certify the airplane for nuclear operations. it will have the internal and all that is required, we simply will not do the test and certification, which is like a leper and includes and we think that is the thing to do, bring on this platform on cost and on time. with respect to who is in charge, i am in charge. the secretary of air force is in charge. the fact is, there combat command is the leading man, because they have the acquisition and the requirements capacity in their headquarters. as you know, global strike is still somewhat new, and will acquire that capability over time, but the idea was to give this to the command that had the

capacity right now, and we will certainly think about when the time comes who is the daddy rabbit for the platform. >> ok, we may come back to you. general odierno, is it true that there are requirements, like the trading operations will require for their resources in this constrained budget environment? for example, do you believe that the ongoing range expansion of the jrtc is an initiative, even as the army draws down its mix of units? >> congressman, as we drawdown and as we come out of afghanistan and other places coming it is imperative that we continue to improve the tools of our training program, which is

the joint training center and the other, to make them -- so we're able to prepare ourselves for the upcoming threats. what they might be and so we can properly train our soldiers, so this is a very important part of our program. it will be reviewed like everybody else, but it is something that we set a high priority on. as you know, there is already money set aside for land acquisition, and that seems to be moving forward, although it is slower than expected. so you feel that is an important part of the future? >> i believe that this is very important, and they will have a high priority as we do our review of the budget. >> thank you, gentlemen, my time is up. >> we have one more, from georgia. >> thank you. i appreciate you staying past

and taking the questions. as you know, general schwarts, i represent robins air force base. -- general schwartz, i represent the air force base. some of the information that is given to us, we did not agree and thought there should have been an analysis prior to the decisions being made, and i am personally disappointed that my generals that i try to work with were asked to sign confidentiality agreements, and there could not even be a command structure and a member of congress this serves on this committee. i did not vote for sequestration. i am doing what i can to help you prior to hearing from secretary donnelly, but one of

the things secretary donnelly did do in that meeting, and he did it on three separate occasions, he is commit that there would be no change to the program managers, and he said it would happen for at least the next 24 months and that there would be no changes to that, unless there was a business case analysis presented to the senate and the congress, and i appreciate his commitment on that, and i want to ask you for your support, that the program managers will continue to operate the way they currently do. >> that is the air force position, sir, and i certainly support that, but i hope you would accept just gentle push

back. it is interesting, and by the way, that that there was interaction at the staff level -- >> yes, sir, there was. >> i agree there was not interaction in the principal level, and i take note of that, sir. lines of authority, the question is where is the theme in this between sustaining an acquisition? we would have at each of the depots and acquisition element that would be in line with a broader acquisition team but would represent their interests at the location and depot. that to me seemed to be logical.

it would be a separate unit. there is the concern about what it might portend, and we did not, as others on this issue, and we certainly would stand by the secretaries commitment, but all i will say is please allow us again to come back to you, as he often said he would do, to make the case as articulate as we can about why we think we should organize this way, ok? >> and we would ask that a business case scenario be presented and that there be dialogue between the members of congress and the generals that are operating the base. i do not think anybody on this

committee or any of you are enough to think that we can get through the type of budget reductions without some changes. i am certainly not. i am glad to know that your onboard with that. maybe there had been some misunderstanding, if you will. all of you play an important role in georgia. the logistics base, kings bay or benning, and if i can ever be an assistance -- of assistance to you, please let me know. thank you for your commitment, general schwartz. >> thank you, it all that you have done for military families and veterans. we are adjourned.

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>> over the next few hours, we are airing several events focusing on job creation. president obama talking about his plan to create jobs by repairing the infrastructure. in 20 minutes, the republican study committee outlined its jobs plan. after that, senators mitch mcconnell and chuck schumer outline their plans on the floor. later, federal reserve chairman ben bernanke is news conference. >> on "washington journal" tomorrow morning, we will discuss the government funded food and nutrition programs with jim mcgovern of massachusetts, a member of the culture committee. we will also be joined by a michigan republican to look at the economy, representative bill huizenga, and we will discuss vaccines with dr.

stanley plotkin. "washington journal" is live on c-span every day at 7:00 a.m. leister -- eastern. several events to tell you about on our companion network, c- span3. protecting military service members and their families from predatory lending practices with the senate banking committee and also financial literacy. then at 12:45 p.m. eastern, a defense department acted on the continuing withdrawal of u.s. forces from iraq. to discourage attacks, the pentagon will discontinue announcing the troop withdrawal schedule. >> would you continue your statement, please? you will receive an answer, do not worry. >> i am prepared to wait for my answer if pelfrey is an answer -- it hell freezes over. >> he was a former governor of illinois and twice ran for the

democratic presidential nominee and lost. adlai stevenson on "the contenders," live friday at 8:00 p.m. eastern. for a preview, including speeches, go to c- span.org/thecontenders. >> every weekend, the people and events that document the american story. this weekend on "american artifacts," the decorative and fine arts rarely seen outside the white house now seen at the smithsonian gallery, and from the civil war, an author who has written a prequel and sequel to his father's novel, and from the film vault, the goldwater for president follows barry goldwater as the five-term senator campaigns in new hampshire. look for the complete weekend schedule at c-span.org/history.

or for schedules in your in box, click on the alert button. >> president obama went to a waterfront park in the georgetown neighborhood of washington, d.c. to encourage congressional support for the part of his jobs plan to repair the nation's infrastructure. he spoke near the key bridge which crosses the potomac river connecting the district of columbia with virginia. this is 20 minutes. >> ladies and gentlemen, the president of the united states. [applause] >> hello, everybody. all right. thank you so much, everybody. please, have a seat on this beautiful day. it is good to see all these

construction workers out. of all the industries hammered by the economic downturn, construction has been among the hardest hit. since the housing bubble burst, millions of construction workers have had to look for a job. so today, i'm joining many of these workers to say that it makes absolutely no sense when there's so much work to be done that they're not doing the work. not when there are so many roads and bridges and runways waiting to be repaired and waiting to be rebuilt. one of these potential projects is behind me, just a few miles from the capitol building. the the key bridge, one of five major bridges that connect the commonwealth of virginia to

washington, d.c. two of these five bridges are rated "structurally deficient," which is a fancy way of saying that you can drive on them but they need repair. nearly 120,000 vehicles cross these two bridges every single day, carrying hundreds of thousands of commuters and families and children. they are deficient roads, and there are deficient bridges like this all across the country. our highways are clogged with traffic. our railroads are no longer the fastest and most efficient in the world. our air traffic congestion is the worst in the world. and we've got to do something about this, because our businesses and our entire economy are already paying for it. give you an example. last month, i visited a bridge

in cincinnati on one of the busiest trucking routes in america. more than 150,000 vehicles cross it every single day. but it is so outdated that it's been labeled functionally obsolete. it worked fine when it opened 50 years ago. but today, it handles twice the traffic it was designed for, and it causes mile-long backups. that means that big shipping companies like ups or fedex are tempted to change routes, but it turns out that would cost them even more to take the long way. so their trucks, their vans, are just sitting there, bleeding money, bleeding time. smaller businesses, they don't have a choice. they have to go across these bridges. when a major bridge that

connects kentucky and indiana was recently closed for safety reasons, one small business owner whose shop is nearby watched his sales fall 40 percent in just two weeks. farmers, they can lose five cents a bushel when a rural bridge closes. so all told, our aging transportation infrastructure costs american businesses and families about $130 billion a year. that's a tax on our businesses, that's a tax on our consumers. it is coming out of your pocket. it's a drag on our overall economy. and if we don't act now, it could cost america hundreds of billions of dollars and hundreds of thousands of jobs by the end of the decade. so you're paying already for these substandard bridges. you're paying for these substandard roads. you could be paying to make sure that workers were rebuilding these roads and you would save money in the long term if you did. i'm speaking to all the american people right now. [applause]

building a world-class transportation system is one of the reasons that america became an economic superpower in the first place. today, as a share of our economy, europe invests more than twice what we do in infrastructure, china, more than four times as much. think about that. europe invests, as a percentage of its overall economy, twice as much in roads and bridges and airports and ports, china, four times as much. how do we sit back and watch china and europe build the best bridges and high-speed railroads and gleaming new airports, and we're doing nothing? at a time when we've got more than a million unemployed construction workers who could build them right here in america right now?

we're better than that. we are smarter than that. we've just got to get folks in congress to share the same sense of national urgency that mayors and governors and the american people do all across the country. i've got to say, we've got some members of congress here who get it. amy klobuchar, from minnesota, she gets it. she's seen a bridge fall apart in her state. senator whitehouse from rhode island, he gets it. congressman larson from connecticut gets it. i know the mayor of washington, d.c., gets it. but we've got to have everybody on capitol hill get it. last month, republicans in the senate blocked a jobs bill that would have meant hundreds of thousands of private sector construction jobs repairing bridges like this one. it was the kind of idea that, in the past at least, both

parties have voted for, both parties have supported. it was supported by the overwhelming majority of the american people. it was paid for. and yet, they said no. the truth is, the only way we can attack our economic challenges on the scale that's needed is with bold action by congress. they hold the purse strings. it's the only way we're going to put hundreds of thousands of people back to work right now -- not five years from now, not 10 years from now, but right now. it's the only way that we're going to rebuild an economy that's not based on financial bubbles, but on hard work -- on building and making things right here in the united states of america. every the deal that

american is looking for -- that we have an economy where everybody who works hard has the chance to get ahead, where the middle class regains some sense of security that has been slipping away for over a decade now. so that's why i'm going to keep on pushing these senators and some members of the house of representatives to vote on common-sense, paid-for jobs proposals. in the meantime, while i'm waiting for them to act, we're going to go ahead and do what we can do to help the american people find jobs. we're not going to wait for them and do nothing. i've said that i'll do everything in my power to act on behalf of the american people -- with or without congress. we can't wait for congress to do its job.

if they won't act, i will. [applause] and that's why today, i'm announcing that we are actually going to expedite loans and competitive grants for new projects all across the country that will create thousands of new jobs for workers like these. if there's money already in the pipeline, we want to get it out faster. and this comes on the heels of our recent efforts to cut red tape and launch several existing projects faster and more efficiently. see, construction workers, they want to do their jobs. we need congress to do theirs. but here's the good news, congress has another chance. they already voted once against this thing, they've got another chance. this week, they've got another chance to vote for a jobs bill that will help private sector companies put hundreds of thousands of construction workers back on the job rebuilding our roads, our

airports, our bridges and our transit systems. and this bill, by the way, is one that will begin to reform the way we do projects like this. no more earmarks. no more bridges to nowhere. we're going to stop the picking of projects based on political gain, and start picking them based on two criteria, how badly they're needed out there, and how much good they'll do for our economy. and by the way, that's an idea -- [applause] that's an idea that came from the good work of a texas republican and a massachusetts democrat, because infrastructure shouldn't be a partisan issue. my secretary of transportation, who is here, ray lahood, a great man from peoria -- [applause] he's the pride of peoria -- he

spent a long time in congress. he's a republican, member of my cabinet. he knows how badly we need to act on this issue. the other members of congress here, they understand that this is important to their states. i can't imagine that speaker boehner wants to represent a state where nearly one in four bridges is classified as substandard. i'm sure that the speaker of the house would want to have bridges and roads in his state that are up to par. when the senate republican leader mitch mcconnell visited that closed bridge in kentucky that i was talking about, he admitted, look, "roads and bridges are not partisan in washington." that's a quote from him. paul ryan, the republican in charge of the budget process, recently said, "you can't deny that infrastructure does create jobs."

okay, so if the speaker of the house, the republican leader in the senate, all the democrats all say that this is important to do, why aren't we doing it? what's holding us back? let's get moving and put america back to work. [applause] the ideas in this legislation are supported by the leading organizations of republican mayors, supported by mayor gray, who's here. the idea would be a big boost for construction and is therefore supported by america's largest business organization and america's largest labor organization -- the chamber of commerce and the afl-cio think this is a good idea to move forward on. and they don't agree on a lot. and when 72 percent of the american people support the

ideas in this bill -- 72 percent of americans agree with this -- republicans, democrats and independents -- there's no excuse for 100 percent of washington republicans to say no. that means that the republicans in washington are out of touch with republican voters. we've got to make this happen. [applause] now, if you don't want to take my word for it, take it from one of my predecessors. it's one of the previous presidents. he said that -- and i'm quoting here -- "the bridges and highways we fail to repair today will have to be rebuilt tomorrow at many times the cost." he went on to say that "rebuilding our infrastructure is common sense" --that's a quote -- and "an investment in tomorrow that we must make today." that president was ronald reagan.

we just put up a statue of him at the airport. since when do we have republicans voting against ronald reagan's ideas? there's no good reason to oppose this bill -- not one. and members of congress who do, who vote no, are going to have to explain why to their constituencies. the american people are with me with this. [applause] and it's time for folks running around spending all their time talking about what's wrong with america to spend some time rolling up their sleeves to help us make it right. there's nothing wrong in this country that we can't fix. there are no challenges that we can't meet, especially when it comes to building things in america. it was in the middle of the civil war that lincoln built the transcontinental railroad. it was during the great depression that we built the hoover dam that brought electricity to rural america.

we have built things even in the toughest of times -- especially in the toughest of times because it helps us improve our economy. it gets us going. it taps into that can-do american spirit. it gives us pride about what we can accomplish. now it's our turn to forge the future. everybody here -- we are americans. we're not people who sit back and watch things happening. and if congress tells you they don't have time -- they've got time to do it. we've been -- in the house of representatives, what have you guys been debating? john, you've been debating a commemorative coin for baseball? you had legislation reaffirming that "in god we trust" is our motto? that's not putting people back to work.

i trust in god, but god wants to see us help ourselves by putting people back to work. [applause] there's work to be done. there are workers ready to do it. the american people are behind this. democrats, republicans, independents believe in this. these are ideas that have been supported by all those groups in the past. there's no reason not to do it this time. i want you to make sure your voice is heard in the halls of congress. i want us to put people back to work, get this economy growing again, and remind the entire world just why it is that america is the greatest country on earth. god bless you. and god bless the united states of america [applause] ♪

>> today on capitol hill, the republican study committee announced its jobs bill which includes changes to the tax code and federal regulations that members they will stimulate the economy. this is a half-hour. >> let me thank you all for being here this afternoon. one of the things i do back home now, every speech i give i asked a couple of questions of the audience.

how many think we need common sense energy reform? how many think we have enough regulation? every time i do, every single hand in the audience goes up. the old line that the american people get it is true. they do. what we have today is our jobs for growth act put together largely by the rnc but under the leadership of our budget and task force chairman, scott garrett, we have reviewed what we think this does is build on the good work the conference has done, particularly on the regulatory front, taking the initiative sitting over there in the senate, using the tax

reform component we have in this legislation which is largely the work of paul ryan and others over the years. then some of the common-sense energy reform that members of the energy and commerce committee have put together. we think it builds on that good work in those three areas and brings it together in a concise and compact way. the other thing i would add is, we also think it builds on the work we have done at the rnc over the last 10 months where we have focused so much on spending. it should be cut, cap, balance, and grow. that is what we try to put together here. we think it is a good package that makes sense and will help create jobs in the private sector, not this crazy concept of more government employment, but real employment in the private sector. i will turn it over to the architect of heading this effort, mr. scott garrett.

>> i am more a simple country lawyer, but thanks anyway. good morning, everyone, and special thanks to our chairman for being the driving force on all the major issues we have been leading through the r s c. i appreciate the leadership of all the folks behind me, each one taking different parts and some major parts of the legislation we are going to be discussing here this morning. which is a jobs package, in essence. the president's proposal is simply a rehash of the proposals of job creation in the past by this administration which has simply consisted of spending more money, rolling out so-called job ready programs that we hear from the price house would immediately create

jobs for the country, but then quickly we learn that those jobs rated programs are not jobs rated programs and did not create the jobs anticipated but cost the american taxpayers more money. on the other hand we have reposal will be laying out here today which does actually create jobs and does not create more debt for the american taxpayer. we do so in three ways, in the area of tax reform, regulatory as well. the one area i will talk about right now is the area of tax reform, specifically in the area of families. what we try to do is make the

tax code simpler, fairer, and better for working families. we do all this at the same time of making it optional as well, the point that jim referenced already. in a nutshell, what we do is create a system for individual tax rates that are two-tiered, 15% and 25%. there is a standard deduction of 12.5%, and $100,000 for standard deductions. packaged on top of this in order to make it simpler and easier to understand in the more convoluted system we have right now, you do away with a number of provisions that make our current tax code complicated. it will do away with the death tax, the gift tax, with regard to investment taxes, and index capital gains. put all of that together can you have a fairer, simpler system that people can opt into

or they can remain in the current system. at the end of the day, we believe this is good. it is good for families, good for the economy, and good for job creation, what this is all about. i would like to now turn it over to reed. >> i appreciate you having me up next, because this is getting heavy. i was asked to head up the regulatory reform portion of this. most of the regulatory reform aspect of our jobs bill has to do with reforming process, but it starts with putting a moratorium on regulations until unemployment reaches 7.8%. during that time, or while the moratorium is on, we are asking

our regulatory agencies to measure regulations against the 21st century economy. we also changed the process -- you might be familiar with the grains act by which a regulatory agency promulgates a major role, -- rule, the congress would have to weigh in on that and approve it before it can be promulgated. any regulation that exceeds $100 million, legislative officials would have to weigh in. the single most important thing i can demonstrate today is why this is so important. i am from northeastern wisconsin. i represent the eighth congressional district, and a large and robust timber industry in wisconsin. it is less robust today. we are importing construction lumber from canada, just miles outside of one of the most robust forests in the united states. if we were to do a timber sale in the state of wisconsin, this

is the contract that is required right here. pretty simple to handle. however, if it were to do a federal timber sale, this is the contract. i was just told by a timber company in hayward, wisconsin, finished a study for a timber study in hayward. it cost nearly $8 million and took six years, and the timber sale was for $4 million, all at the cost of the taxpayer and that the cost of wisconsin jobs. what our bill is intended to do is begin to clear up the red tape, reform the regulatory process, and makes certain key part of the dialogue with america's large and small businesses. thank you very much. >> first of all, i want to thank all my colleagues for the hard work they have done in putting this together.

this is exactly what the american people have been telling all of us that they need. we all know as we said before that the government does not create any jobs. the tax provisions with lowering corporate raids and closing loopholes makes the u.s. more competitive and helps keep jobs here, which is one of our goals, so they are not moving offshore. the importance -- those in my district are saying we could do something or expand, but we are not going to because we don't regulations are coming down the pike. we don't know what regulations in general are going to do. i don't want to hire somebody and next year have to turn around and lay them off after i have spent all this money train

them. the message is there. they just want our help in making their job easier so they can actually create the jobs. in my opinion, this report plan does exactly that. again, i thank everyone who had a part in it. i am introducing to you the energy to room -- the energy guru. >> i want to thank jim andy rsc -- jim and the rsc for their leadership for bringing us all together. we are bringing a jobs act because we want to get our economy back on track, and we are proposing solutions that go to the heart of the problem. while the president is riding around on his canadian made thus giving political speeches, it is his own speeches that have been standing in the way of our job creators. when you look at the energy sector, what we have put together in our package for energy, however objective is to completely eliminate our independence on middle eastern oil, and we can do that just by

utilizing the resources we have here in america that are currently blocked off by the federal government. if you go through the bill and look at the things we are doing on energy, we are opening up areas that are blocked by the federal government from expiration. there are vast reserves of oil on the outer continental shelf. not only will recreate millions of jobs with this legislation, we will also be able to bring in billions of dollars of federal revenue that will help us pay down our national debt, so you accomplish many things by doing this. the president gives a lot of lip service to the keystone pipeline. right now you have a project, one project that can create 25,000 jobs today. canada is saying they want to send us more oil that we don't have to buy from middle eastern countries, and at the president -- and yet, the president continues to hold up this project. 25,000 jobs are at stake right now and billions of dollars of private investment.

the president's idea of stimulus is another stimulus bill that spends more money we don't have to have government play this on the capitalism and that we have seen from solyndra. unfortunately the taxpayer is left holding the bag. you have private investment out there. there are billions of dollars of private capital out there waiting to be spent creating jobs in america. 25,000 jobs that are ready to go, and yet the president continues to hold this project up. what we are saying is, mr. president, if you don't want to create 25,000 jobs, we are going to make sure they are created whether or not you continue standing in the way. , spoke in a bipartisan way over -- congress poke in a bipartisan way over the last two years and said we don't want cap and trade. we don't want a national energy tax. we prevent epa from doing that. if you look all throughout the vast reserves we are finding in natural gas, we see that in louisiana with hanes bill shale, which has employed thousands of people and brought tens of thousands of dollars into louisiana's economy.

the ability is there to create those jobs and to create that american may energy. and so, american made energy can lead the way and job creation. we can create millions of jobs and bring in billions of dollars in new federal revenue. the only thing standing in the way right now is president obama and his radical policies. with this bill, we are unleashing the potential of america's energy sector in creating those jobs. that is something we need to do to get our economy back on track. mick mulvaney will be the tax guru. >> to follow-up on chairman really the start of cut, cap, and balance. as we started to work on that it grew and grew. we knew it had to stand by itself. it is properly seen as a complement to the next step of cut, cap, and balance. we have regulatory reform, energy reform, and that tax policy reform. tax policy breaks down into two separate pieces, the individual tax policies that congressman

garrard talked about and the corporate tax policies. a lot of the work started on actually taking the president at his word in his state of the union address when he said he wanted a lower, flatter, simpler corporate tax rate. we never saw any real movement from that from the white house. our proposals are very simple, we go to a simple 25% flat tax for corporations. we anticipate a world with all the loopholes gone. we are actually trying to put it into action here. one thing we try to move to is an immediate appreciation on capital expenditures. these are things we think will

be solid bipartisan support for. we have a repatriation proposal to encourage the industry to bring money back from overseas. we are hearing there is more and more bipartisan support for that as well. we anticipate going permanently to a territorial tax system. i will talk about my experience with that back in my district. procter and gamble makes duracell batteries. every aa battery they make is made in my district. that factor makes money. they also make them in china, and that factor makes money as well. if procter and gamble makes $100 in my district and $100 over in china -- if they want to bring that money back into the united states to expand that money- making plant in my district, we tax them on it again. the choices so many

multinational corporations based these days is, do not want to lose some of that money, do i want to pay that tax to invested in the united states, or do i want to expand my overseas operation? that is what we need to fix. we are the only developed nation in the world that does this. we are anticipating changing net and are excited about the for us. i will turn it over now to the more regulatory reform. ms.? >> i want to thank all my colleagues for their work on this project. every single year since the clean air act passed, we have had cleaner air, every single year. so now to come in with regulations that are killing jobs at a time when we desperately need jobs is absolutely the wrong approach for this country. i have over here just the rules

that have passed in the first 10 months of this year. we stack them up in my office. they are over 9 feet tall. as you all know, the federal register is in teeny tiny print. 9 feet tall. we cannot get it to stay up, it kept falling over. so we wrapped in red tape, because the government just wrapped our economy in red tape. whether i am talking to my local community banker in wyoming, a little farming community, about borrowing some money, loan applications have gone from being this kid to being this -- from being this thcik to -- thick to this thick, for every single borrower. same business, same banks, and now the ability to borrow

money, even for our little business, has become exponentially harder, exponentially more expensive. imagine trying to start a business in that scenario. i began to wonder, is this the new experience that my little family had happened? i went and did an unscientific survey on my own web site, and i got feedback from all over wyoming. what is the number one impediment to jobs that people in wyoming seat? -- see? we targeted businesses with this e-mail. by far and away, federal regulation was listed. it is not even you need to my -- not even unique in my state. we know from the world bank study that the united states went from no. 3 in ease of starting a business to #13. our ranking has dropped because of this garbage.

we know from the gallup poll recently that it is regulation that is choking business. that is their number one argument, regulation is choking business. i don't know anybody that thinks we are under regulated. honestly, i don't know anybody who thinks we are under regulated. so why don't we do a moratorium on these regulations? why don't we pass the bills that the forgotten 15 at the house sent to the senate that includes a lot of regulatory reform, and just see if it works. i think it is important that we get about the business of taking the shackles of this economy, -- off of the economy, and this is one way to do it. i would like now to turn over to my colleague from kansas. >> thank you, cynthia. i am from the state of kansas.

mr. chairman, i want to thank you for your leadership and others as a freshman, it is and honor to participate in moving the country in the right direction. the president says he wants jobs. we have a plan, the jobs for growth act will create new jobs. we all know washington is not the impediment to the creation of new jobs. real growth comes from growing the economy, not the government. we need to unleash the potential of america's energy capabilities. in my home state of kansas, the keystone project, the president indicated himself is single- handedly holding up the creation of 25,000 new jobs. mr. president, let the jobs 25,000 jobs. we have the proposed expansion of the electrical power plant in kansas. let the jobs began. we need them in our nation. we can meet inner -- america's energy needs and improve our

national security with the keystone pipeline. the potential is there. the problem is this, red tape in washington. >> i will be very brief. a big thanks to our leader, jim jordan, for initiating this to congressman derrek for -- garrett for spearheading it, and to congressman -- the other congressmen for doing the lion's share of the work. there is somebody in america who doesn't think we are overregulated. that is the president of the united states. this is not hard. this is not rocket science. this is a collision of two dramatically different mindsets. this president believes that this town create jobs. say it. that is what he believes. you all should not be bashful about reporting that. everybody up on this stage

believe something very different. i would argue most of the american people believe something very different. this country creates jobs. all we want our government to do is get out of the way. this plan is the personification of that, to get washington out of the way so that the job creators in this country can do what they do best. this is the response to the president, who for months now has been out campaigning on a jobs plan based on his mind set. let's have that debate. let me introduce my colleague from idaho, congressman labrador. >> i am going to be brief. about four or five months ago was talking to my staff and we were trying to decide what we need to do to change the economy could we started talking about all the plans that were here in

congress and we talked about cut, cap, and balance, and we realize we need to cut, cap, and balance the budget. we also talked about how there is no time in history in the united states that we have actually been able to get out of an economic mess by just cutting spending. i started talking to the rnc and -- the rsc and other members of congress that we needed to start talking about growth. we need to have a pro-growth agenda. we decided to write a letter to the president. wrote a letter where we used his own words. we use the words that he used in the state of the union, and i wish that you would look at the words he has said himself. he told us in the state of the union he wanted to get rid of job killing regulations. he told us he wanted to have a flatter and fairer tax and he told us that he wanted to actually have energy independence. he has continued that theme. so i invited the president to work with the republicans in the house, and i reminded him that the last time we had huge economic growth, it was under bipartisan legislation when you had bill clinton in the white house and you had republicans in the house and senate, and they decided to work together to bring america together and to bring america forward.

we can do it. we can work together. we can actually grow our way out of this economic mess and save thousands and thousands of jobs that are being lost. we can do it together. now it is time for the president to act on his words, or is he just going to continue to campaign and blame the republicans and house for the problems that he has caused through his of overregulation, over taxation, and over stimulation. we need to do these things. i invite the president and the democrats in the house and senate to work with us. thank you. >> we will take a couple of questions. yes? >> what steps based on what you are hearing from colleagues [unintelligible] including republicans, going in

the opposite direction and raising taxes. >> obviously we think that is the wrong approach. i will let the members speak for themselves, but my guess is every member is opposed to tax increases. we are watching it closely and reading the same stories that some of you are writing. we saw the story yesterday that six of the 12 now are talking in an independent way. there may be some focus on the catchall term which is revenue. we are watching it closely. as we have laid out up here, we think the way to get economic growth is through a proposal like ours, not for tax increases. >> [unintelligible] there is some form of revenue [unintelligible] some form of revenue -- >> we are against tax increases. the speaker has a strong history and a long record of

being against raising taxes. obviously this summer when there was talk of this, there was no tax increase, which was one of the positives that came out of the entire debate this past july. we are adamantly opposed to raising taxes. the entire leadership has been strong on that as well. >> [unintelligible] a tax increase in your mind, that would be unacceptable? >> what we are talking about is, we don't want the tax burden to increase on families and businesses in this country. our plan reduces the tax burden and make it more fair for families and businesses, so that you get a growing economy and more job creation across the country. >> you have an estimate for how many jobs the plan would create? and also what its impact on the deficit would be?

>> we think it will create a lot more than obama has created, but we don't have a number. we have not put a score to it. again, we think, when you do the kind of things that steve and others are talking about on energy, allowing things to take place, he know that indian, that is job -- we know -= that in the end, that is job creation and additional revenue to the treasury. we think it will generate where way. >> [unintelligible] doing something that would be revenue neutral approach to tax reform. >> i will let the tax experts talk about that. >> let's go back to the deficit for a secondary look at the group up here. i meanm -- mean, this is the group has been fighting against the deficit since we got here. you will not find a group were committed to plugging this hole in the deficit.

one of the beauties of actually taking a serious look get this is, you can look at what other countries have done and what the historical experiences have been. one of the things we hit on is the system has prevailed in hong kong since after world war ii. it is actually a flat tax of about 15% with options for rate progressive system. the tax code there is about 200 pages long. it generates almost exactly the same percentage of tax revenue for share of gdp as our tax code does. we believe that simpler taxeswes it paid. people are more willing to pay the taxes. if the move to a simpler system, we will enjoy the benefits of that. secondly, you have a situation where there is $350 billion every year that is not collected because of complexities of the system. there is another four hundred

billion dollars in tax preparation charges sucked out of the economy that we will be able to push back in. the third piece is what the opportunities are here, which is grown. you put together the simplicity of the system, which has been proven worldwide to generate the same percentage of gdp as we have now. you have this tax gap, the money we expect to collect, and then we have growth. none of those things are scored on the way the cbo is going to look at this bill. if we take real-world approach, the deficit -- it will help solve the deficit problem, and not a single one of us would be up. we thought otherwise. thank you all very much. we appreciate it. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

[indistinct conversations] >> while house republicans were outlining their plans, the question of jobs was on the senate floor in remarks from chuck schumer and minority leader mitch mcconnell. their comments or little less than a half hour. mr. mcconnell: there's no denying the fact that the policies of the past 2 1/2 years have made a bad situation worse. for two and a half years the democrats completely dominated this tow they got everything they wanted. and what happened? unemployment has hovered around 8% for 32 months, the so-called

misery index is worse than it's been in more than 25 years, actually unemployment is hovered around 9%. consumer confidence is at levels last seen during the height of the financial crisis but if there is one number that really stands out, it's this: 1.5 million. that's the number of fewer jobs we now have i this country since the day president obama signed his signatory jobs bill into law. these are just some of the numbers that all of us, republicans and democrats, read about every single day. but it's not the numbers that compel us to action. it's the stories that lie behind them, it's the millions of men and women who have seen their dreams shattered, their lives upended, and their potential unfulfilled. and what republicans have been saying is that if we truly want to help improve the situation we're in, if we really want to

turn this ship around, then we feed to learn from our mistakes and take a totally different approach. what we -- we know what policies haven't worked. we've tried that. what sense does it make to try those same policies again and again? and that's why republicans in the house and the senate have been taking a different approach democrats may control the white house, they may control the senate but for the past ten months republicans in the other half of congress have done their best to correct the mistakes and excesses of the previous two and a half years and set us on a different course. and they'veone something else that democratsave not done over the past few years, week after week the republican majority in the house of representatives has been passing bills that actually have a chance, actually have a chance of gaining bipartisan support and becoming law.

they're actually trying to do something. unlike the president and the democrats who run the senate, house republicans are designing legislation to pass rather than fail. they want to make a difference rather than make a point. and the only thing keeping these bills from becoming law is the democrats in the senate won't take them up. now we know the president's strategy, his so-called jobs bill has one purpose and only one: to divide us. just this morning i read a story that quoted some democratic operative almost bragging about the fact that they don't expect any of the legislation the president has been out there talking about on the bus tour to pass. they openly admit these bills are designed to fail. it's not exactly a state secret that republicans and, yes, some democrats don't think we should be raising taxes right now on the very people we're counting ton create the jobs we need to get us out of the jobs crisis.

and yet the one thing that every single proposal the democrats bring to the floor has in common, it does just that. so the democrats' pn is to keep putting up bills on the floor they know ahead of time we'll vote against instead of trying to solve the problem. and they don't even hide it. the president's top strategists actually issued a memo a few weeks ago saying the president would use this legislation not as a way to help peoe, but as a way to pummel republicans. meanwhile, house republicans have passed bill after bill after bill that are actually designed to do something. on march 31, they passed h.r. 872, the reducing regulatory burdens act. it got 57 democratic votes. 57 democratic votes in the house. a bipartisan bill that could pass and become law. on april 7, they passed h.r.

910, the energy tax prevention act. it got 19 democratic votes. and on and on. there are 15 of these, madam president. 15 of them that he passed each with significant democratic support, one with 33, one with 28, one with 21, one with 23, one with 16, one with 10, one with 47 votes. so there are 15 of these bills that have passed the house with bipartisan support, and here in the senate we don't take any of them up because we're busy taking up bills that everybody knows are not going to pass. this week over in the house they're going to pass four more bills making it easier to hire out-of-work americans. and just last week house republicans passed a bill that would repeal a law requiring the i.r.s. to withhold 3% of future

tax payments from any customer that does business with the government, a bill the president himself said he'd be willing to sign into law. 170 democrats voted for it. why don't we pass it here in the senate? the president is waiting to sign it. this is just the latest example of a simple bipartisan bill that struggling businesses are begging us to pass, but the senate democrats are holding it up right now because it doesn't fit the story line. now i'm not saying we have to vote on every one of the bills that the house passed just as they are. there is an amendment process for that. but why not take them up? every one would help create jobs and none -- none -- would raise taxes. that's what we call compromise. it's called finding common ground. and it's how the american people expect us to legislate. what we're witnessing in washington right now is two very different styles of governance.

a republican majority in the house that believes we should actually do something about the problems we face and which has put together and actually passed bipartisan legislation that would help address those problems. and a democratic majority here in the senate that's teamed up with the white house on a strategy of doing nothing. nothing. all for the sake of trying to score political points and spread the blame for an economy that their own policies have seen in place as they look ahead to an election that's still more than a year away. now the president's economic policies have failed to do what he said they would. and now he's designing legislation to fail. americans are actually tired of failure. so republicans are inviting democrats to join us in succeeding at something -- anything -- around here that would make a difference.

i guess to sum it up, madam pridt, what we're saying is why don't we quit playing the political games? the problems we face are entirely too serious to ignore. let's take up bipartisan bills, house republicans have already passed and actually do something. there is no betterime to tackle the problems we face than now. let's not squander this moment because some political strategists over at the white house is enamored with the own reelection strategy. let's take advantage of this moment when the two parties share power in washington to act. as i often note, it's only when the two parties share power that they can share the credit and the blame. that's why some of the biggest legislative achievements have taken place at moments like this. and that's why i've been calling on democrats in washington privately and publicly for the

past year to follow the example of those congresses and those presidents before us who were wise enough to seize an opportunity like this one for the good of the country. we face many serious crises as a nation. we know how to solve them. let's not let this moment pass ht. well, madam president, today i would like to discuss the jobs bill we're currently debating and how important it is that we pass this right away. i'd also like to respond to the minority leader's remarks this morning in which he tried to deny the bipartisan nature of this proposal and instead sought to divert this chamber towards a hodgepodge of bills taken up by the house. mr. president, madam president, all across the country and in our state of new york from poughkeepsie to buffalo, there are roads, bridges and sewer systems in need of serious

repair. and in each of these places, there are thousands of middle-class families desperately looking for work. in the construction trades, the backbone of the middle class in many of our communities, in new york and around the country, there is 25%, 30%, 40% unemployment, and that's true for many of my colleagues on both sides of the aisle. we all know that in previous recessions, 60% of the new jobs were in construction. that's because they would lower interest rates and build more housing. now there is no more lower interest rates because when the recession began, they were already very low, and of course there is a surplus of housing right now in america. but this week, by voting to pass the rebuild america jobs act, the senate can get thousands of those americans off the unemployment line and back into the work force, and because they

get paid good salaries, the money they get flows into the economy and creates a multiplier effect and creates other jobs. these are good, solid, high-skilled american jobs, jobs that we need. and investing in our roads, bridges and sewer systems couldn't be more urgent. more than one in four of our nation's bridges are either structurally deficient or obsolete. i put out a list of those in new york state and it was astounding in every part of our state, and we all know as we get closer to winter, our deteriorating roads will place a heavy burden on commuters and on local taxpayers. our local towns and villages and counties and cities, they can't afford the infrastructure work that's needed right now because of tight budgets and budget cutbacks at the federal, state and local levels. and as this past weekend's storm made clear, investing in our

crumbling sewer systems has never been more essential as up and down the northeast old sewer systems give way to serious flooding. now, we can make a down payment on these priorities by passing this bill, and we should do so in a bipartisan manner. when i travel across new york state, two of the first things people bring up to me are jobs and fixing our infrastructure. this bill does both. it doesn't matter whether the people are democrat, republican, independent -- upstate, downstate, men, women, liberal, servive. they all say the same thing and we see this reflected in public opinion. a recent cnn poll showed that nearly three-quarters of americans support additional federal investments in our infrastructure. yes, they're worried about the deficit and our long-term fiscal health. but they know we can't cut our

seed corn. infrastructure projects that create jobs and help america grow economically. here's the best part of this bill: it invests in projects that create jobs, but it's fully paid for by asking the wealthiest among us -- those who have incomes -- incomes -- of over $1 million -- to pay a praks on more of their taxes and they pay that not on their entire income but just on the part that's before $1 million. so if a millionaire, someone worth a lot of money, if somebody has an income of $1.1 million, they only pay this small .7% increase on the $100,000 that's over a million. their first million doesn't change. the tax policy doesn't change. now, over the last drkd the middle class has taken a punch in the gut. the cost of sending kids to college has gone way up, the job market is tougher and tougher.

middle-class incomes are declining while middle-class costs are rising. it is so hard as a family -- the middle-class family sittings around the dinner table friday night to figure out thousand pay all those bills and provide a great live for the future and for the children. the very wealthy, the very, very wealthy have done very well over the last decade. a lot of those wealthy people live in our state of new york. we say, god bless them. they've started successful businesses, done well over the last decade, and so, to pay for this bill, we're just asking them to pay a sliver more -- .7% more of each dollar they earn over $1 million, and this one they can't say, well, we're afraid the money will be wasted because it goes to infrastructure, directly to infrastructure. and there is no -- the way this is set up, there's no politics in the process. it's the most needed projects that work.

let me give you a fact, folks. right now -- i know many of my colleagues joined with me and senator brown, senator stabenow, senator casey in saying china has got to play fair. we're all worried that china will get ahead of us economically. well, right now china is spending four times as much on infrastructure as the united states -- four times as much. that's not four times per capita as much. that's four times as much. and here's the real kicker: according to a recent survey of 1,400 business leaders in 142 countries, the u.s. ranks number 24 in overall infrastructure quality. is that a shame? we're behind countries like barbados and oman. we also rank number 20 in roads, behind the united arab emirates and libya.

29th in ports, behind malaysia, bahrain and panama. and 31st in air transportation infrastructure, behind chile, and malta. how can it be? these great united states which we dearly love, which always was at the top in creating roads and bridges and tunnels and great water systems. the third water tunnel in new york is being built right now. it is an engineering wonder. it started in the 1950's, the planning for it i believe. and now we're number 31 in transportation, 22 in ports, 20 in roads, in those categories behind countries like the united arab emirates, portugal, malaysia, thailand, chile? if that isn't a wake-up call, i don't know what is. we can't afford to let our global competitors get the edge. so this bill rebuilds our

infrastructure, will send a shot into the arm of an economy that desperately needs it, and pays for it only by taxing those with an income over $1 million of those who are very, very wealthy and have done very well in our society. how can we vote against something like this? well, one would think maybe the only haven't because some people don't want the economy to grow and prosper. i hate to think that, but infrastructure has always been a bipartisan issue in this body, and it should continue to be. now let me respond directly to the minority leader's comments this morning. he derided the proposal on the floor as something that had already been tried, something that had no chance of passing, and something that was not bipartisan. well, first, already been tried? oh, yeah.

is the minority leader saying because we built the eerie canal or the highway system in the 1950's we shouldn't do anymore infrastructure? it makes no sense. makes no sense. and every study shows that the infrastructure part of the stimulus bill created lots of jobs and then left us with better infrastructure. now, then he said -- as i mentioned -- not just was it i t tried already, but it was not bipartisan. well, we know that the need for infrastructure is a bipartisan economy. because the minority leader may be imposing a top-down strategy that bars anyone on his side from voting for any proposal offered by the president to improve the economy doesn't mean these proposals aren't bipartisan. just yesterday the former republican senator from ohio, a

fiscal conservative if there ever was one, senator voinovich, was quoted saying he believed the need to repair our roads and bridges was so great that he thought president obama should be raising the gas tax to fund those investments. i don't know if i agree with him on that specific solution, but, mr. president, isn't that remarkable? a republican senator calling for revenue increases to pay for infrastructure investment. that's what we do in this bill, madam president. and let me just say once again, he's not in the senate right now, so he's free to pretty much do what he wants. i would hope other senators who are here in the senate would join in that call because i believe they know in their heart it is the right thing to do. the only difference between what we proposed and senator voinovich proposed is that instead of asking middle-class americans to pay more at the pump, we ask those whose income is above $1 million to pay their

fair share to help put construction workers back on the job. that seems like the right set of priorities to me. so the minority leader is clearly wrong when he says this concept isn't bipartisan. another former senator, chuck hagel from nebraska, has been a leader in calling for an infrastructure bank, which is in this bill. senator hagel sponsored one of the first pieces of legislation creating an infrastructure bank and has continued to call for it since leaving the senate. so there are lots of republicans out in the country who support this measure. the polling shows a large, large number of republicans support the kind of proposal we have on the floor. building infrastructure and having those who make over $1 million pay for it so we don't increase the deficit. that is a bipartisan proposal. so, mr. president, let's not hear from the minority leader or

anybody else -- madam president, let's not hear from the minority leader or anybody else that the proposal on the floor isn't bipartisan. just this morning the top republican on the environment and public works committee is quoted discussing the progress that he and the chairwoman of that committee are making on a two-year surface transportation bill. this is great news. i'm glad to hear they're close to advancing that bill. but if you believe infrastructure is enough of a priority that you can support a long-term highway bill, why would you object to speeding up 107some of that investment now o we can put more in americans to work quickly? madam president -- you're clearly madam president -- this bill is bipartisan for sure. the minority leader just has a political strategy to block all of our president's initiatives to improve the economy.

now, what has the minority leader called for instead? he's called for the senate to take up a hodgepodge of bills sent over by house republicans that even when taken together don't do enough to tackle the jobs problem. who would believe that this hodgepodge of bills will do more for jobs than the traditional way we get out of recessions: infrastructure building. most of the ideas cited by the minority leader have next to nothing to do with jobs at all. many of these ideas belong more on a lobbyists' wish list rather than any serious jobs agenda. it's a stretch to call many of these bipartisan. many of these bills are items that republicans would be seeking to pass even if we were in a boom and had full employment. many are just ideological priorities dressed up as job solutions. it's laughable for the house

leadership to act like these proposals would address the jobs crisis when they are signature on real solutions like the china currency bill. i would say to the speaker and majority leader over in the house who want to do something about jobs and are worried about the two houses not working together, we had a large bipartisan majority -- 65 votes -- saying we're going to force china to play fair on currency. their failure to do so causes millions of jobs, good manufacturing jobs primarily, not exclusively, to leave this country. there is nothing congress can do more that would uplift our manufacturing sector than confront china's unfair trade practices. but speaker boehner, majority leader canter sit on that bill and now tell us to take up this little hodgepodge of items? autograpour bill passed, the cha

currency bill with a bipartisan supermajority in the senate. the house leadership continues to sit on the sidelines while china takes advantage of us, and the china exrenc currency bill s languishing in the house for no good reason. speaker boehner, heed the will of your chamber and put that bill on the floor. and the minority leader in the senate would be well-served to stop pretending that these pieces of the president's jobs bill are not bipartisan just because he is withholding his support in service to perhaps a strategy that outlines his number-one goal: the defeat of the president. it's time to stop the games and accomplish something that can make a real dent in the jobs crisis. i say to my colleagues on both sides of the aisle, pass this bill, rebuild our ailing and

aging infrastructure, create jobs, and make sure that what we do here does not reduce the deficit by having those whose income exceeds $1 million pay a small, [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> war on the economy from ben bernanke. he said the economy would be worse off if not for actions taken by the fed several years ago. this is 50 minutes.

>> this afternoon. welcome. the war review the policy decisions of the market committee. i will place it in the context of our economic projections. the committee decided to maintain the policies that were initiated a previous meetings. the committee is keeping the target range at the zero.14%. it will warrant load funds through 2013. the committee will continue to extend the average maturity by purchasing an equal amount of shorter-term securities. our guidance should limit this. the program should foster more conditions thereby helping the balance s heet.

we are continuing our previously announced program in which the principal payments are being reinvested. the committee regularly reduce the size of the holdings. we are prepared to adjust these as appropriate. the purchase pence amid projections for economic growth, the unemployment rate, and the inflation rate for the years 2011-2014. the tendency is our indicated in the figures that have been distributed. the projection shown represent the assessment of the break to which each variable will converge over time.

the longer projection has a tendency of 2.4%. the longer run have a tendency of 5.2% to 6.0%. this can be interpreted as estimates of the growth. because the rate of output growth are determined by non monetary factors that may evolve, these estimates are uncertain and subject to revision. the tendency for inflation is 1.7% to 2.7%. these projections reflect judgment about the inflation

rate that is most consistent with the federal reserve mandate of stable prices. the rate is just to be 2% less. i turn to the economic outlook. the projections for 2011 have a tendency of 1.7%. output growth strengthened, and had win on growth earlier in the year. global supply disruptions associated with the japan have diminished. the prices of oil and other commodities have gone down. the committee expects only a moderate pace of growth in quarters reflecting the troubled housing sector and

credit conditions for many households. looking further ahead, growth is expected to pick up somewhat. it strengthens confidence. the central tendency pecks of gradually from 2.4% it to 2.9% in 2012. in light of the anticipated ones, they expect the rate will come in coming quarters. projections have a tendency of 8.5% it to a 0.7%. it is lower than they lately monthly reading.

the unemployment rate is expected to climb further by the fourth quarter of 2014, well above estimates for the longer run rate of unemployment. while we still expect economic activity will improve gradually over time, the pace of progress is likely to be frustratingly slow. there are some of again downside risks. issues have contributed. the fed had adverse effects of confidence and growth. we will continue to monitor european developments closely. i will turn to the outlook for inflation. the prices of oil and other ones are earlier this year. they picked up over the first

half of 2011, reflecting higher prices of gasoline, food, and goods and services. prices of motor vehicles surged. inflation appears to have moderated. a survey measures a market indicators implied that longer- term inflation exhortations have remained stable. inflation will settle at or below the mandate consistent rate of two% or less. the tendency for inflation projection is 2.7%-2.9%. it remained subdued for 2014. the committee will pay close

attention to the evolution of inflation expectations. the current outlook shows context. the mandate for the congress is to say maximin unemployment. frederick is to save a maximum unemployment. the committee decided to maintain the current degree of monetary policy accommodation. we'll continue to assess the outlook. we are prepared to employ our tools to promote a stronger economic recovery. they strive to do this as clearly as possible. we have a series of discussions about the approaches to a

provide additional information about our policy goals and strategies. no decisions about approaches were made about this meeting. thank you for your patience. >> over the past several months, there has been increasing criticism. e received a letter on the eve of a meeting encouraging enough to take actions from the gop leadership. what are the gop candidates not hearing?

>> they tried to stay non- partisan. we do what we can for maximum unemployment. although it must be accountable, in the short term is important that they be free from pressures. we will make these decisions based on what is good for the economy. i would point to the record. this has been average to%. -- 2%. the criticism is based on the concern of inflation.

we listened to everyone's input. we are free to make decisions based on the interest of the american people. this is what we're going to do. >> >> what are your views of the advantages and disadvantages? >>the mandate is a dual mandate. to have one for both employment and price stability. we have a free market in place that allows us to communicate and think about the mandate. we talked about nominal gdp as a variable us something to add

to the list of variables with think about. it is an interesting discussion the lives of both sides of the mandate, not just some accommodation. we can do this. we have not contemplating any radical change in framework. >> you said you understand some of the framework. the leaded the anger is directed at the fed. some say the fed is part of the problem. is the fed part of the problem?

can the fed to anything to promote an equitable economy? >> i understand that many people are dissatisfied with the state of the economy. increases in the quality have been going on for 30 years. that has continued. i sympathize with the notion that the economy is not performing the way we would like to be. i think the concerns about the fed are based on misconceptions. the federal reserve was involved. weaver during this because it

wanted to preserve salaries. that is not the case. we are trying to prevent a serious collapse of both financial system and the american economy. i believe that our efforts which proves successful were very much in the interest of the broad public. it would be helpful to keep its assistance to work with us to help create more jobs. we're doing our part to try to create more jobs and opportunities.

this is too good chance to earn in coming gain experience. >> the statement says that this will stay near current levels through mid-2013. does that suggest the fed could conceive of raising short-term interest rates before

unemployment gets to 8% are lower tax it could be beyond that. one of the things we discussed was having my brother clarify this part of the statement. we have not come to this point yet. there is no implication that we would necessarily move to 2013 with those conditions prevailing.

>> we had the balance sheet march to the original balance sheet. this belongs scale as a purchase. >> who like to turn our portfolio to this only. they began to bring it up.

there by creating this. the housing sector is very important. i do thing purchases of mortgage backed securities is a viable option. it is seven we would consider it conditions where appropriate. we will certainly look at that. >> thank you. this seems to be holding a lot of cash. the deficit is very large. could you shed some light on this/

-- on this? >> a great deal of the investment takes the form of u.s. government debt. it reflects the desire for liquidity and safety. they hold these primarily us change reserves. while it is good that foreign central banks has the confidence to buy u.s. treasury, it is not like the same as investing in equipment. with us in a little bit of

improvement. it is too low to be consistent with the full economy. >> could you comment on the failure of mf global? the ration was 40-1. were you aware? did the fed approve? is that acceptable of a level ratio? >> the new york federal reserve bank approved it to be a dealer in feb of this year. the company met the criteria that had been set forth.

we accept the standards in a way that would allow smaller firms to participate. there are a couple of points. this is done by them. we do not have ongoing insight into developments within the company. this and not in any way constitute to a seal of approval. we were a primary dealer. the stock trading with them. we suffered no consequences.

the company declined quickly based on the a small number of large bets. we are not aware of that. we are not the overseer's. >> was that an isolated case? and appears that we are monitoring the cost of impacts on funding markets elsewhere. we have not seen any significant impact. >> should they be doing this?

corrects the combination of a broker-dealer and futures commission markets imply that the sec is the appropriate supervisors. there would not have qualified under the provisional guidance. there's no plan for them to be an overseer of the companies. >> this is a third straight set of economic projections of have been downgraded. is there some systematic error or blind spot that is behind these forecast stacks water you do to understand what a gong?

>> we spend a lot of time reviewing those errors. we look at this very carefully. i think it is clear that in retrospect the severity of the financial crisis and a number of other problems including the house and market is more persistent. there were deleveraging by the household sector. but it slowed the pace of recovery. we have downgraded the medium term forecast.

i would add that although i think it is very important to look at the fundamental factors affecting the recovery, there have been some elements of bad luck. and natural disasters in japan. the european debt crisis was not anticipated to be as severe. all of these things have the negatives for growth. they explain part of the downward revision. >> many wonder what the fed has accomplished. this is the effect the have on interest rates. can you explain what you have

managed to accomplish? what do you fill your mandate has required you to do? >> it is a fair question. this has effects on the economy. we talked about the effects in asset prices. analyze the changes in interest rates on decisions like this. this has been a mortgage market where credit standards have prevented many people from refinancing their homes.

monetary policy may be less powerful up than has been in the past. if you ask about the accomplishments, i would mention a very important one. we have kept inflation close to average parent it is difficult to get out of once you're there. we've been able to achieve stable prices on average. with respect to growth, our policies including cutting our

interest rates and the first round of asset purchases in the fall were very important for helping to explain why the economy began to grow again. a lot of things to promote growth. we have been successful with some of the later actions. our best estimates are that the economy would be in much deeper ditch and unemployment will be much higher than it is. people recognize that we have not yet gotten the economy back to where we wanted it to be. this is perfectly understandable. i do think we do need to do what we can to move this toward price stability.

>> use if you consider more purchases. can you elaborate a lot would be appropriate? >> and nothing that could be as precise. the purchases are one set of tools we have. they tie this to economic

decisions or time. we need to continue to work with them to achieve our objectives. the committee will have to look at the alex. -- the outlook. this is in terms of inflation falling. the committee would try to take corrective action. it is a committee decision. we remain prepared.

>> year colic phrase this as further action would be required in the action of this. does this mean that if we do not see improvement that further action will be required? >> i cannot speak for my colleagues. it is very unsatisfactory. the judgment we will have to make are the tools we have.

we're going to have to continue to evaluate the outlook. we have looked at the entire array of data >> in the european debt deal that will mayor may not come pass, it has been said that the bank's operating at 89% tier one capital ratio. a lot of u.s. banks have been arguing that it cannot afford to do that and reduced lending. it did put them at a competitive disadvantage.

do you think it is appropriate that the big banks should except -- accept such a capital requirement? how does that developments stand at this time? >> we are in the process of implementing bael 3 that has a buffer of 7%. and additional surcharges. we think that is appropriate. the 9% is not comparable to the requirements that we will be imposing. the composition of their capital is not common equity. i do not know what risks are being applied. there is a number of questions up probability.

this is being phased in their recovery. these have all the key elements. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

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>> general dempsey told us certain cuts would be irrevocable. nevertheless, the notion that the department can weather cuts for a couple of years so far as we increase funding later. that carrier that i saw -- -- that carrier that i saw, if we just say let's put that on hold

-- just take a little furlough. many of them are addicted to eating and providing for their families. we just asked them to take a furlough and next year we will pick up where we left off crete -- left off. that is not reality. can each of you tell us whether you agree with general schwartz's assessment and provide us with cuts that will have lasting impacts even if appropriations were increased in a year or two. general? >> mr. chairman, i thank you. i would remind everyone that as we look at cuts in the next two years or so that today the army still has over 100,000 soldiers deployed in iraq, afghanistan, and other places we are coming out of iraq at the end of the

year, but there is a significant amount of burden that the army will face, at least through 2014. it is important to remember that and the impact that would have on our ability to train, ensure they are ready and equipped, and have the processes in place. as you mentioned, we are going to reduce our force structure to 520,000. that is before we receive these additional cuts. that will impact the op-tempo of our soldiers, the stress on the army, its soldiers, it's families, and second in line, the equipment. ultimately, if we try to fund our soldiers -- it will ultimately affect our training and readiness as we look to deter in other areas as our

enemies and adversaries watched us as we reduce our capabilities within our army. we have already had to consolidate depos. we have had to consolidate other areas of manufacturing that is allowing us to save, a gain efficiencies, and additional cuts will cause us to look at that even further and a challenge our ability and our own industrial base to provide for our soldiers and equipment that we will need and readiness we will continue to need. it is across the board that will -- that we will be affected as we move forward. >> mr. chairman, from our perspective wheelhouse we share the same anxieties that my fellow service chiefs have over the forerunner $50 billion -- for under $50 billion addition

to the bill. there is no question it will reduce our presence. admiral green talked today about the chinese a hospital ship in our hemisphere. our lack of export presence as a result of drawing back because we cannot afford the operations and maintenance to deployed forward, we cannot afford the ships. we cannot afford the personnel to be able to do that. it will be killed by somebody. the void will be filled by another nation. we do note -- we do not know the net result. down the road, it could mean a lack of access. a lack of ability to shape a nation around the world that our country believes it is important to be involved in. forward presence -- it is no question it will decrease our dwell time. as we shrink our forced to pay the bill, we only have.

ways we can pay bills. one is in procurement. one is personnel. the other one as operations and maintenance. you can dial those three dials in any combination, but there are three styles that we have. as you increased the level of burden of debt on the military, you are going to reduce the force presence. that is going to decrease the time between units. it is going to decrease the quality of life of our service members. finally, it will stagnate the resources. there is no doubt in my mind that we are going to struggle trying to reset the marine corps coming out of afghanistan. pour all our time in iraq and afghanistan, we maintain our equipment in theater and selectively rotated principal items. we do not have the depth on the

bench to be able to afford not to reset that equipment. as it relates to irreversible damage, the kind we cannot regain again, i will offer a couple of thoughts. one would be industrial base for naval shipping. admiral green talked little about that. that would be terminal. as i look at the marine corps, the two capabilities that are being solely built throughout the world -- the only place it is being built is the united states of america. that is tilt rotor technology. there is not a another nation in the world. if those lines were closed, that becomes terminal. that will become irreversible. you will not be able to gain that back. the final, and probably the most important point, is we will lose that leadership of those staff and noncommissioned officers at the five, says, seven year

marked a shoulder the burden of our conflicts. they will leave. it will take us another 6-10 years to grow that sailor down in north fort or that nco in the marine corps. >> thank you, mr. chairman. i. the general laid out the choices pretty well. our choices are similar, but as general amos said, the industrial base -- you were there. we brought a submarine in on budget -- actually, under budget and early. that is because they are in that mix. they have the welders and the people there. they are rolling. if we interrupt that, clearly we will pay a premium for when we attempt to reconstitute because we will not have that efficient process in place. right now, looking just at nuclear ships -- that is where

you and i were, sir -- we have 90% of the sub vendors -- the people who make reactive components, turbans, and these sorts of kings -- they are our single source. that is their livelihood, nuclear technology. it we interrupt that, i do not know how many of those we lose or how we reconstitute it. folks have to eat. they will go somewhere else to work. we have design engineers with pretty unique skills to build nuclear carriers and submarines. we are in the early stages of designing our next ssbn. we need those folks. giving them a holiday is probably not going to work. when the british navy did something similar -- there were compelled to do it -- it took 10 years to build the next submarine. that is not very efficient.

there will be layoffs, as we mentioned before. to preclude that we would have to go to force structure. if you look around the world, reduced force structure caught -- if you cannot do that, you have to deploy them in a shorter cycle. when you were in north fork or the sold -- sailors say they are kind of tired because they are on a pretty rapid turn around right now. this would go on the backs of sailors and the ships. we need more time to train and maintain the ships so they are fully ready to do the job of the nation. we would be compelled to go there to reduce our force structure. it is not a very good set of choices, but that is what we have to contend with. we have to do our best job realizing and fearing it out in that regard. . you, sir. >> sir, i cannot amplify what my

colleagues have said except to emphasize your soldiers, sailors, airmen, and marines are not going to go on break. i think that is wishful thinking. >> if i could just follow up -- or we talked at a low level, but it is also reported to think about it in a more strategic sense. from an army perspective, i think about our ability to prevent, our ability to win, and our ability to win. our ability to prevent is based on our credibility. credibility is based on our capacity, our readiness, and our modernization. our ability to win is based on us being decisive and a dominant. if we are not decisive and dominant, we can still win, but we win at the cost about the project the cost of the lives of

our men and women -- the cost of the lives of our men and women. as was discussed here with forward presence, we have to be able to build engagement. our ability to build partner capacity or allied capacity so we can go hand-in-hand in protecting not only the united states, but also our allies. ultimately that is what this is about. all these things we just talked about affect this. that is my biggest concern as we move forward. we will have those who will attempt to exploit our vulnerabilities if we cut too much. they will watch very carefully at what we do. they will challenge our credibility. they could miscalculate, which could cause significant issue down the road, not only for our own security. thank you. >> thank you.

mr. smith? >> they too, mr. chairman. i agree very strongly with the industrial-based argument. it is a matter of losing core capability that is critical to our security. it is not that well understood, but u.s. companies are great partners in our u.s. security in many ways. we have seen over the course of the next 15 years that we have increased our reliance on international companies to provide core capabilities. we do not want to see that slip and we do not want to lose the skills sets of our workers. it has an impact on the non- defense portion of our economy as well. manufacturing skills, for instance, that are developed as we try to make some of our weapons systems have direct applications on the commercial side that lead to economic growth. to hit that would be a devastating impact on our

economy. i do feel the same arguments apply to infrastructure, transportation, energy, and a lot of the systems that portion of our federal budget funds. also education. i was speaking with someone saying they were talking about going to 83-day school week to accommodate some of the local budget cuts. that impacts on our national security and our defense as well. while eight certainly agree with the chairman that mandatory programs which are 85% of our budget, you cannot deal with a 35%-40% deficit. they are important. at medicare, social security, medicaid have a huge impact on the quality of life for our citizens. that is why i and argued that revenue needs to be part of what we discussed. if we have these crushing needs across many different areas, part of it is meeting we have

the money to pay for it. spending has gone up in the last decade. our revenue has gone down significantly in the last decade as a percentage of gdp. we need to put everything on the table and be responsible. for those of you who watched the super committee yesterday, if them succeeding as all the stands between us and frustration, we have cause for concern. we have to figure out a way to "help the super committee to succeed. it is not rocket science. we have to put everything on the table, including mandatory and regulatory programs. all that left -- that is left is the discretionary budget. i care about portions of the discretionary budget that is not defense. that is more than half of the discretionary budget. it puts us in an untenable position. you gentlemen have talked a great deal about our ability to

project power and have a foreign presence. i agree that is incredibly important. one thing we frequently hear from folks looking for ways to save money is overseas bases. why do we have the troops and we have in asia and europe? i think you have done a pretty good job of explaining it some of that. make clear the money. a lot of people do not understand that a lot of our foreign partners pay a substantial amount of the cost of that presence. if we were to get rid of those foreign bases and gregos troops home, it would cost us more money in attention -- in addition to costing us partnerships. would you man a little bit of your expertise to explain that? >> if we want to be a power, we have to be out and about. that applies -- if we want to

contribute to regional stability, that includes being poured. that is different aspects of the joint team can accomplish these tasks. but to be sure, if the western pacific, for example, is rising in strategic importance to the country, while we do not want to do, and you heard the secretary of defense say this, is arbitrarily reduce our presence there or reduce our prep of capabilities that the team provides there. this is true in other areas of the world. clearly, in some areas of the western pacific, the allies do assist us and provide us resources for basing, facilities, and so on. this is true in both korea and japan. it happens elsewhere. >> if i may, i think it is important to point out why.

access to overseas markets is critical to our economic growth. certainly have access to energy -- oil, natural-gas -- but also critical minerals that are necessary for our economy. if we do not have a presence and china does, they are in a better position to cut off critical economic needs or the help of our nation. that is what people need to understand. >> i will conclude by saying that a byproduct of that presence is access. if you want to have a power projection military, it requires some measure of access. some require less than others. the bottom line is having relationships with others and having access to locations where at 1's the lipetsk from which you can project power is -- where one lily pads from

which you can project power. >> where you see a foreign nation, that is where i caught place. that is their sovereign territory. we get on the order of -- and it varies on be in great -- somewhere around $4 billion from japan. we've been partnered with them for over 60 years. they share information with us. they are an amazing, ford leaning, high and allied. it is more than information sharing and more than a host nation support. they take care of our families. we would not be able to do some operations, if we were not forward and right around there. we would not be able to do the operation libya if we were not somewhere around there. the pakistan earthquakes. the pakistan floods. if you go to singapore, they have a pier facility. they provide that opportunity to us. that host-nation money.

there is a command and control center there for disaster relief. they have offered us to use their peers for our deployments, to repair our ships, etc. i indurain we have built a relationship there. they have offered us and to birth our ships, repair our ships, and our headquarters are there for the navy's central command. there is a host out there. you can see the advantage. if we are not there, it is hard to influence. you cannot search for trust and confidence. you have to build it. >> if i could just piggyback on the comments -- we are going to have to prioritize. there will be a prioritization that has to occur as we develop a strategy where our foreign presence is -- the army has

relationships where we have shared cost. we have had help with defending many of the forces we have had in the middle east. these will continue. in some cases, we may want to expand those relationships. we will have to look at if it is still viable. we have to look at new ways to engage and new ways to work with them. as we look to europe, one of the successes we have had based on the relations we have had, we have been able to develop our nato partners to work with us in afghanistan as they did in iraq and afghanistan. we have worked together so many years. that is critical. we may have to come up with some unique ways to do those things in the future, but there are other areas where we simply will not be able to do that and we

may have to consider increasing presence. that will be based on where our best interest are. these are discussions we have to have as we move forward. one last thought about this. there is an awful lot of economics with regard to foreign presence. if you look in a specific air, there chokepoints that are there. if you just take a look at the gulf and the eastern side of the coast of africa all the way out in the blue water with the piracy, imagine that happening down to the southwest area.

the economics would want us to have foreign presence. i am reminded in november when things began to get pretty exciting and career. -- in korea. i'm not sure how that will turn out. things will not escalate. our ability to have the forward presence there can assure japan that we have been an alliance for 70 years. it's a significant. -- it is pretty significant. our allies pay a pretty hefty price of their own money. it is not completely without costs.

>> it does not work that way. thank you. we are not going to have a more economic opportunity and we have less influence. >> thank you. my first question will be up for the record becausethey're not the time for an adequate response. many of us remember the italians is task force. they took up positions. the north koreans advanced with the tanks. this is not damage the advance. the armies were no longer used. as they continue, they conduct

this. -- the americans opened up with bazookas. although the task force had inflicted 127 casualties, they solved 181. -- they suffered 181 casualty's. this symbolizes a price in blood. it is a low point in american history. our troops paid for an adequate equipment. at the end of world war ii, a 3.5 inch bazooka was developed. the program was terminated as part is the reductions following world war ii. it is clear that if we continue to fight these wars, it was provoked by an enemy with weapons of his choosing. any cut in our military will put this in a position where we will be repeated this kid the

reality is you borrow 42 cents of every dollar. if we spent nothing in our discretionary programs, we will still have a several hundred billion dollar deficit. we have several hundred billion dollar deficit. and you do not have cuts. you have some of the other programs. yet 50 cents to balance the budget. -- 50% to balance the budget. or we face bankruptcy as a country. assume that the super committee is going to default. what he needs to with the military that remains in your service tax what kind emissions canyon perform? -- what kind of missions can you

perform? i studied in national strategy. it could you please include this for the record? we do not have time here. if they're so confident that it will succeed them bring value to the taxpayer, it would be nice if they put a little more against the $1.9 billion. -- they would like the taxpayers to undertake. this is exactly what the contractors proposed to do. consider taking advantage of this average shed take, it supported the competitive engine development. by the way, there never was a competition and the other engine one. it just did not happen. it is $110 billion earmark. there is no competition.

but who the crucial development was to be completed in fiscal year 2010. now it is projected for completion in 2015. the primary engine has been in development for 10 years with another four years to go. the government accountability office indicated that there is an opportunity for cigna began savings. -- significant savings. bill perry said competition for procurement is the only way to control program cost. were you quoted accurately

regarding contractor funding? why do you believe this is not such a good idea? we have to get most of this for the record. our time is out. will you please tell us for the record why this is not a good idea now? >> my comments were made prior to 400 billion. there simply is no money for competition at this point in time. >> it would decrease the cost. they continue to contend it. >> based on the information i have seen, it would require development of two engines with test programs and all associated with that. there simply is no free money available to pursue a second development program. there is all that is associated. >> he said that it will save

money. it will not cost money. thank you. >> it might. >> miss sanchez. >> thank you. i would like to begin for being before us again today and taking a stab. -- and letting us know what the world would look like from a military perspective if we went into sequestration. i think the dollar's were here before. it is a lot to put on the table. i know we're trying to work through that. you're trying to work through that. i am not excited about the super committee touching too much more in defense. i'm not excited about the not getting their job done and going into a deep opposition. -- a default position. there is a lot of things.

it crosses for all of you. there are issues like cyber- security where we are in the dark. it will take more money than we think. i am also looking at the fact that when we talk about defense cuts, we are talking about intelligence, homeland security, veterans. when a look at the fact that we have not addressed our returning soldiers, etc., who have been out there and many of them who will need additional help and the types of hits that the people have taken, there is a big underfunded issue in

healthcare for those people. i am concerned. i work with mr. turner on missile defense. our nuclear arsenal. there are issues there. we will have to work if our testing goes well. -- to get back on track with missile defense, for example. there are a lot of places that need money in the future. i am not thrilled about more cuts. but there is a majority in the house who do not want new revenues on the table. i have a feeling if they come up with some solution, we are going to see cuts in defense.

my question to you iswhere would you cut? i am not talking about another trillion, but where? after the 465 that you are looking after, where would you suggest we point to? if there is some money that has to be put on the table for the super committee,where would you cut? >> the imperative is whatever size we end up, we want to be a superb air force. that means a readiness needs to be protected. the only two other areas where you can make reductions are in the size and number of squadrons and assets and in modernization.

that is what our future depends. >> you have actually been decreasing the structures of in air force. >> we have. we will to make for 50 + -- 450 + targets. further reductions will drive us to get lower levels in modernization. >> you got up 20,000 marines? >> in 2006 we went up from 100 to 60,000 220,000. --176,000 to 202,000. we did the review. >> are those troops going to have it shrink? >> yes, ma'am. the plan was to shrink to about 15,000 below that level.

down to a one-hundred 86,000. >> that is under the 4 65 billion we are looking at? >> that was below that. with the added costs, there is a good chance we will be below its. -- 186,000. if we end up with more in the form of this or the super committee adds, more of we bills are going to continue to go down. we all agree that whatever force we end up with, has to be the most capable for our nation. it will be a smaller force. the ramifications are less engagement and presence. in a quicker turnaround time. you will reach a point or capability will come down. capacity of the force -- number

of units and squadrons of ships -- they will come down. eventually, we will start seeing capabilities leave the military. that is some of the danger. --ll be to die let down and dial the force down and reduce the modernization and procurements accordingly. we have to end of of the marine corps that you can call upon and a confident in. >> thank you. >> if i could just have the comments. i would appreciate it. thank you. >> thank you all for being here. the chairman outlined what has already been reduced from the defense budget this year. most americans do not realize that. you have said that you can handle that much. that it is ok. we agree that another 600 billion dollars is not ok.

that is unacceptable. the greater danger is that some will say "if 465 is ok, why not 466 or another 50 or 100 billion dollars out of defense?" after all, it is not the 600 billion, it is just a little bit more. i would appreciate your answer. that is the great likelihood. >> 465 is not ok. it is something we can manage. it comes as they risk. -- it comes at risk. it does not come without risk. in the army's case,we have been asked to reduce to 520. that is even before the of $465

billion cut. that is before the cuts. we will have to reduce this. if it goes further, we have to start significantly decreasing this. we will have to decrease at the national guard or reserve component along with it. it does have a dramatic impact on our ability to respond whether it be a broad or in support of natural disasters. once you get beyond this, we have taken all the efficiencies be can take. we have reduced modernization. we have taken out a structure. it is lower than we need. if we go beyond thatit becomes critical. it becomes a fact that we will no longer modernize. we will no longer be able to respond to a variety of stress. or have to get to a size that is small enough or we will lose

their credibility to deter. that is the difference. it is not ok. it is something we haven't able to work through. -- it is something we have not been able to work through with risk, but anything beyond that becomes onerous. >> if you look at the number, this is today. it is not ok. with a new strategic approach ,this is what i want your navy to do. perhaps it is manageable. that is less ships and that you see on this chart. we're talking about reducing this. we have to be a whole force able to me. -- able to meet what you ask us to do today.

the industrial base is fragile, as we described before. what area of the world did not want to be in? where must we be? the risk to not be in those areas is the risk we must understand. thank you. >> and give you one example. weapons system support is "-- this is vitally important to maintain the readiness of the platform. >> which are below 80% on their required funding. that is an example of the risks we are taking. incremental cuts will come out of the council of weapon systems support. we have to have armed forces.

-- that our youngsters who are the most battle-hardened ever are proud to be a part of. being good -- this is a vital part of that. it is just marginal as affecting the accounts of are not major programs. it would reduce our readiness. that would be unacceptable. >> another example. we designed the marine corps did come down. -- to come down from 202,000 to some number. he told the marine corps i want 80 take risk in high end missions. that means major combat. we did. we build a marine corps using the lessons of 10 years of war and incorporated it in there. we came up with a marine corps

of 24 and three battalions of 186,800 marines. this is a one major contingency operation. what that means is without manning an operational plan, if we go to warthe marines will go and come home and it's over. there will be no rotation of a forces. there will be no such thing as well. it will be come home and it is over. notonly jobs another five dozen, we are on the process of working free. we're at risk for being able to take your marine corps and deploy it. -- deploy it to a major contingency operation and do what our nation expects us to do. you go beyond. it'll come down. there'll be the ability to respond. >> thank you.

thank you to the witnesses who are reinforcing the message we are from secretary panetta a few weeks ago. and there is a strategic review that is concurrent with trying to observe this. -- to absorbent this reduction. and wonder if you can share with us where you think the strategic review is. will we see that publicly? i will leave it at that. >> it is being vetted. throughout the department and the executive branch. i think that it is likely we will have that product available by the end of the year. >> in terms of programs you are

grappling with right now, one is the c-27. there has been a delay in terms of an august milestone. i take what a lot of people are trying to understand it isis that tied to a strategic review? >> that is not final. if it turned out that way, it certainly -- it is tied to the prioritization. trying to tie that to the strategy. let me say at the outset, sir, if that occurs,it is painful for

m.e -- me personally. i made a committment that i would not do this deal and then back out. that was two years ago. i have personal skin in this game. if it turns out that way, it will be painful. the logic is the reductions require us to take out assets, not a few here and there, but to bring out all the infrastructure and logistics. that is the only way for us to do what we have to do. we have purchased them. -- we have purchased 21.

there are 17 more to go. what the department will do will be clear. i want to assure you that the united states will s upport our army or die trying. -- the united states air force will support our army or die trying. >> i believe it. is this strees being driven by the 465 reduction or the uncertainty about what will happen next? >> it is the former more than the latter. >> that is helpful, just to get that clear. admiral,welcome. i wanted to as you in terms of the review that is ongoing, there are reports that asia is where the whole orgqanization will be shifting focus.

had you an comment? that is where you see the navy's priority and focus looking out at the change or review. >> you have that right. the focus is asia-pacific one, are arabian gulf two. i think he testified to that recently. this is where we are today. the defense treaties are in there. that is the emerging economic countries. this is with the communications are at their highest. there is an emerging china and other issues out there as well from counterterrorism to, obviously, north korea. i think you have a right. >> you referred to the libyan operations. want to finish the thought.

those three submarines -- they will be offline in about 10 years. we have to keep that rate. the point. -- good point. i yield back. >> thank you. mr. forbes. >> he just commented that the air force will be there to support them. -- support the army or die trying. i know the patriotism. it asks you to perform a mission you will do it or die trying. that has been your history. we hear a lot of different opinions about the impact of these cuts whether it is for under $65 billion, or $600 billion more. do you have any historical background can offer your history? -- of where we have made similar types of cuts and the impact it

has made to the lives of the men and women that served in the services that you represent? do you know woman tried to make -- do you know of any time we have tried to make those cuts on the security situation was unsettled as it is today decks any of you, are like to hear your thoughts. >> i remember a little antidote. i want to this. -- i went to my first submarine. i was a lieutenant junior grade. we are about to get under way. it is 1979. we get on board. we but get the ball caps. there are people from several squadrons. we could not man up. we had a sonar display their cricket. we had a display there. they were being told when you see this let me know. we had valves a different color. we got under way two days later.

it was not necessarily unusual in that regard. this is for a major deployment. this is drug exempt. we had eight serious drug problem. it was ok if you came forward and said "i used drugs. you are exempt. he could get out of the submarine force. we cannot go back there, sir. this is a focus of the people. they make all the difference. mattthey must build around this. >> i which is echoed those comments in 70's, post-vietnam. the issues we had with discipline standards and lack of direction for the army, lack of modernization -- there's a lack of modernization and standards. i would also point out where we believe that we would not have

any significant amount of operations following that. we cut the army by a significant amount of individuals. we reduce our modernization program. we found ourselves engaged in more a month of operation. i think that brings to what secretary panetta has talked about and secretary gates as well -- our inability to predict the future. it is about us being able to develop a strategy, focus on the asia-pacific, also the middle east. also the ability to respond to unforeseen contingencies. that goes specifically to readiness. the mistakes we have made in the past allowed our readiness to slip. it has always cost lives in the end when we do this.

also, the way we route down our army in the '90s left huge holes in our leadership, both at the noncommissioned officer and officer levels. it is critical that as we go through this we be allowed to do this right. that means there has to be consistency that allows us to maintain the capabilities of our leaders, both with our noncommissioned officers and our officers, as we go to this process. that will allow us to sustain our readiness and also allow us to speak -- to expand quickly if we have an unforeseen contingency. >> sir, i would only ask you to recall the american hostage rescue attempt in iran. that is the classic example of what can happen -- both the tragedy and embarrassment of that event -- if we do not do this right.

>> congressman, we of talk about post-vietnam and '70s and the different international landscape than we have today. we all share the same -- interesting that in those days we did not classify it because we were in attendance. we did not understand what a hollow force was when we were taking panels off, and putting them on another airplane so we could fly. the significance was embarrassing. the international landscape in the '70s and early '80s is different than it is now. this is a very dangerous met two decades. i think that is the difference. >> let me assure you one thing, we will not go quietly in the night in trying to preserve and make sure you never go there again. some of us have thought this $465 billion. we may have lost that battle.

we do not intend to lose the second one. i yield back. >> thank you. >> thank you, mr. chairman. the gentleman, thank you very much for your service and your thoughtful attempt to answer our questions. as i have been listening to this, i am hearing all of the reasons in general why we cannot do any cuts or limited cuts. surely in each of your organizations you are doing some very serious planning about what cuts really mean. it seems to me critically important for this committee to know precisely what you are planning at various levels of cuts. we know we have $450 billion. it may do to over $1 trillion. what exactly does that mean, not in general, about hollowing out,

which may mean something, but does nothing to inform me about what a precise cut is. i asked my staff to go out and find out what others are saying. we have gone to the far right of think tanks and the far left think tanks and put together a matrix about cuts. -- cuts that they think are possible, ranging up to $1 trillion and over $1 trillion, including a certain senator who believes you can cut $1 trillion. it is interesting the way they match up. i will share with you that matrix and i would appreciate a specific response from you. is it possible and, if so, what does it mean? that gives me some of information. i appreciate the general coming to this hearing. i understand that we need to do a lot of things. one of the things that will

apparently be done is very serious cuts. what exactly can be cut? for example, do we need 400 to three nuclear weapons? do we need a triad? does the marine corps really need a new expeditionary vehicle, or can we get by without a marine corps vertical takeoff and version? those are serious. but those are the real things. the generalities, yes. that is nice to hear, but we are getting very close to some specifics. what exactly is going to happen? this committee needs to know and i certainly need to know. i will share the matrix with you if anyone would like to respond with some specificity. i would be very interested in hearing it. >> i am sure all of us will be happy to respond to that. the reality is that we operate under certain limitations in the executive branch.

you can be frustrated, but this is the way it is. it is not real until it is the president's budget. nevertheless, we certainly will do our best to respond. i can tell you that in my case we are talking about hundreds of aircraft. we are talking about thousands of people. >> i understand the generalities. which aircraft? what people? what basis? what does that mean? i understand that you have to wait, but as near as i can tell, this committee is looking at less than a month and a half where some decisions are going to be made by the united states congress. frankly, at this point, we do not have much information other than that things will happen. yes, it is time for some

specifics. what exactly is going to be on the table? >> we will certainly share, sir, with you and your leadership. >> mr. wilson. >> thank you, mr. chairman. i would like to thank each of you for being here today. i appreciate your service and your leadership. we have the best military in the world. i have pre sons currently serving in the national and the nest -- in the army and the national guard. i have a son in the navy. i haven't met you in the airports. general amasa, might late brother and law or marines. -- general amos, my late brother in law was a marine. i appreciate what you do in read to the attention of the american people the danger of the level of these cuts to the security of our country.

i had the privilege of being with the general at the italian american foundation dinner to honor military families. general, i want to think you for your family's extraordinary service. you truly exemplifies what is best about our country. i appreciate everything that you have done, in particular the briefings i had when i visited with you in baghdad. additionally, i into de's roll call, we had secretary of the army, who is a full member of this committee. he has written a very thoughtful op-ed. it backs up what secretary panetta said about the need for a strong national defense. general, if you could contact -- comment on this -- just as we did not predict pearl harbor or 9/11, we cannot predict the future with any certainty.

we can, however, remember the lessons of history. no major conflict has been won without boots on the ground. would you comment on this? >> of course, we think that we must have the ability to protect our land. it is critical to whatever we do. we talk about how we have access and are able to use the global -- it influences populations to either improve their ways or dominate a population ultimately what we need to do when that happens is we may be asked to solve the problem on land. we have proven that time and time again. we must be prepared to do that. we only want to do that as a last resort. it is something we must do as a last resort. it is important that we have the capacity and the capil