enormous heavy equipment. when we build a building in new york, we often lose three or four people because it is inherently dangerous to do a construction project. somehow we got through that whole four months without anyone being seriously injured. some people are seriously injured now and they should be abandoned, but i would not have believed it possible that we got through that period without a serious injury. richie is one of the reasons for that. he is one of the foremost experts on emergency management in the country. did not have people like rudy in ritchie, i would not have been able to do it, and there were many of them. pplae]

so how you relate to september 11 and whether the country is safer now or not a safe and what should be done about it? it is a defining event for our country. whether we think it is or not, it is, because it is one of those events that people remember where they were when it happened. in my lifetime, i can relate only two others, one before i was born and one when i was in college for the first one was pearl harbor. my parents and everyone of that generation would constantly tell you where they were when they heard about pearl harbor. the second one was the assassination of john f. kennedy. i remember where i was when i heard about the assassination of john f. kennedy. everyone in this room could immediately decide where they

were. in the third one is t timber 11, 2001. everyone remembers where there were when the attack on the twin towers, on washington, and over the skies of pennsylvania happen. in fact, this is almost completely accurate, i cannot think of too many times that i spent in an airport, including in singapore and tokyo and south africa, where people have not come up to me and said, do you know where i was on september 11? and then explain to me in detail where they were. the first couple of times that happen, i found it very strange. the answer was always, no, i do not know where you were. do you know were i was? i remember where i was. i do not know where you were. i decided that i had beco a resitory for people feeling like they have to explain that.

it is a defining event for us. right now as we enter into the second decade of the 21st century, it is a defining event and it is tremendous implications for us. and it has implications that we still do not quite understand, because i'm not quite weak -- i'm not sure that we quite understood all the implications of pearl harbor or the kennedy assassination. here are some of them. and some that i think we can learn from. when people in your a dramatic event -- in your -- endure a dramatic event, they become immobilized and defeated and crushed by it, or the growth of it. on the evening of september 11, i asked the people of new york, i think it might have been dissected till last statement at

the third press conference that we had, and we're all exhausted. probably in shock. i said, i want the people of new york city to emerge stronger for this. i remember thinking as i walked off the podium, that i was not sure if that was a exhortation, an admonition, or a prayer. i was not sure that we had emerged stronger for it. i thought that we would, i hope that we would. i had the essential fate that the people of the new city and the things much better -- big things much bigger than small thgs. there is a pothole oyou do not get rid of the first snow, they want to impeach you. but if there is a train wreck or a blackout, they just rise to the occasion. the people of new york really did rise to this occasion. they have been stronger and better than even i thought it

would be. new york city is focused on the new york city, which was the center of the largest attack. new york city now has more people living there. new york city has more tourists. new york city is economically sound or, even with the recession and the problems we're having now in our economy. new york city's economy is not as affected as the rest of the country. it is a more diverse economy. there is absolutely no feeling that i detect that people do not want to comeo new york, because they are afraid of the attack or september 11, or afraid of the realistic advice that new york city is a major target to this day. there's absolutely no one that does aa that they would not attacked -- that does not believe that they would not attack york city in. in fact, there was an attack on your's times sque. it was full. resilience is a defense against

islamic extremist terrorist -- terror, an important defense. the first reason they attacked us was to kill many, many people. they ended at killing almost 3000 pple. the worst attack in the history of our country very worst -- of our country. worse than pearl harbor. they did damage to us, damaged i still see and ritchie does and rudy, because it plays out in people's lives. i do not what my feelings will be on sunday when i see so many of the fily members again, that many i saw for the first time a the family center or at the site when i took them there for eir first visit, or the many funerals and wakes and memorial services, some of thie

families are still very close to me, my closest friends. it has played out in their lives in ways if you can imagine. children go without fathers or mothers, people cannot cope with a memorial service because they cannot deal with the fact that it happened. others have moved on, but they did achieve that significant damage that is almost indescribable and will continue until we move on to another generation or generation after. but on the other side of it, i think they wanted to kill more people than they did. the first estimate that was given a number people that died at the world trade center was given to me on the street after we got out of the building we were trapped in. after t second building came down, and we saw the cloud rushing through the street, i turned to my communications director and ast, tell me the number of people they think are

missing. i was trying to calculate what kind of help to the fire department aide, what kind of help to the police depament need, are these numbers we could handle, what we have asked for the national guard, and within 10 to 15 minutes, she got back to me as we were walkg to our new command center, she got back to me, and she said, the part authority estimates about 12,000. i said, how the thing to do that? they tried to calculatehe number of people on the building when the first plane hit and the number of people you could get out in that. out of time, and they calculated about 12,000. i'm going to tell you the reason it was not of thousand. it ishe bravery and courage and a loss of life that occurred to the members of the new york city fire department, the new york city police department, the port authority police department, and some very brave civilians who stepped up and guided people out othe building.

i d not cut -- get told this is often about -- often, but more people tell me, it was not for your fire department, i would not have made it out of that building. there would say to me, you cannot of action -- they would say t me, you cannot imagine how much confidence it builds up in you when you are walking out of a building that is on fire and men are walking into that building. and do not seem to be afraid. the continue to walk again. they did not run out on the first sign of evacuation. that saved incalculable numbers of lives. there was an orderly exit. things far less dramatic tn the world trade center attacks have led to riots in which many people died. that is because of the bravery and the inherent courage of in

york city fire department, the new york city police to farming, the port authority, and individuals like the one movie is being met about, the last one out. i think he saved a couple thousand people. that the mall on elevators, forced them out, and said he would be the last one out, and he never did get out. that prevented it from being worse than it was. it may be prevented the terrorists from achieving their -- whatever there weird number they had in their head. the sec reason that they attacked us was to break our spirit. -- the second reasonhat they attacked us was to break our spirit. the purpose was to break our spirit, and it was accidental but they said elected washington d.c. and new york city. the capital of in this case, the political capital, and the economic capital of the world. what is at the core of their hatred of us?

our politics, our economy, our belief in various religions as opposed to what they believe is the one true religion. our political right that we give to women, that we give to other people. these are reasons that they he us. was not accidental that they attacked washington and new york city. the purpose of it was to break our spirit. to demonstrate how week we are. to demonstrate how they doing this, that would put our economic system in chaos, they put our political system in chaos, and the would show how much better as a world ruled by theocracy could be. well, boy, just the opposite occurred, right? from the first moment of the firefighters walking into the building, not running out, to our political people all coming together, man, we should have bottle that. [lauger]

oh, it was fabulous. i was the mayor of new york. i had all the support i could ever possibly ask for from president bush. from the democtic members of congress. i had many gatherings of democrats and republicans goi down to ground zero in talking about how to prevent another one and the american flags all over the place, being waived. i rode with president bush of west end avenue on a very famous day, september 14, to thousand one, after he went to ground zero. -- and the car with me and commissioner carriage and commissioner von essen, all of wh are big guys. one of them sat on his lap. [laughter] as we're going of west end avenue, there were flags all over the place your people yelling and screaming, god bless america.

blowing kisses to president sh, we love you. i cannot help but looking at them, and i said, mr. president, i have to tell you thi not a single one of these people voted for you. [laughter] and i think four of them voted for governor pataki and me. this is not our part of timown. for republican, there is no part of town except staten island. but the reality is, we achieved a unity that most of us had never seen before. and it is because something when you're became stronger, not because it is new york, a bit -- but because they are american. america became stronger because realize how important freedom was and to defend it and to remain together when that happens.

those are all wonderful things that emerge from september 11. i have absolutely no doubt that if god forbid we re attacked again, whether it happens under president obama, i certainly hope it does not, or under another president, that we would have exactly the same reaction to the president said aut a year ago, and some people criticized him for this, but i thought it was absolutely the right statement, he said, america, something like america could not handle another attack. he was not inviting one are suesting that we would have one, just dating the office. that we could and it is important for the terrorist to know that. resiliency takes away a lot of what they think they are going to do to us. what do i think the country has really not been attacked since september 11? i have to tell you, if i take myself back tenures go to the morning of september 11 and

september 12 and 13th and 14th, and both of them will remember this because they were at all of these meetings with me, we were being warned of numerous attacks. on that very day, we did not know if there would be another three or four airplanes that would attack is. a lot of our response, when people look at what we did and why we did it and the right decisions in the wrong decisions, but a lot of our response was not just to say that many people at the site -- save many people decide what -- but to prevent further attacks which we were told were going happen and what happened in the aftermath of september 11 and for many years to come. there is every indication that that was the case. there have not been a lot of attacks. there have been at least 40 attacks in the united states since then, a lot more than people realize, and those are 40 that i can find from public documents from my previous

experience in government. i can assure you that there would be a lot more. but for one, i would consider major hassan's attack on fort hood and islamic extremists attack. i cannot see what of government as i see it that wayince he was yelling allahu akbar. that would be good evidence as a prosecutor as to why he was doing what he was doing. but we have been saved, although a great deal of hard work has gone into it. i will show you the reasons why i think we were saved, and we have to do to continue to remain safe. we won on an offense starting with the war in afghanistan and the war in iraq. i think tying up al qaeda, tying up other groups that would try to rival and equal what al qaeda would do in foreign wars, it was

enormously effective in slowing them down. it also gave us a plethora of intelligence that we would not obtain if we were not pleasant there -- present there, if you are nodding cage in a war there, capturing people, questioning people -- that intelligence was not available to us before september 11 because we did not have a major presence in that part of the war. the biggestear that i have is that as we get to the 10th anniversary of september 11, people are going to believe it is over. there is nothing special about a 10th anniversary. one of the women who lost her husband, was talking to are a few days ago and asked her, how would you deal with the 10th anniversary for summer she said, is no different than the ninth for the 11th. for the day after. that is true. there's nothing special about the 10th anniversary. it just happens to be a

numerical computation that you may. here is the simple fact about september 11 that should be emphasized over and over again until the 10th anniversary is over. september 11 is not yet part of our history. pearl harbor eight is part of our history. pearl harbor is over. that war was one very our enemies have become our good friends. you can do it in less analysis it for purely historical reasons and to learn from it, but it is not part of our present reality. september 11 as part of our present reality to threasons i mentioned before and some others, for which those people attacked us on september 11, live. the people who attacked us under that banner of distorted islam still want to attack is der the banner of this -- distorted as long. and they have plenty to do it as we memorialize the 10th

anniversary, arguably with even more force, maybe less, maybe they will resor to weather wasn't doing it. but we can i use this as an opportunity to say, oh, l's put this behind us. -- we cannot use this as an opportunity to say, oh, let's put this behind us. it does not evaluate correctly the scope and danger of islamic extremist terror purred notice i use those words and i use them often. i have a simple believf. if you cannot face your enemy, you cannot defeat your enemy. can ominous -- if you cannot honestly describe your enemy, there are distortions in your policy decisions as a result of that. there is nothing in salting to decent good members of the moslem religion by side -- by my saying islamic extremist terror, any more than it was

insulting to the italian community for me to say the word mafia, or do decent germans for me to say the word nazi. our family here to do it could lead to a series of mistakes in the bahamas and the figure appeared one mistake to avoid is political correctness. you cannot fight crime and you cannot deter terrorism if you are hobbled by political correctness. i believe that major hassan is an example of that. there is no way that major hassan should have been a major in the united states army, and for several years, building up that hatred for the united states ofmerica under the nner of distorted islam. if we want to learn from september 11, here is one of the first lessons to learn. do not underestimate your enemy. do not be afraid to face your enemy honestly and squarely.

do not be afraid to discuss it honestly. and do not create within the bureaucracy, including the bureaucracy of the military, a fear of doing the right thing because it will be misinterpreted. most human beings are not heroes. most human beings are not going to get a chapter in "profiles of courage." most human beings do what is expected of them, and that is to ignore reality, because when they get in trouble, they will ignore reality and we will be the worst for. the second thing ielieve that we have to remember as we come out of september 11 is that there is an impatience that has developed over the last two years to our military presence in iraq, afghanistan, and some other parts of the world. that is an understandable impatience. we have been there a long time. and we have lost so many

wonderful, innocent people, people who just want to serve their country, and they're the ones to show it -- who choose to serve and they lost their lives. it is understandable and a good country a desperate but leadership is say to the american people that we have to be present in that part of the world in spite of what public opinion polls say. we have to be present in that part of the world until that part of the world stops making plans to come re and kill us. isn't that why we were in germany? for as long as the time we were in germany? isn't that why we were in europe? isn't that why ronald reagan appointed cruise missiles at the soviet union in the 1980's, because that part of the world's endangered our survival? isn't that why we remained in south korea for as long as we have? it was our leadership, republican, democratic presidents from truman to geor bush the first, they understood

that and our leadership now needs to understand that your w need to be militarily present in the middle east until significant numbers of people in the middle east stop planning to come here and kill us or callous overseas. and we should get the american people ready for that. we should make impatient with that. we should get them to understand the value of in terms of intelligence, the value of it in terms of stopping things before they geto the point of people tried to kill us here in the united states or attacng one of our embassies abroad. we should explain to people how that has a deterrent impact, this is 100,000 american troops in that part of the world, the deterrent impact on these miserable dictators. it would be nice if it were different. it would be nice if we lived in some perfect world. but that is not leadership. leadership is helping us to live in the world that we actually live in. my final thought about it is, in

addition to those things that we have to do, in addition to the fact that we have done some very good things, both in the bush and the obama administration, in improving airport security, and significantly improving intelligence gathering and a flow of intelligence, which also had a big impact on preventing those 40 attacks and more, and the good work that both president obama and president bush did in the long-term effort to catch bin laden which was significant achievement and a significant achievements we're having now, we have a tendency to think that the next attack will be like the last attack. we've done a good job of preventing an attack like septemr 11 from happening. it doesn't mean it will not happen but we of done as good job as a kindred port security has not been improve the way that it should and it needs that kind of attention. we should get out of the mindset

that the next attack will be like the last one and we have to start thinking about, what else might they try to do? will they decide that they can do small attacks in smaller cities as a way of disrupting as? and we have to prepare for that. and we have to say to ourselves that we have let our economy and our budget get so out of control that it is beginning to become significantly and really a national security issue. when this country has to worry about whether it is spending too much money on defending us, then this is a national security problem. republicans and democrats should figure out how to get beyond the fighting over old things and start to figure out, how you create a budget that people the confidence and? a budget that shows that we can get over our spending addiction, a budget that shows that we can make se reasonable choices

about how much money we're spending on health care, not to eliminated, b to g it under control. if we do not do that, the 11 plication on how well we can defend ourselves. and it is past time that that stops being a political issue and becomes a national security issue. having said that, my primary memory of september 11 is the bravery. at least that is what i choose to make it, of how brave those people were. and i remember the first good thought i had on september 11 was seeing the picture of the firefighters putting the flag out on top of the rubble and fire. and immediately what came to mind was iwo jima. book, qead tom brokaw's q the greatest generation." netbook a the question, could this generation handle what that generation was able to do?

watching that picre, i said to myself, they are the sons and grandsons of the people who fought and won the second world war. it is not going to be any differt. they are just as strong, they are just as powerful, they're just as much in love with america as their parents and grandparents were. and maybe it takes a time like this to bring that out. but that is there. this is the most exceptional country in the history of the world. what nation has ever fought wars for other people? empires are created like rome and england fighting wars to acquire territory for the empire. america has fought war to liberate and help other people. no nation in the history of the world has ever done that. this is an exceptional country, we should love it, we should

understand its failings and picks them but we should also understand that no human beings have ever done a better than americans in the 20th and 21st century. it is never been any different and we should be very grateful. thank you. [applause] >> thank you, mayor. >> you're welcome. >> we had a lot of questions, a lot of people, nice crowd for you and we're grateful for all that. let's start with a personal aside. someone asked the question, where did you personally find the strength to continue leading the city after 9/11? >> no one place. first of all, i do not think i had a choic perdue was a question of, to lht roldan

ball and have people showing me on television like that? -- to i roll up into a ball and have people showing on television like that? it would of been embarrassing to show the mayor crying. or to adjust to the best that i can. he was and my father taught me very young in life, i have no idea why he taught this, if you ever ever in an emergency or fire, remain calm, because it's your best way of figuring your way out of it and if you are not, pretend that you are. and it will help you the calm. i can remember that and i prayed a lot. i had no one biggest loss on september 11. but maybe the most jarring was father michael judge, because it was the first one. we have reestablished a command center at the police academy and someone in foreign aid that the first person was discovered did, being carried out of the world

trade center to st. peter's church, and it was father michael judge, the chaplain of the fire department. father michael judge was the person i was already thinking about that i would lean on to help me get through it. to help me explain it death to some many people. because he did it so many times for me with the fire department. when i lost him, i really felt alone. i felt almost like i felt when i left -- lost my father. i'm going have to grow up and do this myself. i guess you find the strength in the things that brought you up, the things -- and then i would go back and think about the other emergencies that i handled, and realized i knew how to do this. and when i went home last night, -- that night, i read a biography of churchill, because how did he hane something far worse than this, repeated attacks every single night. i thought that was when happen, and gave me a great deal of

strength to be able to see that, if someone else can go through that, i can gohrough. i wanted to say to the people of new york, the people of london went through this. you can go through it. >> a lot of questions about the face of terrorism today. one has to do with the ongoing threat from hawkeye that and then the shift this seems to occurred with even the present -- even before 9/11, the fear of homegrown terror. what is your thought about balancing those two and where you think we are with that? >> i think they're both equally dangerous threats. homegrown terrorists are more dangerous in some ways, bause they are harder to detect. if something is being organized overseas, particularly in the areas where we have this tremendous military presence, which also means tremendous intelligence presence, the need to communicate that across the

world gives us a much better chance of finding in detting that. stopping people from coming in, picking up messages. when it is done homegrown, it is much harder to detect. i was in london the day of the attack in london, the four bombings in ldon. i had to walk away from a liverpool station when the first bomb went off. that's why people were reluctant to invite me to parties and things like that. [laughter] and that was homegrown u.k. terrorists. i thinkhat shocked even them and their intelligence services are about the best in the world. homegrown terrorism is a very dangerous thing, but most of them are still organized around islamic extremism and around their own desire to protest a paid in jihad, irresponsible and insane even though it is.

unfortunately, that is the area where you have to look for5% of your terrorist. if you divert resources from that, you make terrible mistake. >> what was your reaction to the death of osama bin laden and how have we manage the problem presented by pakistan? >> my reaction to the death of bin laden was relief and a tremendous amount of pride in the way in which the united states handled it. i thought president obama's finest moment, he handled it courageously, particularly having to make the decision to send the seal cent rather than engage in a bombing that would have left all kinds of questions about whether we really had hindered i thought his decision making about the burial as he was excellent. -- the burial at sea was excellent. president bush paused policies

held view of the information that led to that and that has to be acknowledged. and i think it will make the 10th anniversary somewhat easier. because when you bring someone to justice, there is something very elemental about the desire in human beings who been victimized the way that these people were victimized. and i think it will help. and i think it will help to stabilize and toonstruct a al qaeda. -- help destablize and deconstruct al qaeda. there are allies of ours in pakistan and there are enemies. pakistan is a nuclear power. so we have to be able to play a game with pakistan that is better than the game they're playing with us, which is to minimize the people that are taking advantage of us. the problem that we have in afghanistan and pakistan, and i

do not want to give political particularly, because i do not like doing that around september 11, if but i do not consider this political. i consider this important as sacred part of the problem we have in pakista and afghanistan is the silly timetable that we put of mr. you cant fight a war with a timetable. when did this idea of murder? who figured this out question no. this is the dumbest thing in the most dangerous thing you can possibly do. imagine if we had engaged in the civil war or the first world war or the second world war with a timetable? we will y nazism for three years and they get tired and leave. we will be in afghanistan until the summer of 2010 or the summer of 2011. first of all, you cannot win a war that way. secondly, you give your enemy a tremendous blaring headline that we really are not serious. we really can wear them out. we can willie -- really wear

them down. finally, when you do that, you demoralize your troops and put them in a much greater danger. they realize the more pressure they are being put on, maybe that will speed up the withdrawal and we would change her mind. you fight a war for objective. objectives do not have time tables. what was the objective of the second world war -- defeat hitler. at is the objective in afghanistan? to make afghanistan say so that they stop plotting to kill us there. -- safe so that that, plotting to cause there. that could be six years from now. just like the cold war. we should remain in afghanistan, in iraq, and in that part of world until people in that part of the world, significant numbers of people, stop trying to figure out how to kill americans. [applause]

>> your referenced this in the beginning of your speech. mayor bloomberg decided that no religious leaders would participate in the ground zero ceremony on sunday. would you have come to the same decision? >> i respect mayor bloomberg very much and i appreciate what a good mayor he has been because i worked very hard to reform the new york city d i'll worried intensely my last year in office said that would be changed by another machine politician taking over and ruining the welfare reform program and hundreds of others. mary bloomberg has carried them on and improve them. -- mayor bloomberg has carried them on an improved them. but i will allow four religious leaders to say a little prayer since so many people wanted. at least i personally quickness talent for religious was in getting people to september 11, whether your religious yourself or you're not, it played a tremendous role. having gone to some many masses,

so many religious services, so ny synagogues -- maybe a hundred? they did not know. -- i do not know. seeing how that offered some strength to move on, and it's a religion played a significant role in getting people through september 11, what you believe or do not believe, it is just the reality. it would be very simple to have a priest, minister, a rabbi, and a imam, the way that we had at the service that reorganized at yankee stadium -- and oprah winfrey, if i'm not mistaken with m? you get them up and they say a little prayer. the microphone will not melt to say a pray. [laughter] the first amendment -- it does

not mean that you cannot say the word religion in a government building. we do not have to be hostile to religion. we just cannot establish one and require people to be a part of their religion. at the same time, we should not be at war with religion because it is evil and bad an awful, which is an excessive reaction they probably has marred the last 30 years of our country. >> you said you did not one of the political but i hope today that that has to do with i/11. we are in a political science and -- with 9/11. we are in the political season. the consensus is that you're not one to run for president. >> how do i know? i am part of a consensus. nobody asked me. >> well, i am asking. >> i did not know the answer that. i decided to put off as we get closer to september 11. but i tell you what i said before that. i would very much like to see a change of direction in our

country. i am a republican. how's the first repubcan elected mayor of new york city in 25 years, the first to remain a republican in 50. [laughter] i may be described as a moderate republican but i would ask people to read the "new york times"editorial about me and see how moderate i really was. i thought i govern economilly as theost conservative mayor in that city. george will said i of was the most authentic conservative candidate because of my economic policies and my welfare policies, policies on crime, and security. and if i were to run, i would have a chance of winning the presidency, a chance. nobody ever knows. but i would have a hard time getting on there. i am a realist and i understand how the primary system work paula like to say, if there is someone that emerges that i think would be a strong candidates, if someone does not

emerge that i -- is someone emerges that i think they can support, i would. my slogan for mayor of new york city is comg you cannot do any worse. bridget was, you cannot do any worse. [laughter] [applause] >> rick perry endorsed you in october 2007 in your bid for the nomination. would you like to return the favor? >> i like him very much. i told him that if he wants to avow his endorsement of may, he could. i was such a liberal, crazy, out of control republican. i could see myself doing that, sure, bui do not know enough

about what -- is going to say tomorrow night and the next two or three nights that the debate. i do not know what it romney is going to say. this is very strange election because we only had one debate, maybe two. we do not know all the positions that and how they can handle it. who looks like it would have the best chance of winning? the presidency. i would rather wait and see what happens there. but i do have a lot of admiration for rick. a campaign for him when irahe rn for governor against kay bailey hutchison. i think his record in texas is exactly the record we would need in the united states. but i am not sure he is the right candidate yet. there is a lot to that. at this point four years ago, i was the nominee. and i was running against hillary clinton for you see how accurate those things are. >> which is said you cannot be

nominated. what is it about the republican party that would prevent that from happening? >> i said it would be difficult be nominated. we would have to be truly desperate. which, maybe we are, i do not know. >> about the party. >> is the organization of the primary system. it is a big party and has all kinds of facts and senate, far right, right, conservatives, moderates depends on where you are if you're running a primary like new hampshire. it is on thing they will be economic issues. if you run n/a caucus like iowa, is going to be social issues and still have enormous impact even if the net -- if the economic issues are important, they still forced a vote of many people. the mistake i made last time was getting too focusedn the

idea of the national campaign. i would tell rick perry and governor romney not to worry some much about what those national polls are. i was at 34% -- national polls to not mean anything. winning iowa mean something. winning new hampshire mean something. winning south carolina mean something. those primaries are tilted very much in favor of conservative republicans who are very strongly conservative on social issues. and i am simply not a conservative on social issues and i am not willing to change just to become president. >> i want to follow with some of the lighter side of what people when asked about, but briefly, can conservatives en the win thete 0--

electote? >> it will be based on the economy. i think it space the next i will be important. it is his last chance to be moderate. it is a last chance to do a bill clinton. which is what he has to do if he wants to be reelected. but if he remains tied to extremely unrealistic ideas about our economy, and those underealistic ideas are borne out by the poor performance of our economy, it does not matter if someone is right wing, medal win, or no wind, they are going to be him because the american people will say, let's give something else a chance, this is not working. right now of the election took place, i believe the president would lose to anyone of tho top two or three republicans that are running. they would lose because the american people are fed up because -- fed up with a result.

it would take a chance of something else. if peace does not show improvement in the economy, then it will not matter that much. if there is improvement in the economy and he pulls the clinton in that sense, and i mean that a right way, in the sense of trying to govern in the middle -- i did not mean it is a disparity. for the last couple of years, having been a cric of president clinton, i have been say to myself, i want you back. [laughter] you're not so bad. the reformed welfare and you put on hundred thousand cops out on the street and you understood how a compromise with us. -- how to compromise with us. and this is really been a disaster. i did not want to get too political. [laughter] >> we took care of that. we appreciate that very one of our traditional housekeeping matters year as a gesture are

things before we get to the final question, i would like to present you with a true token of our appreciation, the national press club coffee mug. and here is our final question, the political season is heating up. but there is another season, baseball, and you bought yankees world series rings. water the chances you'll have another opportunity to do that after this season? >> here is my lucky yankee bracelet. i wore in boston when we beat the red sox. i think the yankees have gotten very hot at exactly the right time. just like football, the team that wins the super bowl tends to getot in december and january. the yankees have all of a sudden started to hit the way they are capable of. if you look at their batting averages, they're fabulous. since thell-star break, one is

betting .330. a-rod is back. and they just brought up our rookie to beat the orioles is today. i am more about the red sox, always am very i am worried about rangers. and i am worried about the philadelphia phillies, what a pitching staff. but i think the yankees will be in the world series and that they are in it, they will find a way to win. >> how about around of applause for our guests. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> i like to thank all of you for comingere today and thank our national press club staff including our library and broadcast center for organizing today's event brief all like to thank our guest speaker. you can find out more about the national press club at our website, www.press.org.

you can get copy of today's program there. thank you very much and we are adjourned.

>> postal service, an iconic american institution since the 18th century, can survive in the 21st century. it is hard to believe that it does come to this, but it has. so much of our nation's progress is interwoven with the history of the postal service. if you look at some old maps of america, you see that a lot of the roads that we use today started out as colonial post roads. as our nation pushed west before the railroads were built, the post office created the pony express to keep america connected with its frontiers. and the post office subsidies

for air mail in the early days of aviation helped jump-start the fledgling airline industry. through parts of four centuries now the postal system has actually helped make as a nation, connecting the eric and people to one another, moving commerce and culture coast-to-coast and to all points in between. postal service has also bound the individual towns and neighborhoods together with the local post office often serving as the center of civic life. over the years, the post office has grown very large. today the united states postal service is the second-largest employer in the united states, second only to walmart. and with 32,000 post offices, it has more domestic retail outlets

than walmart, starbucks, and mcdonald's to mind. sadly, these impressive statistics belie a troubled business on the verge of bankruptcy. business lost to the internet and more recently, of course, to america's economic troubles have led to a 22% drop in male handled by the postal service and a gross revenue decline of more than $10 billion over the past five years. this year the postal service is expected to have a deficit of approximately $8 billion, maybe more for the second year in a row. the postal service will also soon bob up against its $50 billion credit line with the u.s. treasury, which could force it to default on a five and a half billion dollar payment into

the health care fund for its retirees, which would normally be paid at the end of this month. the bottom line is that if nothing is done the postal service will run out of money and be forced to severely slash service and employees. that is the last thing our struggling economy and country needs right now. despite its shrinking business, the postal service still remains a powerful force in america's economy and american life. it's still delivers 563 million pieces of mail every day, even with the rise of e-commerce, most businesses don't send out bills, and most families don't pay those bills, except through the u.s. postal service. while magazine deliveries are also down also because of competition with the internet and the recession, 90 percent of

all periodicals, about 300 million paid subscriptions per year worth billions of dollars to the publishing and advertising industries and bringing about the employment of millions of people are still delivered by the postal service. only the post office will go that last mile to ensure delivery throughout the country to everyone's address, and even using the grand canyon and snowshoes in alaska. last year, just to show the diversity, and the american people know this, last year the postal service process to over six and a half million passport applications. right now there is no other federal agency with the national presence that is ready or able to take on that task.

now, why are we here today? before the homeland security and governmental affairs committee became the homeland security and governmental affairs committee it was the government affairs or government operations committee, and in that capacity it has long had jurisdiction over the united states postal service. that is why we are convening this hearing today. we are going to hear several proposals this afternoon about what can be done to create greater efficiency, close the postal service deficit and give it the flexibility and tools that it needs to survive and thrive in america's future. postmasters general donato recently offered a plan that he believes would save $20 billion return the postal service to solvency by 2015, and that plan is the immediate impetus of this

hearing, to both give him the opportunity to explain it, describe it, argue for it, and to give others the opportunity to comment on it and, indeed, to oppose it, which some will do. the proposal includes eliminating saturday delivery, closing approximately 3,700 post offices, shrinking the work force by as much as 220,000, pulling out of the federal employee health care plan to create a separate postal service employee health plan, doing away with the defined retirement plan for new employees and transitioning to a fund contribution plan and asking that almost $7 billion in overpayments to the federal employee retirement system be returned to the postal service. these are self evidently been told, tough, and controversial

proposals. as for myself, i don't feel i know enough about them yet to reach a conclusion. that is why i look forward to the testimony of the witnesses today, but i do know enough about the real crisis that the postal service is in to appreciate the postmaster's courage in making these proposals. i am also grateful that my fellow senators have been leaders on behalf of this committee in dealing with the postal service problems and,o indeed, were the architects of the postal reform bill that passed back a few years ago. each of my colleagues, senator collins and carper, have now introduced legislation to deal with the current postal crisis. i am encouraged to learn that president obama wilson offer an administration plan to respond

to the postal service's fiscal crisis. so, i have an open mind on the various proposals that have been made, but to me the bottom line is that we must act quickly to prevent a postal service collapse and enact a bold plan to secure its future. the united states postal service is not an 18th-century relic. it is a great 21st century national asset, but times are changing rapidly, and so, too, must the postal service if it is to survive. senator collins. >> thank you, mr. chairman. first, mr. chairman, let me thank you for holding what is truly an urgent hearing to examine possible remedies for the postal service's dire and rapidly deteriorated financial

condition. the drumbeat of news about the exhilarating lapses at the postal service underscores the need for fundamental changes. the postal service is seeking a far-reaching legislation to allow the service to establish its own health benefits program, administered its own retirement system, and lay off its employees. this is a remarkable turnabout from its previous proposals. i appreciate that the postal service has now come forth with several big picture ideas, although many of the details remain unclear. as we search for remedies, we must keep in mind a critical fact, the postal service plays

an essential role in our national economy. if the postal service were a private corporation, its revenue would rank just behind boeing and just ahead of home depot on the the fortune 500 list, but even that comparison worth the one used by the chairman understates the economic importance of the postal service. the postal service directly supports a 1.1 trillion dollar mailing industry that employs approximately 8.7 million americans in fields diverse as direct mail, catalog, paper manufacturing, and financial services. many of these businesses can't

return to readily available alternatives. they depend on a healthy, efficient postal service. but as vital as a stable postal service is to our economy, at its current financial status is abysmal. the most recent projections are that the postal service will lose some $9 billion this year. that is $700 million more than the deficit that the postal service was projecting just at the beginning of this year. this hemorrhaging comes on top of eight and a half billion dollars in red ink last year, and 3.8 billion lost in 2009. unfortunately there is little

cause to believe that an improvement in the overall economy will stop this slide. the fact is that americans are unlikely to abandon e-mail and text messaging and return to first class mail. the postal service's own projections now resume declining revenue all the way out to the year 2020. the losses in mail volume are even more dramatic. last year the postal service handled 78 billion pieces of first-class mail. that number is now projected to fall to 39 billion pieces in 2020. this represents the 50% decline in first class mail volume over ten years. i want to give the new

postmaster general great credit for coming forth with more creative proposals to stem this crisis. at times, however, the postal service response in the past has been inadequate and even counterproductive. some would cut directly into the revenue that the postal service so desperately needs while leaving customers with diminished and insufficient service. consider, for example, the debate over post office closing. now, let me make very clear, there are undoubtedly some post offices in maine and elsewhere that can be consolidated or moved into a nearby retail stores. this simply is not an option for many rural or remote areas.

in some communities closing the post office would lead customers without feasible alternatives and access to postal services. that would violate the universal service mandate that is that justification for the postal service's monopoly on the delivery of first-class mail. let me give you a couple of examples from my home state, maine. two islands, post offices, good examples. the tennant this is 20 miles off the coast of maine. it receives mail five, rather than six, days a week and only in good weather. closing this post office or moving it into a large retail facility is simply not realistic

for the residence of cliff island, closing their post office would mean more than a 2-hour round trip by ferry in order to send parcels or conduct all but the most simple of postal transactions. the fact is that maintaining all of our nation's rural post offices cost the postal service less than 1% of its total budget that is not where the problems lie. that does not mean that there should not be consolidation and, indeed, i believe that closing some post offices and moving them into the local treasury store or pharmacy would work very well. similarly the postal service plan to move to a 5-day delivery is not without significant downside. it would harm many businesses

and less the postal service can mitigate the impact. it would force industries ranging from home delivery medication companies to weekly newspapers to seriously consider other options. once these private firms leave the postal service behind, they won't be coming back. and the postal service will suffer yet another blow to its finances. the major solution to the financial crisis should be found in tackling more significant expenses that do not drive customers away and lead to further reductions in volume. to actuarial studies have found that tens of billions of dollars have been made in overpayments

by the postal service to the federal retirement plan. regrettably today the administration has blocked the bulk of this prep payment. i proposed last year a new, more gradual amortization for the postal service's annual payments to reduce the unfunded liability for retiree health benefits. to that, too, is no longer adequate. more than 80% of the postal service's expenses are work force related. the failure to rein in these costs threatens not only the viability of the postal service, but also the livelihood's of the postal service workers themselves. the worst possible outcome for these workers would be for the

postal service to be unable to meet its payroll. that is a very real possibility for next year if we cannot act together to achieve reform. in my a judgment the most recent contract agreement with the postal service's largest union by and large represents a missed opportunity to negotiate a contract that reflects the financial realities facing the postal service. the postal service has to preserve the value and the service it provides to its customers while significantly cutting costs and streamlining its operations. and that is no easy task. senator carper and i have

reached introduced our own bills to try to avert this crisis. i am the first to admit that worsening conditions clearly require far more significant reform. so, mr. chairman, thank you for calling this hearing. we do face an urgent task, and that is to save this icon of american society and this absolute pillar of america's economy. thank you. >> thanks very much, senator collins. senator carper, because you have been doing such an extraordinary work on behalf of this committee i want to invite you to make a opening statement if you like at this time. >> did you very much. to our witnesses, thank you for joining yes. thank you for holding this hearing and allowing me to deliver an opening statement. appreciate it to you and senator

collins for the attention that you and your staff has paid to this vitally important economic issue. for some time my subcommittee and i have been sounding the alarm about the dire financial situation facing the postal service. unfortunately while the number of bills have been fourth congress has been unable to up reach consensus on the kind of dramatic and likely painful reform that will be needed to avoid the looming showdown. in addition the proposals put forth by the administration today have been insufficient. just a few weeks after narrowly avoiding the first ever to fall by the federal the government if we may be a few weeks away from??? the first ever default of the? postal service. that defaults, if permitted to? happen, would be lasting and? dangerous and would pave the way for postal insolvency by this time next year if not sooner. officer of manager and budget declined to testify to discuss

the administration's plans for preventing the postal service from failing. it is my hope that the discussion we have will jump-start the process of developing a bipartisan, bicameral consensus around the reforms necessary to restructure the postal service's finances and transform operations to reflect the uncertain future that it faces. postmaster general donahoe will testify today that the postal service's finances continue to deteriorate. he is projecting a year and loss of some $10 billion. nearly 2 billion more than projected when our subcommittee last held a postal oversight hearing, i think, in may. it will not be able to make the five and a half million dollar payment due on september 30th. come october it will have exhausted its line of credit with the treasury and we will have only enough cash on hand to get by. then under what is likely the best case scenario, cash will be completely exhausted by next

summer and the postal service, absent any lifeline, will likely be forced to close its doors. if the postal service were to fail the impact on our economy would be dramatic. as postmaster general donahoe and others have pointed out time and time again the postal service operates at the center of an industry that employs? millions of people.? these people don't just work at? the postal service, magazines,? banks cannot printing companies, and businesses large and small across america. every state and congressional district. and they generate more than $1 trillion in sales and revenue each year. given the challenging economy facing our country we cannot afford to put jobs, these jobs in that kind of productivity in jeopardy. in fact, it is our job to do what needs to be done to save this industry, even if it

involves decisions that might be difficult politically. like it are not come in a number of ways i don't like it very much myself. the postal service needs to right size itself to reflect the decreasing demand for products and services offered. it's needs to shed employees, downsize its network up processing facilities to reflect there is less mail to process and technology has made getting it to it's destination easier to do. the postal service needs to be able to relocate or colocate some of the postal services that are provided in communities across america. putting forth a plan to eliminate 120,000 positions on top of the 100,000 that were lost through attrition. they have begun studying some 300,000 post offices around the country. looking at 3,000 post offices for closure or card location with other businesses. expected to propose similarly

dramatic changes to its processing network in the next week or so. we are rapidly reaching the point, however, at which the postal service no longer has the authority to do what it needs to do to get by which is why i have introduced legislation that aims to clean up the postal service's finances and help implement the ambitious plan it announced last spring. postal operation sustainability act aims to permanently address the various pension and retiree health related issues that have plagued the postal service for years. the postal service inspector general, postal regulatory commission, and to independent actuaries, one of whom is represented here today, have come to the conclusion that they have overfunded obligation by some 50-$75 billion. in addition, numerous observers and the office of personnel management have pointed out the postal service has paid

$7 billion more than it goes into the newer federal employees retirement system. my bill will give the postal service access to the funds that it has overpaid. they would be able to use them to make required retiree health refunding payments picking a parts of $5 billion off its books each year for the next several years. once they're satisfied, the fines this bill would free up could be used to pay workers' compensation obligation and a debt to the treasury. these reforms are in similar can be a vital part of any effort to improve the financial condition in both the short and long term. stopping these reforms and avoiding further and potentially more difficult changes will simply not be enough. to anyone taking an honest look at the numbers, it should be clear that more will need to be done. that is why my bill takes important steps toward giving the postal service the flexibility that those of us in congress all say we want to give

them. the new realities and operate more like a business. no business facing the kind of difficulty the postal service faces today would survive very long if it were told how many retail outlets they should have and where they should be located or if they were prevented from making operational changes are taking full advantage of the resources and expertise at its disposal. if that is what congress does to the postal service. my bill and to address these problems and take congress out of the day-to-day management, assuming the postal service can continue to build on recent cost-cutting efforts these changes could help set the service on more solid footing in the years to come. i don't just focus on cost-cutting. also aiming to give the postal service new authority to leverage its nationwide retail logistics' transportation and delivery networks to attract new business. it gives the postal service more flexibility to work with existing customers to keep them in the mail and partner with

state and local governments to find new potentially profitable resources. i mentioned at the beginning of my statement that there have been a number of bills introduced to address the postal service financial condition -- condition. my hope and prayer is that they will do it this time to good effect. another approach. parts of both i don't agree with, but also parts of support. overlapping the provisions in my own bill. we need to focus on the areas of agreement. from there, with input from the administration, a key stakeholders, prevent a default and insolvency and said the postal service on the road toward stability and profitability. in conclusion, mr. chairman and senator collins, let me say this, the postal service is an enterprise, a business enterprise. it is an enterprise that has more people than it needs if it

is to reduce its head count we need to let them. we have more post offices and we need. the key is not closing post offices but to provide better service to customers and communities across america by co locating services to drugstores and supermarkets and department stores and the like. finally, twice the number of processing centers and they need. they need to reduce the number of processing centers, and as they do those things we need to get out of the way. there is not a huge bailout that is needed, but to let the postal service act more like a business and come up with even more great ideas like flat rate boxes and last mile delivery. if you do that and we do our job, i think the postal service will be here for a lot longer. thank you so much. >> thank you, senator carper. postmaster general donahoe, we will go to you first.

i thank you for being here. it probably does not need to be said, but the fact is that you÷ have had some tough proposals. i think everybody listening÷t should know that you are not÷ some sort of executive that was brought in from outside to go through the post office. you spent your whole career in the postal service, beginning as a clerk 35 years ago in pittsburg. having had that experience, from my perspective, you remained remarkably youthful. whether i can say that at the end of the next year or so remains to be seen. thank you for being here. >> mr. chairman and members of the committee, good afternoon and thank you for scheduling this hearing. i appreciate the opportunity to testify about the financial state of the postal service and about the proposals to improve its business model.

america depends on a financially strong postal service. the postal service provides a vital national delivery platform that is part of the bedrock infrastructure of the american economy. it supports a $1 trillion mailing industry that employs over 8 million people. every american residents and business depends on regular, secure, and available delivery of mail and packages. this will always be so, even in an increasingly digital age. nevertheless, the postal service is at the brink of default. without the enactment of comprehensive legislation by september 30th the postal service will default on a mandated five and a half billion dollar payment to the treasury to pre fund retiree health benefits. our situation is urgent. the congressional action is needed immediately. mr. chairman, the postal service requires radical changes to its

business model if it is to remain viable into the future. the postal service is in a crisis because it operates with a restricted business model. a self financing entity that depends on the sale of postage for revenue. requiring the ability to operate more as a business does. this applies to the way it provides products and services, allocating resources, configuring retail, delivery, and mail processing networks and the way it manages its workforce. unfortunately the postal service today has a limited flexibility to respond to the changing marketplace. since 2008 the combination of weak economic conditions and divergence to electronic forms of communication have resulted in unprecedented declines in the use of first-class mail and the weakness in the use of standard mail. in response we reduced our annual cost by more than $12 billion our work force by

110,000 fewer employees in just the last four years. as impressive as these have been, we must accelerate the pace of cost reduction over the next few years. based on current revenue estimates the postal service must reduced its annual costs by 12 -- $20 billion by the year 2015 to become profitable and to return to financial stability. mr. chairman, we do not have the flexibility in our business model to achieve these cost reductions. to do so requires the enactment of a comprehensive long-term legislation to provide us with needed flexibility. short-term stopgap measures will not help. our long-term revenue picture dictates developing a long-term comprehensive approach to help the postal service and mailing industry that we served. the postal service has made a number of policy proposals that merit consideration including

giving the postal service the authority to determine its delivery frequency and transition to a national five day a week delivery schedule. the postal service needs to restructure its health care system and make it independent of federal programs and eliminate the mandatory annual five and a half billion dollar retiree health benefit payment with this action. we need to accelerate work force reduction by as many as 220,000 employees and are asking congress to consider the reductions -- be governed under the reduction provisions applicable to the federal employees. be are also seeking the authority to provide a defined contribution plan for new hires, rather than today's defined benefit plan. we are seeking the return of $69 billion in federal

overpayments. we are also seeking to streamline postal governance models. we have advanced these and other proposals to provide the congress with a range of legislative options and are also aggressively doing things that we can do within our own business model. by 2015 we intend to capture more than $11 billion in additional cost reductions by optimizing our delivery network, retail network, reducing mail processing footprint by more than 300 facilities, and by taking advantage of negotiated workforce flexibility. these are aggressive and necessary steps. america deserves a financially strong and independent postal service that can meet the evolving needs for generations to come. we require the flexibility to operate more as a private sector business would. this would enable the postal service to return to profitability and sound financial footing.

this would also enable the postal service to properly fulfill its mission since the 70's, which is to operate on a profit test launch basis independent of taxpayer support. let me conclude by announcing the commitment and dedication of our employees during difficult times, even as we consolidate facilities and made substantial work force reductions. they have delivered at record high service performance levels. mr. chairman, thank you for giving us the opportunity to testify today and i look forward to answering any questions you might have. >> thank you for your testimony. we will go to the hon. john berry, director of the u.s. office of personnel management directly to testify as to the subject matter as it relates to opm. he is able to speak on behalf of the administration as well. >> thank you, mr. chairman, for the opportunity to testify regarding the financial challenges facing the united

states postal service. i have met with the postmaster general several times recently, and the administration is committed to exploring ways that can be helpful to the postal service. both the president and i know of the critical importance to our nation's economy that the postal service provides, and we are grateful to the men and women of the postal service for the important work they do for our country. the president's fiscal year 2012 budget proposed ways to provide postal service financial relief, but since those proposals were offered the financial situation of the postal service has deteriorated further. in response to this situation the administration plans to release a proposal in the few coming weeks that will ensure a sustainable future for the postal service. this proposal will be included as part of the broader one in a half trillion dollar deficit reduction package that the president has promised to submit

to the congress. in the interim the administration supports delaying for 90 days the postal service's five and a half billion dollar refunding retirement health payment that is due on september september 30th. this would allow the congress, postal service, and administration the time to carefully worked through the details of a proposal. we believe that the postal service and its employees and retirees are well served by the existing health benefits program and the retirement system. the postal service proposes reducing costs by discontinuing participation in federal health and retirement benefits this is a complex proposal that will require further study and analysis . as such the administration does not have of formal position on this proposal at this time.

opm expects that a withdrawal of the postal population would not have a significant impact on the federal employee health benefit program as a whole. in addition, the overall cost of the program would be minimal and would not impact the integrity. however, it would have a significant impact on health plans with a large postal population or such as rural letter carriers with the american postal workers union plans. if these plans chose not to participate in the fehbp in the longer it could have a significant impact on the number of choices that are available to our enrollees and overall competition in the program. the postal service's proposal to withdraw its employees from c.s. irs would pose very significant challenges because postal and

not postal service are integrated in the same retirement system. as such many employees have a credible and door fers service both in postal and not postal employment, and the federal government will have a legal obligation to pay those benefits. any proposal to remove the post a population from federal employment health and retirement systems would be complex and more analysis is required. as i mentioned earlier, the president's budget proposes improving the postal service's financial condition by approximately 5 billion in both 11 and 12. first we do propose returning to the u.s. postal service its surplus in the retirement fund estimated by opm at 6.9 billion dollars.

also proposes a restructuring retirement benefits at an estimated cost savings of $4 billion in temporary relief. additionally, the president's budget proposes streamlining fehbp pharmacy purchasing benefits, and we believe this could save the postal service an additional $300 million over the next five years. lastly, i would like to address a number of reports questioning whether the postal service has overpaid its obligations. moreover, i would like to clarify the term overpayment has been used by those who implied that there should be a change to the current allocation that is mandated and the law. opm applies the method established in tech current law for apportioning responsibility for ses are as cost between the postal service and the treasury. after careful review by the

office of personnel management general counsel, our inspector general, and our board of actuaries, they have all concluded opm does not have the administrative authority to make a reallocation of the cms rs cost based on the 2006 postal accountability and employment act. however, if congress determines that another methodology is more appropriate and explicitly establishes another allocation method, i pledge that opium will quickly and fully implement those changes. we look forward to working with the committee and the postal service to develop a solution to this problem and in addressing these fiscal challenges. thank you for your time, and i'll be glad to answer any questions??

>> the thank you very much. it will be submitted. if we give you the authority to return the money that the postal service believes is an overpayment to the fund that opium will implement that rapidly to. i appreciate that.?? next we will hear from phillip? herr, the director of physical infrastructure issues at the government accountability office really here because under that general title he is the expert on the postal service. thank you for your testimony. >> thank you. thank you for the opportunity to discuss the serious financial crisis facing the postal service. as volume has declined that service has not generated sufficient revenue to cover

obligations. critical decisions by congress, the administration, and the postal service are needed to help put it on a path to financial solvency. first, by most measures the financial situation is grim. net loss of 20 billion over the last five years. a projected net loss of 9 billion this fiscal year, and reaching its $15 to have $15 billion borrowing limit on not making its retiree health benefits payment this year. the postal service has released several proposals to address these problems. one is to withdraw from the federal employee health benefits program and create its own using the 42 and and a half million dollars fund set aside for future retiree health benefits. this proposal should be carefully reviewed as it is not clear whether the postal service can achieve its planned cost savings or what the implications are for employees, future

retirees, and the federal budget. currently over 1 million employees participate in the federal health benefits program and 300,000 employees are eligible to retire over the next decade. this is a significant obligation. several proposals would defer as a way of providing financial relief. however, deferring payments increases the consequences should the postal service not be able to make future payments if its core business continues to decline, as expected. this increases risk to the federal government and taxpayers and possibly future retirees. important that the postal service continue to pre find its obligations to the maximum extent its finances permit. the knowledge this will be difficult until its business model is updated to reflect current realities, however. some key questions to consider regarding the proposal to create

a separate program include how it will acquire the expertise needed to manage health benefit programs, what would be the budgetary impact of transferring 42 and a half billion from the treasury-help fund to a postal administered program that could seek higher returns in the market with potential risk. can savings realistically be expected from restructuring its health benefits program? with such a change. if it defaults on funding or benefit payments to employees or retirees are changes significantly, as is possible, what would be the federal government's obligation to 1 million plus beneficiaries? the postal service has asked for legislation to access its surplus estimated to be about 7 billion. what is discussed last often is the postal service has an unfunded liability estimated to be about 7 billion.

in june 2011 the postal service stopped making payments, meaning the surplus has been reduced by $800 million. the postal service has also proposed making new employees ineligible for annuity raising the question of whether other options have been considered. flexibility now accommodate different ecru rates for certain employees. the postal service also seeks to accelerate network and work force downsizing. we agree networks need to be realigned. frankly, network realignment is overdue and necessary, whether or not actions are taken on the pension and health proposals. when fully implemented estimated savings could total $11 billion. several key areas include saving 3 billion by reducing processing plants from 500 to 200, 3 billion by reducing delivery from six to five days, reducing

delivery cost drought consolidation and saving one-half billion by selling postal service to private businesses and closing up to 12,000 post offices. realigning will require trade offs in the postal service asking for legislation to eliminate the layoff provisions so that it can reduce its work force by an additional 125,000 career positions. if congress considers possible changes questions include, is six day delivery still appropriate? what changes to delivery standards are needed to realize cost savings derived from network optimization? our statutory or regulatory changes needed to permit postal operations while assuring appropriate oversight. in closing, the stark reality is the postal service business model which until 2006 relied on continued growth has broken. the gap between revenues and

expense of maintaining network has become unsustainable. difficult choices must now be made. members of the committee, this concludes my statement, and i'm happy to answer questions. >> thanks. i think you? have summed up th reality pretty well.? the business model, which worke? for a long time for the postal service, has not broken, and we? have to help fix it. thank you for being here.??ó? thomas levy is the senior vice president and chief actuary at the segal company which has done work relevant to our hearing. proceed. >> thank you. i was the principal author of the 2010 report to the postal regulatory commission on civil service retirement system cost and benefit allocation principles and i'm here today with the encouragement of the postal regulatory commission to discuss the recommendations with respect to this important issue.

let's make it clear. our assignment was to look from the current point of view at what is fair and equitable, not whether opm, in fact, and implemented the 1974 legislation correctly. i have not heard anything in our study to suggest that they have done otherwise. we do not suggest overpayment in the sense of not following congress's direction to the extent that i may use that word, it is in a standard of fair and equitable in 2010-11. when u.s. ps was established as and entity in 1971 and important issue was the allocation of civil service retirement system costs between the work -- the federal government for worker service and the post office department and the u.s. ps. opm has consistently done this

allocation in accordance with public law 93349 in 1974. the essentially allocating the federal government the cost of a frozen pension benefit for each worker as of june 30th 1971 based on service, rate of compensation, and the benefit formula at that time. the entire balance of that workers' pension over and above that frozen amount has been charged to u.s. ps. the benefit design is more generous in the later years of the worker's career. since it was always the second employer, the benefit accrual charge was usually higher. because the benefit is based on the high three-year average salary for all years of service, usps is paying for the impact of

post 1971 salary increases on pre 1971 pov pension accruals. in a report for the -- office of the inspector general dated january 11th 2010 actuaries' concluded that this allocation was inequitable in both respects. they estimated that an equitable allocation accumulated with interest would have resulted in did usps share of the csrs assets being lowered by $75 billion for past payments with about $10 billion of savings anticipated in future years. usps requested the opinion on the fairness and equity of the opm method. after taking competitive bids the segal company was selected to analyze and make recommendations. we met with stakeholders and reviewed the actuarial and accounting standards, and we

concluded that the most relevant benchmark was the accounting standard applicable to private companies. this was the only one that had as the primary objective the matching of revenues in the postal service's case, selling postage, with the labor cost to produce those revenues. that was our assessment of the appropriate basis for evaluating the fairness of the csrs cost allocation. the accounting standard provides clear and not discretionary direction with regard to plans such as csrs that provide non uniform benefit accruals, in this case higher accruals in later years of employment. the expense charge requires following the plan cycle formula as opium was doing. it also requires the cost allocation for a final average

salary plan like csrs must reflect the anticipated future salary at termination or retirement and may not be limited to the cost based on the compensation at the time the work is done. reflecting future compensation increases in the allocation would not part of the opm methodology. based on this analysis we concluded that the preferred method to allocate csrs benefits to the federal government was to reflect post 1971 salary increases with respect to up 31971 service, but otherwise to follow opm methodology. we indicated we did not believe that the commission of future salary increases with respect to pico de services was fair and equitable. in effect what that did was gave the federal government a

lower-cost because of the establishment of usps then it would have had had the pierre de continue to operate, and we did not see anything to suggest one of the objectives of establishing the usps was to reduce past pension cost, but that is, in fact, what the law has done. we also noted a pro rata reduction of accruals that did not follow the csrs formula was within the range of fair and equitable alternatives, but was not our preferred methodology. we did not do any calculations of our own, but roughly estimated that are recommended allocation would result in accumulated savings of 50- $55 billion for past allocations compared to the opm methodology with an additional savings with respect to future

payments of 6-$8 billion. that completes my prepared testimony and i'm pleased to answer questions. >> thanks. we will go now to questions.q let's do six minutes since there are a number of senators here. postmaster general donahoe, you mentioned that without some change by the end of this month the postal service would have to default on the five and a half billion dollar payment to the health fund. indicated the administration would seek legislation to delay that by 90 days, but assuming that is taking care of -- let me ask another way. if nothing happens, you receive none of the relief we are talking about providing, by what they teach you think the postal service will not just have to default on the health payment but will begin to find it impossible to carry out its

normal responsibilities such as delivering the mail? >> probably next august, september timeframe. what we are looking at is even if we push the payment off for three months, we have got the payment of over $1 billion due in october. >> what is that? >> workers' comp. >> department of labor. >> department of labor. then we have a couple of payrolls in october. we will be very close, even not paying the prepayment. now, over the course of the winter mail volume picks up and we will pick up revenue. we think that by the august-september timeframe next year given no action we will be out of cash to pay employees and contractors.óóó >> and if for some reason you don't get that 90-day delay, what is the consequence? >> well, the delay one way or

the other we will not make that payment. so the delay now, it does not really matter. if they delayed it makes a october more bearable. >> right. you are saying here, and i know you said it before. there is no way you will have the capacity to make the payment due at the end of this month. >> i will not. >> okay. let me ask you this. you made would be described as controversial proposals reducing delivery to five days a week, closing significant -- over 3,000 post offices and reducing the number of distribution centers and ultimately asking for authority for reductions in force comparable to what exists for other federal employees. help us understand the basis of those requests in this sense. why are you confident that the result of those cutbacks will not lead to a further drop in

business for the post office? in other words, why do you think those changes will not only save money, but will really put the post office back on the road to being balanced fiscally or even slightly in surplus. >> here is the way we look at this. there are two major things happening right now. one is the decline of first-class mail. i think that we can cut the price in half and not be able to slow it down. >> that is important. it is all the internet. >> 60 percent of americans pay bills online, and that will not change. as a matter of fact, what we are seeing are a number of companies requesting payments to have a hard copy statement mailed to once house. >> that's right. >> banks are now starting to charge for checks. so all of these things will continue to force the first

class mail volume down. we think that is something that will try to slow, but will continue. where we see our business going forward it into direct areas. one is standard mail. the drop-off of the economy. standard mail has leveled off, and i will tell you for the most part standard mail is an excellent investment. >> define standard mail. >> advertising. what happens is companies tell us over and over that they get the best return on investment because it gets in front of the customer's eyes, like the internet and radio or tv. ..

the third area we think we will see growth is potentially in the digital area and that whole area is open for the postal service and not so much payment as you seeing being done for free but there are secure digital messaging. it's not cling to make up for the first class difference but those are three areas so given that we have plot of volumes and revenues over the next ten years. we are using that revenue as the governor of our business. we do not want tax payer money. we have to get our finances in order to provide good dependable service. i think if we provide good dependable service which we have an excellent history of doing on the standard mia lee and remaining first class mail and

packages our business will be fine and we will not have people moving away on account of the changes we are making. thinks my time is up. senator collins? >> thank you. the failure of the postal service would be devastating to our economy. i see that you are nodding in agreement. it would pose a threat to the jobs of millions of americans. today you've heard the postmaster general describes a crisis. he says the postal service is on the brink of default. a year from now we will not be able to meet its payroll and carry out its operations yet this morning or this afternoon you come to us and tell us that the administration does not yet have a plan. you've proposed several of the reforms, the fundamental reforms that postmasters general has put

forth as far as the separate retirement system and changing to the contribution system. you asked for word you say you want more time to study it, you asked for a 90 day delay in the 5.5 billion. you haven't mentioned your procession on the noeth layoff provisions that are in the union contracts other than to take a position in opposition to the repayment of the $55 billion of the csrl s system that our actuary has described. i just don't understand why the administration doesn't have a concrete plan to put before us

today he given the dire straits that we are in the senator harper and all i have pulled out there for many months they are not perfect and they've been overtaken by the rapidly deteriorated in crisis that we face. why doesn't the administration have a plan before us today? >> there will be a plan as i testified that the white house will have that submitted with the deficit reduction package within the next few weeks, and the president will meet his promise to give that to the congress. i also just want to correct what the administration hasn't taken a position of the postal service proposal on the retirement system's so i'm not here in opposition to those. >> you're not supporting it either. >> all i did was to explain it will require further study but

there is no formal administration position of opposition, so i want to be clear on that point. the other is something we are supporting and it's in the president's budget and is reflected in a number of the pieces of legislation is the overpayment, the surplus in the retirement of what we estimate to be the $6.9 billion the administration does support returning that the postal service. it would require legislation to do that, but we are supportive of that relief and i think that will go along way in terms of helping some of the challenge that i know you all are wrestling with the we want to help. >> but mr. berry, the 6.9 billion pales in comparison to the 55 billion that mr. levy described, and you said that you don't have the authority. i've gone back and forth on

this. i wrote the provision of the 2006 act that gives the authority and section 802 c2 and it says the postal regulatory commission can hire an actuary that's what they did to take a look at it and it gives you complete authority to then change the formula. so, i just don't understand why the administration continues to say that it doesn't have the authorities. >> i am not an attorney, and i have to defer to my general counsel, my inspector general and board of actuaries in their reading of bill walsh and i know there is no disagreement in this what with respect, they advise me. i do not have the authority to determine fair and equitable as he testified. that authority rests with you and you alone, with the

congress. i'm not here testifying against the report in fact we find a lot of value in the report and it might be a good basis for the committee, for the postal service and for us to have our act worries and staff work with you to determine what is fair and equitable, but the congress needs to said that in the law and that's where i'm stuck. >> mr. postmaster general, my time is expiring rapidly. but you did not mention the need for her reform and the workers' compensation program. this is an enormous expense that's supposed be a safety net for workers were temporarily out of work and yet the postal service as is pointed out is something like 2,000 individuals over age 70 who are receiving

worker's comp. mr. postmaster general, those people are not coming back to work. >> i think it is in my written testimony, will double check that we need reform with workers' compensation. the proposals you put forth makes a tremendous amount of sense to us and we would like to have that included in the comprehensive legislation going forward. specs before. >> thanks for the information and according to the normal custom of calling on membersñóó right before the gavel in order of seniority and after the gavel in order of appearance if theyó are here we will call on the?ó senator's a cocotte, orrin,óó clyburn, brown, mccaskill.óóó senator akaka is not here,óóó senator moran is not here so weó will go to senator begichóó petraeus genex before mr. chairman. let me if ióóóó can follow-i

can and regards to mr berry to follow-up on that i understand the 6.9 billion, you don't question that. you want to give it to the post office sooner rather than later. we all agree on that. the 50 billion give or take, do you agree on that number? i am to stand you've got the process convoluted between the sides so do you agree on the number? >> it would take -- we would need to get the actuaries on all of the parties in a room together. >> but you said you had asked where eagles do the work. >> i appreciate your message that we are following the law because that is what has driven our interpretation is applying the standard of the law.

the law has us do this on an annual basis and not look forward in terms of the issues that you heard mr. levy discuss on a fair and equitable. >> the work that your editorials did, did they indicate any overage payment, any payment above 1 million, million, 40 billion, 50 billion, any number? >> we would agree there are many ways to accomplish the goal of a fair and equitable -- >> that's not the question i asked you. can you provide the study that your editorials did in regards to this issue? >> absolutely. can you provide also i know we got a letter from you about your legal interpretation kind of from the council to you to then us but i would like the legal analysis that was given to you. >> absolutely. >> we will get the act were real documentation which will show how they did their analysis on

this question of the money, not the process on do they believe or not. we are clear on that? >> yes. >> if i could because i don't -- i am not trying to avoid your question is when you look into the future yet to make certain assumptions on inflation rates and mentality rates and on the difference between genders and all these other things that need to be accounted by actuarial and that's where in other words -- >> by understand that part as a former mayor i have to revamp several retirement programs, the whole system defined for all of it so i want to make sure understand you have a basis of assumptions and i will differ from his assumptions and everybody's assumptions. i want to see if there is a number and how you got there. we can argue over the inflation rates and return on investment

and all that stuff. >> knowing of the importance of this and both with senator collins and the chairman and the whole committee and appreciating the criticality of this issue i can pledge to you our actuaries stand ready to be here to help inform your judgment on what is fair and equitable. >> in all of my years dealing with this issue from a small perspective still in the hundreds of millions of dollars it took many years to resolve these issues between the unions and the individuals as well as the retirees because there's no group representing them and the list goes on and on and so i'm very familiar with how this works i just want to see your assumptions. were you about to say something in regards to this also? >> the 50 to 55 billion relates entirely to past payments. it has no actuarial assumptions. it's the 68 billion for the future that as actuarial assumptions involved.

>> the 6.9, no one disagrees with that. you're going to pay at some point if we give authorization? what i'm interested in is the 50 billion. the 50 billion number in 03 you determine of past behavior. >> i wasn't here. islamic there was a determination by the congress that there was an overpayment 73 billion if you direct us to pay and we pay it back. in 06 you did the same with military service credit, 28 billion-dollar credit and was a determination of the congress that would be fair and equitable to have that paid by the treasury, not the postal service. it is reasonable congress might decide in this circumstance that a fair and equitable solution would require a new determination of that number and if it