depends on how big the bar is. i do not know what the value of gold has done today. if you compare that to win nixon took controls off, it was $35. so there has been quite a lot of appreciation. maybe it is more useful to think about that there has been more depreciation in the value of gold and the dollar. host: roger lowenstein, writer for "businessweek," thank you for joining us this morning. we were talking about the "nixon shock." that is all for "washington journal" this morning. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> both of maryland senators have a role in this morning's

foreign relations hearing for wendy sherman, who is nominated to be the next undersecretary of state for political affairs. the third highest ranking position in the state department. she'll be introduced by senator mikulski there on your screen, and the hearing today being chaired by committee member ben cardin. >> the senate foreign relations committee will come to order. good morning, everyone. we are gathered today in regards to the nomination of the honorable wendy r. sherman of maryland to serve as undersecretary of state for political affairs. first, i want to thank senator kerry for allowing me to chair this hearing. senator kerry has a statement for the record, without

objection that will be made part of the record. i would also announce that the record will remain open until close of business today in regards to this hearing. this is a unique pleasure for me to be able to chair a hearing for ambassador sherman. senator mikulski and i are very proud of ambassador sherman and her incredible history of public service to our country. we are very proud of her. we are proud that she hails from maryland. and we thank her for being willing to step forward for this very important assignment that president obama has asked her to fulfill. i also want to acknowledge her husband, bruce stokes, who is in attemptance, as well as her caughter, sarah sherman stokes, and her husband chris richards. this is a family sacrifice, public service. i think we all understand that. although we appreciate very much ambassador sherman's willingness to serve, we know that it involves a very understanding family. so we thank you all for being

willing to share your wife, your mother with us in public service and with your nation. ambassador sherman brings a wealth of foreign policy and political experience to what is a critical position at state, particularly at this pivotal time in world events. we continue to find ourselves in the midst of a singular time period in history. it's hard to recall another era characterized with so much turmoil, but also by such great possibilities. many have been captivated first and foremost by the wave of change sweeping the middle east. we have been inspired by the people of tunisia and egypt who have demanded freedom and dignity and end to repression and corruption. we have been moved by the courageous uprising in libya, but we have also watched with increasing disgust the syrian government and use of violence and brew tality against its own people. -- brutality against its people.

there are challenges in all parts of the world. we are still actively engaged in afghanistan and iraq, pack -- pakistan, all these present challenges for the united states and the position that ambassador sherman has been nominated to. we also have significant economic and political challenges stemming from china, india, and brazil. as well as from a host of emerging powers. as we experienced firsthand this summer, our budget constraints are forcing increasingly painful tradeoffs. we cannot afford to be the world's first responders whenever crisis arises. we need strong multilateral partners who can help us shoulder this burden. at the same time, my colleagues and i take very seriously the notion that no other country in the world has the resources, the capabilities, and the expertise to stabilize, mitigate disasters and prevent catastrophes as the united states. we have managed to accumulate tremendous wealth, power, and influence and with this comes a

high moral responsibility. today i have the pleasure of welcoming ambassador sherman. she'll be formally introduced by my colleague, senator mikulski, but i just really want to point out to the committee the incredible record that ambassador sherman brings to this nomination. she attended smith college, graduating with honors from boston university. miss sherman earned a master's degree in social work from the university of maryland, launching her on a career path of public service at the community, state, national, and international levels, including a stint right here on capitol hill having served as chief of staff for the seepor senator from maryland, senator mikulski. and i remember very well her as chief of staff and the way that she not only managed senator mikulski's senate office but the way she worked with all of us to make sure that we were all well informed. her responsibilities and seniors

positions at the state department beginning in the early 1990's combined with her considerable experience in the private sector have prepared her well to assume the tasks associated with the undersecretary of state for political affairs. the position to which she has been nominated. i would note that miss sherman will be the first woman to serve in this position once she is confirmed. miss sherrman's past policy experience will be especially helpful as she assists the secretary and deputy secretary to formulate a foreign policy at this critical time in relationship to our allies and adversaries alike. with that, let me turn to senator lugar. >> thank you very much, mr. chairman. i join you in welcoming miss sherman. i appreciate her experience and willingness to rejoin public service at a very challenging moment for the united states foreign policy. soon after taking office, secretary of state clinton initiated the first ever quadrennial diplomacy and

development review, modeled after a long-standing pentagon strategic assessment process. what emerged last december after 18 months was largely a blueprint for improving coordination of america's existing foreign policy and foreign aid operations and an agenda for future reforms. with that exercise did not prioritize policy goals. nor did it take account of the rapidly changing domestic budget environment. for many months congress and the president have been involved in deliberations on the budget that are focused on reducing massive federal deficits in the short run and constructing a long-term strategy for dealing with the national debt that's approaching $15 trillion. this governmentwide budget focus will continue this fall with a joint select committee on deficit reduction holding its first meeting this week.

at the supercommittee process does not produce a viable budget reduction plan, agencies and programs will face automatic sequestrations. in this context the state department must be planning how to perform its important national security, economic, consular, and diplomatic missions in a declining resource environment. this planning should proceed far more rapidly than the present because at heart it's not just a management exercise it's a policy imperative. even apart from budget dynamics, i remain concerned that our national security policy is being driven without sufficient planning or strategic design. the expansion of the afghanistan mission and the intervention in libya in particular have occurred with limited reference to strategic goals or vital interests. as i noted in our hearing series on afghanistan several months

ago, it's difficult to see how the current level of the united states expenditures in that country can be squared with a rational allocation of national security resources. undoubtedly global emergencies will occur that require an american response, but the state department has often been adept at moving existing funds around to address urgent contingencies. we also have seen recent efforts to trim civilian projects in afghanistan or elongate their time frame to reduce the rate of spending. but if resources for national security contingency is declined, as most observers expect, u.s. policy will require a much more defined set of priorities and the discipline necessary to stick to them. the state department and white house should be working with congress to articulate a set of priorities to be funded that are based on vital national security interests. within the state department, the

impetus for such planning must come from the highest levels. i will be interested to hear the nominee's views of the united states national security priorities. the state department's response to intensifying budget limitations, and the prospects for improving strategic planning at the state department and throughout our government. it is quite a challenge. we welcome miss sherman. i thank the chair and look forward to our discussion. >> thank you very much, senator lugar. it's now my privilege to introduce my colleague in the united states senate, senator barbara mikulski. >> good morning, senator cardin, senator lugar, senator demint. it is with a great deal of pride and enthusiasm i come before you today to unabashedly lend my support for wendy sherman to be the undersecretary of state for political affairs. i believe secretary clinton has chosen wisely because the am

bass dorn sherman because -- ambassador sherman brings to this post an exceptional background and great deal of skill. she has unique abilities she wants to put to work in the public service for our country. as you said, senator cardin, i have known wendy sherman for 25 years. i have known her as a friend, a chief of staff, and she continues to be a close advisor. i do know wendy sherman and therefore that's why i'm so clear that this would be an outstanding nomination and hope the committee confirms her. she brings competence, intelligence, and integrity. wendy will be an invaluable member of our foreign policy team advancing the global interest of our country, a safer country, a stronger economy. she is strategic -- strategic thinker, a seasoned diplomat, and an experienced manager and negotiator, and knowledgeable of the world and the issues that

the united states faces. she understands and respects the important role of congress in foreign polcy. as assistant secretary of state for legislation, under president clinton and then secretary warren christopher, she knew how to listen to us, made sure our voices were heard at the state department, and was truly bipartisan in her approach and in her work. she played a role working with secretary albright on every major foreign policy issue. she managed very special assignments at the request of the secretary, including in negotiateations on nonproliferation. she also has extensive experience in the private sector. that doesn't usually happen at the state department that you should come from academia, a good place to come from. from congress, some might say an even better place to come from. and then the private sector

which we cannot have a safer country and stronger economy unless we know how it all works together. ambassador sherman and her role has worked with identify connick american companies to -- ike onic -- iconic american companies to make sure we have a presence over there while jobs stayed here. she understands the people of the united states of the america that she serves and the constitutional requirement that the executive branch must consult with congress on important affairs of state. she has an incredible background and one that might be unique as i have outlined. senator cardin talked about how she went to smith, was an honors graduate from boston, then we both went to the university of maryland school of social work. i was a couple of year books away from ambassador sherman, but we did go to that

outstanding school where we learned community development and social strategy. what we learned there was to to -- to accomplish a goal you have to organize based on a felt need, around a goal, a noble idea, and build the support to do it. she will work at her job to build support both within her own country and within the world to advance our vital interest. one of the important things i think also about ambassador sherman is her incredible commitment to public service. it is in her d.n.a. she comes from a wonderful family. senator cardin, you and i know her parents very well, who were prominent in the baltimore business community, in the real estate community. and they were known for their pry principles of integrity, their commitment to social justice, and they knew you could do well while doing good. it is there that they had -- i know the ambassador sherman

learned first about foreign affairs, trick or treating for unicef to help the little kids in the world, now she's going to be a big kid on the block helping the little children in the world. her husband, bruce, is a distinguished journalist and international economics. her daughter is a recent law school graduate, again committed to public service and her husband, dr. chris richards. i think the committee would do well to take the executive branch's nomination and move her forward. i look forward to working with you should the committee decide to vote to advance this on the agenda. thank you for your kind attention. i know you want to hear from ambassador sherman. >> senator mikulski, let me thank you for your comments. i join you in presenting to the committee ambassador sherman. strongly support her confirmations and just want to underscore the personal aspects that you did. i have known the sherman family

all my life and i have known wendy all my life. they are incredible public family in that they have give back so much to our community and we are very proud of your record and willingness to step forward for this important assignment. ambassador sherman. >> good morning, senator cardin, chairman for today, and senator lugar, whom i have had the distinguished honor to work with for many, many years and to all of the members of the committee, senator demint, senator udall, and others who may join. i'm very honored to be here. i want to begin by thanking president obama and secretary clinton for their confidence and with your support for the opportunity once again to serve our country. senator mikulski and senator cardin, i am so very grateful for your friendship, your support, your wonderful words, and for your leadership and service toe all of us who are marylanders and to all

americans. i'm very humbled by your introductions this morning. and if i may thank as well my husband, bruce, and all of my family. and so delighted that my daughter, sarah, and her husband, can be here today. to all of my family, as senator cardin said, who are willing once again to have the phone ring in the middle of the night and to welcome me home after yet another trip abroad. none of us can contemplate these responsibilities with a mighty support system of family, friends, and colleagues, several of whom are with me here today. this is the third time i have come before this panel seeking confirmation. in 1993 the chairman was senator claiborne pell, who always carried a copy of united nations charter in his pocket, proudly pulling it out and reminding us all how we all must work for peace and prosperity. my own parents were at the founding meeting of the u.n. in 1945 in san francisco. my father, an active duty

marine, stateside after being wounded at guadalcanal, hoped to organize veterans to advocate in support of the world body. he was determined to do all that he could to save future generations from the trauma his own generation had experienced. in 1997 when i appeared before the committee for the second time, the chair was senator jesse helms. it will not surprise you to learn that he and i did not always agree. but i never doubted his love for our country and he never doubted mine, either privately or publicly. those who knew him know that he was a true gentleman. when i had surgery, he called me at home. and when we failed to see eye to eye on an issue, there was never any questioning of sincerity or motive. today under the leadership of chairman kerry and ranking member luger, the committee is at the forefront of debate about

america's position in a world of constant change, but what has not changed is the professional and dedicated manner in which the committee conducts the nation's business. i am grateful for your courtesy. i look forward to working with you in the future just as i have worked with many of you in prior years. i'm also humbled by the knowledge that the job of undersecretary for political affairs has been filled in the past by people for whom i have enormous respect, including most recently ambassador bill burns, an outstanding member of the foreign service, who continues his service as deputy secretary. if i had to write a job description for the position it would begin and end with the willingness to take on whatever assignments are deemed necessary by the secretary of state. if confirmed i will bring to this new assignment years of experience as a staff member on political political, as assistant secretary and counselor at the department of state, and as the president's special advisor on north korea. in recent years i have gained valuable additional experience

in the private sector. this background has enabled me to develop skills as a negotiator, strategist, troubleshooter, and problem solver. i think you'll find i'm also a good listener. as chief of staff for senator mikulski, i had a good keel -- deal of practice. listening is important not only in meeting with foreign officials but in consulting with you, the representatives of the american people and our citizens. my own boss and current business partner, secretary albright, used to say there is nothing foreign about foreign policy. what the state department does and what this committee does is intimately related to the health of our economy, the demands made on our military, the safety of our people, and the future of our children. it is vital that we communicate these connections to the public. mr. chairman, i expect during the course of this hearing that we will cover many of the specific countries and

controversies that presently concern us across the globe. rather than try to address those in this brief opening statement, i thought i would summarize very quickly the attributes of american foreign policy that i intend to stress if confirmed to the position of undersecretary of state. the first is persistence. i think we make a mistake when we look for quick answers to hard problems. it's always tempting to seek instant gratification, but that is generally unfortunately not how the world works. we owe it to ourselves, to the public we serve, and our allies to persevere in our strategies, maintain our commitments, and finish the jobs we begin. second, we need to take advantage of the full range of foreign 308cy -- policy tools. from the simple art of persuasion to the pervasive impact of military force and include in between a variety of carrots and sticks. when possible we should act with

others. when necessary we should not hesitate to act alone. our military must be strong, versatile, and ready, but the same is true of our civilian resources. third, american foreign policy must reflect a blepped of idealism and realism. a decisionmaker has no choice but to begin with the world as it is. but our decisions would have no purpose if not to shake the world as we would like it to be. we cannot claim to represent the american people if we do not explore every opportunity to support freedom, prosperity, and justice. in pursuing our interests and our values, we must also reach out in the broadest possible way to governments, opinion leaders, young people, women, and girls, the private sector, and civil society in all its dimensions. we must also take advantage of the opportunities presented by the information technologies and net work -- network

capabilities. finally, in all that we do we must keep in mind on whose behalf we serve and in whose interests we labor. the department of state like this committee exists not to represent the world to the united states, but to enhance american influence across the globe. we may disagree on occasion about how best to do that, but there should be no confusion about the nature of our purpose. certainly no one understands better than secretary clinton and this committee's members the importance of investing our dollars very wisely, of tying our diplomatic initiatives to the best interests of our country, of making sure that our policies reflect and uphold american values. at the same time as an optimist i see a convergence, a growing convergence between our interests and those of our peace loving and law-abiding countries. the art of diplomacy to mobilize

others, to coordinate with us in pursuit of shared goals whether we have in mind of further degradation of al qaeda, or halt to nuclear proliferation, or the strengthening of stability and democracy in every corner of the world. in closing i want to once again thank the president and second of state for their support to say how very much i look forward if confirmed to working closely with the members of the neat and your colleagues in strong and to express my gratitude for the opportunity with your blessing to devote my full energies to serving the country we all love. i thank you again for your hospitality and would be pleased to respond to your questions. thank you. >> thank you for your appearance here and your testimony. i want to start off with a point i raised in my opening statement and senator lugar also did and that is the fiscal realities we are finding ourselves in. the united states has a security budget that includes not only

the department of defense but our civilian efforts and diplomacy within the state department. we spend more than any other nation in the world by far in regards to our defense issues. on the diplomacy, civilian side we spend a lot of money. but as a relative part of our budget it's relatively small. the obama administration has made the point over and over again that we have a national security budget. that we need to be able to use all resources whether they are military or civilian, or diplomacy in regards to our national security interests. i would ask you to share with us how you would go about making priority recommendations to the administration? there are a lot of demands out there. we have the -- we are still involved in afghanistan and iraq. pakistan is a huge challenge for the united states and could become an expensive operation for us, already is an expensive operation for us. in addition there's opportunities, new opportunities

in egypt. we have libya that's emerging. so how will you go ba -- share to us the standards you will use in trying to make priority judgments. we are faced with the possibility of congressional record cuts -- across the board cuts if congress is unable to reduce the deficit further, which could obviously bring in tough decisionmaking challenges to the department of state. >> thank you very much, senator cardin. this is a very many tough question we are beginning the hearing with and i know that for every member you have just come back from recess and talking with your constituents and being back in communities and american families are worried about everything from the floods in their neighborhoods to quite importantly whether they are or loved one also have a job to be able to support their families and have the kind of future that we all hope for our children.

when we think about foreign policy priorities, i'm sure you hear from many constituents why are we spending a single dollar abroad? we need every dollar we have until our budget, particularly as we need to deal with our deficit and we need to create opportunities for jobs for people at home, we need every dollar at home. at the same time i know that the american people are well aware that on sunday we will memorialize 10 years since 9/11 and the tremendous threat of terror that came across an ocean we thought would never reach our homeland, and the terrible cost in lives, the way we go about our civil society, in the ways we face our future. and so i think americans understand that in order to have the economic future we want, we are connected to the world. we are connected to the world's economy. we are connected to events that take place in the world that are

going to have an impact on what happens to us here at home. we have to find the right balance. most americans believe that we spend 40% of our budget on foreign policy. when we ask them how much we should spend, they say 20%. as i think all members of this committee know we spend less than 1% of the federal budget on foreign policies. even with that 1%, as you say we are going to have to be very thoughtful about what we do. president obama, secretary clinton have really led the way, as secretary clinton, secretary gates did, in putting forward a national security budget, at looking holistically at all our tools, and the tools of our private sector in trying to advance american vital national security interests around the world. so i think we are going to have to be very smart about how we move forward. i think prom looking quite

carefully as we know we are finding down the war in iraq. that will be quite crucial. he has a glide path for moving troops out of afghanistan which will have an enormous budget savings between now and 2014. when that will be accomplished. we are looking at the new challenges that we have both in terms not of what we alone can do, but what we can do with others. the efforts in libya were not led so much by the united states, though we played an invaluable role in what the libyan people themselves have done, but it has been led by nato. so that the burdenle is shared. so i think we are going to have to look at all of the stakeholders, all of the resources we have. i think the building of public-private partnerships will be crucial. i think secretary clinton, secretary gates, and now secretary clinton and secretary panetta, will lead the way in

martialing the resources we have in the -- marshaling the resources we have in the best way we have, in the fundamental premise what, is in america's vital national security interests? and that has to set the priorities for where we will head. >> you were a major player in the clinton administration as -- to develop policies towards north korea. could you share with us what lessons you believe were learned by that experience that could be helpful as we continue to develop a strategy as it relates to a country that presents serious challenges to the united states? >> thank you, senator. i think that during the time that i worked on that very, very tough problem for president clinton, secretary albright, it began really in 1998 when north korea launched a missile that

overflew japan and it failed, but it raised great concerns not only in the clinton administration but up here on capitol hill. there was a suggestion spect underground site and we didn't know what was going on there. so with bipartisan support from the united states congress, the former secretary of defense, william perry, was designated to be a north korea policy coordinator and to do a review. which went on for 11 months. and at the same time undertake some new diplomacy. i was the person inside government who worked with secretary perry and then replaced him as north korea policy coordinator. i think we learned what every administration since has learned. working with north korea is very frustrating, exceedingly difficult. they are elusive. they do not keep their commitments. they are often hostile. they are oppressive to their people.

and that solving this problem is very, very tough. takes enormous persistence, and there are no good choices. we were able to get a significant dialogue started. make some small progress, but those gains turned out to be ewlusive. -- elusive. president bush tried some new efforts, including the development of the six-party talks. continuing what was called the t-cog, try lateral coordinating mechanism with south korea and japan which was very important. he started a policy of interdiction, of possible and suspect efforts on the high seas, which i think was an important tool. secretary obama -- secretary clinton, president obama have continued the six-party talks and continued with the two-prong approach that senator -- secretary perry first put on the tabling and that was that north korea had a choice t could

eliminate in the irreversible program its nuclear weapons program and long-range missile program, improve iments human rights record, and give its people a future and join the international community and see normal relations or they could continue their isolation as a weakened failed state and get the wrath of the international community. so far north korea has chosen the second path. the obama administration, secretary clinton have worked with the u.n. and with allies around the world to place additional, very serious sanctions on north korea. they are probably among if not the most sanctioned country in the world. it has created some pressure on north korea. they have recently had talks with south korea. they have had some talks with the united states, but secretary clinton has been quite clear and i think quite wisely has said that it makes no sense to have talks just for the sake of

talks. that new york 12340rk must keep its commitments it made. to really move forward to the denuclearization of the korean peninsula. if they show they want to proceed in that way, then talks may have some serious purpose. i'm quite clear this is one tough difficult thorny problem. we learned some things but we are in a new environment in many ways a tougher environment. and the choices that the president and secretary have to make are probably even tougher than the ones that we made in the late 1990's. >> senator lugar. >> thank you, mr. chairman. mr. chairman, following up the chairman's earlier question i would simply note that the appropriations subcommittee on foreign operations of the house of representatives recently passed a budget for the state department for fiscal year 2012 in the amount of $39 billion.

this figure is $8.6 billion or some 18% below the fiscal year 2011 enacted level, and 22% below what the administration requested. for the funding level of 2012. i raise this because i just want to get some insight as you perceive your role as undersecretary for political affairs. is your role obviously close advisor to the secretary of state, but is it your responsibility to rearrange the deck? the $39 billion may not be the final figure, may be up or down. the state department's been included along with the defense department as the chairman has mentioned in the event of committee of 12 does not reach a

policy decision, and so the -- so-called 50% of all the reductions to get to the $1.2 trillion comes out of there. there are there is discussion who will meet with the state department and defense department as to who loses what in that process. so i'm trying to define in my own mind's eye as well as for those who are witnessing our hearing, what is your job? how do you meet the budget or the priorities? who is going to do what? or do you simply advise somebody else who makes the decision? >> well, thank you for that question, senator. many years ago then chairman hahl rogers, republican in the house -- hal rogers, republican in the house, put in the state authorization bill language to create a secretary deputy secretary of state for resources and management, and this committee and the senate were

quite wise to recently confirm deputy secretary to that position. secretary clinton is the first secretary of state to fill that role because she understood, i think, the point -- at least one of the points you are trying to make, senator, that is dealing with the budget priorities of the state department is complex, it's difficult, it's a competitive environment. it's a challenging environment. and so secretary nyce has the principal responsibility with the secretary of state in establishing those budget priorities and working in the whole of government approach to a national security budget. the role of the undersecretary of state for political affairs is more political and diplomatic role. of course offering as part of the secretary's team advice and thoughts and recommendations and helping to enumerate the many

priorities in front of the united states as it tries to extend its interests around the world. so i will certainly do all that the secretary asks me to do to support that effort. i think the secretary has already made clear that if the house bill were to move forward to the president's desk she would personally recommend a veto of that bill not only on the basis of the deep cuts to the bill, but many of the provisions within that bill. i certainly understand the house's actions in these difficult times, but i remain hopeful as i know the secretary and president does, that we can all work together to find something that will help pursuant to the rule meet the vital interests of the united states. >> thank you very much for clarifying the work of secretary nyce and your efforts in political affairs. in that role very rapidly the general assembly of the united nations will be meeting.

it's anticipated that we are going to have a real problem with the palestinian authority suggesting that a palestinian state be recognized at the u.n. what are we going to do about that? what is the program the administration as it approaches the u.n. and this ongoing problem which has perceived a long way down the trail but is close at hand? >> senator, the administration has been very clear that all of us hope for a two-state solution in middle east peace. a viable palestine and secure israel with clear borders. we do not believe that a u.n. resolution will get us to that place. and the secretary of state and the president are doing everything they can to make it clear to the world that we think that this is not a positive step

forward should a resolution come to pass. my understanding from the state department is that there has been a very broad and very vig russ -- every capital in the world that this is high on the agenda for every meeting the secretary has with every world leader. today i understand that both special envoy, david hail, and ambassador dennis roth, are in the region. having a -- conversations with all parties to see if there is not a better way forward to resolve this issue. but there is no question that the president, secretary of state, and if confirmed i will do everything possible to see that this does not move forward. >> the united states oppose palestinian authority, president abbas, and his motion, but specifically what can we do? if the general assembly has the majority of votes, where is our

next step? >> i think the next step, senator, to the best of my understanding, is the discussion that is are going on in the region as we speak. to see if there is not a more viable path forward. i think my understanding is the palestinian authority has not yet decided exactly what it will put forward. so i think there are ongoing discussions and i think it's incumbent upon everyone in the administration to do everything we possibly can to see if there is any possibility that this not proceed. >> finally i would just ask with regard to egypt, the egyptian government, the new one, is seeking to buy 125 u.s.-made abrams tanks. what is our position on that at this point? is this provisional government attempting to buy tanks?

what stage do we deem there is a government that ought to be involved until defense spending of their own and getting armaments from us? >> there is a transitional government in place. as you know, senator, i'm not aware of that particular request from the egyptians. we have a very -- my understanding is we have a very clear process for any arms sales and that is something that we would consult with the congress about. and i would be glad to ask the state department to provide you with an updated brief on that particular question. >> thank you very much. >> senator menendez. >> thank you, mr. chairman, ms. sherman, thank you very much for your long service to our country. i appreciate it and look forward to your role now again at the state department. there's two lines of many questions i would like to ask you, but two i'll have within my six minutes. one is libya.

i welcome the political change in libya. to bring about the aspirations of the libyan people. and certainly proud to have been the sponsor of the senate no-fly resolution in the early stages of this challenge. i'm very much in support of an opportunity for the libyan people to start anew. and for the successor government to embrace democratic reforms and rehabilitate libya's reputation in the world community. at the same time i have, you may know, for some time followed the case of the pan am 103 bombing which claimed 189 american lives, including 34 from my home state of new jersey. and i have never believed that that there was a lone beginning and end of the master mind of pan am 103's bombing. i think people generally believe

that is not true. we still do not true who ordered the bombing, who collected the intelligence to carry out the blan, who made the bomb, and who in addition bears responsibility for this heinous attack. so it is my hope that the follow-on libyan government will be responsive. certainly mr. jabrill when he was here and meeting m my office in pursuit of having funds raised, sanctions raised or at least for humanitarian purposes and seeking our support in that made certain direct commitments about the t.m.c.'s engagement, but i am somewhat dismayed by the news reports that i have seen coming from the t.m.c. since. whether it relates to mr. mcgrahee or other pursuit of information that would give us the wherewithal to understand who was involved in the bombing.

i'll introduce later today pan am 103 accountability act which would require the president to consider the cooperation of the t.m.c. and any successive government in libya about making decision abouts u.s. assistance and liment the distribution of libya frozen assets until the president can certify they are cooperating with the u.s. investigation in request for information. what inquiries to your knowledge, as i'm sure you have been briefed in preparation of this hearing, what inquiries has the state department, our government, made with the t.n.c. respecting first access to determine what his state is, and also what inquiresries -- inquiries has our government made in reference to cooperation and getting acks is to -- access to both individuals and documents in pursuit of finding out all of those responsible for this bombing? >> senator, when i was counselor

for the department of state, i had the privilege, the sad privilege, of meeting with the families of pan am 1033 as the scottish court was getting under way. and i heard firsthand what i know you have heard many times which is the horrible grief of the families of the victims of pan am 103 and their sense that justice had not been served. i know those feelings continue today. it was a very tough and painful meeting so i do understand quite directly what those families have gone through. or heard at least. secretary clinton understands as well and she had said from the start that the administration does not believe that he should have been returned to libya in the first place. in the last few days when she has been in paris and meetings with the t.n.c. and leaders, she has had direct conversations on this subject.

both on her concerns that he be brought to justice and that further that all that needs to be done to seek justice for these families is a priority for the t.n.c. she and the administration certainly understands that the t.n.c. has much on its plate at the moment, including the security and governance of their country, but she wanted to be clear that this was a very importantish smue for the united states -- important issue for the united states of america. >> what response did you get? >> the spopes was this was very much understad by the t.n.c., knew how important this was for the united states, and they would continue their conversation and dialogue. i am not aware in part because i have not been briefed, snoort, more recently, whether any specific commitments were made other than to continue the dialogue and pursue that justice, which is an important commitment that justice be

pursued. >> this is my concern. i appreciate continuing the dialogue, but this is a transitional government for which the united states has made a major role from establishing and being the advocate for a no-fly zone, from getting nato to be engaged from providing considerable assets from unlocking frozen assets here for humanitarian purposes. i am concerned the dialogue while desirable doesn't need to the conclusion that is we want. and so i would hate to give all the leverage away before we have more than a dialogue, before we have a commitment. i am looking for the department to pursue a commitment. i'm looking to find whether the department has had the opportunity to get access to its former foreign and extern at security administrator. i would hate to see us release all of our -- all of the assets

and then be in the mitts -- midst of a dialogue. i will press that point and will continue. >> i certainly understand. i do believe, senator, there is an absolute commitment to justice. i take your point about the spess physicality of that commitment to justice, and i'm sure that -- specificity of that commitment to justice, and i'm sure that the secretary will pursue this. it is a high priority. >> timely in the time i have left, it has been raised about the u.n. vote on the palestinian authority's request. is it the department's position that a resolution recognizing a palestinian state could stall the peace talks for the foreseeable future? what message has the department -- i heard the demarches which i aflawed and secretary rice has

done an extraordinary job in her advocacy, but what has our government said to abbas about the impact that this vote will have on u.s.-palestinian relations? >> the administration has been very clear that this resolution is not positive for the peace process. that leaders should hear what the united states congress and other leaders are saying about what impact might result. that that is a serious, serious reality for the future of the region. and for the palestinian people. indeed, today as i mentioned both david hale and dennis ross are in the region having those very direct discussions. >> thank you, mr. chairman. >> senator demint. >> thank you, senator card yib. thank you, ambassador sherman. i appreciate you being here.

i very much appreciate your many years of service and sacrifice as well as the sacrifice. i know your family's been a part of it. so my questions are not at all directed at character, integrity, or commitment to our country. we very much appreciate it. but i do want to ask you about what i see as two different philosophies in our foreign policy. not just this administration but maybe across the board. there is one philosophy that the united states needs to deal very firmly with strength and a lot of verification with other countries in the world. and i think there's another philosophy that perhaps through friendliness, even appeasement and trust, that we can accomplish much more. certainly that approach with friends and allies is the preferred approach, but behind closed doors over the years as i have talked to some of our

allies, i think there is a perception in the united states, maybe uses more carrots than sticks, and there's maybe a degree of naivete in our state department, that is our friendliness and willingness to trust is seen in many parts of the world as weakness rather than a genuine desire to work with others. as i look at your work with north korea, it does suggest to me perhaps a willingness to work with countries that we know can not be trusted. almost maybe as a peer and dealing with them in a way that somethings that friendliness and appeasement and trust might be more of your philosophy. i like what you said in your opening statement, but i am concerned as we approach other countries, china, russia, iran, syria, the palestinians, that

these countries respect power and that clarity of purpose is very important for us. i would like to hear you discuss how you see the world in that respect and moving forward how do you see the rome of the united states in dealing with -- role of the united states in dealing with other countries? >> thank you, senator. i think it's a very important question and i think that my own philosophy probably in the way you set up the question, i might not set it up quite that way, is on the side of strength and verification. what -- where i think we may see it slightly differently, senator, is i don't believe engagement antithesis of strength. engaging leaders is a way to test them. to see if in fact the commitments they have made they are going to keep.

in the case of north korea we engaged with north korea to see if they would not only make commitments and keep them in a verifiable and irreversible way. they did not. we did not conclude the agreement with north korea. sanctions not only remained on north korea but increased over the years. we know during the bush administration that there was difference of opinion about how they would proceed on north korea. in the obama administration there's been great clarity, a two-pronged approach, but as secretary clinton has been very clear we will not talk for the sake of talks. north korea has to demonstrate that it is going to keep the commitments it made in 2005. and that talks make no sense until they show in a verifiable way that they have kept those commitments. so i believe absolutely in clarity, in strength, the

importance of sticks as well as carrots. of putting all the pieces on the table. the reason, it was interesting, when secretary of defense perry was asked to be the north korea policy coordinator, the suggestion came actually, initially from a republican staff member working for then chairman of the appropriations committee, mr. mcconnell, and the reason was because in 1993 when north korea threatened to leave the nuclear nonproliferation treaty and we thought we might be a moment as military power and force, secretary perry did not hesitate to begin to pull troops out of japan if in fact we had to take military action. so we knew that the person who was leading that effort, the north koreans knew, was a tower of strength and purpose and clarity and toughness. >> thank you for that answer.

another question related to philosophy because i think a lot of us are grappling with this now as we look at situations around the world as some of the other questions have suggested. it appears particularly with our financial situation and our own country, the sense that perhaps we are spread too thin, does america, as we look at our foreign policy, need to be the city on the hill, be the model for the world, be the example? or the other philosophy which i think very various administration and congresses have pursued for years, is promoting our ideas, sometimes forcing our ideas in other parts of the world, transplanting democracy which seems theoretically a good idea, but as we look at our track record of success, there is some question if perhaps we should begin to look at things a different way.

as you think of our role in the world, which side of that equation would you be on? >> senator, i think that what we must be is who we are. and i think the advance of our vital national security interests, which include the values that we hold dear, is very important, but i absolutely believe that we cannot impose those values on other countries. . we show by who we are what people might aspire to be. the people who fomented change in egypt and libya and yemen throughout many parts of the world back during the fall of the soviet union did not do so to live under another dictatorship. they did so to have prosperity and freedom, to be able to build the future for their

families just like all of us want to do. and so i think the united states is at its best when we live our values and live our interests trying to influence others to meet our national security priorities but not try to impose upon other people what we believe because quite frankly as i think you're implying in your question that is often a costly enterprise and often an enterprise that does not have the results that we desire. and so i think we need to be careful. >> thanks for the little extra time. >> certainly. senator casey. >> thanks very much. ambassador sherman, great to see you again. thanks for your willingness to serve again. i want to thank you and your family as well for this commitment. the senator mentioned that and it bears repeating. i know you don't serve alone. your family serves with you in

more ways than one. i want to thank you for a long commitment to public service. a whole variety of positions starting with those in the state of maryland and others where you were an advocate for children and now in your work that has worldwide impact at a time of real tension and danger for our country. i wanted to ask you about two issues. one is in relationship to a trip that i just took during the month of august and then secondly about something very specific as it relates to a constituent of mine. first of all, with regard to both afghanistan and pakistan, i was just in both countries, three days in pakistan, two days in afghanistan in august with senator whitehouse, senator levin -- leventhal.

i think it was to push first and foremost the pakistanis to help us on the question of so-called fertilizer that comes in from pakistan in amounts that allows the bad guys to be able to construct i.e.d.'s that are killing so many of our troops and if not killing them grievous and irrepairably wounding them. here's what we got from them. we got a presentation as the state department knows and others know of a strategic approach to this to be able to track it better, to be able to regulate it and interdict it. in addition to the strategy and implementation plan of the strategy so they're two for two. what we haven't seen yet is the implementation itself and the real hard work at various levels of their government to

be able to just help us protect our troops and also to protect their own people. one of the reasons i think the pakistani leadership is willing to engage in this because their own people is being adversely impacted, thousands of people being impacted by i.e.d.'s. i'd ask you two questions. number one, your assessment of that commitment that they made to me personally and to the other senators and to our government. i know secretary clinton's worked very hard on this, insisting they make this commitment. secondly, not just your assessment of the commitment but what will happen if they don't fulfill that commitment in terms of our relationship with them which i know is a very tense relationship to begin with. >> thanks, senator. first, your travel with the other senators to afghanistan and pakistan is tremendously important. and i know that members of congress often get a lot of

grief for traveling abroad even to places as not wonderful as afghanistan and pakistan. but i cannot begin to tell you as someone who travels the world quite a bit in my business life and before when i was in public service when members of congress, when u.s. senators travel to these areas and work on these very crucial issues, it makes a phenomenal difference because it not only echoes what an administration might be able to say but it's a point of leverage to really try to get action. so i thank you tremendously for having made that very difficult trip. also want to thank you for your leadership on this very crucial issue. knew moan yum nitrate which is a precursor for the production of i.e.d.'s is a very crucial problem. and you have led on encouraging and pushing pakistan to move in

a direction it needs to to stop the production and the transit and to work with afghanistan to do so. and i'm very glad to hear that you heard what i heard in briefings which was that the pakistanis are taking this quite seriously, have a strategic approach, an approach with afghanistan as well to control the borders and to stop this from coming across and have an implementation plan as well and this in part arose out of the working groups that we have with pakistan. a very successful working group working on these very tough issues. this is a priority for the administration because as you point out, i.e.d.'s are a horrible, horrible reality for members of our military who rusk their lives for us every day. and so it is a high priority

for us. we intend -- i know the department intends to stay on this to make sure the implementation plan is acceptable, to continue to let the pakistanis know what a high priority this is. this is doable and a lot of things we are trying to do are even tougher than this. and we should be able to get this done. >> i want to talk about one other issues. the hikers. of course, two now just receiving an eight-year sentence which is an abomination, it's a mockery of justice. but they're faced now with a long prison term. one of them, of course, is a pennsylvania man. family has been remarkable. his mom, his brother have been just remarkable -- remarkably effective in making his case and reminding all of us about

this. can you give us a sense of where you see this case, and what the state department can do to keep pushing to make sure that we get them out of the prison? >> senator, i know that the secretary believes that we must take every opportunity we can to push this to work with the swiss protecting authority which represents us in iran to try to get consular access to them to push for their release. the administration quite agrees with you that this is an abomination that these hikers should not belong in prison, do not belong having the sentence, ought to be released immediately and i know the secretary is aptly committed to using everything she can and the department to do everything they can and i will do

everything i possibly can using every relationship we have with iran through third countries, if not directly, to get their release. >> thank you very much. >> thank you, senator cardin. ambassador, thank you so much for coming today, and i have one issue i wanted to focus on a little bit. one of the real successes in the middle east and, of course, there aren't many, but that is there that's existed for 30 years is the peace between egypt and israel and particularly the line on the cyanide that's separating the two countries and it's been successfully maintained, even in light of the fact that there's almost daily disputes there over the last 30 years. so those of us -- i've been there. i've seen what's happened.

and those of us who've watched that over the years, are concerned, after the change in egypt with what the potential for what could happen there. and it appears that some of our fears have been founded. we all know that cyanide is not nearly -- sinai is not nearly what it was. can you give me your thoughts on that and what you think the multilateral force can do to restabilize that line and retablize the sinai? >> thank you very much, senator. this is a very important issue. it is my ups understanding from the briefings i had that the transitional government in egypt has reaffirmed its commitment to the camp david accords, that they are in die logs with israel to not only ensure that there is a transition that maintains a

strong and positive relationship between egypt and israel but the issues on the sinai are addressed, that the multilateral force does get back to the posture that it had where they're not an increased number of ins dents. as you said, there is a -- incidents. as you said, there's been a number of incidents over time but there's an increase as of late that's great concern. and assistant secretary sulton has his eye on this issue. and i know that our new ambassador, ambassador ann paterson, whom this committee and this senate was wisely confirmed and in place very much has this on her agenda. >> i appreciate that. are you personally convinced that the new administration in egypt will do what's necessary on their side in the sinai to try to get control again of what i think any observer would

say is the growing walllessness on the sinai itself? >> senator, i have not met directly with the leaders in the new transitional government, but my understanding from briefings is that the state department believes that there is a commitment to maintaining and strengthening the historical relationships here but it is clearly something that has to be front and senator as we go forward in our diplomacy and our discussions with the egyptians and as they develop their government structure in the weeks and month ahead. although today i believe the state department has confidence, it's not something that anyone should take their eye off of. i mean, we need to continue our vigilance to support and head in that direction. >> thank you, ambassador. i think we all share that view. >> senator she houston. >> thank you, mr. chairman.

ambassador sherman. i want to echo my colleagues in expressing my appreciation for your past work within the state department and for your willingness to consider taking on such a difficult post at such a dangerous and critical time in our foreign relations so thank you very much. i hope that we can all move quickly to consider your nomination on the floor and i look forward to voting for you. like senator casey, i had the opportunity over august with senator levin and senator hurricanely to travel to afghanistan and pack -- pakistan and what we heard from the civilian leadership in pakistan was a commitment to try and improve relations with india. the news this morning, we heard not just about bombing in queka

but a bomb in a courthouse in new delhi. and reports suggests that it was an al qaeda-linked group and pakistan and bangladesh is claiming credit for the attack in india. i wonder if you can -- obviously part of the effort is to try and discourage those efforts to improve relations between the two countries. i wonder if you can talk about what more we might be able to do to try and encourage that effort to keep the two countries talking and to continue to work on improving relations. >> thank you. as i said to senator casey to your travels to afghanistan and pakistan, it's hard for members to do this travel but very crucial in world affairs.

i think that the administration is heartened that there have been three significant meetings between india and pakistan. commerce secretaries, foreign ministers, diplomacy, and in fact their follow-up meetings is secretaries coming up and that that kind of dialogue between the two countries is absolutely essential. the united states has always supported that dialogue, the pace and scope and character of it is up to, of course, india and pakistan. and we can't prescribe for them exactly how to proceed. but it is crucial to both of their security to the future of that country that that takes place. it's my understanding that prime minister singh is in pakistan now. secretary clinton's trip to

india, she said india is a player in south and central asia, taking more of a leadership role and i think it's important not only for india but for all of us in terms of the security of the region. so i think your conversations to encourage better relations is very important. it is something that the administration has done in my sort of focusing in the past few years. i've been to india and pakistan both as a business woman and to track two tie logs. i know there is a desire in both countries to move forward. >> thank you. >> another report today suggests that we're moving towards a drawdown of our troops in iraq. possibly down to 3,000 to 4,000 who would be there to continue

training forces in iraq. i know the plan was to significantly drawdown our american troops there, but there have been some reports that iraqis will be asking us to love, a larminger contention than the 3,000 there. and, again, i appreciate this has been a contentious issue in iraq. but to what extent is the iraqi political situation making planning difficult -- excuse me -- for the drawdown and do we have any indication that the iraqis are going to ask us to stay beyond the end of this year? >> senator, my understanding is that the iraqis have said they might have some interest for some ongoing presence, particularly as you note on the area of training, continuing

training of their military. it's the understanding that they have made no decision in this regard even though i read the same report in this morning's paper that the defense department is considering 3,000 or 4,000 military to stay as trainers past the point of departure. i'm sure that the administration will have -- continue to have extensive consultations and conversation with congress before a final decision is made. it's my understanding as of this morning no decision has been made. >> another core lear of that is -- corillary of that is the state department operation that will continue in iraq once our troops are drawn down. and how we continue to maintain security with that increased role throughout the country.

can you talk a little bit about how you see that transition happening and what we might need to do to ensure we can maintain that diplomatic presence even though we may not have the military security to protect those state offices around the country? >> senator, in the briefing i had with undersecretary of state pat kennedy who's responsible for management and with deputy secretary they are very much focused on what in fact the patterns should look like to provide the kind of consular services we need to have the presence in iraq but do so that's secure father our diplomats and for our civilians and they are working on those plans and i'm sure we will continue the conversations with the congress as they're finalized that it's very much

something that preoccupies them. >> thank you. thank you, mr. chairman. >> senator lee. >> thank you, chairman. ambassador, thank you for joining us. it's good to see you again. i want to return to an issue that you addressed briefly with senator lugar a few minutes ago in relation to the push announced recently byle palestinian national authority for president mahmoud abbas about possible efforts to seek recognition outside of direct negotiations with israel. by taking the issue with the united nations. now, president obama recently sdroibs those efforts as purely imdish symbolic. i can see why he might use those words to describe that. i want to believe that he's

right. i hope that he's right. i can also foresee some scenarios which that might not turn out to be right in which that characterization could perhaps have proven to be a little bit too optimistic. do you share that view that, you know, it's not absolutely certain -- i'm not ask you you to disagree publicly with your boss. i'd never do that. do you foresee scenarios in which that could have -- we could later look back on that and say that was a little bit too optimistic and if so are there things that you think the administration can be doing right now to sort of protect against that? >> the president, senator, has been very clear that a u.n. resolution to recognize palestine will not get us to the two-state solution that both parties seek and that most of the world seeks. and he has been unrelenting in

saying such a resolution is not in our interest or in the interest of the world or the two parties. secretary clinton has used every opportunity she's had with leaders to make it clear, as has the president, that this is not a positive outcome should such a resolution go forward. as i mentioned to senator lugar , indeed, the special enjoy hail and another is there today having conversations to see if there is another path forward to meet the needs of the parties. but more importantly to get them back to direct negotiations which is really the solution here. a resolution that the united nations is not really going to get us the solution that

everybody is seeking. direct negotiations will. and are the only path to that resolution. so i think the administration's doing everything it possibly can sending very high level envoys to the region for discussions and i know that our ambassador at the u.n., susan rice, is working with her colleagues as well. the administration has been very clear as well, and i don't expect this to occur, but if it did occur, any such resolution were put in front of the security council, that we would veto it. so our expectation is that will not occur but the general assembly is still concerned, so there is very urgent work going on to try to see if there's not another way forward. >> so it sounds like you're very confident that the united states would remain committed with great result to the veto

threat. >> the united states is very resolved to a veto threat in the security council. what we are very resolved about as well is urging the parties to enter direct negotiations again. the -- it is very crucial to the middle east process, it's oppressing in that direction. i know that their envoy, former prime minister blair is very engaged in representing them to moving to a more positive direction. >> ok. do you see there being a coalition of countries that will build from there or do you think we largely know who's with us and who's against us on that? >> well, we are working on that. it's my understanding, senator, that this is a core of the cortez that includes the united states and that we are working outward and increasing the number of countries who

understand that to really have a viable palestine secure israel will require direct negotiations with the parties, not the resolution at the united nations. >> ok, thank you. now, deputy secretary burns during his time as undersecretary, if i'm not mistaken, was a key negotiator with iran amongst the p-5 plus one countries. do you plan to take on that role if confirmed? >> i'm planned to do whatever the secretary of state asks me to. i am not in the job yet. hopefully i will be confirmed, voted out by this committee and confirmed by the senate. a if she were to ask me to do that i would be honored, as difficult as it is, to do my very best. >> if you were confirmed and assuming this fits within your area of assignments, would you be inclined to recommend

additional sanctions against iran to discourage iran from developing its nuclear weapons program? >> i think, senator if she asked me to take on this assignment, which has traditionally been at the undersecretary level, i would want to understand all of the facts of the situation, be briefed on both the classified as well as the unclassified information which i have not yet done and then talk with the secretary with the rest of the administration and see what the best way forward is. there is no question that the sanctions have been tremendous on iran. they have begun to bite iran, despite the high price of oil which gave them some relief. there have been other actions that occurred which we read in the newspaper which has degraded their -- it is a serious national security problem for the united states and for the world and we have

to approach it with that seriousness and purpose. >> great. thank you very much, ambassador sherman. thank you, mr. chairmen. >> senator koonce. >> thank you, mr. chairman. i want you to thank you for having this. i want to thank you for the service to our nation that you bring to bear today. for your husband, wruste, and their family to willing to support you. i was struck in your relationships with senator helms when he was the chair. even though he may have disagreed on some substantive foreign matters, your ability to maintain a relationships shows the long tradition of the bipartisanship that has abstained it. you heard from senator lugar, senator lee, myself about the efforts of the palestinians to achieve some sort of recognition within the united

nations. i was pleased with your response about the intention and focus and sincerity of the administration in resisting that and finding all possible ways to move the parties back to responsible negotiations. on the question of iran, i will just be interested after the announcement by the iaea last week that they encreased their enrichment activities. what further actions do you think might be necessary or taken by the administration to strengthen other sanctions and what do you think we in the senate might be doing to continue to enforce a multilateral approach towards prevepting the iranians from achieving what i think are their aims and which as you put it are a great threat to our security, to israel's security and to the world? >> thank you, senator. i share your concern about iran. i think as i've been getting briefings at the state department to prepare for this hearing and hopefully to prepare for the job, i've been

struck by the progress we actually have made. if you had asked me just a couple of years ago whether the european union would have put on unilateral sanctions to the extent that it did i would say might not be an easy thing to get done because they had so many of their companies, particularly their energy companies that were in iran. now, most of those energy companies are gone. the number of companies that have left iran is quite significant. i think the kind of diplomacy that the administration's engaging, including happening special advisor robert inhorn travel the world to have countries to force the u.n. security council resolutions have been crucial because sanctions are only as good as the enforcement of them. so it's not always a need for more and more and more sappingses. it's really about using all the

tools we have at our disposal including the treasury department's actions that have been quite crucial where iran is concerned in terms of financial assets and financial transactions. so i think again as i just said to senator lee if i am -- hopefully i will be confirmed by the senate and the secretary asks me to spend some time on this very, very tough problem, i would want to have a greater understanding than i do today of how far we are, what else we need to do to encourage enforcement of existing sanctions. whether in fact any further sanctions would really move us forward. obviously the sanctions are having some bite because we're beginning to see folks in iran as we saw in david sanger's article yesterday trying to throw proposals on the table. i'm skeptical today as i'm

sured at mferings is of those -- sure the administration is of those proposals. but usually when countries begin to put ideas on the tables, sanctions are beginning to bite. so i'd want to make sure that we encourage as much biting as we possibly can because this is a very tough issue. i also want to thank you, senator, for your mention about the importance of bipartisanship. i quite agree and i know that for me and this committee i always think about nunn-lugar, kerry-lugar-biden, a lot of legislation that's set bipartisanship that's moved our issues going forward. >> i hope we enforce the sanctions. i want to commend the administration for continuing to stay on this issue. but i know many of us show grave concern about the speed

which the iranians have moved and show a more thorough and effective engagement on this issue. let me turn to the challenging situation. the full-blown humanitarian crisis in the horn of africa. senator isakson and i healed a hearing before the debt ceiling vote and as many members were going home for the work period. we had a hearing about the difficulty the office of foreign ethic control is required to enforce sanctions and al that back is preventing -- al shabaab is preventing aid. we had a report of additional 300,000 people are in critical need of assistance, raising to 12.7 million. usaid has said this is the worst humanitarian need.

what else do you think we can do to reduce al that -- al shabaab's influence? >> i thank you for raising this. this horrific situation. almost 13 million have been affected, not only in somalia but a refugee camp in kenya that was meant for maybe 90,000 people, has now maybe 400,000 people who are seeking hem and assistance. i know that the office of treasury that issues licenses when waivers are needed and a situation in somalia does with al shabaab's interference has in fact created a license waiver for aid to provide some snaps and is looking at the

potential for other waivers, for n.g.o.'s that might be appropriate to try to bring in that humanitarian relief understanding that, of course, what you want to do is sew a secure situation as possible. i know that the administration is working with amazon and with transitional government in somalia to see what other options there are and to see what we can do in areas out of mogadishu to bring relief. but it is a truly horrific situation. working closely with the u.n. which obviously is key to the relief efforts. and i must say one of the things i've been doing as a private citizen is i've been chair of the board of oxam america, and the outpouring by americans to provide funds, to provide the relief in somalia is incredibly heartening. americans are very generous

people when it comes to humanitarian disasters. but i know assistant secretary johnny carson, with whom i met yesterday, is doing everything he can possibly do to work internationally to bring relief both with the private and public sector to those families and to the people of somalia. >> well, thank you, ambassador sherman. i want to thank you for bringing that perspective in the difficult situations in the horn and somalia. >> thank you, chairman cardin and let me also echo, ambassador sherman, the appreciation for your long public service and also your family's sacrifice. and one of the things that hasn't been noted is you have served in the public in a number of positions dedicated

to children and children's issues and that's something that's very close to my heart and i very much appreciate that. if iraq were to make the request to retain u.s. troops in iraq, and i know today there is a big front page article on "the new york times" about various parts of this to retain -- iraq makes a request to retain u.s. troops past the december, 2011 deadline. how would it change the defense to stay if at all and how would it affect the state department's ability to operate in iraq and the preparations being made for the transition? >> senator, i read this in the paper this morning along with you, and so i don't know all of the answers to the questions but certainly we'll ask the state department to make sure that you get a full answer.

my understanding is that this may be a request for military trainers and if so it would be other than the plans that need to go forward to ensure the protection civilian workers in iraq after the drawdown of our military and that the iraqi government has long had discussions with us of some kind of continued presence and this may be what they are seeking, but i am quite certain that no decision has been made on this. but would be glad to ask the state department to get more information to you. >> thank you. i very much appreciate that. the article noted that, you know, if there is the withdrawal that there's still going to be a significant state department presence in iraq. and one of the things that was highlighted is a 3.2 billion dollar request from the overseas contingency operating

fund move from military to the civilian mission there in iraq. and this mission is expected to be the largest state department mission in the world there in iraq. this will include not only employment of state department personnel but the hiring of numerous contractors to do the work the military's leaving behind. now, with reports that contracting money in afghanistan has funded the taliban and led to corruption, i'm worried about a similar outcome in iraq. from your standpoint, what does state need to do to ensure that the transition is smooth and that the u.s. taxpayer funds are well spent in iraq? >> thank you very much for that question, senator. i know that secretary clinton has asked deputy secretary and

undersecretary to take special attention and take special responsibility for exactly that and that is to make sure that the civilian presence in iraq is well protected, that the contracting is done in a transparent and accountable and auditable manner and to ensure that taxpayer money is well spent. i know that over the years there have been many times not only the state department but throughout the government concerns about contracts. whether dollars are well spent. whether we put all the monitoring systems in place that there is little corruption as possible. i

>> thank you. as a member of that commission, you played an important role in making findings and recommendations for action to prevent the spread of weapons of mass destruction. recommendation number 12 stated, u.s. counterterrorism strategy must be more effectively -- must more effectively counter the ideology against w.m.d. terrorism. the united states should develop a more coherent and sustained strategy and capabilities for global ideological engagement to prevent further prekreutz, supporters and facilitators. they need to make soft power an

option just as viable and effective as hard power. it should be a top priority of the next president's foreign policy team. and the quote ends there. we've had a new president, two new congresses. how would you assess the progress of the administration in employing soft power and do you believe that some of the proposed house budgets could threaten these initiatives and destroy the soft power capabilities and our overall ability to prevent the proliferation of weapons of mass destruction? >> when secretary clinton came in she set up the first quadrennial review of diplomacy and development and part of the impetus for doing so is how can we have a whole state department and a whole

government approach to our national security and foreign policy to make sure that all stake holders are in place, to make sure that foreign officers not only talk to members of government around the world but talk to people in civil society, talk to the press, talk to business people, talk to young people, talk to women and girls, talk to students? really understand all of the stake holders that make up what people do in their day-to-day lives and to really know what's going on in society and what america is about and what it seeks for our own security. i think the qddr was a crucial step in that process. in the meetings that i had in the state department since i was there 10 years ago i've already seen an enormous change

. people understand the depth of communication. there is information technology that wasn't there the last time i was there. the last time i was there we only had classified computers. we couldn't go on the internet. that has changed substantially and people understand the value of positive and negative social media. i think there has been a tremendous change but it still has to be harnessed and made use of and there is no question that having sufficient resources to do so is part of the solution. >> thank you very much, ambassador, for those answers. you're obviously very well qualified for this position. i sbepped to vote for you and i hope that the foreign relations committee acts quickly on this nomination. with that, chairman cardin, thank you very much for allowing me to run over a little bit of my questions. >> well, senator, thank you for your questions. you questioned about the accountability of our foreign

assistance which i think is an extremely important point. tomorrow, the senate foreign relations committee will be holding a hearing on afghanistan and the effectiveness of the u.s. participation in that foreign assistance program. so we -- it's a continuing issue for our committee. and senator lugar whispered to me when senator coons was mentioning the bipartisan initiatives and the one that the two of us worked together with the strong support of secretary clinton bringing transparency to extract industries and ambassador sherman, we will be working with you to implement that policy, not only with you in the united states, part of the d.o.d.-frank bill but actions taken by our -- dodd-frank bill but actions taken by our allies to give transparency to our gas and oil contracts, mineral

contracts that will have such an impact on the stability of the developing nations. so it's an important initiative that we will be working closely with you as we move forward. it was interesting that many of our members talked about the pending vote or possible vote in the united nations as it relates to the palestinians. and i just really want to applaud your efforts, secretary clinton's efforts, to let our other leaders of other countries know how important this vote is because it seems to me if it becomes a popularity vote within the united nations the numbers are not going to go well for a general assembly vote. the united states invested a lot to the peace process and the united states understands the negative consequences of a u.n. vote. i think that needs to be transmitted to the leaders of other countries and i'm glad to see that the administration's taking a very active role to

let the capitals of the world to understand this is an important vote and that if you support an independent palestinian stateside by side with the state of israel the best way to do that is direct negotiations. the only way to do that is through direct negotiations and a vote in the united nations, even though its legality may have some questions, vote within the united nations will be counterproductive to that end. and i applaud you with your strong statements in that regard. i just also want to bring up the case of allen gross, cuba, imprisoned. i know we have a difficult time in communications with our neighbor, cuba, but i think it's important that we continue to advocate for justice in regards to allen gross and to bring him back to the united states and we'll be enlisting your help as we develop the best strategies to bring that about. senator lugar.

>> with that, again, i thank you for your patients here today in answering all our questions, as i said in the beginning of the hearing, the record of the committee will remain open until the close of business today. and with that the committee stands adjourned. thank you. >> thank you very much. thank you very much, both of you. [captioning performed by national captioning institute] [cap

>> also, the u.s. senate is in session now and you can follow live coverage on c-span 2. senators today plan to spend much of the day on whether to bring up a bill changing u.s. patent law. the house, meanwhile, meets at 2:00 eastern. they'll consider three bills, including continuing to use duty-free products in the u.s. and expanding charter schools in the country. we'll have that on c-span. c-span3 with a look at terrorism threats since 9/11. panels include members of congress, current and former intelligence and homeland security officials. in fact, the white house counterterrorism director, john brennan, is speaking now. that's live now on c-span3.

and at 8:00 eastern on c-span3, oral history from the days of the 9/11 attacks. senator ted kennedy's assistant, mary beth cahill. that gets under way at 8:00 p.m. eastern. >> this weekend the 10-year anniversary of 9/11 on the c-span networks with live coverage from each of the memorial sites. new york city, shanksville, pennsylvania, and the pentagon. here's our live schedule -- saturday on c-span, at 12:30 p.m. eastern, the flight 93 national memorial dedication ceremonial from shanksville, pennsylvania. and sunday morning at 8:30, a memorial at the world trade center site with president obama and former president bush. on c-span 2 at 9:00, vice president biden from the pentagon. and on c-span3 at 9:30, honoring those who lost their lives on united flight 93. 9/11 remembered this weekend on

the c-span networks. in 1844 henry clay ran for president of the united states and lost but he changed political history. he's one of the 14 men featured in c-span's new weekly series "the contenders." this week live from ashland, henry clay's kentucky home. friday at 8:00 eastern. >> president obama goes before congress tomorrow evening to explain his jobs plan. you can see live coverage of the joint session at 7:00 eastern here on c-span. ahead of that, though, republican presidential candidate mitt romney announced his jobs plan yesterday. it includes lowering the corporate tax rate and eliminating capital gains taxes for middle class americans. 59 proposals are contained in a 160-page book. we will have that linked to our website, c-span.org. he's introduced by congressman joe heck and the founder of the

international truck company in las vegas where this 45-minute event took place yesterday. >> thank you for being here this morning. i'm congressman joe heck. many of you -- [applause] many of you may have heard news this morning about a tragedy in carson city. this morning a lone gunman opened fire at an ihop restaurant wounding and killing a number of nevadans. we just recently learned that two of those nevadans were uniformed national guards members who were there. at this moment we're still learning the details of this horrific violence. as we consider the future of our nation and our communities, our thoughts and prayers are with the victims, their families and friends. i ask that we take a moment and

if you would join me in a moment of remembrance for those victims and their families. thank you. well, welcome and thanks for coming today. it's especially heartening to see such a great crowd turn out and what a great honor it is to have governor mitt romney back in nevada. [applause] it is very fitting that governor romney has chosen nevada to discuss his jobs plan, a state that has been hurt like no other by policies that stifle entrepreneurship, investment and job creation. and it is exciting that governor romney is here today to provide his vision for a

more prosperous america. [applause] so today we visit -- we visit a facility created because john mccandless believed in his country. he drove to nevada with a little more than a uhaul bed full of tools. he worked hard, earning and saving enough money to take a chance. today that chance employs more than 100 people. like any good business owner -- [applause] like any good business owner, john and his sons have had to make difficult decisions. recently at 82 years old john decided to continue working every day reducing his own paycheck so that others could keep their jobs and he's had to

comply with new and often unnecessary federal regulations as government has become a larger and larger part of every business owner's life. it's an honor, it's an honor to be here today at a facility built through hard work, dedication, determination and pride and it's an honor for me to introduce you the founder of mccandless international trucks, john mccandless. [applause] [inaudible] i am the child of a depression. i've worked since i was 7 years old. i've had some exciting jobs. i lived on long island sound in new york, long island. i dug for sand worms and sold them to fishermen for two cents

a piece. and on a good day i could make 20 cents. i used to pick up bottles, beer bottles, usually. people from new york would come, throw them out the window of their car and i would get a nickel a piece and a nickel would buy you a double dipped ice cream cone in those days. i worked in a service station. i was made manager at the age of 13. it was pretty hard for the owner to find anybody better than i because of world war ii. and then i moved to merrisville, california. i picked peaches. worked on a harvester. then went to junior college there. before that i joined the navy. that enabled me to go to college. [applause]

in the navy i was an aviation electronics technician. i spent just two years in the navy and got out of the navy, went to college on the g.i. bill, played football. i had a football scholarship. and then all of a sudden i graduated and i thought, what am i going to do, and i did. i went to work for shell oil company but they tried to make a clerical worker out of me and i wasn't fit for that. if you could see my desk you'd know why. . i told the shell oil people i didn't want their job. i used the afternoon to find a job and the next afternoon i

found a job with international harvest company. i went through the ranks there. trainee, salesman, system zone manager, zone manager, and branch manager in phoenix. from phoenix i came to las vegas . as i said with a u-haul trailer and four-wheel drive travelogue. i found a warehouse, made that nigh dealership for years while i built the new one. international had a program where they loaned me the money to become a dealer. i was at that location i think for 20 years. we moved out here in 1994 and at 82 i still go to work every day, and my wife convinced me i don't have to come in on saturdays anymore. and she wants me to retire and i keep telling her that there's

twice as much husband and half the income. despite the rough economy i haven't had any massive layoffs here. i laid off four people and it really wasn't a layoff. they wrnt doing the job. so they were -- they weren't doing the job. so they were gone. but my service manager found jobs for the four people. i didn't feel guilty about that. i still believe in the american worker. i got through jimmy carter era in in ma lace and was so happy when reagan made me as an american feel good again. the troubles i have now are e.p.a. relations, commerce department, and the nlrb. i don't trust the insider politicians in washington, they have no ideas on how things work with no real work experience.

i'm honored to introduce you to a man who has real experience making -- 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] >> nicely done. quite a story. thank you. thank you. thank you. thank you. >> it is great for human beings who participate in hard work and great for the country. as people work hard we are able to build a strong economy that

can -- a military that can defend us. my heart goes out to those in the military and the lives that have been lost today. we love and care for those people who serve us. thank you to congressman joe heck for welcoming us here in this district. i appreciate his election and look forward to many more. now, this is going to be a conversation today. i don't have a hex written. you can actually see here what i've got. i got notes. i got some notes. there are some things i want to tell you. i'm not going to be reading and i don't have a teleprompter here. nothing wrong with that. i just want to talk to you about our economy. about what's happening to american families. an what it's going to take to get america back to work again. over the next couple months but over the next couple decades. before i get into my plan, i want to describe to you the

vision i have what this country would look like down the road. there are a number of things. one is, middle income americans, the average american, ought to have the highest income in the world. they calculate that as g.d.p. per capita. let's say simply our people should be the best people, best paid people in the world. that's number one. number two, it should be good to be in the middle class in america. you shouldn't have to wonder -- how you're going to meet your bills and how you are going to afford college for your kids and whether you can take the prescription that is have been prescribed. it should be good to be in the middle class of america. america should be a job machine. jobs being created all the time. people looking for employees to join their enterprises. people coming out of vocational schools able to get jobs right away. even those coming out of high school knowing their opportunities for them. we should have a job creating

machine in america. we also ought to see the world buying the things we make. we should be proud of the fact they buy as much from us if not more than we buy for them. i also see america being on the leading edge of innovation. the time and again just like in the past when there is a new invention, a new economy, a new era, that at the very front is america. innovation and being the innovation leader of the world is probably the best leading indicator of what the future will be. and so with those elements of our vision in place we know one thing. we'll never question whether the future will be brighter than the past. we'll know that we are leaving to our kids a leg kwlacy of prosperity -- legacy of prosperity and liberty and america will remain as it's always been, an example of the world, a shining city on a hill, and hope for the earth. that's the vision.

now to john and a few of the other older folks in the audience like myself, that sounds a bit like things were in the 1950's and 1960's and 1970's. you might say can't we just go back to the way things were back then? well, a lot's changed. in our economy globally. over the last few decades. i hope we recognize just how much it's changed and the fact that so much has changed says the right course ahead is to adhere to the principles that made us the nation we are economically but also to update our strategy, our economic policies in such a way that we can conform to the new realities of the new global economy. you know some of these changes. 30 years ago china represented 1% of the economic conditions of the world. 1%.

now they are ten times that amount. 30 years ago america was overwhelmingly the largest manufacturing nation in the world. this year china is slated to pass us as the largest manufacturing nation in the world. about 0 years ago as the nobel prize awards, americans, or people affiliated with american institutions won 3/4 of the nobel prizes. today it's less than half that amount. the world has changed. i mean 20 years ago if you want to make a phone call to the airport, you took out a quarter and you went to the pay phone. and you put it in the pay phone. today you got these things, all right. you got smart phone. pay phone, you put your quarter in, oftentimes you had an operator that came on, told you to put in a couple more quarters and you were connected to another person if you could find them and you spoke voice to voice. if you happened to connect to a machine, like a fax machine.

[inaudible] >> being written all over the world. this is an entirely different economy than the economy we knew in the 1950's and 1960's. and so our economic strategy has to be brought up to date. and to make sure that 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. and to balance our national budget. the right answer for america is not to grow government or to believe that government can create jobs, it is instead to create the conditions that allow the private sector and entrepreneurs to create jobs, create jobs, and to grow our economy. growth is the answer, not government.

now, over the last several months my team and i spent a lot of time talking about what things we think we ought to do to update america's economic strategy for this century. and we put together a plan which i'll describe here in a moment. we have actually gone through an analysis to look and see what the impact of this plan would be on the american people. just to put this in context in the first four years if i'm lucky enough to be president, in the first four years this will grow the economy at approximately 4% per year for each of those four years. it will add 11.5 million new jobs for americans. that's what i want to see happening. now, 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 and 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 market of the united states of america. and so government could charge businesses whatever the heck they wanted in taxes because where else would the businesses go? this is where they were. this is where their capital was. their capital plan. their blast furnaces, assembly lines, transfer lines, all were 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 world. where enterprises want to participate. we now compete for enterprises to convince them to come here and grow here and create jobs here. so it's no longer 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 japan. the average of developed nations

tax rate for corporations is 25%. ours is 35%. we got to bring our tax rate down to that same 25% level. i will do that on day one. there's something else we do that doesn't make a lot of sense, think about this, and again this was from the mindset of the past. what we said in the past was, if you're an american company and you are making money over in some far country and let's say you got a bunch of money you made there, if you want to keep the money there and invest in that country, we'll let you do it tax free. you don't pay any u.s. taxes, you just pay local taxes. if you want to bring the money home and invest here, then we are going to take you at our 35% rate. doesn't make sense, does it? we are going to change that. they call it change to a territorial system. we have to end this repatriation tax and get money to come back to america to create jobs here

and invest in america. we also have to help the american people. and that's why as i look at some changes to our tax policy, the place i really want to make a difference is for the middle class. and one way i'd like to do that is to 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, no tax on interest, dividends, or capital gains. let's be able to save our money for our own future. now, back in the 1950's and 1960's and 1970's you could put all sorts of regulatory burdens

and government burdens and bureaucrat burdens on american business and again where else were they going to go? 24 was the biggest market in the worrell. they just swallowed it and stayed right here. today they go other places. of course it's still important to have regulations. to go after the bad actors and get them out of the marketplaces and make sure markets work efficiently, but we got to stop this extraordinary weight, this burden we place on small businesses, particularly, and middle sized businesses as they try and grow or they won't be able to grow, they won't be able to start, or move elsewhere. so i -- by the way, do you know how much the burden is? this is something that just shocked me. do you know how much we pay in taxes a 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 about $1.1 trillion a year. that's the total amount. the government does a calculation, however, of what

the cost is of regulations per year. don't forget, the total tax burden is $1.1 trillion. do you know what the total regulatory burden is? $1.7 trillion a year. this is not just some little sidish smue. -- issue. this is burdens on enterprises from growing and expanding and starting in america. if i'm in the white house, the first thing i'm going to do on day one is say all those regulations put in place by president obama, by the way his rate of adding regulations is about four times greater than president bush's was. so all those policies, all those regulations he put in place i'm going to stop in their tracks. any of those regulations, any of those regulations that cost american jobs, we are going to get rid of. that's number one. number two, if you have a new regulation you want to enact, you have to remove another

regulation of equal scale. that's number two. number three, we are going to make sure congress gets in on the act. what i mean by that some regulator wants to put in place a brapped new scheme, i want congress if it's a major new regulation, i want congress to vote it up or down. i want people who we can elect or remove if we don't like them having a word to say about the regulations and burdens placed on american employers. now, again, in the past the 1950's and 1960's and 1970's our market was king. everybody wanted to be here. businesses that i knew were oftentimes thinking about international markets as sort of gravy. icing on the cake. this is where the real stuff happened in this market. 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? so markets for our goods an services are expanding extraordinarily. and so we have to rethink trade. there's also a reality associated with a nation that's a high productivity nation. we hear that term a lot. high productivity. what does that mean? americans are the most productive work force in the world. well, 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's going to be why are we going to need so many people? how are we going to find jobs for all those people if the ones we have are making more and more stuff per person? the answer is we'll find more jobs for our people if we can sell our goods to other nations. so high productivity nations it's good to have trade. as long as the people we trade

with play by the rules. over the last 2 1/2 years, theure peaian nations and china have been putting in place trade agreements with other nations and we have been sitting as if nothing's going on in the world. no trade agreements negotiated or signed. and by the way, that puts us behind. those nations that established those linkages with other nations they get distribution, the consumers in those markets get used to the brand names, and when we come in 10 years later there is not much of a market for us. this doesn't make sense at all. i will dramatically increase the interest and the effort in our nation to establish trade relations with other nations. i actually established something i'll call the reagan economic zone. i'm going to say to those nations around the world that want to trade on a fair and free basis we'll honor our intellectual property, our patents, our designs, our know-how if they'll honor those things and float their currency

and not cheat, they can come in this reagan economic zone of prosperity. by virtue of doing that we'll trade in more places and american goods will be seen around the world. one more thing i'll do and that is i'll clamp down on the cheaters. china is the worst example of that. they ever manipulated their currency -- they have manipulated their currency to make their products artificially expensive. i will go after thom for stealing our intellectual property and they will recognize if they cheat there is a price to pay. i certainly don't want a trade war with anybody, but we are not going to have a trade war but we can't have a trade surrender, either. we have to make sure we protect americans. we have a fair trade with nations that are willing to live by the rules. we'll insist on that with all of our friends.

now, you recognize in the energy world do you know that we are an energy rich nation? but we are 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. established bayiers that make it hard to use coal, hard to get oil, hard to get natural gas. virtually impossible to establish a nuclear facility. look, i believe in wind and solar and green jobs are great except where are all those green jobs? and those green jobs cost more than the jobs they create. i want to take down those barriers and get america's energy industries and companies back to work creating energy we need at the price we can afford. i'll do that. now, let me mention one more thing. i have a long list here so i'm

not going to go through all of them, but if you want to convince businesses -- by the way, what is a business? it's jobs. you want to convince people like john to say i'm going to take my life savings and i'm going to go to my family and friends and say would you loan me some of your money and start a business. and maybe it's big companies that want a build a factory somewhere and they are deciding to build it in a nation in latin america or right here in the u.s. or somewhere else. if you want to convince people to invest in america they have to have confidence that america's currency and america's government are stable. and we are not going to find ourselves in a greece like situation down the road. so it's absolutely essential to get this economy going 4r0r78 -- long-term to stop this in---this practice of spending more money than you take in. you have to ultimately balance your budget.

and so my economic plan lays out how i will ultimately get government to shrink, grow our economy, balance our budget sew that -- so that investors in new jobs and enterprises will have confidence in america. now, this is a pretty complete volume of the work that we had over the last several months. it's about 150 pages with 59 different policy ideas. there are a lot more where these came from. but we have one of these for each of you if you'd like to take it and read it. if you don't happen to get one in your hand, go on to amazon-kindle. i don't know if it's free. you can get one of these and look at it. it's in color on kindle. you can look and see the specific 59 steps i would take. this is an effort to really

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 economic prosperity, but that our tactics and strategy have to be updated from time to time, particularly in a world that's changing at the rate which our world is changing. why isn't obama working? why isn't the obama economy so tepid? how has it failed so badly to put americans to work? he'll be giving a speech in a couple of days. i know what's coming. i haven't read it. i have seen version one, two, three, four, and five. they are not working. the reason is -- i mentioned a moment ago that there -- we are now using smart phones not pay phones. president obama's strategy is a

pay phone strategy and we are in a smart phone world. and so we are going to have to change -- what he's doing is taking quarters and stuffing them into the pay phone. and can't figure out why it's not working. it's not connected anymore, mr. president. your pay phone strategy does not work in a smart phone world. we are going to hear about another stimulus and more quarters, trillions of them, getting stuffed in that pay phone and i know what the results will be. they won't be getting america back to work. they won't be restructuring and updating our economic foundation so we can have the find of jobs we need. a middle class that's prosperous. kids coming out of school getting great jobs. leading the world in innovation, continuing to do so. these kinds of outcomes, that vision requires dramatic change not more coins in a pay phone

strategy. this is not just one silver bullet. there is not just one idea in here. there are 59 of them. i take on most every element to get our economy going. it is practical. this was not created by a professor working alone in academia. nothing wrong with that. this is the product of somebody who spent his life in the private sector. and has done business competing with businesses around the world. it's been done with my team. i have a lot of folks i work with on this and helped write this. this is the result of practical work. it's a practical plan to get america back to work. and to strengthen the foundations of our economy. it's also immediate. this is not something which can -- which is going to take years and years to put in place. in day one i have five executive orders i'm going to put in place. i wonder if that works.

there we go. see, look at that. magic of technology. day one i'm going to put in place five executive orders. the first one is going to direct the secretary of health and human services to grant a waiver from obamacare to all 50 states so we can stop that in its tracks. the second one is going to put all of president obama's regulations on hold until we see if they cut jobs. if they do we'll get rid of them. the third one is going to open up production of energy across this country and get jobs as we do so and get americans back to work. the fourth one is going to send a signal while we love free-throw and we are going to open -- free trade, we'll open trade, we are going to clamp down on china for not living by the rules they signed up to live by. we are going to make sure they get sanctioned.

timely, we are going to say to america's workers that we are going to protect you with the right to a secret ballot and not impose unions on you if you don't want unions and we won't have money taken out of your paycheck to go to political campaigns you disagree with. we'll protect american workers on day one. i'm also going to file five bills on the first day. and look to congress to get them in place within 30 days. number one is -- we are going to call it the american competitiveness act. it's going to lower our corporate tax rate from 35% to 25% so we are competitive with other nations among other things. we are going to open markets. we are going to sign immediately the bills that are outstanding with other nations like colombia, panama, and south korea and work very hard to open markets to our goods around the world and get american products around this -- the globe. number three, domestic energy, we'll pursue legislation that allows us to take advantage of drilling in places across this

country that are now closed to drilling. we want drilling for oil and gas that will create jobs and get energy no longer being supplied by the dictates of the oil cartels. retraining. retraining. do you know how many government programs there are? for job training? we all know training for the jobs of tomorrow are important. do you know how many federal programs there are for job training? 47. 47. i hear 48? 49? eight different departments managing 47 programs. only five of them have been evaluated. and the one that is have been evaluated were seen to be a very limited help. i want to take those 47 programs, collapse them down to one, and turn it back to the states. the states ought to run these programs not the federal government. and says down there a down payment on fiscal sanity. i'm going to propose a bill and

ask for it to be passed within 30 days that says this simply, we'll immediately cut all federal spending by 5% step for our entitlements. all discretionary government spending will be cut immediately by 5%. and there's more to come. look, this is a business plan for the american economy. we have to recognize that our nation is in competition with other nations around the world. if we want to create jobs, we have to have the best business plan in the world. we have the best people in the world, the most productive people, innovative people, best universities and institutions of learning. this nation cannot be stopped. the only thing stopping us right now is government. stop government and let's start growing again as a nation.

the plan is not more than 25 or 30% of what has to be done. if we are going to get america going again like it needs to go, we have to rely on a couple other things. one is the american people. we are going to have to work hard. and smart. we are going to have to tell our kids to get the best education they can whether in vocational school or high school to push themselves. we can't sit back and think we are entitled to the great wealth we enjoy. we have to work hard. we are going to have to some demonizing other americans. one of the places where the president has disappointed me the most is the way he's attacked other americans and found someone to scapegoat for any kind of problem that exists. united we stand. united we stand. if we disagree with other people, fine. talk about those disagreements, but don't turn other people into

enemies. even the president, by the way, he's not a bad guy. he just doesn't know how the economy works. he never worked in the economy. i am re looking forward to him coming back into the real economy. let me mention something else. and that is when you have a plan like this, and you have 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 knows what they are doing and knows how to lead. just having a plan, a plan could 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 1960's and 1970's under the leadership of jack welch. apple computer, what a company. even starbuck's, there are stories there about the enterprises led by individuals. i said to myself once, what

would happen if there were competition between jack welch of general electric and a second-year business student describing what it takes to turn a business around. my guess is the second year business student might win. but he wouldn't have a clue what to do in reality. jack welch would know what to do. there was a time when steve jobs was removed from apple computer. some other people had some things on paper that looked smart. but steve jobs was the real deal. he was a leader. he is a leader. he knows. he's done it before. that's the nature of real leadership. i don't have all the answers to all the problems that exist in america and around the world, but i know how to find the answers. i also know how to lead. i was in the business 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. you heard of that company. an office supply superstore. i went around, my team went around asking people what they thought of the idea? every person we talked to said it wouldn't work. would not work. people will not leave their offices to go buy office supplies for a few bucks less. they want convenience. they want delivery. staples will not work. you know what? we proved them wrong. staples employs over 90,000 people. i went to the olympics in 2002, the olympic games in salt lake city city, one of our volunteers right there, this gentleman here was one of my volunteers back in the olympics, he gave me his card as i came in, as i came there, i came there in 1999, january or february of 1999, there were people who said we ought to give the games back because they couldn't be successful. and people came together. that state and those people came together. i was part of that leadership

team. we were able to turn those games around. dick ebber sol, the chief executive officer of nbc sport, he said those were the most successful olympic games summer or winter ever. i came to my state of massachusetts after that. we had about a $3 billion budget gap we had to find a way to fill. most people said you can't do that without raises taxes. i said we got to find a way to do it without raises taxes because raising taxes hurts people and kills business. we were able to do it. we balanced the budget every year. we put away a $2 billion rainy day fund for the next governor to use, and he has. most of it. and from time to time in my life i have been in rooms with people who don't think the job can get done. who get discouraged. i love proving them wrong. i have experience in the real world solving real problems with other people. i know what it takes to get people to work together.

i know that unity is key. republicans and democrats have to work together. democrats love america, too. just like we do. we have different ideas from time to time, but there is common ground. we want to get americans back to work again. and i want to tell you i will use every ounce of my energy and every element of my devotion to get america back to work. i'm concerned about middle income americans. the families all over this country that have really suffered under the obama economy. he's not a bad guy. he doesn't have a clue what to do in part because he's never done it before. and i have. i have done it before. i'll use that experience to get america working again. and i'll make sure that you'll never have a question in your mind whether the future is brighter than the past. it is. that's part of the american heritage. we are going to keep that american heritage alive and leave a legacy the world will always remember. thank you so very much. appreciate your being here today. thank you.

♪

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] 1í1v

>> mitt romney from yesterday in north las vegas. this evening he'll be among the candidates participating in that presidential candidate hosted by msnbc and politico. we'll bring you post debates spin room coverage from california this evening. you'll be able to follow that live at 9:45 eastern on c-span.org. also the entire debate will re-air on c-span radio at about 10:00 p.m. eastern. on the issue of jobs the president gets his turn tomorrow evening. he'll address a joint session of congress, laying out his jobs plan. we'll have coverage here on c-span beginning at 7:00 eastern. we got a small business perspective and preview of the president's speech on this morning's "washington journal." . >> "washington journal" continues. host: karen karrigan is the

president and ceo of the small business council. we want to hear your take on jobs and the economy this week. what is happening on that front as far as hearing the plans from some of the gop presidential candidates? the president, what do you want to hear from him? guest: small businesses are really looking for some more leadership, definitely. more than just hearings. there have been a lot of speeches, a lot of different types of plans that the president has attempted to implement over the last couple of years, and they have not been beneficial for small business owners and the economy, from their perspective. frankly, i think that their expectations are fairly low. they would like to hear him

address their key concerns. obvisly, revenue is weak. we do need to see an uptick in revenues. the economy performing, overall, very well. they would like to see some additional moves, like the one that he made last week, reining in epo. there are a variety of motions moving to agencies right now. over 200, many of which impact small businesses. the reining in of regulations. i think that every time the president talks about tax increases, it creates

uncertainty for small businesses. i do not know what the taxes are going to be in the future. there are a lot of items that are expiring. stability in terms of the tax system. relief on the regulatory and. being open to listening to ideas to improve the health care reform he listed. there will be many elements of that that will continue to raise the burden and cost on small business owners. host: we do have a line set up for small business owners. and democrats, 2-624-1111. for republicans, 202-737-0001. for independents, 202-624-0760. if you are a small business owner, 202-737-2579.

let's look at the cerage from "the new york times," on the president's plan for this week. host: going on into the story, in "the new york times," moody's has reported -- tax cuts expiring in 2012, what you think of that? guest: extending it? it would put more money into the pockets of consumers and continues to be a decent idea.

from the smallusiness perspective, it is not enough. certainly, we continue to see increases in prices, fuel costs, things along that line. it is more of the same and i think they are looking for more bold ideas and action. what is happening with the tax code, are we going to extend the current tax group? are we going to rein in an additional regulations? what else can we do on health care front? without continuing to see the upticks that we have seen that have been uearable for small business owners, who have to provide insurance to compete in this economy. host: c-span will broadcast the president's speech tomorrow night. he will address a joint session of congress from the u.s.

capitol building to the house chambers. let's hear from janet, small business owner, joining us from baltimore, maryland. caller: good morning. host: go right ahead. caller: one question. i would like to know your guests definition of small business. host: good question. let's start there. guest: the governme's definition is any business with 500 employees or less. in terms of the makeup of our organization, our members, the employee sizes are much smaller than that. 90% or more members have 10 employees. if you look at the $5.9 million in employer firms that existn this country, many have 100 employees or less.

those smlusinesses that have employees with five, 10, 15, 20, even 100 or less, you get more to mid-sized choices in this rae. caller: i have a small business. i understand what she said as far as president obama, but i think he has done the best that he can with what he has as far as trying to get revenue for small businesses. my business thrived when president clinton was in office. i was able to employ individuals in my small-

business. that is why, when i asked for the definition, i am not thinking of the small busines making ove $1 million per year. i am talking about someone who on employs two people to five people. guest: that kind of business is really the heart and soul of the american economy. in fact, 21 million of these small businesses are self- employed. they do not have any employees, though some may aspire to that. i agree, moving forward, particularly now, we are facing the prospect of a government recession will the president and congress need to find common ground on issues. i think that they can do. there are bipartisan bills

before congress waiting for more small business input into regulations. perhaps there are tax proposals or additional ideas for precluding the health-care laws in place. there are areas of common ground that they just have to work through. host: ohio, good morning. caller: good morning. how are you. listen. the trouble, nowadays, with all of the people who are making -- host: i think that if you turn down your television --

caller: i do not hear the television. host: ok. caller: the people who have retired and are making 100% of their top dollar, they have 100% of their health-care and everything like that. i know someone who is making $120,000 and he is 86 years old. he has been retired for 37 years. host: we will leave it there. guest: i think that what she may have been addressing was the area of entitlement. social security, perhaps. medicare reform.

certainly, that is a huge issue that needs to be addressed. certainly, there should be income testing into those programs, as well as, in terms of social security, looking at the retirement age. i will be interested to hear, tonight, during those republican presidential debates, the specifics from some of the candidates and what they address in terms of those issues. oif you what spending and control, you have to address the issue of entitlements. reform ideas out there, that issue can be tackled right away. there just needs to be political leadership on this issue.

host: let's listen to mitt romney, speaking yesterday in nevada. >> why is the obama economy so tepid? how has it failed to put americans to work? he will be giving a speech in a couple of days. i know that it is coming. and 1, 2, 3, 4, 5, they are not working. [applause] we are now using smart phones, not pay phones. is adent obama's strategy payphone strategy and we are a smart phone world. we have to change what he is doing. he is taking quarters a stuffing it into the pay phone

and cannot figure out why it is not working. it is t connected, anymore, mr. president. coast of that was mitt romney, talking about his jobs plan yesterday in nevada. -- host: that was mitt romney, talking about his jobs plan yesterday in nevada. guest: with it in a very modern, competitive, fast-paced, changing economy. the the old kinds of policies and rules, centralized types of government, washington knows best, just does not cut it in today's economy. so, we need more policies that empower individuals and

entrepreneurs. if you want to continue to get that type of innovation and is unable entrepreneurship, government has to get out of the way. particularly when you lk at what is happening on a obal leveles around the world. perhaps they are not major competitors right bell, but they are competitors. they are cutting taxes, elinating capital defense taxes, simplifying the tax system. and getting out of the way, really, of regulatory relief and reform. capital being as mobile as this is, it will go to the lowest tax

friendly haven. pakist, a few years ago, they had major plans in place to put their entrepreneurs out to attract investments. i still argue that we have the most creativity in the world and we do not have the corruption issue that many of these countries do. still, we need to be getting better. and if we are not getting better, we are getting worse. we are doing a good job at attracng capital, outside vestors, and corporations, doing business over there and building facilities in this country.

host: and twitter -- guest: they can. they certainly can't. right now they are hamstrung b government, in terms of burton's and regulations. the co of federal regulations as 1.75 trillion. small businesses are effected more than large businesses. small businesses, a very smallest, those of 20 employees or less, have incurred regulatory burdens of $10,000 or more. so, yes, small businesses can compete on the international level, if they are given the opportunity to do so. certainly, more small businesses are competing in the international marketplace in terms of selling their goods and services abroad, but again,

there are some issues and regulations, and paperwork, and burdens involved in the process that are needing to be fixed, and needed to be streamlined. h., karen kerrigan is president anceo of the small business and entrepreneurship council. she has also been involved in the women's on to producers inc.. she participated in the u.s.- iraq business dialogue, and joined a bipartisan debt reduction task force in february of last year. let's go to the telephones. if you are a caller that is an owner of a small business and want to weigh in, you can do that. here are the nbers to call.