300,000 people who were potentially exposed in and around the zone. you are right, as we say we know what the potential consequences are. it is from exposure in the environment. one tries to avoid exposure. it is always better to watch for it and then to have to treat it. that is where these zones get set up. some places are evacuated. when i was in fukushima, we drove across.

there is 10 miles of land that is not occupied. it is stunning the fact that has. the japanese are beginning to clean some of them up. some sites may not be occupied for many years. it is a huge social disaster. it is a huge economic disaster. some of the more important consequences are not from the radiation but from the stress. people were displaced. a lot of the long-term effects will be dealing with potential stress outcomes on people during this incident. host: this tweet -- guest: thank you.

to my knowledge, chernobyl is one of the biggest with this radioactive plume defect. i am not an expert on what has happened locally in chernobyl. i was there to see it. it was striking to see the amount of damage in the land that is not occupied. i believe there is some land being preoccupied, but i am not expert enough to comment request i. host: it is completely deserted? guest: some reactors are still working. there are people working in the reactor. when i was there, six or seven years ago, it was pretty much not occupied, but there is wild life. >> are we seeing radiological

we seeing radiological effects? guest: i am not an expert, with some abnormalities, they let it into the food supply. until they began to cut it off, some people drank radioactive milk which gives them an abnormalities. you have a high incidence of thyroid abnormalities, but a small incident of thyroid cancer. the bad news is you have the road to cancel -- you have thyroid cancer, but it is treatable. one is to keep watching. we know secondary cancer can come decades later. we do lifelong studies.

one of the most informative studies the previous caller asked about was from focusing me -- fukushima, and the incident began commission we had was valuable. -- the information we had was valuable. this all goes into the algorithms' we developed -- please to be treated, followed, so forth. host: do you know how many survivors of nagasaki and hiroshima all are still around? guest: they are still in the thousands. caller: i just wanted to say

this is the most wonderful format for when to speak their mind to the country. i added a bunch of stuff for you here. you've been a ground-floor physician, on the front lines of a topic that is usually not addressed -- is one of the things we really do not want to ever encounter, one, is the public diu of the blast radius one of the criterion is that you want to alert the people to? cit -- host: what you mean by public view? caller: there is security, and what is disseminated to people on their news reports. if i have a blessed. coming towards me, i want to know if the wind direction is

points to contaminate meat. i want to know that. second, how are you going to deal with the tree irish? host: let's get an answer. let's walk through what has been developed. guest: thank you for those questions. so, the immediate advice would be to go in, stay in, tune in. try to get into a reasonable shelter. the major risk from fallout is the radioactivity. so, you can avoid radiation by what we can call shielding. if you have a structure that has good shielding, it will reduce the radiation. if you are there a shorter amount of time, the further you go, the better. so, the recommendation that we do, it is that you go into some

kind of shelter. if you are in a good house, go into the basement does that make a difference? it makes a huge difference. if you are in side of one of these baseman's you'll get 1% or less of the radiation dose you would get in the street. so, you might be stopped or enclosed for a while, but you might get very, very low radiation. even people in the hotter zones, if they were in good shelter, may have to stay there for a day or so. that is opposed to a nuclear power plant. it goes through about 10%. you are down to about 10% of the level you have seven hours before. you are inside, and you avoid a lot of the radiation. also, when you look at weather

pattern information very quickly, we will know which way the wind is blowing, which way it is not blowing. a lot of the radiation that is going to fall at a high enough doses to cause the centrum will fall in our, an hour and a half or so. so, after an hour and a half, you really know the people at risk, and you will have a lot of information as to folks that might have no radiation at all. it is part of the plan we developed. it is called mad mad. we know where they are. they are closer respondents for the medical responders. the toll, that is a big issue. again, what we have done which has been politically good -- has

been particularly good as far as responses and recommendations is out there in the public to access, so we can get feedback and comments. which is published in march a whole issue in a journal on nonnuclear detonation, and it addresses the skill issues. how do you manage your medical response when there are not enough resources to go around. can you deal with triage, even having it brought down to how you can triaged one person depending on the radiation dose and so forth. host: dr. norman coleman is our guest, talking about potential radiation fallout and the government's plans to mitigate that fallout. one of the things he developed in your response plan, in the first 24 hours of that plan, establish a decontamination site, access radiation injury, begin treatment of obvious radiation casualties, activate

victim tracking system and activate mass fatality plans. anything there that you can speak to to give us more information on what it means? guest: we expect most medical responders will not spend a lot of time learning about nuclear incidents because it is something they are really very unlikely to face, almost zero probability. what we have developed is what we call just-in-time tools. whether a website called radiationemergencymedical management -- phe.gov, or if you put in remm google it comes out on top. it has every detail you can and mention about how to manage -- details about medical management, counter meadows -- countermeasures, decontamination.

we worked with a group of the radiation injury treatment network, which are medical and he matell logical experts that provide advice and medical care for rhodesian casualties. we try to set up networks of people who that day jobs, but if something happens they can quickly keep in in response mode. host: texas, bud, you are on with dr. norman coleman. caller: i would like to throw as an area out. we have a lot of nuclear power plants in the east coast, even biological and chemical facilities. recently the canary islands were active volcanically, and there is a scenario that exists where on one of those islands there is a split and it is about to expel a bunch of -- like a year she landslides -- into the ocean. -- like a hero shima landslide into the ocean. eight hours, what do you do with all the nuclear power plants and biological facilities

on the east coast, you have a 200-foot tsunami coming your way. guest: thank you for your question. what was interesting in japan, the nuclear power plants actually behaved like they were expected to be saved. they all went through their shutdown procedures. what the real problem was, was the loss of power. so, the earthquake and tsunami that knocked out power prevented the people from being able to cool the reactors. we have exercises that we run through various scenarios. we have the nuclear power plant exercise. we had one last year. when it happened last year, we had worked our way through what irresponsible look like.

we have real-life exercises. so, we do plan for these things. one can never exactly plan for what one will see, but one can plan for enough different things so when something comes up you put all your experience in. that is what happened in japan. it is a combination of problems. this really came in handy for us. a lot of other u.s. agencies, the department of energy, all of those experts but to make a big difference.

guest: the responses are done locally. nuclear regulatory commission and the power plant worked out with the local community is what kind of plans they would need. the biggest thing is to avoid the plum. so, if you are warned about the that would be sink's center on the ground to avoid. i do not have the details of their plan, it is not as outrageous as it seems to be out to be able to actually get some organization that people could follow instruction, and actually protect themselves from the major harm, and then to the next response. if there were an accident is it

your office put the responsibility to initiate the plan? >> the power plant is responsible. health and human services are not directly involved. we are involved in health. any issues that came up to be ready for, we would be ready for. so, for those in need extra medical help, this or that, they would be able to provide resources and information. you had talked a little bit about basement's been a little safer. we are here on the sixth floor. if this building were attacked, and there were fallout, would this help to be in a building? guest: fallout is fallout. if you stay away from the roof and the ground, you are better off. if you go inside the building,

you have the distance effect. if you go downstairs, you are below the ground. even inside a car, which we do not recommend, it should only be about half the radiation even modest buildings, you'd be able to get yourself down to 10%. that is a huge difference. it would be a huge difference between getting a dose that could be fatal. it is a big difference. there are some fairly easy steps that could help to do that. is it all about protecting inhalation? guest: the plume is. what's it is down, that is it. then, the ground is what you worry about. initially, at getting them out, preventing them from inflation

would prevent that. the next call comes from washington, -- host: the next call comes from washington, d.c.. go ahead. caller: i do not understand why they do not issue iodine especially in cities prone to terrorist attacks. it is effective fed by the time you try to react and distribute in a time of panic it will be too late. this could save lives, especially kids lives. i do not understand why the government does not start distributing some quantity to groups and especially schools. in my opinion, every elementary school should have a few bottles. this consisted kids. guest: thank you. it is a big issue with for pushing up. it is a specific and adult.

-- antidote. it is not a radiation protection drug. it is a major problem, because it is part of the plum. the nuclear power plants, and their local regions all have their plans for how they are quite to shelter people, he deftly people, or distributed it. potassium iodide is no benefit at all for nuclear detonation. the fallout has so many other things that the radioactive iodine that is part of that is really a small component. in some ways, we actually would be concerned if people went out looking for potassium iodide wind it is still in a benefit, the exposed themselves to other risks when they are going to a medical countermeasures that is not know necessary. the federal government does have some potassium iodide is

still on hand, and we had some that we offered to japan. but the need for potassium iodide is really acutely during the plume and by the time all was said and done, japan had taken care of all its issues. but i am very glad you asked the question. host: sugarloaf, pennsylvania. you are on with dr. norman coleman talking about potential health hazards of nuclear fallout. caller: good morning, dr. coleman. i have a comment. i am one of many emergency responders to live within a 10- mile area of a nuclear-powered plant -- power plant, susquehanna. each year we have a drill in conjunction with pp &l where we do different scenarios, set up decon and everything else and

every year we do this to keep up-to-date on what is going on. if this plant has an emergency, being i am within 10 air miles of the plan -- and i do have a mountain between us and the plant -- when there been any way to predict approximately how long it would take for the plant to currently knelt down and to start releasing the actual fallout radiation that may affect us? host: we will get dr. coleman to answer that and a second, but if you could, do you find the practice and the training you get every year helpful? caller: yes, definitely. and these practices also include every emergency country in the 10-mile area, in the 10- mile circular air mile area. that includes several counties.

host: as a first responder, are there any changes you would expect -- suggest to the plan? caller: not at this point. the plan we work with is excellent and we have been rated as one of the talks in the country. pennsylvania power and light company has also been rated highly what their procedures they have in the plants and surrounding the plant. host: ok, thanks. dr. coleman? guest: it sounds like you are the perfect caller to reassure people there is progress and for this. i am not a nuclear engineer, but what i do know, from what i said in fukushima, it takes a while before these things have problems -- it could be hours or days. and even with three mile island, a lot of the precautions built into the plants shut them down and as contained the release.

again, there may be more expert than i am -- but these can take hours, days, or longer before plumes get released, and that is why you can do evacuation's. and you can find out which way the plumes are going. but with nuclear power plants, they connected to u.s. releases. with a nuclear detonation everything happens quickly. but with a nuclear power plant you have to watch the releases over time. that was an issue in japan, too. what are happy to have the expertise of the u.s. what. one can map plumes and whether the infection -- directions and knowing what is coming out, there are pretty good models of where fallout may be going. it is good to hear how well you are prepared for this.

thank you for that. host: phase 2 of hhs's plan of public health of fallout. it radioactivity every six hours. prepare for transfer of victims to hospitals. open other centers and shelters. measuring read or activity every six hours -- was a drop quickly? -- measuring radioactivity every six hours? guest: one thing in japan that was reassuring, people are terrified irradiation because you cannot see it or smell it. but the one thing you can do more than any other toxin is measure it, and you can measure it down to very low levels because the geiger counters are very sensitive. the answer is, the fallout, about every seven hours it goes

down to 10% of its former level. in eight hours, the fallout will be 10% of what it was initially. people who are inside for the first 12 or 24 hours, the dose outside might be a lot lower so now it may be ok for them to come out and be evacuated. being able to measure things is really important. host: virginia, we have about 30 seconds. caller: yes. i am calling because about 10 minutes from where i live, we have like $10 billion worth of iranian out here -- uranium out here. there are a lot of people who don't want the uranium mined. but they say that the radiation from it will make everybody have to move. is that true? if they mine that? host: i did not know if it is in your expertise.

host: it is not, but the good thing about radiation is you can measure it. i would unimagined that the higher doses -- one can measure but the doses would be and i suspect if you are not anywhere near it in there should not be much risk. but the people involved can deal with that for you. host: dr. norman coleman of hhs, the office of preparedness. if you want to find out what the health and human services department has done, the plan they have put in place, you can go to phe.gov, which stands for public health emergency. dr. coleman and the national cancer -- from hhs and the national cancer institute, thank you for being on the washington -- >> former libyan leader muammar gaddafi was killed in his home

town of surt. french defense officials say a french fighter jet fired on the convoy. president obama will make a statement coming up to date to o'clock p.m. eastern. back on capitol hill, the senate education committee has been meeting on the rewrite of the no child left behind law after an agreement was reached to accommodate some of senator rand paul's concerns. they have been marking up the bill. there are a series of votes under way on the senate floor. once that wraps up, we expect the education committee to resume their markup, and we can follow that live c-span.org. in the meantime, we will show you some of that education committee.

>> there might be some symbolism to this, but i think it is important that when a lot has 37 states desk for waivers, d.c., and pr, there is something wrong with the law, and i would give the people on the committee the opportunity to retail no child left behind. there is a significant coalition of people that think we have made a mistake. the national education association says a while probably increase in some things, this bill relies heavily on outcomes of test scores, provides top-down models of school turnaround, ticks away teachers' rights to any real voice in their own evaluation system. heritage, a conservative organization, says wall local districts are crying out for more freedom from red tape, this proposal further empowers the u.s. department of education

while weakening schools direct accountability to parents and teachers. the former assistant secretary of education under the esteemed center of tennessee was a big proponent of no child left behind as were many republicans when announcing some of the problems that come about. so, you have a strange coalition. you have conservatives, liberals, democrats, teachers, all saying there are big problems, not little problems, but big problems with no child left behind. she has written a book that talks about how testing is undermining our education. she says "i believe no child left behind as they sailed policy, has dumbed down the curriculum, narrowed the curriculum, and so much time is being spent on test prep and contest that are not really good tests, and in some cases even

fraudulent scoring of the test. the children are getting a worse education." my amendment would scrap it completely. that is a dramatic change, but what we have been doing has not been working. there is no objective evidence that no child left behind has improved sting. it is a top-down model that applies universal standards that ignore and negate the individual aspects of education. it isn't possible for washington to judge who is a good teacher and was not a good teacher. most states have a policy for developing testing. most states have policies with regard to having to judge which teachers are successful. it is not perfect. there are some good teachers and some bad teachers, but to presume any of us in washington can tell the difference and be aware of what goes on in the classroom is a real mistake. i know you will see my proposal as being too dramatic, too much, and you cannot support

it, and i will probably get a few votes, but ask your teachers if they would vote for a repeal of the child left behind. i think if you polled teacher, 80% or 90% of them would report -- vote for a repeal of the whole thing. it is not working. it is complicated to determine who is a good teacher and who is not. you need to be in the classroom if you are a principal, superintendent, school board, or a parent, looking at that teacher and finding out how that teacher is doing, how was listed in performing? tests are part of it, but they're not the whole thing. you need people on the local level determine who are good teachers and to are not good teachers. while i do not have high hopes for winning on this amendment, i would like to get people on record for those of us thinking that there's a preponderant of evidence to think no child left behind is not working and would

signal that you would take a more dramatic step and a limit this whole thing. thank you, mr. chairman. >> senator bingaman. >> all right. let me just ask a question on this. as i read the amendment it says it doesn't refer to the elementary and secondary act that was first enacted in 1965 and the second sentence there the elementary and secondary education act of 1965 shall be implemented as if such act, that is no child left behind, the 2001 act, had not been enacted. so i assume what that means is that we would go back fought --

to the elementary and secondary act under president clinton in 4-, it's not that you repeal the elementary and secondary education act of 1964, but put back in place the elementary and secondary education act that was in place in the clinton administration, am i right about that? >> correct. i would love to do it that way and then start from scrafment instead of trying to fix something i think is so horribly broken that 37 states want no part of it and i suspect probably more than 37 states want no part of this but rather than fix it, let's get rid of it, let's go back to what we had and see what we can do. there is still federal money to dispense to schools. let's work on incentives. i'd much rar send -- for example, in my child's high school, they go to public school in bowling green. there's one teacher who comes

before school every day and after school. he does all of these advanced periods. they call them zero periods and all of these advanced placement help. and i think most of it without any adutional remuneration. he is one of the best teachers i've come across, reward him with more money, you know. when we look at our classrooms, if let's say in kentucky we spend $700 per pupe i and you have 20 in the classroom, that's $140,000. we couldn't always do it. on occasion we could give one teacher $140,000. you know, we can't always do that because there's middle men. let's not try to make more middle men in washington. no child left behind doubled the size of the department of education. doubled the funding for the department of education as well. since 2001. let's take some of that money, let's go back to a smaller department of education, put some of that money let's use as incentives to give to better teachers. let's not judge who the better fichers are. let's late the localities are

determine who the better teachers are. let's in essence sort of block grant that money back and let it be spent at the local level. >> senator alexander. >> mr. chairman, senator paul's arguments sound familiar to me because 30 years ago as a young governor i went to see president reagan and i asked him to make a grand swap which was to swap all of elementary and secondary education from medicaid. in other words, the federal government would get completely out of elementary and secondary education. i thought that was the states' responsibility, and the federal government would take over all of medicaid. which would be the states would be in much better state today if that would have happened. i still think that would be a good idea. but that's not going to happen. i mean, president reagan and i were the only people for that at that time. and we've moved on down the road, and i think the better

course for our children and our schools is to try to fix no child left behind. not end no child left behind. so while i respect his arguments, the course i prefer to take is to fix it. and this bill, and we're beginning a process here that i have high hopes for because we might actually legislate on this bill. that is to amend it in committee some, amend it a lot on the floor, take it to conference with house members and bring back something and get a result. i think that's within the realm of possibility. fixing no child left behind. and when we begin these discussions a year and a half -- when we began these discussions a year and a half ago, identifying eight or nine problems and fixing it would be better than scratching it and re-authorizing a complicated bill. and the harkin-enzi draft moves us in that direction in some important ways. it sets a more realistic goal. it requires states to have high standards. it eliminates 95,000 public

schools from the business of washington deciding whether schools are succeeding or failing. it helps states fix the bottom 5%. it encourages, as i've mentioned earlier, teacher-principal evaluations related to student achievement. that's an important step forward. it continues the reporting requirements of no child left behind which have been a valuable addition to what's been going on. it creates secretary's report card, not a requirement but a report card. it beefs up the teacher irn sentive fund which has been useful in encouraging teacher evaluations and it authorizes race to the top. that has a number of provisions in it that i would like to get out of it which in effect create more of a national school board but i am going to keep trying to remove those provisions and get it closer to the legislation senator isakson and i and burr introduced a few weeks ago. i think i have a chance doing

this as we go through this process. so i respect that point of view but i disagree with it. i think the more reasonable way to deal with the problems in no child left behind is to fix it, not end it. and i think we should try to fix it fromptly. we've been working on it for four years. if we don't fix it, our inaction will turn arne duncan, the secretary of education, into a waiver signing czar because he says there will be 80,000 schools defined as failing. if we had an education czar arne duncan would be a great one. i don't want one. i think we should take this beginning we made and fix no child left behind and make sure that in the rest of this process that we open it up to amendment and have votes and improve it and be willing to accept some provisions that aren't exactly the provisions that any one of us would have preferred if we were writing the bill by ourselves. >> senator bennett.

>> just three quick points, mr. chairman. first, i'd like to endorse virtually everything that lamar alexander said. second, i want to thank secretary duncan for responding to the communities in this country that are asking for relief from the laws that exists today. you know, people have been critical of that. but i think as we observe that waivers have been asked for by 37 states. yet an administration is responding to the local level. and i think it's important we acknowledge that response. i'm very glad we're legislating now because i think it's important for us to do our work and respond to our local communities as well. third, i think it is important to have a discussion. we're having it in this committee about what the appropriate federal role is and what is appropriate to do locally. i used to say when i was superintendent no kid in denver would remember when he was

superintendent when they were there. my job was to make sure is they remember their teachers as favorably as possible. my own view is our job ought to be we expect more of our states and our school districts. we should assist them, but we shouldn't be telling them how to do the work. having said that, i just want to say for the record that we have is a vital national interest in what happens in our schools. even though a lot of the work is at the local level. you know, it would amaze people to know -- people don't know this by the eighth grade only 16 out of 100 children living in this country can read proficiently. 16. 84 kids that are living in poverty in this country out of 100 cannot read at the eighth grade level. only 17 of 100 are doing math at grade level in the eighth grade in the united states of america in 2011.

they're not going to be able to contribute meaningful to this democracy or to this economy if they can't do math at the eighth grade level or read. and i knee the senators, i hope, agree with that that we have a vital national interest. the future of this democracy depends on this. the worse the unemployment rate ever got in this recession, in this recession, the worst recession since the great depression, the worst it ever got for people with a college degree was 4.5%. we have a structural issue in this economy that cannot be addressed if we continue to fail the children that are going to america's schools. and we didn't know what i just said before no child left behind was put in place. we didn't know it. there isn't a fiercer critic -- maybe one -- the fiercer critic

of the existing law other than me on this panel, but we ought to understand the value of it as well. and we ought to understand that what flows from this discussion, i think, is that we need to radcally overhaul in this country the way we do -- deliver public education. we're not going to do it from here. i agree with that. but we have to do it. we have a completely obsolete system that was developed in colonial america that was brushed off when we had a labor market that discriminated against women and said you have two choices. one is being a teacher and one is being a nurse so why don't you teach julius caesar for 30 years of your life. we can't imagine paying the person more than we should and we should. so i think it's really important that we keep the

focus here and the attention here at a national level that says -- that this isn't just something to be left somehow to other folks. that we have to set a standard and a set of expectations and then we got to empower people to do the work at the local level. they're the ones that can do the work. but we spent a lot of time speak being people's moral right to in and that and health care and other things. let me tell you something, as a parent of three little kids, i can tell you that if my kids faced the odds of children living in poverty face, i'd quit my job tomorrow and spend my time making sure that those odds changed. that's the way we need to think about this. so i'll oppose the amendment. >> could i make a quick response? >> senator isakson. >> sorry. >> i had already indicated he wanted to speak. >> he'll probably want to

respond to me. i completely respect the senator from kentucky but we're all avoiding what is the obvious. the reason there are 37 schools looking for waivers, there is something we didn't do in the re-authorization, the no child left behind. i disagree categorically about the statement this doesn't focus on the individual because no child left behind was the first federal focus at the local level and the individual. we didn't know how an african-american, non-english speaking student was doing or whether they were getting left behind. we were able to disaggregate people by race, by ethnicity, by disability. we created a measure called adequately yearly progress. when they made that year one they had to do better in year two. and the reason you have more people by being labeled as needs improvement and i reject the concept of failing schools. that's a media word. that's not a no child left

behind word. is because the better they did in a.y.p. the more difficult it was to meet a.y.p. next year. that's a good thing. so while i understand there are things we need to do, we needed to do them four years ago when this was supposed to be re-authorized, not dilly-dally around when the schools had the pressure put on top of them more and more and momplet i don't agree with the amendment. i think we should do what we should have done four years ago now and address the problems of no child left behind and never lose fact for the first time six -- 10 years ago we started focusing on individual children and their individual achievement and got away from mean testing average and never go back. i oppose the amendment and i appreciate the things that came out of the elementary and secondary education act which passed in 2001. >> the gentleman from kentucky. if i want to add one thing, this is a great discussion.

i pay close attention to it. i'd make one observation. if everyone thinks the waivers are going to do anything, those waivers, as far as we've been able to determine, might affect anywhere from eight to 20 states. the urgency of what we're doing here is that we cover the flakes. -- nation. all states will get relief and not just some select few that may be as few as eight, may be as maximum of 20 states. there's an urgency i believe for us to complete our action and move it legislatively. senator paul. >> mr. chairman, i'll just make the point that i think there's so much wrong with no child left behind that rather than reducing some of the burden, let's scrap the whole thing and if there's anything good in no child left behind, let's add it back in. i think the prepond rance of no child left behind was a mistake. i think the fact that 37 states wants out of it and two territories want out of it is a significant indication of its

failure. my son's high school in bowling green, kentucky, was ranked as one of the top performing high school in the country. they have the magazine cover when you walk in. they were ranked as a failing school by no child left behind. it's -- it's not working if a school that we're very happy with, it has very high achieving kids and has some low-achieving kids too and that's complicated. i don't think you can fix that either on how to make them all high-achieving kids. it has some extraordinarily young things. i don't care if you are poor and have shoes on your feet, if you're smart and at this school you can take a.p. courses and go to college with 16, 20 college credits by the time you leave high school. it's for you regardless of your culture, background, ethnicity. it's there for you i'd also say if we repeal no child left behind it wouldn't be as if there's no federal federal government.

started back in 1965, probably before 1965 there was little involvement. it evolved for 30 some-odd years before we then doubled it. the other thing is we're broke as a country and spending dollar after dollar we don't have. we're borrowing 40 cents out of every dollar. we don't have money at the federal level to spend things that aren't working. i think we should get rid of it. if there's any part that should be useful it's the minority, not the majority. let's move forward, not backwards. >> mr. chairman, i just want to add one sentence to this discuss and that's what we're doing right now is repealing no child left behind and replacing it with a new bill. and we want that to be as good a bill as possible. >> no more discussion then all those in favor of the paul amendment will say aye. those opposed, no. >> can we have a recorded vote?

>> senator wants a recorded vote. clerk will call the roll call. a no by proxy. >> senator bingaman. >> no. >> senator sanders. >> no. >> senator casey. >> no. >> senator haggan. >> no by proxy. >> senator franken. >> no. >> senator whitehouse. >> no. >> senator blumenthal. >> no. >> senator enzi. >> no. >> senator alexander. >> no. >> senator burr. >> aye by proxy. >> senator isakson. >> in on the paul amendment? no. >> senator paul. >> aye. >> senator hatch. >> aye. >> senator mccain. senator roberts.

senator murkowski. >> no. >> senator kirk. >> no. >> i'm sorry? >> no. >> chairman harkin. >> no. >> 17 nays, three ayes. >> 17 fillets, three ayes. the amendment -- 17 nays, three ayes. the amendment is not agreed to. senator haggan has an amendment. senator sanders and i recognize senator sanders. >> yes, thank you, mr. chairman. this is sanders title 1. >> senator is recognized for amendment number 1. >> thank you. this is a pretty simple, modest amendment which i hope is not

too controversial. i think everybody in the congress is deeply concerned about the high level of dropouts that we see in our school systems. approximately 30% of our children drop out. among african-american kids, 50%. latino kids, the number is even higher than that. and i know that in this bill there are various tools that we are developing to try to address that issue. all that this amendment does is give us a little bit more information about the number of kids who are dropping out. as i understand it, what the bill says is we will keep track of kids from grade nine on, kids who enter high school drop out, we now know who those kids are. the problem is there are kids who leave elementary school, graduate from the eighth grade

who never go into the ninth grade. so all that this amendment does is say that states should keep track of those kids as well to give us a better understanding of the magnitude of the dropout problem. that's about it. >> question? i'm sorry. who sought recognition? senator whitehouse. >> i have a question about how the local education agency would know who has transferred to and enrolled in a school outside of the local education agency. >> the process would be the same as is currently the case for tracking kids from the ninth grade. what the school district and entity would not be asked to do is to track kids, for example, who have left the state. the issue is if kids are staying in their same area and drop out we want to know who those kids are and what the

numbers are. and so it would be the same process as is currently in the bill starting in the ninth grade. >> and you can do that with information that is already collected under this bill? >> yes. >> thank you. >> mr. chairman. >> senator alexander. >> this graduation rate is a big important issue. i compliment the senator for his interest in it. i hope that between now and the time we have a hearing, go to the floor, we look at this amendment and the provisions in the harkin-enzi amendment carefully because states and local school districts, number one, have had a very difficult time defining what they mean by graduation rate. that is not easy to do. sounds easy but it's not easy. and then the real world of public education today is -- would be surprising to many people.

i mean, we have, you know, classrooms, especially along the border but even in places like tennessee where students ariff in october and leave in march and no one knows where they go and no small school district has the capacity to keep up with it. maybe we have some capacity to keep up with them. it would be a very good thing if we could do a better job of following a child from school to school so that if his military parents move from here to there that the records go and in our mobile society we deal with that. but i hope we are very careful where it. that's all i'm saying, we don't impose an unrealistic requirement. either in the draft amendment or with the senator's amendment. so i don't oppose it. i just -- i just have questions about it. >> if i might clear up one thing, i want to ask the senator, i think, senator

alexander, this only applies -- i'm told this amendment only applies to districts that get these competitive grants. in other words, they apply for competitive grants, they have to agree to do this. that's what i'm told. i want to know if that's correct. >> yes. >> so it doesn't apply to everybody? it just applies to only those schools who apply for the competitive grants? >> yes, that's correct. >> so it doesn't apply to all of them. anyone else seek -- >> mr. chairman. >> senator isakson. >> there is currently not a mechanism to track from middle school to high school, so this would -- anybody -- in is going to require anybody applying for these grants to figure out some way to track and figure out what happened to somebody because mr. bennet may know but i don't think there's any existing way you can. you have to create a mechanism to do that which probably means you have to create a person to carry out that tracking. that would be my guess. >> any other --

>> mr. chairman? >> senator murkowski. >> so just to clarify then from senator isakson, if you do receive the competitive grants and you cannot establish it, i guess it becomes a requirement you must establish this tracking mechanism for kids moving up from middle school in order to receive these competitive grants, is that correct? >> yes, i think that's right. in order to receive a competitive grant, as i understand it, yes. i'll let the senator describe it. >> it's a question, senator murkowski, of fracking the records that go from the eighth grade to the high school. so i think it's -- senator alexander made a good point. this is complicated stuff and all that we're trying to do here and i think we all agree the dropout rate is unacceptably high. all i would like to do here with minimal bureaucratic effort is to try to track a little bit further because we -- if a kid leaves the eighth

grade and doesn't get into high school, i think it's important that we know that. that's all we're trying to do that. to ascertain how significant the problem is. >> mr. chairman. >> yes. >> if i may just follow-up on that, i support where you're going with this amendment because i do think that we need -- we need to know, we need to better identify. i'm going to be bringing up -- excuse me -- an amendment later that begins our focus on dropout prevention, not at middle school, but at the earlier year. kids don't wake up in sophomore or eighth grade and say, i'm checking out of here. it happens over a long period of time. so understanding and being able to track i think is important. i share some of the concerns, though, about how we actually do it. you said that this is a simple amendment. i think it's simple in concept. we want to know what's happening with our kids. we want to know where they're

going. how we actually implement it may be a little more challenging. we got a lot of military students that come to our state and they're there for a couple years and move on and we don't know and i understand that those are not ones that you're tracking. i like the idea. i think we need to try to figure out how we can actually make it work. >> mr. chairman. >> this amendment will give the states the opportunity to figure out what methods work best for them so we're mott mandating a methodology. giving the state of alaska the opportunity to figure out any way they can. >> mr. chairman. >> as i understand i read through the amendments, those who have not transferred to a local education agency within the state so there applies to students who don't transition in that local education -- >> correct. >> in other words, people are going to pick up and move to another state, we're not asking

the district to track those kids. >> mr. chairman. in the bill we set up some criteria for finding out graduation rates. we haven't had a good criteria before. we're going to find something out about that. now we'll talk about the transition from eighth to ninth grade and that's probably important too but it does impose an extra requirement from washington on the states for what they have to do and i think most of them will just put down that they left the district for any of them that is missing. i don't think it will really achieve what we're trying to achieve with this. while we get the bad wrap -- rap for doing another federal requirement. i'll oppose it. >> to respond what the ranking member said. i think if people are applying, districts in states are applying for competitive grants, the least we can do is ask them for this kind of information.

it's not hard. it's hard when people leave states. but when kids are in the state, people ought to know where they are and most of our state departments of education can do that. i think the most important point here from my perspective, districts across the country were calculating their dropout rate on who started the 12th grade and who finished the 12th grade and that's why they said, oh, we have a 5% dropout rate. oh, we only have a 6% dropout rate. senator sanders said it very well, among african-american students in this country the depropout rate is 50% and latino students it's higher than 50%. but district after district after district says, oh, no, we only have a 5% dropout rate. the transition between eighth and ninth grade is a critical transition. it's a good example of how obsolete or system is because these transitions from elementary to middle to high school were all invented in the

deep past. there's nothing that says that's where the transitions will occur and the least we can say is if you are going to apply for competitive funds you ought to tell us where your kids are. not that hard and it's not a mandate. . >> senator murphy. >> thank you, mr. chair. a remember my eighth grade class. we had 170 graduate from high school. nobody knew what happened to those several hundred kids. today, here we are, a generation later, we still do not know what is happening, which is the a eighththrough that i year through graduating year in high school. the overall discussion about graduation rates and discussion, there is a lot of language in this bill, 1110 phone being

college or career ready, preparing folks. but we have to collect -- about being college or career in, preparing food. but we have to collect the information that would be valuable for the entire set of schools across this country. >> if there is no further discussion, amendment no. 1, all those in favor? opposed to? the ayes appear to have it.

>> who is next? senator alexander. >> i have a total one amendment that would like to offer -- a title 1 amendment that would like to offer. and that would like to offer and withdrawal two amendments. the first one is a follow-up to discussion that several of us had. education allow straighstate licensees to develop. as it stands in the draft, for

the 5000 schools or so, those who have the worst performing schools, there are five turnaround models that local agencies from which they may select. this would add a sixth category in a alexander-kirk bill that we put it earlier. it authorizes this additional turnaround model for the lowest 5% for the state agencies to develop their own shortages, come to the secretary and say that this is the strategy we can use. instead of us telling states what to do , they would come to the secretary and say this is the way we want to do it. the secretary would say yes or no. there are a number of senators on the committee who are the --

who already supported. public to see if this of the the committee would like to except. there are two others that i would like to withdraw. >> mr. chairman? >> this is adding a sixth turnaround model. i think you have five. emma wrong about the numbers? they already have sex? this will be the seventh. i was not -- they already have six? this will be the seventh. i was not county. i support the amendment. the amendment as it is drafted does provide some additional flexibility and it also retains the requirement that the secretary approve whatever the

state chooses to do in this regard. with that provision in there, i think it is useful -- it is a useful addition to this bill. >> mr. chairman? >> i approve it as well. i think it is well written. i hope we can pass it. >> mr. chairman? i was not here when the amendment was discussed. if there has been any issue that has been brought up in alaska with concerns about the proposals that we have seen, it has been the four turnaround

malls and the models contained therein. in our state, and are very small, remote, rural schools, part of our biggest problem is getting the educators out there and keeping them out there. an even bigger problem is getting the administrators out there and keeping them out there. we have had some real hardship -- >> we will take you live now to the white house for comments from president obama. >> today, the government of libya announced the death of two to the coffee -- of muammar gaddafi. this ends a long and painful chapter for the people of libya. now we have the opportunity -- now they have the opportunity to form a new government. for four decades, muammar gaddafi ruled libya with an iron fist. civilians were detained, beaten, and killed.

the enormous potential of the libyan people was held back and terror was used as a political weapon. today, we can definitely say that the doctor's name has come to an end. -- that the gadhafi regime has come to an end. the new government is consolidating the control over the country in one of the world's longest service -- over the country. and one of the world's longest serving dictators is no more. notions of a free libya once seemed impossible. then the people rose up and demanded their rights. when muammar gaddafi and their forces started going city-to- city, town-by-town, brutalizing men, women, and children, the world refused to stand idly by. a call for help from the libyan people -- the united states and

our friends and allies stopped gaddafi forces in their tracks. they persevered through the summer to protect libyan civilians. meanwhile, the courageous libyan people fought for their own future and broke the back of the regime. this is a momentous day in the history of libya. the dark shadow of tyranny has been lifted. with this enormous promise, the libyan people now have a great responsibility. to build an inclusive and tolerant and democratic libya that stance as the ultimate tribute to gaddafi's dictatorship. we look forward to the announcement of the country's liberation, the quick formation of an interim government, and a stable transition to libya's first free and fair elections. and we call on our libyan friends to continue to work with the international community to secure dangerous materials and

to respect the human rights of all libyans, including those who have been detained. we are under no illusions. libya will travel a long and winding road to full democracy. there will be difficult days ahead. but the united states, together with the you know -- together with the international community, is dedicated to the libyan people. you have one or revolution. now we will be a partner as to forge your future to provide dignity, freedom, and opportunity. for the region, today's events proved once more that the rule of an iron fist inevitably comes to an end. across the arab world, citizens have stood up to claim their rights. youths are delivering a powerful rebuke to dictatorship. those leaders who tried to deny their human dignity will not succeed. for us here in the united states, we are reminded today of all those americans that we lost

at the hands of the dot the's terror, -- hands of gaddafi's terror. we recall their bright smiles, they're extraordinary lives, and their tragic deaths. we know that nothing can close the wound of their loss. but we stand together as one nation by their side. for nearly eight months, nem -- many americans have provided external a service and support in our efforts to protect the libyan people and to provide them with a chance to determine their own destiny. our skilled diplomats have helped to lead an unprecedented global response. our brave pilots have flown in libya's skies. our scilicet provided support of libya's shores. and ehrlich -- our sailors have provided support of libya's shores. without putting a single u.s. service member on the ground, we achieved our objectives and our nato mission will soon come to

an end. this comes at a time when we see the strength of american leadership across the world. we have taken out all kinds of leaders and we put them on the path to defeat. we are winding down the war in iraq and have begun a transition in afghanistan. and now, working in libya with friends and allies, we have demonstrated what collective action can achieve in the 21st century. of course, above all, today belongs to the people of libya. this is a moment for them to remember all those who suffered and were lost under gaddafi and look forward to the promise of a new day. i know the american people wish the people of libya the very best in what will be a challenging, but hopeful days, weeks, months, and years ahead. thank you very much. >> president obama confirming the death the libyan dictator

muammar gaddafi. more within the briefing in the next hour or so. we will have it live for you here on c-span. the first official reaction was from u.s. secretary general ban ki-moon. >> excellence is, ladies and gentleman, good morning. before we begin, let me say a few words about this morning's news headlines. we have seen reports of the death of colonel muammar gaddafi and the end of fighting in sirte and other cities. clearly, this day marks a historic condition for libya. we expect scenes of celebration and grief for those who lost so much. yet let us recognize immediately that this is only the beginning.

the road ahead for libya and its people will be difficult and full of challenges. now is the time for all libyans to come together. libyans can only realize the promise of the future through national unity and reconciliation. combatants on all sides must lay down their arms in peace. this is a time for healing and rebuilding, for generosity of spirit, not for revenge. transitional authorities pave the way for elections and make other steps for building their own nation, including -- must be the watchword inclusion must be the watchword. libyans will be able to recognize themselves in the

nation's government and leadership. the high hopes sustained through the long days of revolution and conflict must translate into opportunities and justice for all. i have just spoken with my special representative for libya in tripoli. the new united nations mission for libya -- >> in comments just minutes ago, the president called this a "momentous day" in the history of libya. we will have more from the white house. jay carney.with j kearne it is likely that he will also be asked about the occupy wall street protests.

we caution that some language may be offensive to some viewers. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> do you know why? the lawyers know which judge to go see. we will be here long time.

[unintelligible] they took over this whole country. >> what you're describing can be summed up in one word -- car compared >> money talks -- in one word -- corruption/ >> money talks. money has the power in this country. it is about money. they take the money and give it to the banks and to the wall street guys who messed it up in the first place. what does that tell you? they're all in collusion. given the dam health care. everybody else got it.

>> what needs to happen desperately is that we need regulation throughout our entire society. one of the things that happens now is that we have a system that's as, well, if somebody is not wrong, then they have the court system to try to fix it. what you're describing is that, unless you have money, you cannot get justice that way because the other side is usually bigger and they will walk all over you. without regulation, these companies will be able to act with impunity. if there is strong regulation, they will not be able to -- >> we are at -- go down to the tombs and see who is imprisoned down there. see you then have locked down there right now. it is a bunch of poor people. if you go to court, you go through so fast, it will make

your head spin. but if a poor guy gets arrested, he has to go to the jailhouse, handcuffed behind his back, given bread and water, beaten and everything, right here in new york city. you do not have to go to a brave. just go right down -- you do not have to go to abu graib. just go right down there. they have one lawyer for 20 guys. what can use it to that? discusses that it is not about money. but it is about the money, man. that is why we are out here .eopl >> i think he was saying that if different, itm was

would not be a money problem. >> if they got rid of fossil fuel and used -- they have so filled with cameras on them. they can use other technology besides fossil fuel. c'mon, man. they got it. they're using gastronome to kill people. they're using that technology right now to kill people. they're not using it for anything good. they got it. >> democratizing energy, everybody makes their own energy. >> we could have done that. >> we still can. >> [unintelligible] ♪

>> are you a fan? >> comrades, i like that. >> i have been here for 23 days. when i first heard about it, basically, since this country started, it has been a war between the rich and the poor. that really is what defines whether we have a democracy or not. it is a class war and it has been perpetrated against the poor when suddenly. when i heard about this, i knew that the poor was waking up. this is really where power comes from. this is the seat of power, not

washington, d.c. >> what do you want to have for your cause with this protest? >> i want a revolution, but i do not see it coming out of this specifically. but the first step to revolutionist to trade public opinion. this is a big university. i'm here to talk. i'm here to listen and learn. and hopefully tj little. that is -- and hopefully teach a little. that is basically it. >> what do you think of what is happening around the world? >> we have the moral argument for abolition, for taking our side for the class worker. -- argument for revolution, for taking our side for the class were prepaorker. it is not the moral argument anymore. it is the necessity. >> how does this impact you

personally? >> 25. for seven years of my life i worked. but i have not been able to find a job in the last year-and-a- half. it is impacted me greatly. i am from a town named bethlehem, which used to produce most of the fuel for the country. >> you said you have been here for 23 days? >> yes. >> how does it work? how's this setup for food, shelter and all that stuff? >> over there is food. you put it tarp down. you put a sleeping bag down. then you put another tarp on it. if it does not rain hard, you will not get wet. but if it rains hard, it will try later.

-- it will dry later. ♪

>> we are a specific group. there are a lot of different ways -- that is the beauty of the process. everybody has ideas and are empowered in the bentley -- empowered independently. now we're trying to consolidate them to create the best solutions and get everyone in the conversation. we're launching a new web site with all of the information on it. that way people on the outside

and people on the inside cano and groups oour meeting. every morning at 9:00 a.m., we have a working group coordination meeting. we have representatives from all the groups. they give reports back. you have one or more representatives. everyone is invited to come could you talk about your group and, if you need to coordinate with other people, it is a great thing where, most of the time, we have breakout groups after words of people stick around and talk about things that need to be hashed out between certain groups. that takes place there. >> how many groups would you say are involved? >> right now, we have around 40 groups that have started. we are in the process of trying to maybe combine forces to dovetail into each other. we have maybe three groups with different headings that include education or groups that deal

with women's issues. we have -- we do not have a specific economic proposal. we are suggesting that people create groups that are more inclusive and then discussions can break down in those groups for different tactics and different ideas for how to resolve bigger issues. we are open to subgroups if you have a specific thing you want to address. we're keeping things -- as we are growing, restructuring and making sure things are streamlined. the pace of things coming in is really overwhelming. is constant. -- it is costa, especially running a 24-hour operation -- it is constant, especially running a 24-hour operation. there are islands in the chaos that we can sort of group together and have a giant communications dynamic that is

open to everyone. we are at least maintaining a lot of the really core values of the consensus-based openness. everybody is a part of the conversation. the next step is deciding how we can get that conversation easier to taxes for everyone who is getting involved. everyone can be a part of the conversation and see how they can engage immediately and really streamline the power people to do what they need to do so they can do what they want to do. >> originally, i am from long beach california -- long beach, california. i live in brooklyn now. >> hello have you been here? >> i think this is my fourth week.

i started listening to the media blackout. i came to check it out. i came men and i have a lot of things that a lot of people come in with parents or their want? what they doing? i have -- i came in and i had a lot of the things that people came in with. what do they want? what are they doing? i realized that this dathere ise and a process that is going on. it is not just the signs on the outside. there is an important part of it. it is something that you can just jump into and get engaged in. i can either stand outside and

judge it and try to follow the news or i can just jump in and if i have concerns i can raise them.

>> we have a kitchen. we have a warehouse. we took it and bring it here. a lot of people come in and steal product coul. we do not have the capacity. people are donating their time to take it from here to the warehouse. we have people coming in and stealing a nighttime. this morning, we came and we had to contenders for cereal for breakfast.

there are gone. we feel about a thousand to 5000. but if something is going on, it could be up to 20,000 a day. we have three ships. we have the morning shift -- i get up and deal with the morning shift. that is from 4:00 a.m. until 7:30 a.m. we brought food. and then we put snacks out at the 12:30 p.m. at 1:00 p.m., we have lunch until 4:30 p.m. we clean. at 5:00 p.m., we close the kitchen could then 7:30 p.m. until 11:00 p.m., we have dinner.

>> i come out here every day. i spend my money every day to get out here for blacks and latinos. this is a racist fucking country. we are the leaders today. >> it is not about the size bed let me show you what happened not 40 years ago. this happened in 1997. a white guy killed this in mission hills -- >> when they finish college today. >> i want to take lead to the white house for the briefing with jay carney. >> got a good night's sleep last night? after a fabulous trip. good afternoon, ladies and

gentlemen. thank you for coming to the daily briefing. i do not have any announcements to make at the top. sort will go right to your questions. >> how and when was the president informed of muammar gaddafi's death? >> the president, as you know, had a regularly scheduled briefing this morning. he was aware prior to that of the reports of muammar gaddafi's death. as has also been reported, we were working with our allies as well as others to confirm those reports. that is why the president made the statement that he did make. >> you have an idea who is in charge in libya right now? >> yes, the tnc is in charge.

is the only authority claiming to be in charge in libya. i would refer you to what the president said about the process going forward once liberation has been established and declared and the commitments that the tnc has made in moving forward with the transitional government. >> do you feel that you have a specific understanding about who those individuals are? you have any concerns about what you may not know? >> it has now been seven months since the nato mission was undertaken. it has been seven months since we recognize it the tnc. prior that -- but since then, we have been engaged with them as our allies. we have a feeling for an understanding of that body. and we would simply point you to the statements that they have made about their commitment to

democratic transition in libya. >> finally, does the president see this development as a vindication for in his approach to war? >> the president views this as a victory for the libyan people. the approach he took was to assess the situation in libya which, at the time, was faced with potential massacre at the hands of the gadhafi regime. he understood that working with our allies, we could take action to prevent a massacre of libyans in benghazi. and he took that action. as promised, we took a supporting role thereafter. i remember saying at the time that this was an action designed

to give libya the best chance and the libyan people the best chance to determine their future. it needed to be for the libyans to take control over their country and for the libyans to decide how and by whom they would be led. we believe, the president believes that the actions taken by his administration and by nato have helped the libyan people reach this day. they now have an opportunity to secure a much brighter and more democratic future. that was double all along. when you make the calculations that this president made then and makes when all matters of national security are a state, he looks at american interests and he looks at our ideals.

they do not have to be mutually exclusive. that is the approach that he took here and it is the approach he applies as commander in chief. >> the president mentioned the inevitable end of dictatorship rule. >> the president believes that syria's leader has lost his legitimacy to rule. the violence he has perpetrated against his own people is unacceptable. i think it is fair to say that the events of this entire year in that region of the world have spoken more dramatically than any individual could about where the future lies in the region. it is a future that lies with

the youth of the region and those who are demanding greater democracy, greater accountability from their government, greater freedom. that is as true in syria as it is in libya. >> will the president now the ben u.s. support for the libyans during their transition -- now deepen u.s. support for the libyans during their transition? >> we will partnership to further assist libya as to make this transition period as the president said, with his future is obviously undetermined. there is a long and winding road ahead for libya. what we have witnessed today and what we witnessed over the past several months is that the libyan people are taking control of the country and putting themselves in a position to create a better future for the young people in libya and future generations of libyans.

there are no guarantees as to what the future will look like. but they are in a much better place now because of what they achieved with our assistance and may use assistance. that makes this a very good day. assistance.nato's that makes this a very good day. >> there are very few military personnel guarding the u.s. embassy. what exactly can the u.s. to end what will the u.s. do? >> -- what exactly can the u.s. do and what will the u.s. do? >> i do not have a lot of information about what kind of assistance we will be providing libya in the future.

as you mentioned, our personnel on the ground, at the embassy, the efforts are related to security. but we will be committed to helping libya along with our international partners to make this important transition. >> there will be meeting tomorrow to talk about what is next and the mission now that the gaddafi family is gone. >> it is clear that the nato mission is coming to an end. i will leave it to nato to formally declare that. but the militia that is outlined in the united nations security council resolution was very clear, to protect the libyan people from violence perpetrated by forces associated with the gaddafi regime. not just because of the announcement of gaddafi's death, but because of the successful

taking of sirte and other areas, libby is now under control of -- libya is now under control of the tnc. the nato mission bears on the security of the libyan people. but i will leave it to nato to make announcements about that. let me move back a little bit. yes, sir. >> he calls all the libyan authorities to work with the international community on dangerous materials. can you elaborate on that? what kind of dangerous materials? >> as you know -- we have talked about this before -- the united states is committed to helping libya secure its conventional weapons stockpiles, including the recovery, control, and disposal of shoulder-fired antiaircraft missiles.

they are also known as man portable defense systems. we will come support from the tnc on this issue. they have made a formal request. this was previously announced. since april, u.s. activities include $3 million in aid to the swiss international and swiss ngos who have been working with tnc to secure bunkers and destroy unconventional weapons. 2.5 $7 million -- $2.57 million for ongoing consultations with regional governments and our international partners to build a coordinated approach to this shared security challenge. in cooperation with the tnc, our teams have destroyed man pads.

we believe that millions of them have been destroyed during nato operations. >> i heard the announcement of the adoptee's debt. but i have not heard your the president say that gaddafi is dead. has that not been confirmed by the white house? what we do need to confirm that? >> we are confident in the reporting perio. we have seen the announcement by the authorities in libya by the tnc. we have no reason to doubt this. we are not on the ground making that assessment. but we have confidence in the reports that gaddafi is dead. >> america spent $2 billion total -- this is more prescription on how we ought to

deal going forward. does the president to agree that this is a prescription for the future and not just for libyans? >> the vice president's point is an important one. action, it was far less than two billion dollars. but i think it is important that the approach the president took here was designed that we work together with our partners. when the u.s. military forces took the lead, our allies in nato therefore took the lead and we were in support. that enabled us to do many things. most importantly, it led to emission that, i am predicting libyan civilians, allowed libyans to control the outcome of their -- that led to a

mission that, in protecting libyan civilians, allow libyans to control the outcome of their future. it is important also that, in doing this, we were able to provide this essential leading role and assistance role through the remarkable contributions of our military forces and our civilian personnel and to do it without a single u.s. casualty. >> what about in other countries? in syria, where over 3000 civilians, reports say, have been killed? at this point, is it a prescription about moving forward? >> i think his point is that, whenever we face situations around the world that may require action, we shall always work with our allies and look at the opportunities to work collectively a.

this is all about taking the long view. what kind of outcome best serves american interests? and thus serves american ideals? that was the -- and best serves american ideals? that was the approach the president of. >> on jobs, the vice president talked about crime recently in relation to the part of a jobs plan that we will be seeing coming up for vote in the senate, the money for teachers, police officers, firefighters, and he had an exchange with a reporter from a conservative news station. >> he is beating his colleague to the punch. [laughter] >> he clarify his comments. he said that raises of three times in flint. murder is up, flurries are up --

burglaries' erupted the vice president said that murder will continue to rise, rips will continue to rise, all crimes will continue to rise. does the president embraced this? >> i think everyone will agree with the equation that fewer police officers on the street has a direct effect on the crime rate. we saw this in the 1990's. i do know that any lawmaker up on capitol hill will contest that simple fact or any american who makes that assessment in their local communities. would you want fewer or more law enforcement officers on the job? do you think that having more officers on the job would have a positive impact on crime? that is the point to was making good that is the point that the president absolutely shares. thehey're told that opposition is that more people

will be murdered and more people will be raped. what does the president say on this? >> you can focus on the words or you can focus on the simple fact. the present put in the american jobs at assistance to put teachers back to work and to put firefighters and police officers back to work. first responders. are they arguing -- are republicans arguing that there's no correlation between the number of cops on the beat and the crime rate? that would be an interesting argument to hear. it is a new one, a novel one, but i would like to hear it. yes, we're saying that more police officers on the beat is a good thing and will help keep crime rates lower. more firefighters fighting fires will reduce the impact that buyers will have on our communities. and it will save lives. that is a fact. and more teachers in our classrooms and in our schools

will enhance the education their children get around the country, further strengthening our position going into -- as we continue to compete globally in the 21st century. that is when the president wants the american jobs that passed. now we're taking it up provision-by provision. putting these people back to work is good because it puts them back to work the added benefits are also extremely important. the added benefits of putting teachers back to work are obvious to anyone who has children, anyone who cares about the future of this country and the needs that we have in terms of education and the direct correlation between the better educated america and a more competitive america. more police officers, more firefighters on the job has a direct impact on crime and can

save lives in terms of fires and other emergencies. the president believes very strongly that there is to be bipartisan support for the step of approach and we hope there will be as the senate takes up this important measure. >> if you look at iraq and you look at libya, they had different approaches. in iraq, we lost 5000 lives. in libya, there were no american lives lost. can you say that iraq is the way used to do things and libya is the way we will try to improve on doing things? >> i think analysts make observations about that comparison. the president simply believes

that the action that he took, that this administration took, working with our allies, working with nato, working with our partners in the arab world was the right action for libya. -- it is hardly to grip the importance here, but it is vitally important that libyans won this fight, that libyans have secured their country, have removed a brutal regime and a brutal tyrant, and that this position is that country and those people as they create their future. it gives them a better opportunity for a more democratic and more free and more prosperous future. it is obviously also important that the united states was able

to do this by sharing the burden with our allies and partners. that allowed the cost of a very low and, most importantly, it allowed us to experience no u.s. casualties. >> is this obama's way versus bush's way of going to war? >> we will allow you to make the observations. this was the president's approach. there were a lot of people suggesting that we should be marching into libya with u.s. troops on the ground. the president did not believe that was the right course of action. it was important to do this collectively. the president believed that it was important to take action because there was an immediate need to save lives, a large number of lives in benghazi. he assessed what was happening on the ground. he assessed the request from the libyan opposition.

he assessed the input from our allies and worked with the united nations, worked with nato to take this action. >> it has been exactly seven months since the president announced that european and american forces would begin air strikes. he took some criticism at that time from people on the hill who said he was leading from behind and seeking victory on the cheek. how would you respond to those critics today? >> i think this is a day not to engage in politics, but to commend the libyan people on what they have accomplished and to commend our armed forces and their civilian personnel for what they did in libya. >> what about the foreign-policy goals? >> i have made clear that we believe the president made the right decision to work with our

allies, to work with nato, to work with the united nations, not to do something on the cheap, but because it was the right policy answer for the situation that presented itself taking a long-term view about what outcome you want in libya. the president's assessment was that there are no guarantees in these kinds of situations. but he believed it was important that, collectively, working with our partners and allies, it was important to take action to save lives immediately and place libya in the best possible position to determine its own future, to put it in the best possible position to make that future more democratic, more free, and more prosperous. that was his view. he was not particularly interested in how that looked the first weekend or the second week in. he was interested on how that looked down the road and how

that would affect americans' national security interests and how it would affect libyas future. >> there were reports about french fired jets involved in hitting gaddafi convoys of that led to his death. can you rightly say that the u.s. did not kill gaddafi? >> we are hearing a lot of reports about the action. i believe nato has made the action about nato action against the convoy it. but i cannot elaborate on that. i do not have any information to provide to you on that. it is worth noting that there have been a lot of reports, as is often the case in this situation, some of them contradictory, but i would point you to what nato said. and i would point you to the many conflicting reports about what actually happened on the ground. >> marple rubio said -- marco

rubio said that you have to give credit where credit is due could he said that the british and the french lead the way. when it is said that the president did not lead the way you said -- >> i think this is not the day for politics. i did note that senator rubio issued a statement pretty soon after that. commending the actions of american servicemen and american civilian personnel. that is important. i think that is the only comment i have on that. >> he says that he thinks the president's policy in the end was right, but that it took him too long to get there. >> history will judge. i think it is important to last, -- to ask, whether it is one senator or another who is observing this, what action are

they suggesting? were they suggesting u.s. troops on the ground? were they suggesting using force? obviously, those are options that were assessed here at the white house. the president chose a different path, working with our allies, taking a lead initially that, as he said today, put americans in harm's way. there is no question. but it was the kind of operation that gave the libyan people the best chance for success, ensure the protection of libyan civilians and allowed us to work collectively and quarterly with our partners and allies. that was the approach the president thought was best. today is the day when we can celebrate the demise of a tyrant and the potential for a brighter future in libya. >> you said earlier that the servesipresident is what best america's interest.

100 u.s. troops were deployed to central africa appeared wha >> he addressed this and i think he said it better than i could. anythingeally have further to say on that. >> the president talked about hoping to see a quick transition to an interim government and then a democratic government. what sort of timeline are you hoping to see and what is the benchmark moving forward of the next several months? >> let me see, i think i might have something on that. we are obviously in an early e

period here after the demise of colonel gaddafi. >> we have been heartened by actions taken in statements made about the commitment to ensuring a positive, democratic transition. there is a framework set up that involves declaring liberation and then moving forward from there. i certainly would wait for those actions about moving forward. >> one member of the syrian national council was quoted as saying if the regime continues to be responsible, [unintelligible] that cleared the way for nato air strikes. what is your reaction to that, and is that are realistic request? >> i am understand the desire to make analogies and comparisons. one thing we have said from the

beginning, this whole year, is that circumstances in each country are different, and in the region, depending on the country, the circumstances can be different. the action we took in libya was specific to libya. it involved an immediate threat of master -- massacre in benghazi, it involved a coalition of nations that want to act, including not just western nations but nations in the region, and that fed into the decision making process here. every country is different, and i think we have an absolutely clear about opposition with regard to syria and the syrian regime. i want to say on the earlier question that at this time of transition, we look to the tnc

to begin the formal transition leading to libya's first free and fair elections. we also expect tnc to provide leadership should in promoting reconciliation and respect across the syrian society. >> [unintelligible] do you feel like the message has been well accepted? >> the president traveled through north carolina and virginia to talk about the need to take action, forced it -- for washington to take action right away to help the economy grow,

to help the economy create jobs. that is why he put forward the american jobs act. >> we want to let you know the white house briefing continues live over on c-span.org. we will take the next to a senate banking subcommittee looking at the g-20 and the global economic and financial risk. mark warner of virginia chairs the subcommittee on security and international trade and finance. we are going to hear from the undersecretary of the treasury for international affairs among others. it is just guarding here live on c-span. >> the g-20 will hold a full susummit. the single most obvious challenge at this moment is the european economic and financial crisis. it is not the sole responsibility of the g-20 to problems, and obviously this is not the only

item on the g-20 agenda it in november. if the g-20 is to prove itself useful in the long run, and demonstrate its ability to react and at times get in front of the next economic or financial crisis, then these next few weeks are going to be extraordinarily important. the world economy now faces a variety of crises. we still have an american economy that while technically in recovery, a huge number of americans have not felt that yet. are further shock to the system coming about -- of further shock to the system coming about from a non structured default by greece or any other country or even a contagion spreading across europe that could freeze financial markets will have a dramatic effect on our economy, and effect -- an effect that if

not properly monitored and dealt wit, could even rivaled the challenges of 2008. the challenge right now is we don't have all of the same tools available to us that we had in 2008, both in terms of monetary policy and stick rejects -- fiscal stimulus, and a growing level of concern and skepticism among the american public that some of the actions in 2008 disproportionately help financial institutions or many of our fellow citizens. so we are very pleased to have secretary lael brainard year. she has an enormous challenge. i would like to now turn it over to my good friend and colleague, the ranking member.

>> let me just say to my colleague, senator warner, thanks for your willingness to do this. this cannot be more timely and cannot be more important. secretary brainer, i think he said it very well and very directly, i was reading through your testimony and right here you say europe's financial crisis poses the most serious risk today to the global recovery. that is what this hearing is about. we want to hear about that and what you see on the horizon. if i might just offer a couple of thoughts about what i see, because i would like your reaction to that at some point. on one hand, i think there is consensus about the need for action, obviously. you have countries like greece and portugal that are really struggling, and trying to figure out how they better position themselves. on the other hand, you have political realities, too.

how far can other leaders moved to deal with the crisis they are facing? every day is a day of concern. every week is a week of concern. as we continue to move down this pathway, if there is not some hint of resolution or some pathway, then it appears to me that what ever since of security the financial markets have in the potential for resolution, the underpinning for that really gets hit. they began to be more and more concerned and then it gets tougher and tougher to fashion a solution. so again today, this cannot be more timely. we apologize for putting everybody off, but that is the way of the senate. my life is more dictated today by what mitch mcconnell and harry reid are doing and what my wife is doing, and that is a terrible thing to admit in an

open hearing, but it is true. some of this is just unavoidable, so we appreciate your patience. with that, i am very anxious to hear from you, secretary, your thoughts on this. this is informal enough for i think we can actually engage in a dialogue about what we see and what we need to be thinking about in the weeks and months ahead. thank you. >> with both of us being relatively new year, it is particularly painful for us as governors, we used to make the agenda. >> as you said, this hearing is very timely. today americans are focused on securing good jobs, providing for their families, build and opportunities for their children. that is why it is so important for us to strengthen america's

recovery, which still remains to vulnerable to destruction beyond our shores. europe's financial crisis poses the most serious risk today to the global recovery, while the direct exposure of our financial exposure is moderate, we have substantial trade and investment ties with europe and european stability matters greatly for consumer and investor confidence. last week at the g-20 meetings in paris and on an ongoing basis, the europeans are discussing their methods to deliver a comprehensive plan to address the crisis by early november. the plan must have four parts. first, your needs a powerful firewall to ensure -- europe needs a powerful firewall to ensure they can borrow while they bring down debt and strengthen corporate european authorities are taking steps to ensure their banks have sufficient liquidity and a stronger capital to maintain the full confidence of depositors and creditors and a capital backstop.

third, europe is working to craft a sustainable path forward for greece as it implements very tough fiscal and structural reforms. finally, european leaders need to tackle the government's challenge to get at the root causes ensure that every member support growth and stability. for our part in the u.s., pro- growth policies in the near term and meaningful deficit reduction in the medium term provide the best insurance policy to protect the u.s. recovery from further risks from beyond our shores, to promote near-term growth and job creation, the president has put forth a series of proposals that would put veterans, teachers, and construction workers back on the job and more money in the pockets of every american worker. president obama has also proposed a framework to put our medium-term public finances on a stronger and more sustainable flooding, placing the nation

rejuvenation debt to gdp ratio of a declining path by the middle of the decade. with overall demand in the advanced economies likely to remain weak, it is essential for emerging economic powers in the g-20 such as china to move more rapidly to a pro-growth strategy that is led by zero domestic consumption, by allowing their change -- their exchange rates -- to move towards a market oriented exchange rates. we made this our top priority would china and we have seen progress with appreciation of over 10% real term bilaterally since june, with exports to china growing process fast as other markets. the exchange rate remained substantially undervalued and many to see appreciate faster. there are two other birdies i will touch on briefly in the g- 20 and the financial stability board. first, we have been working very hard to level the playing field

across major and immediate -- and emerging greenwich centers. in the wake of the most globally synchronized financial crisis world has seen, we are working to implement the most globally convergent and enjoy protections world has attempted. we are trying to do so in lockstep as we implement reforms here under dodd-frank. the g-20 endorsed a new global capital standards in november 2010. it will endorse a new international standard for resolution redeem at this summit so that large cross border firms can be resolved without taxpayer exposure to losses. it is very important that we move forward in sync with our g- 20 partners on the reforms to derivatives markets that were enacted under the dodd-frank act and that are extremely important for ensuring that there is much greater transparency, that with the risks in the system, and efforts to mitigate them.

finally, sustained and strong american leadership through the international financial institution is vital to achieving our role in the g-20 and at home. where were instrumental in 2009 in strengthening the imf, which helped strengthen the global economy and our continued leadership as vital in the imf to provide us with outside influence at the -- as the imf response to challenges such as the european crisis, which matters greatly to american jobs and growth -- whiteford to working -- we look forward to working closely on this continuing challenges. >> rather than putting time on the board, have a couple of questions. we can go back and forth in a more informal way. the first question is, and here we are a year after dodd-frank,

three years after the 2008 crisis. one of the things we saw in 2008, i am not sure we would have predicted that not only lehman but then the exposure with aig, because we did not have actor, real-time ability to figure out counterparty exposure overall. this is not directly your area, but with the financial stability oversight council in place, we have seen a lot of published reports about u.s. bank exposure to greece. what level of confidence to you have at the regulator level that we have enough knowledge, not only depository exposure, but we have talked about money market exposure, counterparty exposure,

obviously direct and indirect exposure. do we have enough current, real- time knowledge in terms of our financial institutions exposure to greece and some of the other countries that are talk about -- talking about being in the path of contagion? >> some of the reforms under dodd-frank and some of the confirming reports in the international system will help over time, although these are in the process of being implemented as we speak. fsoc has spent time on the risks from europe and it does provide a forum for sharing of information among the supervisors and regulators so that they have, assessments of risk. as you said, there is the direct exposures, particularly to the

most vulnerable periphery countries are relatively modest at this juncture. there is also -- >> not just depository institutions. >> direct exposure from depository institutions. in terms of the intermission have on some of the other entities in the system, there is much greater information, much more detailed information available now. money-market funds and that immigration is publicly available and that is a critical development. i think we are going to see that moving along at a rapid pace as well. of course the reforms that are just in the early stages on derivatives will provide extremely important transparency into what was previously a very opaque set of markets between central clearing, between the information being reported on a real-time basis, trade depositories, those reforms will make a material difference in terms of our regulators and

supervisors visibility into the system. >> again, i hope we recognize that we are doing as much as possible at this moment and time in terms of the counterpart exposure of some of our institutions. we had chairman bernanke in around lunch to do a small breathing around some of these issues as well. one of the things i think europe is wrestling with, we focused on greece, and we are looking at what the europeans directly have done in terms of the european stabilization fund and potential ways to lever that up. mr. bernanke made the point that if we were to see contagion if recent defaults, it would be

challenging but if this were to spread to italy -- if recent defaults. -- if greece defaults. 500 billion euros in debt over the next year to roll over. when you look at the size of the european stabilization fund, even if you layer on top of that the imf dollars, our reserves, those reserves are not enough to take on the kind of challenges, and the far wall dimension to, it did that have enough -- the firewall you mentioned. the the have and a framework to provide that are wall? >> it is very important as you say to emphasize that in order for europe's financial stability to return, what they

categorically need to do is take the risk of cascading defaults and bank runs off the table. order to do that, they need a fire wall of sufficient -- in order to do that, they need of our wall of sufficient force and size to overcome the markets. that is something we saw in our own financial crisis was critically important in helping to restore orderly functioning to our financial markets and it is something that european leaders are talking about as they are moving forward on this comprehensive plan. they have quite substantial resources in the european financial stability fund, but they will need -- they have 440 billion euro under the structure that was just approved by the national parliaments in the euro area. that funding is going to be critically important for doing those things that we talked about earlier, which is to

ensure that large sovereigns with sound policy such as spain and italy can fund at affordable rates so that they can implement those critical reforms that will allow them to grow and bring their debt down. they also need to have adequate bank capital backstops, so as they move forward with their plan to set strong capital buffers in the banking system, that were needed, they have public capital backstops. in order to do that, the esff will have to lever up. these goals are achievable with the capital that have, but that of course is one of the key issues that will be part of their comprehensive plan. >> you did say you think within that european stabilization fund, it is adequate?

>> the funding that is available in european financial stability fund can be leveraged up to adequately address the needs that we were talking about, to ensure that italy and spain and other large performing sovereigns have adequate funding, to backstop the banking system, and of course to continue to fund the program countries as they perform. again, it is vital important that they leverage up the efs. what is on the table is precisely what is the form of that leverage. that leverage needs to be credible in the markets and it needs to give them that overwhelming force that takes the threat of default and bank runs off the table. >> there is so much to talk about and ask about.

let me start with some of the thoughts expressed on dodd- frank. i think the dilemma that we are heading toward, we have put in place with dodd-frank and enormously complex piece of legislation. i did not support it. now, the rules are coming out and it is just a massive amount of injection of new systems, new rules, new requirements for the financial system. at a banking hearing some months ago, a concern was expressed by senator johnson and others, actually, and the whole issue was how it is this going to be harmonized internationally?

deputy secretary wall and said we are working closely with our g-20 partners to make sure we get our regimen networks worldwide so we don't have new opportunities for arbitrage. we are concerned about you end up with his u.s. system and then our capital flees because why deal with this if you can find less resistance in singapore or a g-20 country? soon after that, i am reading an article and i probably will butcher his last name but michael grenier of the european union said this. we don't support the same approach. he said that is not what we are going to do. he really kind of put down what we had done in the united states.

so what assurance can you give me that the g-20, with all of these other problems that and have -- there are economy threatening problems for that part of the world that in the midst of that, they are sitting there trying to figure out how to put the volcker rule in place and how to put this rule in place, etc., and following the leadership of the united states. >> senator, let me just a first of all, i could not share more fully your concerns and your determination to make sure that as we move to put in place the mechanisms to ensure the vibrancy and resilience of our system, that we move in lock step to ensure that other financial centers around the world, those established financial centers and those coming on line, move in sync with us so that we don't inadvertently undermine the safety and soundness of our system by providing regulatory

arbitrage opportunities or create a competitive disadvantage for our financial institutions. i believe we have done more on that than has ever been true in the past, and we are having quite a lot of forward momentum among the other members of the financial stability board and in the g-20. the commissioner who is -- who has responsibility for these issues in the commission meets regularly with secretary geithner or and they both have repeatedly stated their commitment to ensure that as we move to put in place new capital acquitted deleveraged standards, the europeans do the same. as a move to put in place requirements for standards based on a central clearing trade repository on derivatives, they move to do the same.

i think we have had successes in terms of getting the general adoption of the principals across all the g-20 and fsb membership. i work closely with my counterparts to make sure that not only are they adopting these principles, but they are implementing them, and our staff sit with the staff of the international financial authority and the pri in great detail, and we are trying to be as granular as we possibly can to make sure that as our implementation proceeds, there's does as well. obviously we each have different national, legal, and regulatory environments, so there will necessarily be moments where, for instance on dodd-frank, we move forward with our legal framework more quickly than the europeans did, but we have similar implementation deadlines come and we are all working extremely hard.

they are similarly as committed as we are and i think they see the same risks to their system, which are more evident today, perhaps, than ever before, of not moving forward on those key requisites for a sound financial system. >> we could spend hours on this debate in this, but here is my impression. my impression in having worked with the european union for many, many years, part as governor, more intensely as secretary of agriculture, this is a very unusual governance system, something we are not used to. you have this umbrella organization out there and at it is not really a central government, but it kind of tries to act like a central government. you have all these other countries that are member countries of the european union. they are forever proclaiming

their sovereignty, because it is important that they proclaim their sovereignty to their citizens in their country. when you talk about principles being adopted, it is not very reassuring to me, to be honest with you. all that tells me is that we are having a lot of meetings. i think you are working hard, but i will bet when we look back 12 months from now, 24 months from now, 36 months from now, we are going to see little activity by the member countries to embrace anything near what we did with dodd- frank, putting our financial structure at a serious disadvantage. i hope you can call me in 12 months, 24, and 36 months, and say mike, you were really wrong about that and i am here to call you and tell you you are. i don't think i will be wrong about that, unfortunately. if i might move on to what

probably is occupying our attention right now, that is the financial crisis. we are all worried about it. here is another impression and i would like your reaction to this. we have a handful of countries that really are struggling. greece would leave that --lead that. also portugal and ireland. they are really trying to figure out how to deal with what is the crisis, there were huge protests increase yesterday for example. they are really resisting the efforts -- huge protests in greece yesterday. you have a second group of countries, spain, italy, that somebody said to me, and it describes it well, too big to fail, too big to bailout. large economies, if somehow the

problems with the other countries cannot be walled off, they kind of get tangled up in it and their cost of borrowing dollars up, etc. you have serious under capitalization of the banks. you have stress test that nobody has regarded very seriously. i think they made an attempt, but quite honestly, our financial community is not relying on their stress test. then in the midst of all of this, you have a european system and you have got citizens like mine -- it would be like for germany to embrace the idea of bailing out greece, it would be like nebraska up with a balanced budget amendment and an obligation that we cannot borrow any more than $100,000, so we have no debt, bailing out another state that spent wildly

and borrowed money. you can only come to understand how the germans are looking at this and going, are you kidding me? then you begin to realize, how do you move those dynamics with this system to the kind of resolution that is necessary? we are not talking about a few dollars. if the market does not have confidence that this is a big enough fire wall, and guaranteeing 20% or 30% of the dead is not going to be sufficient, c and sufficient,alm the market's down -- and you cannot calm the markets down, at this thing is serious. i would love to have your reaction. what have i missed read about this? where am i wrong about this? >> i think the risk to point to are real.

i would say, though, on the other side, that europe has the resources. it has the capacity, and we have heard from european leaders that they have the will. the things that need to be put in place i think are fairly clear, and of course as you said, i think there is mixed public support. if you look at the vote in germany on the efss, the overwhelming majority is in favor of supporting the july 21 reforms which expanded it and enable it to do the critically important functions of providing precautionary financing and backstop in the banks. so you are exactly right that europe will need to muster the political will, but everything we have heard is that european leaders are determined to do so

, and have the capacity. they have the ability to leverage up the efsf to a level that is commensurate with the size of the challenges that have come to take the risk of contagion to italy and spain off the table entirely, and we will see over the next days and weeks how they are going to confront those challenges. as you indicate, over a slightly longer period time, and they are talking very clearly about this, they will need to move forward on putting in place mechanisms that give them the fiscal capacity that really matches their monetary union. that is the piece that will take little longer, but they are going to need to have much more fiscal unity and much more centralized the school governance over time. that is something that member states are clear eyed about in

the face of this crisis. >> does that require a treaty change, the last step you have just described? >> it depends very much on how they decide to move forward on creating a more unified fiscal structure. some of the ideas being discussed would require treaty changes. others might not. they have already put forward some very important governance reforms in terms of surveillance and penalties for fiscal -- not meeting fiscal targets, for instance. some of these issues have already -- we have already got a sense of where they are moving. on the broader sense, fiscal government is likely to be in several years time. they are still working on that, but they are committed to it, from everything we hear. >> changing their treaty is akin

to amending our constitution. this is no easy task. a complicated problem is what this all comes down to, a very complicated problem. >> i agree about the complexity of this. i think what we have got -- a balanced budget state with the aaa bond rating. if nebraska government was well run, but nebraskan banks completely finance california's budget, we have had a little bit of that problem, but i think we are looking at in germany, one way or the other, germans are going to have some level of responsibility, whether directly through their people or indirectly through their bank

exposure to greece. one of the things we had a spirited debate about dodd- frank, i think it is imperfect, but the reaction i heard more from our european colleagues was, thank goodness that at least america went first, and because we have advanced capital standards moved further, and we have had more transparent stress test, for example. the fact that we are intertwined, whether we like it or not, we did not try to have these coordinated standards, slipping to the lowest common denominator is not going to help anyone. i share the concern on how we do this on an organized basis. as seen in the u.k., they may be

taking even more structured approach than we took. when you hear some of the leaders in france and germany in terms of transaction tax or other things that go beyond dodd-frank in terms of financial constraints, and while we may disagree about that the merits or lack of merit around dodd- frank, i think we agree we need to have not this arbitrage, and consistently moving forward. i think as we get to this g-20 framework, how we make sure that even if it moves forward in a coordinated fashion, there is not this kind of out liar that does in effect become o --ut- lyer -- outlyer that does not

agree to these international standards. what are we doing to grapple with that? >> senator warner, as you said, i think we derive tremendous advantage from moving first and pulling the world to our high standards. what we have seen in the g-20 and the fsb is that we have succeeded in having all the members of the g-20 and the fsb sign up for tougher standards on capitol liquidity and leverage at banks. sign up for resolutions, higher provincial standards, greater intensity of supervision or round up systemically important financial institutions, and sign up for a host of very profound changes that will make our derivatives markets less opaque, more transparent, less risky. in terms of getting emerging financial centers to come on board, that is why we thought it was so important to be working

through the financial stability board and the g-20 were the major financial centers and the emerging financial centers fit together. we have a variety of standard setting bodies now, the fsb, the basel committee, where we have emerging financial centers represent, and taking on the same obligation, the same principles, the same commitments, the same standard, uniform across all members of the fsb. we are intensely engaged with singapore on are derivatives of reforms. we have received repeated assurances from the singapore monetary authority and financial supervisory authorities that they will move in lockstep as europe and the u.s. come together on their derivative regimes. i think the concerns you raised are very real. we are working very hard on them. we have to stay extremely

engaged at a level of detail on implementation which we will continue to do, but i think we have a real chance of having a system that has far fewer major areas that presents regulatory arbitrage risks and disadvantage our financial institutions. >> we will obviously want to monitor that. we need to establish what those metrics ought to be. i know you have to leave in a couple of minutes. i want to ask one more question. you may not have seen the news that while there was some anticipation that the eu might resolve some of these issues this week in, they are already talking about now a second summit. they may not get there. a lot of pressure on the media in cannes.

i do make sure this crisis -- is there anything we can do other than continue to urge you to move forward and the administration and others to move forward to make sure this does not just drag itself out? at some point, we staunched some of those dramatic actions in 2008. what is your best guess that we will see definitive action within this next 30-day period with this summit coming and probably another summit in the next 30 days with this overhang that is going to take months to work through? >> but just say this. the european leaders are very intensively engaged on this. i think this toys good sign that they are meeting intensively on this. president obama has been on the

phone with european leaders and has spent a lot of time asking them about the comprehensive plan that they are developing. he is very, very committed to ensuring that the u.s. economic recovery is as robust as it can be and as insulated as a candy from shocks emanating from abroad, recognizing that had winds from europe have slowed our recovered somewhat. i think that the set of issues on the table are the right set of issues. european leaders are focused on the firewall, the bank recapitalization plan, insuring greece is sustainable, and then that longer-term set of governance reforms. again, i think they have that capacity. they have stated repeatedly that they have the will, that have the resources, and i think they

know from discussions we have had among finance ministers and central-bank governors at the g- 20 last weekend that this is an issue that the world cares a great deal about, that the emerging markets that are part of the g-20 also see european financial stability as central to their own economic growth. this is the most important priority for the g-20 meeting, and we see every indication europeans are working very hard to come with their plan and to have a plan that succeeds on the four dimensions they are talking about. >> i understand your answer, and i appreciate your comments and appearing before me, hoping you recognize we are inexorably tied and there will not be

continued ratcheting back of expectations. the eu has already decided a second summit, and there are the first two steps of the plan in terms of the fire wall and a bank recapitalization. we do hope the g-20 will continue to show that these kind of large international organizations can be successful, but dragging this out is clearly not in europe's interest nor in the interest of the united states. again, we appreciate your time, secretary brainard, and we will move on to the second panel. thank you. [captioning performed by national captioning institute]

[captions copyright national cable satellite corp. 2011] >> if we could go ahead and move to the second panel, and as they get settled, i may go ahead and start to make some introductions, recognizing that we will probably have another round of votes at some point. in all our second panel we are going to continue this question of the g-20, the european crisis, and currency issues in terms of making the point that all our economies are enormously intertwined. we have three very distinguished panelists, dr. uri dadush serves as director for the carnegie endowment for international

peace. his work focuses on trends in the global economy and the implications of the increased rate of developing countries and their pattern of financial flows, trade, and migration and associated economic policy. he has served as the world bank director of international trade and director of economic policy. he directed the bank's world economy group before that he was president and ceo of the economic groups intelligence unit. thank you for joining us. dr. john macon is an american scholar at the american enterprise institute. he is a former consultant to the u.s. treasury department, the congressional budget office, and the imf. he specializes in international finance and financial markets including stocks, bonds, and

currencies. he is also -- research's monetary policy and tax and budget issues as well as the japanese economy and the european economy. he is the author of numerous books and articles on financial, monetary, and fiscal policy. dr. fred bergstrom has been director and widely squirted think-tank economist at the peterson institute for international economics in 1981. he has been ranked -- the type is getting smaller and my eyes are getting worse. he is ranked as someone who can move the markets. he was the assistant secretary

for international affairs of the u.s. treasury under the carter administration. he also functioned as undersecretary for monetary affairs in preparing the g-7 summit in 1981. during 1969-1971, he coordinated u.s. foreign economic policy in the white house as an assistant to dr. kissinger at the national security council. he is well published scholar and has served in several distinguished institutions on economic matters throughout his career. i want to thank all of you for being here today and the timeliness of this hearing could not be more important. we will start with mr. dadush. >> thank you very much, mr. chairman and mr. ranking member for inviting me here today. on the euro crisis, i think it

has been apparent from the discussion that just preceded that everyone understands that a set of sovereign defaults in europe, possibly leading to a collapse of the eurozone, would have major repercussions in the united states and could lead to a lehman like event. in my view, one of longer duration. i think what is not sufficiently understood is that the eurozone may not be able to handle this crisis on its own. this is because of two dimensions. one is the politics, and the other, even more importantly, is the economics. the politics, because europe remains -- the commission is not

the federal government and european central bank is not the federal reserve bank. therefore, the example of nebraska bailing out another state, i think, is extremely appropriate in terms of understanding the dynamics of the current situation, but i would take it one step further. i don't think there is any question about nebraska and other states, considering themselves part of one country, americans. we are far from that situation in europe. the second aspect is the economics. whereas the eurozone as distinct from the european union is quite a bit smaller economy than the united states, the subprime crisis was between one trillion

dollars and 1.5 trillion dollars, but the sovereign debt of the periphery countries is 4.5 trillion dollars. furthermore, banks are much more important in the european union economy and heroes on economies than in the united states. there are just a much bigger part of the financing. as you have already recognized, policies largely are the bullets. it is important to recognize that the european stability fun, there is an element of smoke and mirrors in it. the guarantees come in part from countries that are themselves in trouble, and even the country's that were thought not to be in trouble, like france, now are confronting a borrowing cost

which has doubled the it spread -- has doubled in the course of the last several months in excess of 100 basis points. that is an indication that the market is now going into questionable capacity. in the most recent moody's decision to put france on credit watch, referring to the guarantees at the current levels, not at levels contemplated for the next age as being one of the reasons that day are considering -- that they are considering a downgrade of france. that is why my written testimony, have proposed that there is an emergency, and as a precautionary measure, the imf's resources should be

expanded by a trillion dollars. i am audacious enough to say with the u.s. making a contribution to that expansion, audacious because i know that the previous expansion has not yet been agreed, but this is the situation that i see. i see it as an insurance against a very bad event. why don't think the emerging markets want to contribute, i don't think the emerging markets will put all of that amount by themselves, and even if they wanted to, the yet -- the united states would not necessarily want to see its interest diluted. >> the current imf balance sheet is about $300 billion, isn't it?

>> according to the managing director, is four hundred dollars billion. -- $400 billion. $400 billion is the port capacity. -- the forward capacity. >> thank you for the opportunity to testify. i am going to focus my comments on the european situation. it is appropriate to remember that the g-20 was first established in 1999 after the asian debt crisis, which was tied to excessive rigidities of exchange rates in the region and tends to avoid those adjustments. my contention today is that the european crisis will not be contained until some of the problems inherent in an unstable and nonviable currency

regime are addressed. i think if i go in detail as to how we got here, how did we get in this situation where last april were all thinking we were out of the woods before starting to invest again, and the economy was looking good, to a situation where we are looking at a weekend where once again, europe is delaying needed adjustments, with good reason, because they face some very formidable problems. europe's current problems, i would term internal systemic driven. they have a flawed currency system. how did they get here? when the european monetary system was sit -- was set up, the assertion was made that if he became a member, greek dad was the same as german debt. if you were a greek -- a german bank and greek debt was commanding an interest rate where greek debt was above

german debt, you would lend to the greek government. you could use that claim on the greek government to borrow from the european central bank, and the process began. in effect, the european monetary system initiated a massive increase in the credit ratings of the weaker southern european economies, whose unit labor cost suggest they were in no position to continue to compete with germany. over time, the european debt crisis was built on a premise that is if sovereign governments don't default, the systemic financial crisis was built on the premise that house prices never go down. those problems come back to haunt you. why is it so difficult to address this crisis? first of all, there are four ways to address it. one, the one that is being contemplated now is to engineer massive transfers from northern

europe to southern europe, and as others who have testified have suggested, really we are down to germany, because even the french have their problems. the esff is a bit of smoke and mirrors. when we were discussing that earlier, when you take away the funds that are already committed, you are down to 275 billion, and when you look at the commitments from italy and spain, which are prospectively going to be recipients, you really don't have any fun to. the idea that you could leverage that up by saying it will somehow guarantee the first 10% or 20% of the 20 -- of the countries involved i think it's wishful thinking. the second way to do with the problem, the resources or not there to make asset transfers. last year, the idea was to say to the greeks, we will give you money if you will blow your

brains out, that is a few will make massive increases in taxes and cuts in spending and boost the economy into a tailspin. that means the debt to gdp ratio will be higher this year that it was last year. that is where we are with greece. that is conceivably where we could be headed with some of the other countries. a third alternative which is being rejected is to force wages and prices in southern european countries to go down to rapidly they are able to compete with germany. that is not going to happen. greece, italy, spain are not going to turn into germany, so that is not a realistic alternative. the fourth alternative is to allow currency adjustments within the currency union that would address some of the stresses that are there. i think that is probably where we are going to end up, although we are certainly going to exhaust lot of pain and suffering before we get there. see a way to make reece

a viable member greece a viable member of the the parallels with the argentine debt crisis are there. a long period of promise, we will do this, we will do that. they're really not prepared to undertake the adjustments that are required, so i think it is probably not wise -- i would respectfully disagree with my fellow panelists -- to put more resources into shoring up what is probably not a viable system. why would it be a viable system? to impose a single, central bank on an area as the verse as europe -- as diverse as europe is just not a workable system. the sooner we recognize that, the better. thank you. >> two out of three, so far,

this panel is not going to lack for some questions. >> i will try to give you the basis for a few more. i want to make a few points that will complement what the earlier panel discussed and my colleagues here. i think the most important role for the g-20 summit is to inject renewed impetus for world economic growth. we're not going to solve the european crisis. whatever financial engineering is done, unless they can get more growth going. yet, the strong countries in europe, led by germany, holland, austria, scandinavia, are consolidating, tightening budgets. under no pressure from the market vigilantes'. moreover, the european central bank should cut interest rates substantially. they are the only major central

bank which is considerably away from the zero balance. unless europe is broke, none of the financing is going to work and it needs to be emphasized. unless the u.s., you and the congress and the administration can get together and provides a new stimulation to the u.s. economy, the world is going to continue to wallow as well. the good news is that half the world economy is still booming. the emerging markets are expanding by an average of more than 6%. moreover, they have policies based to do even better. they have low deficit and debt ratios. they still have fairly high interest rates. we should now ask the emerging markets, who are the leaders of global growth, to do more. they can do it. they can expand further. they have been worried about inflation, but now with a rich country slowing down in commodity prices having leveled

off, that is the logger a concern. they have been the beneficiary of global growth strategies for 30, 40, 50 years. it is time now for them to live up to the capacity their achievement provides. i would say that this gent -- that this g-20 summit needs to take coordinated action to get the world out of the last economic crisis. we have to do it this time led by the emerging markets, but with europe and the u.s. chiming in as well. it is critical how that emerging growth impetus takes place. it has got to be done by expanding domestic demand, letting their big trade surpluses decline so as to impart growth to the world, not take it away from the rest of the world, and that means letting their currencies go out

much more and much more rapidly. -- go up much more and much more rapidly. on the european crisis, i think they do need to lever the european financial stability up to something like two trillion-4 trillion euro. it is a halfway house. it is going to have to complete the other half, the fiscal union, but i think the way to do it is to complete the fiscal union, not to abolish the monetary union. with great respect, i'm going to disagree with an analytical point made. nebraska and other surplus u.s. states to to a degree bailout u.s. deficit states, not by a direct loans, but through the federal budget. when you transfer your surplus to washington and they transferred the deficit tumid -- they transfer it to the deficit in mississippi, there is a form

of bailout. likewise, when states have high employment and rising, you help bail out those losing states. the europeans need fiscal union to complement their monetary union. if europeans do not get their act together quickly, plan b would have to center and the international monetary fund. if the europeans cannot put together an adequate safety net, only the imf can provide it. that money would have to be borrowed from the big surplus emerging markets, china, korea, brazil, india, etc., oil exporters. they could provide the money. they should do so. they need to pay back. finally, what can the u.s. contribute to all of this? i have suggested that our government needs to get its act together to get growth on track.

we obviously need to move to tangible, credible means of bringing our deficits down over time without disrupting growth in the short term, and i think we should take on a new commitment. it is a way to create 3 million-4 million u.s. jobs over a five-year period or so. we have been facilitating the export-led growth of these emerging markets. they have piled up huge reserves as a result, partly by cheating on the exchange rates and manipulating them. i think we're perfectly justified, and it is not a protectionist, to eliminate our big, external deficit. we are the world's largest debtor country. they keep telling us not to build it up. eliminate the u.s. trade deficit. by the way, it would create something like 3 million-4 million u.s. jobs. if we're serious about getting

back to full employment, we've got to add that. i would throw that back into the hopper as part of the g-20 strategy, but then we have to do something about it by getting growth going domestically. >> you did not disappoint. there are so many different places to go with this. what -- i would like to ask you to respond to a least one part of the provocative part of what he does send -- just said. is there any realistic chance

that through the g-20 mechanism we could really see a challenge or a coordinated action were the emerging nations would take on this kind of growth policy? it seems to me that there has been for the most part an enormous lack of coordination amongst the more industrialized nation on issues like currency, and then we perhaps him handily try to deal with china on a one- off, not the most effective tool, i will grant. let's just are with the first prescription -- start with the first prescription. what do you think the chances are that could happen? >> i will just focus on europe.

india, why would i want to finance a european experiment that has been struggling since 2009? why would i want to invest in a system that is not going to work? we're not going to get fiscal union in europe. we have a monetary union that is not viable. 500 billion euros trying to turn greece into germany is not going to happen. while the chinese through their aggressive geopolitical ambitions may want to step in here when the u.s. is not willing to do so -- >> could i just ask? >> yes. >> i am understand the point

about direct assistance, but the kind of more macro agreement that there could be coordinated growth policies across emerging nations, letting currencies appreciate, i mean, is that even realistic? >> well, what have we been doing since 2008? >> well, from emerging -- >> yes, but remember, in 2008 after the lehman crisis, we cut aggressively and china engineered the large stimulus in the world. it was worth 14% of gdp over two years. they got their economy going. they have unfortunate situation that they have lots of resources -- they have the fortunate situation that they have lots of resources and lots of things that need building. it had its downside in the sense that china is such a new force,

their contribution was so great, that there were pushing up commodity prices, energy prices and so on. i think if i were the chinese i would say look, we did a lot. it was in our own interest. we wanted to stimulate our own economy and the spillover effect was positive. i would think what is realistic now is to see if the chinese are prepared to back off a little bit on tim kaine down the growth rate because they're seeing higher domestic it did tamping down the growth rate because they are seeing higher -- on tamping down the growth rate because they're seeing higher domestic production and. >> is your prescription for china were your expectations for tennis same as other emerging

markets as well -- expectations for china the same as other emerging markets as well? >> my bottom line is this. i would not bet on a lot of help from emerging markets for the european experiment, nor for the american conundrum as well. >> first of all, i agree with john in the the emerging markets played an absolutely instrumental role in 2009 in particular in supporting global economic activity at a very difficult moment, with china played disproportionate role. but i think we need to recognize that that was a very particular situation, and as the emerging markets kind of the celebrated extremely rapidly beginning in

the second, third quarter of 2009, within about a year, a year-and-a-half, they were running into what is called the supply constraint. basically, inflation was building up. there is also a real concern with acid price bubbles. there were a number of them. -- asset price bubbles. there were a number of them. they're reaching their limit. now, in a scenario where global economic activity deteriorates in another signal of the giveaway, i think emerging markets can provide -- in another significant way, i think emerging-market can provide a cushion. it will take awhile. it might take six months, nine

months for the inflationary pressures that have built up over the last couple of years to hit the emerging markets, and then they can accelerate their growth again because they have reached their capacity. to say that their contribution in this scenario will be relatively modest is safe to say. i think we should remember that american gdp -- to take one example, i could take other examples -- is composed of domestic demand and not exports. the problem is, domestic demand is about 34 times bigger than exports. even in the best of circumstances, the simple arithmetic tells you that the real key to american growth, a

particularly american growth because it is a large, relatively closed economy, the key to american growth is the internal dynamics within the united states. trade balance will help cut the margin. by the way, there is virtually no conceivable increase in demand from china that would have a significant impact on american economic activity. i mean, very simply, just a result of the fact that china is one-third the size of the united states and the united states is a relatively closed economy. so, it is about domestic activity and it is about domestic reforms. it is about domestic structural reforms. it is about domestic fiscal reforms. that is the essence of what will drive the american growth in the

long term. finally, if i may, i also want to disagree with john about not helping europe. should europe not be able to get its act together, and i fear that it might not, or it could not to a certain degree, and that lead to a collapse of the eurozone, of this half build failed experiment as john would describe it, then i can assure you that we would have a crisis of absolutely global proportions that would be of much longer duration than the lehman episode.

>> just three points quickly. on the argument about the fiscal union in europe. europeans are not going to give up. they're not going to let the european union collapsed. the history of european integration is that when they face crises, and they have faced many before, all of the cacophony of voices comes forward toward progress and greater union. i think we should convince them to move toward fiscal union because that is the positive outcome. i agree with my colleagues. china played a decisive role in the world recovery from the big crisis in 2008-2009. i said that in my testimony. i applaud what they did. they did it last time. they can do it this time. the supply-side constraints that john talked about have declined sharply as world growth prospects have declined and

commodity price levels have leveled off. they have the financing to do these programs. the issue is when? from the world standpoint, now is the time to do it. some of the other emerging markets have already reversed policy. indonesia just last week began to cut interest rates. brazil has begun to cut interest rates. the time is quickly occurring where other emerging markets are already moving in the direction i suggest, and i believe china, which is by far the biggest, but others as well can do it. i think the g-20 can push the process. i will reiterate what i said at the outset. these emerging markets are growing three times as fast as the rich countries. a decade from now they will be two-thirds of the world economy. they can be drivers if we can

get them to do even a fraction of what china did the last time around. finally, i went to take up the point that the export side is not very important to the u.s. because we are a closed economy. we're looking at 2% growth, maybe. it is perfectly feasible for as to strengthen our external position by one-half to one percentage point of gdp per year for the next five years. that would take our growth up by a significant increment and create a big amount of jobs. we are a relatively closed economy in the sense that you are ready mentioned, but at the margins, we can do a very large benefit for our economy by growing your external sector. he is absolutely right. exports to china alone are not going to do that, but if we can

get the kind of pick up in world growth that i talked about at the outset, with all of the emerging markets, more than half the world economy, plus a little more in europe, there is no reason why we cannot expand our international contribution to gdp growth in the major way. we're missing a very major bet in not emphasizing math as part of our current jobs strategy -- emphasizing that as part of our current jobs strategy. >> the debt of the european union countries, the united states slow economic growth, just a whole host of things going on. i wonder what the potential is that inflation kind of rears its head again. how does that fit into the

equation year or does it fit? -- equations here or does it fit? we have probably worry more about deflationary in the past few years. we a historic low interest rates. but it occurs to me that the pressures up there are enormous to roll over debt. you have a situation out there were countries will be struggling to finance that said. what is the potential that inflation becomes a more serious problem as we look two years and five years down the road? i would like everybody's thought on that? i am going to work my way across the panel, so everybody is going to get a shot at that. >> right now, inflationary pressures are quite new to it -- quite muted.

you are seeing some pickup in headline inflation, in europe, for example. but a lot of that is the delayed inflation of commodity prices to a large degree. there is so much unused capacity and so much risk aversion by people who manage cash and banks to manage cash, that even with the expansion of the central bank's balance sheet that we see, the actual expansion of credit remains relatively constrained. that is a general phenomenon in the advanced countries. it is different in the developing countries. in the developing countries you have seen very significant acceleration of inflation. i think if you look several

years for word, a lot depends on what you assume the capacity of central banks as the economy recovers to withdraw the massive amount of liquidity that they have injected into the system over the last few years. central bankers will tell you they know how to do that. the problem i have and the risk that i see is, no they -- i know they know how to do that. the big question is, will they be able to do it eloquently? will they be able to do it in a way that you avoid a very rapid rise in interest rates as has happened many times in the past, against a background of a lot of over-extended investment and lending that is maybe triggered over a period of years by the abundance of liquidity.

>> i am not concerned about inflation right at this point. i would add, however, that if $1 trillion are made available to try to shore up the exchange rate in europe, the possibility of inflationary risks would rise. in the great depression in the united states, and usually after financial crises there is a greater risk of deflationary than inflation, and secondly, as we learned with the great depression, the requisite way out, initiated in 1933 by the u.s. evaluation of the dollar versus gold, a sharp exchange rate adjustment, is exchange rate adjustment. our friends in europe would like to maintain a single currency. i'm understand that and i'm

understand the firmness of their -- i understand that and i understand the furnace of their commitment to that, but i think that does come with some inflationary potential. >> you have to make two key distinctions. you made wine, which is timing. over a two-year -- you made one, which is timing. over a two-year horizon, i do not see a problem. over a five-year horizon, it could be a problem unless we get our fiscal policy under way. given the slowness of growth, high unused capacity levels, developing countries, emerging markets have had that risks. i do think they are now recognizing new -- i do think

they're recognizing the need to adjust. i would not expect them to do nearly as much as china did in 2008-2009. if they did it, germans did it, we did it, that could have a huge affect on resolving all the problems we're talking about. >> i will just ask one more question, and it may be one of the most complicated things to try to figure out. it is no secret if you look at the published polling numbers in germany and france, the leadership there is really struggling. people are looking at what is being an honest and required and kind of recoiling. >> lower than the united states congress?

>> i am not sure i can add any spots on the line -- any thoughts on that, but it is a difficult situation, and the political ramifications are significant. what happens if you get a year- and-a-half out there and all of a sudden, in response to actions that have been taken, you of governmental change, campaigns that have been run on an anti- this or anti-that approach, and all of a sudden, you have a whole different set of circumstances from a leadership position. try to factor that and give me your thoughts on that. >> certainly, that is a theoretical risk. i have worked for a long time to get populist politics in europe to go in that direction. but i must say, there is no evidence to support it. the germans and moan and, but

they vote in favor of pro- european policies, including the bailout. the fundamental factor is that germany is a huge beneficiary of the euro and the european union. there are politics going back to and the germans do not forget that. but in purely economic terms, the euro is nirvana to the germans. but is the dream of german leaders i used to work with in government. germany is such a massive beneficiary from the economics of the eurozone that the

business community knows it. the labor unions know it. the one party that opposed the european bailouts, the free democrats got thrown out of government in the last election. 80% of the popular vote went to parties that are in favor of continuing the policy. the opposition in germany is even stronger in favor than chancellor merkle's party. it is a risk we need to keep our eyes on. it could happen. but i would say watch what the germans do, not what they say. >> i think that, again, looking at germany, germany has been a great beneficiary of the monetary union, but now that the

financial complications of the currency era have begun to jeopardize the stability of the financial system and you have the failure of a major financial institution two weeks ago in belgium. german economic activity is slowing rapidly, partly i would argue because things are slowing in china, but also because german citizens pick up the paper every day and look at what is happening in greece and they know that something is not working. i think if we listen to german leadership carefully over the past several weeks, i am sure they are contemplating their options. the german finance minister said default may be necessary. the german public was never asked -- was never permitted to vote on germany joining the currency union.

german elites are powerful and they manage the system very well up until a point. i think we may be approaching not point. some of the political -- approaching that point. the political pressure is rising in germany and could continue to rise. since they are being asked to pay the bills, that could be a destabilizing actor that could be pre-empted, again, -- destabilizing factor that could be pre-empted. >> i tend to agree with fred. the european project goes very deep in germany, very, very deep. of all the parties, the least likely to desert the euro is germany, not just because they

are the beneficiaries. right now, i could make a very machiavellian argument that germany is benefiting from the crisis because of low interest rates and the low euro. but more fundamentally, it germany, which is actually benefiting from lower itself to say -- benefiting, were itself to say i am leaving, that would be the end. it is very different if greece says i cannot take the pain anymore. finally, i am not ready to predict how things will develop. let me just point to the fact that domestic demand, a

consumption + investment plus government spending in ireland is down 20% compared to 2007. the magnitude of that number is staggering. increase, it is down about 15% -- in greece, it is down about 15%. it is the equivalent of the great depression. it is just not called back because it happens in small countries. but for all intents and purposes it is a great depression. unemployment is at 24%-25%. i think it is remarkable the degree to which this structure has held together under enormous economic pressures. but if we go -- i believe it is a structural crisis more than a

fiscal crisis that is affecting the european periphery. if we are now talking another five years of adjustment, it is very difficult to say whether the policy can actually stay together in these countries. that is one of the arguments why the combination of the commitment to the european project and the incredible stress under which the system is being put it is one of the arguments, i think, to say that europe should be helped in a situation like that. >> two quick sentences back to dr. mencken. he says, germans pay the bills, right, but that is a gross payment. net, they are still huge winners from the eurozone. he also suggested that creek default would equate to exit

from the euro -- greek the fall would equate to exit from the era. i disagree -- greek default would equate to exit from the euro. i disagree. >> could you respond to that, because one of the things in your initial points, you paint inappropriate challenge, and i clearly think the idea of currency without fiscal union has presented a half built house. but i think if you're going to break up the currency union, you're going to have some huge short-term disruption, right?

in a goode're not situation here, right? so getting out of it is going to be difficult. it seems that addressing a reality, which is that greece cannot coexist in a currency with germany without massively affecting the rest of the system, is probably going to be a positive thing. i do not see how it is worse than going from weekend to weaken where we keep saying we were going to settle it this weekend, but now we're going to do it next weekend. remember, the 400 billion euros was agreed to in july, and it is not enough. so, how much is enough? again, getting a resolution to this problem, containing the fallout, it is not going to shock many people in the financial markets if greece either do false or leaves -- defaults or leaves the union.

>> i know everyone has been very generous with their time. this is been a fascinating and provocative. and -- this has been fascinating and provocative. there seems to be one major consensus point. the currency needs to either break up or continue, but the current resources available, i am hearing concurrence on that. if we each could, please no more than two or three sentences if possible, give me your best prediction of what if anything will happen out of the

activities this coming weekend, and what should we realistically expect coming out of cannes in a few weeks? >> i will just venture to say, what comes out of the e you this weekend is further steps toward the objectives -- eu this week and is further steps toward the objectives we're all talking about here. they cannot do it in one leap, but they will take some steps forward and will eventually lead to the outcomes i was talking about, namely, highly leveraged css, and further institutional reform that will further lead to fiscal union. but in the meanwhile, there will be so much cacophony and so much uncertainty generated by

trailing the market pressures that the crisis atmosphere will continue. but i think they will move forward. at the g-20, there will be more pressure on the europeans to complete that progress. i think there may be some steps along the growth path, probably not as much as i would like to see, but there may be some steps. the finance ministers last week and actually did reach a consensus on the director and that is needed -- and the direction that is needed. the imf's of i think is not as clear. i thinkll -- imf stafuff is not as clear.

incidently, in the kind of uncertain world we're facing here, who knows where the imf will be needed, but i think it should be there. >> this week and we have are the heard what we will hear, which is that we're going to have another meeting. the alternatives are so unattractive, it is very difficult to step up to the plate. what the french will do is put up a number over $1 trillion, that somehow will be a shock and on number, but nothing will get done. they will try to shore up the system. six months from now we will be back with more problems looking for more resources. that is why i think it is a bad idea to go down this road. >> i was going to say you could just read the last g-20 statement that came out in

april, but at that time they said that the global recovery was broadening. they will have to say that the global recovery is narrowing and we have problems. we hope everybody gets everything straightened out. what else can they do? >> my projectionists first of all that the crisis will continue to fester for released another year or two. the second is, with regard to the next two months over to the g-20, i think you will see h significant bank recapitalization decisions. you will see a structure for the forgiveness of greek debts that will be fleshed out. i think you will see a larger

and better articulated efsf, and i believe that with all of that, you will also see some much significantly greater engagement on the part of the international monetary fund. i don't know how exactly that money will be found, but i believe that is going to be part of the game going forward. with all of that, the crisis will continue to occasionally over the ugly head, o course of the next several years because as i said at the beginning, this is a crisis of economic structure, a crisis of competitiveness, a crisis of growth. it is not just a fiscal crisis. >> thank you very much. >> thank you, all.

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>> still work to be done in the senate as they're trying to wrap up work this evening on three spending bills. you can follow the senate on our companion network, a c-span-2. coming up this evening, reaction to the death of muammar gaddafi. we will hear from president obama, ban ki-moon and others. on c-span-2, updating the no child left behind law. at 7:00 p.m. on c-span-3, prime minister's questions from the australian parliament. >> because i am a businessman, of which, incidently, i am very proud, and was formerly connected with a large company, the opposition has attempted to picture me as a proponent of

liberalism. i was a liberal before many of those heard the word, and i fought for the reforms of theodore roosevelt and woodrow wilson before another roosevelt adopted and distorted the word liberal. >> he was a member of the democratic party for 40 years, switching in 1920. wendell willkie ran for president. although he is lost, he won a place in history. he is one of 14 men featured in the new series "the contenders," friday at 8:00 p.m. eastern. >> republican presidential candidate mitt romney today made his first trip to iowa in two months. the former massachusetts governor did not compete in the iowa presidential straw poll and his last visit to iowa was for a

debate. he told residents of the state that he will be back again and again. this rally is almost an hour. >> i am dr. sam clovis, the chairman of the department of economics here at morningside college. for some of you who may have heard, i have a radio show. you did not come here to listen to me, although the press is here, a great turnout. i want to introduce the candidate for president of united states, governor mitt romney. >> thank you. i was just on the radio with sam this morning. he asked some good questions on the air there. randy has pretty good audience in the morning time. how do you do? pretty well? thank you for joining me this

morning. a number of students from morningside as well. how many are morningside students? great. good turnout. i have to be honest with you guys, i do not know how any young person in this country could vote for democrat. i know that is a bit of -- i just mean to say to you that my party is focused on making sure that america is strong and prosperous for you, not just how well we can do for ourselves and how many benefits we can accrue for my generation, but how can make sure we can care for our own folks at the same time we care for the next generation and leave america stronger and more prosperous than we found it. i am 64 years old. what i enjoy today, the benefits of living in america, are the result of the contributions made by my parents, made by the

greatest generation, folks like these two here, not those two, folks like these here. they held off tierney in the world. they built the strongest economy in the world. and they left a nation with an economic base the was second to none. the question now is, what are we going to leave? are we going to leave a stronger america? will this be an american century or the century of some other part of the world? i want this to be the american century. one is to have the strongest values, the strongest economy in the strongest military in the world. i am committed to keeping america strong. my foreign policy can be boiled down to keeping america strong and doing whatever it takes. [no audio] our economy is in trouble, and

you know that. this president points out that he did not cause the recession, and he is right, but he made the downturn worse and made the recovery lasts longer than it should have. i do not think he is a bad guy, i just think he does not understand how the economy works. i think he is in over his head. 25 million people out of work or start -- stopped looking for work, or are in part-time jobs when they need full-time employed. when you get your graduation certificate and you go to get a job, you're going to find it is not as easy as you might have expected. home values continue to go down in this country. the median income of americans over the last three years has dropped 10%. this is unprecedented. this is unprecedented.