became their child and would never have to leave again. -- the day they legally become their child. for instance, a lot of foster families find when they enroll a young person in school are getting permission about what is going on, if they do not have a legally recognized relationships, foster families are not given the types of information they need. that is one reason they find the permanency matters. host: kathleen strottman, executive director of the congressional coalition on adoption institute. ccainstitute.org. thank you for being with us today. we will have another segment on your money next monday. that is it for "washington journal" this morning. now go to the brookings institution a state panel discussion about what the super committee should recommend.

also, the senior fellow and director of foreign policy at the brookings institution and alice rivlin, a senior fellow. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> good morning, everyone, welcome to brookings. i am michael hammond. we are joined by bruce katz and alice rivlin to talk about america's fiscal future. last time we spoke, it was a happier day. we had dreams of washington in the super bowl and dreams of a balanced federal budget. and a super committee that might come together to give us holiday cheer before thanksgiving with the report, and then before

christmas, when the congress would pass a fiscal renewal bill. it does not appear any of that is happening. today, we're here to talk about what is next. i am sure the prospects for any small sliver of hope that the super committee may still be grasping onto come up in conversation, but i suspect we will be talking more about what happens next, assuming the failure of the script to produce a bill at the congress can pass. therefore, the likelihood of sequestration and all that follows there after, as automatic spending cuts kick in, and think about what to do next. >we are grateful to have all of you here. i will first asked alice rivlin, who we all know is one of the country's greatest economists and budget experts, to talk about where we stand. alice was part of two deficit reduction committees to set of proposals on where the country might go, which have been

central to the debate, but have not yet produced the major we had hoped for. then bruce katz, who runs our metropolitan studies program, will speak. one of the things we do keep in mind is where do we need to invest, even as we are cutting? that is front and center of what bruce works on with his colleague, thinking about those areas of infrastructure, science, research, education, and those other areas where spending may be needed. at least we need to be careful about how we cut, if we are going to watch out for our country's long-term interest. then i will speak briefly as a panelist about the defense budget. then after a bit of the change, we will go to you. without further ado, i want to thank alice and burst for being here, as well as all of you.

alice, give us a sense of how you feel on this monday morning, and more generally, where we need to go next? >> i feel worse about the super committee even then i do about the redskins. [laughter] one could argue that they played well and almost 1. one cannot argue that about the super committee. -- almost won. i believe this is a huge opportunity missed, and that that will be announced later. let me say a word about what they should have said, why they did not say it, and maybe a bit about where we go from here. what they should have done, and had the power to do, was get the federal budget back on a sustainable track. that would have taken going well beyond the minimum requirement of $1.20 trillion.

going big, as many of us were saying, and actually solving the problem. the $1.20 trillion does not stabilize the debt. the debt would still be growing faster than the economy can grow, and that is the definition of a bad problem. what we have to do is get the situation back on track where the dead is not growing as fast as the economy. we did that for decades after world war ii. we never paid off the debt. that should be the objective. it was basically the objective of the two commission that i served on, some symbols, -- simpson-bowles, domenici-rivlin.

you have to do two things at the same time, the curbing of growth in entitlement programs. especially medicare and medicaid -- and it would be nice to get social security back on firm foundation -- and work on the tax code so that it is better, and raises more revenues. those two things have to be part of a solution, and the numbers, $1.20 trillion, it was a combination of those things to get to $5 trillion over the next 10 years. many of us thought the bic scenario was easier than the small one. it certainly got a lot of attention. we testified before the super committee about two and half weeks ago, but there was an enormous -- there was a big

group in the congress around senators warner, chambliss, including senators from both sides -- it was not the gang of six anymore, but more like 36, that wanted the solution. there was also a large group in the house. about 100 house members signed a letter to say, go big. why did not happen? there are a lot of culprits. it happen?'t basically, the polarization of the parties, particularly, the extremes of the parties, which much -- with much of the republican contingent saying no revenues, even with reform at the tax code. a small crack in that was the

toomey proposal, but not a big one. on the other side, a lot of democrats saying, no changes that would affect medicare beneficiaries or social security recipients, ever. those are very difficult positions since we actually have to do both of those things. i think there was a failure of leadership. if the leadership, including the president, really wanted this to happen, they could have made it happen, but they could not sell it to their caucuses. they tried to, but the answer was no. republicans were not voting for tax increases. from the democrats, they were not voting for entitlement cuts.

so we are where we are. there is a lot of blame to spread around. i think the business community could have done a better job. maybe the wonky community could have done a better job. the consequences are pretty serious, i think. we may not have a market meltdown, because we are the only game in town. the europeans are doing worse. i would expect paid equity reaction but not a bond market reaction in the long term. we may get a downgrade. the important thing is we missed an opportunity to fix, not only in the long run problem, but short run problems. we need to extend the payroll tax, we need to extend unemployment benefits. those would have been easy to fold into a big deal, along with some other things, like the so-

called docs fix. those of you who know me know that i am generally an optimist, but i'm not an optimist today. >> if i could follow up with one question. some people are saying sequestration, the automatic cuts that will kick in, really is not the worst scenario and we should not sweat it so much -- obviously, i do not agree with this, and you will hear why. some people will say, this sets the stage for the bush tax cuts to expire at the end of the year, which might be better for our deficit situation come up attacks most of our entitlement, and therefore, things could be worse. you do not feel that way, but how do you respond? >> things could always be worse. this in error that you suggest,

which is the sequestration cuts go into affect, as enacted, which means account by account, and - way to cut anything, whether defense or domestic, and heavy on discretionary spending, annual appropriations, which have already been capped. that is not a good idea. there will be other chances because the bush tax cuts do expire at the end of 2012, not 2013. that will be another moment in which, maybe, people get together and say do we really want this to happen? but there is no indication, at the moment, of the consensus of what to do in the face of any of those things. >> bruce, you have watched a

number of programs, you have seen programs that your expert in take a hit. >> i think my perspective is partly washington-based, and partly from someone who spends most of their time outside of washington. mike started by saying, how do you feel? i mostly feel physically exhausted. i was on the west coast twice last week in reno and san francisco and then somehow ended up in lansing. as i talk with political, corporate, civic, university, labor, environmental leaders, i would say they have several views about the process under way here. obviously, they are concerned about the impasse. frankly, they are even more frustrated with washington because they do not see the

conversation about debt and deficits aligning with what they know needs to be achieved here. we just have to remember a few salient facts that should bound the conversation. we lost 9 million jobs care of the recession, and we have barely regained about 25% of them. the hamilton project has put out a statistic that says we need 1.3 million jobs to regain those that we lost and to keep pace with population growth, labor dynamics. we monitor the economic performance of each of the top 100 cities and metropolitan areas every quarter. this is two-thirds of our population, three-quarters of our gdp. only 16 have regained half of the jobs they have lost during the downturn.

so what i am out around the country, what people are focused on is growth, as well as deficit-reduction they fundamentally believe the federal government has to get its fiscal house in order. at the same time, they believe would have to set a platform for the next generation of growth, which is not likely the road we had pre-recession, highly characterized by consumption and over leveraging. their perspective is three-fold. first, we have to cut, but we have to cut to invest. we have to begin to invest in those things that will set our economy on a different path board. -- forward. substantial increase in research and development. we do it to some extent in health, defense. we have not invested in the clean energy r&d to the extent

we need to to crack the code on clean energy, low-cost. we need to invest on advanced manufacturing. once we invest in basic science, we need to be much better about commercializing innovation and new technology transfer, so we just cannot have the ideas in the united states, we prototype products, and begin to deploy and manufacture more of what we invent. finally, we need to invest in next-generation infrastructure, transportation and energy, and the human capital we need to set up this new generation of growth. i was on a panel in palo alto with george shultz. his recommendation, which sounded eminently intelligent, maybe not politically feasible, was to end all the tax subsidies for all kinds of energy sources

we have, whether oil, coal, nuclear, and ship a good portion of that funding into the advanced r&d that we need. simpson-bowles had been interesting recommendation that we cut and invest. the first thing that states and locals are focusing on, cuts. second is cuts and reform. i was chief of staff of the department of housing and urban development. last fiscal year, and the community block grant was cut $900 million. this fiscal year, the package approved the other day, hud, dot, commerce, public housing

was cut $750 million. the cuts are our blood happening. what is not happening is the reforms that need to occur in these highly prescriptive, highly bureaucratic, highly top- down programs, so that you can do more with less. it is not enough to cut and just think it is all going to be fine, or presume that these programs are functioning effectively. the our legacy programs. simpson-bowles talks about multiple training programs across alt will agencies. federal government needs to radically get its act together on the fiscal side and programmatic side. last point about what i think states and locals want to hear -- and i have a recommendation on how to do this -- cut and devolve.

alice wrote a book if you years ago called "chasing the american dream." code to the bookstore and buy this book. it is more relevant today, in some respects, that it was 20 years ago. what it basically says is we need a new division of responsibility between the national government and state and local governments for the 21st century. the federal government needs to do less, do it well. states and their cities and metro's need to take on the productivity agenda, income- enhancing engine deck, and have prime responsibility for some of the growth that needs to happen. it is so different across the country. i was in reno on monday, lansing on wednesday, palo alto on friday. three radically different economies. it is hard to imagine a government being smart or

strategic enough to deal with those differentiated economies. but the metropolitan have prime responsibility for that part of the domestic agenda. i think there is an enormous amount of concern and frustration out there. mayors, governors, these folks are just who were pragmatic about things. partly because the wake of everyday and are accosted by somebody in the supermarket. as we go forward, i really hope that we begin to set up some different vehicles, not just for deficit reduction, but for growth strategies, with the congressional class and federal political class. bring in the governor's, bring in the mayor's. they are the get stuff done

party. let them sit on the committees and tell everyone what they have done in their states to balance budgets and get their economies moving. i think it would be a breath of realism and pragmatism to have chris christie and andrew cuomo said in on some of these sessions and began to help what is a hyper-divided governing class in this town begin to get its act together. >> before i speak on defense, because you say localities could do more, the fed's could do less, that raises the obvious question, how much can federal spending on domestic discretion accounts be reduced? i know you do not have a detailed final answer for us across the entire government -- question is relevant with sequestration kicking in. do you feel sequestration will

go too far, or will then be compatible with what you said? >> the kind of remaking federalism i am describing also requires that you remake the tax code, how much can be made at the staid and local level. that has to be not just about the cuts and revenue remaining the same. we have to sort this out in major, structural ways. you can cut them, you can cut smart. sequestration, to me, sounds all-cut strategy. when you think about what the federal government does with regard to the growth of these, in the near term and long term,

there are certain programs that are absolutely fundamental to that, that should not only be ring fenced and protected from cuts, but frankly, should be put on steroids. i will come back to one idea. clean energy r&d. nih gets about $30 billion, national science foundation, $7 billion. are department of energy's in the shop gets $180 million a year. it is about the only investment in green energy. we have national labs. we should be spending $25 billion a year on clean energy r&d if we're going to crack the code on the low carbon and be the vanguard of the clean energy

revolution. if we do not do it, taino or germany will, or it will be some sort of combination -- china or germany will, or it will be some sort of combination. when you think of the growth trajectory this country needs to be back on, it does not make sense. >> i agree with that, and thank you for the plug, bruce. i think there is one thing that many people, including many of the mayors and governors we are talking to, especially the democratic ones, think there is a conflict between jobs and growth and deficit reduction. they are wrong about that. that has been one of the impediments to getting an agreement, and even the president has talked about pivoting from debt reduction to jobs. and, unfortunately, he could

lose the opportunity for some of the job growth that could have been folded into a larger deficit reduction deal. we will not grow in the long run as long as our debt is rising. >> while you are buying books, i will ask -- you are getting t wo for the holidays. my new book is called "the wounded giant." it is about the armed forces in today's society. i want to move on to sequestration and summarize, i believe sequestration would be a nightmare for our national security. if it kicks in, i hope it will be quickly superseded by subsequent action in 2012, so we do not start to see the kinds of cut that would otherwise be necessary. there is some talk out there, including from one of the republican presidential candidates, that what is

happening now is not really cuts. that is wrong. real cuts are happening as a consequence of the august deal. that will result in about $400 billion in 10 years in savings, according to the cbo. in other words, we are $350 billion below what would we be needed to keep up with inflation before sequestration. then you add on the cuts, roughly another half trillion over 10 years for the military, and you end up with an annualized budget that is about 20% less than is today, but it is even more of a reduction because i have not included war costs. those are assumed to come down anywheray. those are savings that the

congress cannot claim for deficit targets. that is appropriate. the pentagon should not be claiming credit, but that is another $100 billion that will result, each year, by the time we are getting out of afghanistan by 2014. so in other words, total defense spending going from $700 billion a year to somewhere near $500 billion a year. most of that is ok. the war cost can and should come down. i was in afghanistan last week. i think we may need a couple more years of a sustained effort. i think we will have to have around 68,004 around the next two years. by 2014, we are down to a modest presence. that is doable. therefore, we will see

additional reductions in war spending each year. by 2015, hopefully, down to a modest level. maybe even $150 billion relative to the peak last year. on top of that, the base defense budget, the peacetime military establishment, can get smaller and smarter and more efficient, but let's bear in mind the constraints under which this needs to happen. president obama, secretary clinton, and secretary panetta have been in asia saying that we are here to stay, we are here to stay even more than people appreciated before their trips, we are not going to cut our military presence, we are aware north korea it continues to be a threat. and china, while a rising power, is a rising power. bob taken would make this point

eloquently. in history, any time a country rises the way china has, it is tempted to use its new resources and capabilities to push others around. i do not favor a conflict with china, but it is important we stayed robust be engaged in the region with our allies to constrain china's growth in a constructive direction. the strategy is working. we would be foolish to pull back now because our deficit problems have led us feel that we cannot sustain them. so we have to still be active in asia, but do so more economically and a brutally efficient way. there are ideas out there to do this. i will give you one quickly, which i wrote about last week, which is the idea that today's navy needs to do something that most sailors do not like, which would be challenging, and which some of my colleagues have told me is harder than i want to believe.

nonetheless, i think it is doable. it is the idea of having crews share chips. today, a ship is prepared in american waters for deployment. they sailed across the ocean. it takes one month. they go on station in the persian gulf for western pacific. they spend four months there, they come back, another month in transit. meanwhile, because we only have one ship of a given type in one area, we have to send another ship out, and there is an overlap in their deployment. the bottom line is, you need four or five ships in the fleet to sustain one on station the way we do things today. what i would submit is what the navy needs to do, what it has proven to be feasible in experiments, what it does with mine sweepers, leave the ship fully deployed for a few years,

ply the crews to replace each other, and they share a ship back home to train. if you do this, you get a number of savings. i do not want to push the idea too far because there is another reason why you may need a certain size may be, and you may lose certain ships in a future war. but right now, the navy is saying we need to add 30, 40 ships to the fleet relative to the correct size of 284 major ships to maintain our global presence. that is not going to happen. we need to find ways to be more innovative and creative. with this approach, you can go below 280 ships and maintain the presence we have. i do not say that in order to be harsh on the navy. they are doing amazing things. we all admire them. but even to get this $350 billion in 10 years cuts, you

have to do these things that i have mentioned, which will be challenging for the services. there are parallel ideas in other parts of the military. i will just mention one more. for the last 20 years, we have had a basic force contract for ground forces which says we need to be ready for two major regional wars at once. we did not always satisfy that requirement. in fact, in the past 10 years, we did fight two regional wars at once. our troops had to go the extra mile and then some. it is difficult to scale back in a major way, from that kind of requirement. nonetheless, in this new world, with saddam hussein gone, and therefore, iraq no longer a looming threat as it was, i think it is time as a matter of fiscal necessity to go to a one- war requirement for ground forces.

i call that a 1 + 2. one wore + two substantial stabilization missions where the u.s. is one of many participating countries but could last a long time. this could be afghanistan post- 2014, syria, libya, yemen, depending on how things go. if kashmir becomes another flash point between india and pakistan, we could be needed there. i will not go into all the details on these scenarios, but we need the ability to respond. these kinds of missions are potentially important, and potentially beyond our ability to prevent, whether we would like to do them or not. therefore, my approach is a pretty brutal change in what has been seen as conservative force planning. instead of two major wars, one major war, plus two stabilization missions.

even if you do that, you cannot shrink them to small levels because the world is still dangerous. some of these countries still have nuclear-weapons, the potential to provide sanctuaries for transnational terrorism. we cannot just wish these problems away because we are tired of being engaged overseas. we have got to be brutally efficient and creative in how we challenge traditional ways of operating, to be able to protect our core interest at less cost. but let us not pretend that we can wish to win that interest or mission. the western pacific and persian gulf, which already receives most of our attention, still require it. one small disagreement with mr. schultze. oil is a big subsidy. it is a huge benefit, which is one reason why i agree, we should be increasing r&d in

clean energy. oil is getting a subsidy of a at least $50 billion a year, because of that military protection. we cannot wish away the fact that the persian gulf still has a two-thirds of the world's oil and clean energy is not quite yet for prime time. so we have interests that are enduring. we can be more efficient in protecting them. i see no way to save $400 billion of in the next year if you have to double the cuts. that is automatically -- adamantly against sequestration. i hope it can be softened by 2012. with that, i will turn to my fellow panelists to see if they have anything. otherwise, start preparing your question for us. >> let me just ask you a

question, a factual question, about the affect -- the wind down of the wars. some military folks i have talked to say we have lost all this equipment, we need to rebuild and modernize, because of the wars. others say we have done a pretty good job of modernizing, using the war funding to do that. which is right? >> i think equipment stocks have not been pummeled by the war. where there have been specific needs identified, we try to address them through supplemental appropriations. having said that, even beyond the war story, the reagan buildup of the 1980's provided us with a lot of new equipment. i think you know -- you reduced

spending and disproportionately reduce procurement spending because you realize we have stocks of new equipment we could live off for a while and spend less on acquisition. the war supplementals have done nothing to change the fact that the reagan-era equipment is wearing out, and we cannot again take the 1990's solution of simply deferring. those same f-15, f-16's are still in the fleet. we have got to replace them. the war supplemental to not replace that core stock of our military equipment. >> it really gets to the point of what differentiates the defense establishment, perhaps, from non-defense establishment on a national scale. there is a level of strategic and scenario planning going on, and there is the use of metrics that are continuously updated to

inform the kind of strategic planning. that does not happen with regard to what i would consider to be next generation economic growth models. we still do not quite measure things in the way we need to, and we clearly do not have -- and this is something that many of the president paz private councils of called for. we have no long-term strategic plan on how to think about policy procedure, particularly given china, india, brazil, are totally online, to an extent. how many people in the audience have seen the movie, or read the book "moneyball?" it talks about the oakland a's

and how we is to measure things in the wrong way. there was this new character that found a new way to measure baseball performance and applied it to oakland, and voila, they do quite well. we need to think similarly on the economy. pre-recession, we focused on consumption. how many ways can we measure housing? we measured it. how many ways can we measure retail? we measured it. when you tried to measure exports, foreign direct investment, manufacturing, all of these, trade and logistics, frankly, we do not have the same kind of statistical base with regard to the consumption economy. it is not surprising, but the way in which we have perfected a set of metrics, performance

measures, and sort of an ethical planning, which we do not have on the domestic side, and which we fundamentally need in a federalist way. >> to give you in your credit program, some of your colleagues in the country, you have come up with specific recommendations. you've already mentioned one today, where you think clean energy research can go. can you give us another, whether is in terms of infrastructure investment, some sort of tax subsidy for economic renewal of cities, some area where you have done that analysis and could highlight an example of what it could allow us to do? >> this is what makes it such an intriguing period. if you think about a shift to a different kind of economy, it has an enormous effect on infrastructure building, please- making. if you are going to shift to a more export-making -- export-

oriented economy, we need to focus on manufacturing and the infrastructure of ports. we need to think about the transmission of energy. if we are going to think about an innovative economy, like what michael bloomberg is doing, advanced engineering schools, shows me that he is thinking carefully about the interplay of density and innovation. we need a different scale of investment in infrastructure in the united states, but it cannot be the old style, we are born to wait for the fed's to reign down. it has got to be done in a public-private way.

we have been waiting for a new style infrastructure bank, where there is a certain scale of public resources, but the goal is to leverage private sector capital expertise to deliver this next-generation infrastructure. so it is both the size of the resources, but the manner in which the resources are deployed at have to change. and again, in need to be more distributive and more diffuse. we could be entering a century -- as alice telegraphed 20 years ago -- where the national scale has to scale back its ambitions, and the state and local scale have to scale up. >> this relates to the broader question of what is going on this week with the super committee. to what extent is the failure of the super committee going to fundamentally get in the way of a lot about a you are talking

about? to what extent is it just a confirmation for you and mayors and governors that you should not look to washington? they will get on with their collaboration at a local level on impeded by the spirit down in washington? >> assuming the markets assume dysfunction -- and i'm not just talking about mayors and governors. the state and local level, it is more about governance than government. they have already presumed dysfunction in washington. they are already changing how they function. i will give you one example, which will sweep across many areas of domestic policy. transit. if you want to be a 20th-century mitropoulos, you need a 20th- century transit system. interplay of commuter rail, light rail, rapid boss, so forth

and so on, to connect the corridors. in denver, they are building the largest light rail system in the united states, primarily funded with local money. in los angeles, the land of sprawl, they are dramatically extending out there transit system with smart land use and zoning, primarily financed by local revenue sources. they moved on. they are not expecting washington to get its act together. they know, to compete globally, they are to have to make the kind of investments with their states and private sector to do so. they want a level of the reform at this level, so that their presence and prominence in the global economy can be recognized and built on.

>> but none of this great stuff -- which i totally agree with and an enthusiastic about -- will happen if we have another recession. they should be keeping in mind that if we do not get on top of the debt problem, we will be precipitated into a new recession. we do not know exactly when, but instead of gradually crawling out of this one, we could be in a decade-long slump that would be much worse. that would preclude just about everything. >> alice is absolutely right. that is why it is so critical to make the connection between the macro and metro function. i do think the metro areas and their states, where you have the pulse of the united states, in the public, private, six sectors -- civic sectors, the

need to identify that to get things done. >> if you could direct your questions to one of us it is for one of us. please mention who you are. >> i am a retired submarine officer. i agree in principle with your comment about 1 forward- deployed ship, however, having made patrols with two ships, i see a problem with the surface navy. a lot of sports do not let our nuclear ships in. in each area, you need to have a port for refueling, bringing aboard chow, as well as shipping crews. i see problems with what you are saying. i like it in principle, we have done it with the blind sweeps

and storm class pc's, but i do not know about the aircraft carrier level. >> thank you. i do agree that that could be different. we should begin with major service combatants. for those of you who are not naval officers and do not follow this up as much, there are about 300 people typically on a major service combatant, a destroyer or cruiser. that class of ship, where this idea is challenging and difficult -- and my navy colleagues have been reminding me of this in recent weeks, and i accept their contention -- it will take awhile to make it happen, even if we try to do it, because you need to find those overseas ports to do more minutes than they have been so far. i also can see they smaller fraction of our make it will be done at american ports as a result of this.

therefore, we will depend more on foreign partners. some people may not like that in a time of economic downturn. the other point, it will take three, five, seven years or you can do this, even for the service combatants -- surface combatants. some may even challenge me that that is an optimistic time line. even if you're looking for big, new ways to achieve cutbacks, it will take a while. if you rush it too much, you run the rest of current -- risk of contributing to recession because you are pulling back on spending too quickly then perhaps we should. from a military point of view, you also have to realize ground forces cannot be heavily cut back because they are still engaged in afghanistan. even if some of this happens, it will take a while, it will be

hard, and it will not be something that you can make occur overnight. >> derek mitchell. i write the mitchell report. i have an observation which leads to a question. your comments about the light rail system in denver, a situation that i have some familiarity. dick lamb was elected governor in 1974, talking about the sorts of things, did his best to make these things happen. it has taken 35 years to get there. here is the question. my take away from this conversation this morning is, if you could snap your fingers and have two things happen, you would have the capacity to cut smart and engage in devolution,

programs moving from the fed's to the states. in order for each of those things to happen, he would need to have a radically different political atmosphere and environment than we do today, because what is engaged in cut smart and devolution, it seems to me, frames the start differences in our politics. so i am interested to know what steps, what sequencing, do you see as possibilities, and is it correct to assume that that is apt to be light the light rail system in denver, that will take us decades, instead of years?

>> those are helpful and insightful comments. here is what i -- what i would take part in why i think we can excess covered some of this. you are right. it took a long time for cities to understand the need to make these kinds of infrastructure investments. it is a sign of how long these paradigmatic ships take place. i think the conversation coming out of the business community is quite different today than it was five, 10 years ago. again, when you read the recent book from the head of dow chemical, or you livlisten to jeffrey m. alt, or you listen to the technology community out of silicon valley, there seems to

be a common prescription of growth coming from these tech and production-oriented leaders, which gets to the kind of mix i was describing before. in best smart. invest in what matters. invest today to growth for the next 30 years. -- invest smart. that includes innovation, r&d, and human capital. when all is said and done, it is those three things. the fact that the major business leaders seem to share the same perspective about what it will take to move forward is a platform for shift. the second piece is the state and local level. there are obviously many partisan divides. i do not want to be a pollyanna sure about this. but i do believe governors and mayors put party over

collaboration and conflict. when push comes to shove, what they do is strengthen the strengths of their state, which comes back to innovation, infrastructure, and human capital, tailored to the economy of a denver versus detroit, michigan versus colorado. there is a pragmatic caucus out there. this country is rich in leadership, in pragmatic, non partisan, bipartisan leadership. what has to happen is and infecting of the federal class, which has become hyper- polarized, divided. structurally, two things need to happen. and this gets to the history of how innovation happens in the united states in the public realm. states are our laboratories, the

metros are centers for innovation. whatever they will be doing, the federal government will be doing tomorrow. the more we can get in these fiscally-strap times to show the way forward across party lines, the more likely we can repair the damage here. the second piece is what i talked about before. let's begin to have federalist super committees. this is a republic. we are like germany, a whole series of other countries around the world. we act as if these levels of government, even though they interrelate, are separate and distinct. let's move forward on deficit- reduction and grove -- growth to pull in the real pragmatic innovators, not just from the political realm, but corporate, civic, and others. that may begin to, not just

deal, but move us forward. -- heal, but move us forward. these sorts of things really require the kind of profound shifts in this polarized realm. >> yes, ma'am. in the green shirt. >> defense news. what sequestration might be a dumb way to cut defense, is there is more to do it? in the ribbon-amenity plan, it calls for cuts passed sequestration. is it the top line #or is the process itself that is so damaging for defense? >> i rather think it is the mindlessness of the sequestration process, even if

the top line #holtz, number holds, i would hope the detail does not and they begin thinking about some of the things my cast talk about as more sensible ways of cutting. >> to me, it is the magnitude as well as a way in which it would happen. i should have lived this to the earlier discussion on swapping crews on the navy. sequestration has to be steeped in 2013, so you do not have the opportunity to phase things and, which would probably lead to lay people off, which would risk a bond that we have had with our men and women in uniform. but the magnitude of 20% annual

reduction in the budget, it would only be 80% as great by the end of the decade. that is too much, as far as i can tell. i have other ideas in the book. they include reform through military pension and health care approaches. and not anything that would take money away from our wounded warriors. i think all agree we need to do even more for them. but for the middle a retiree who has served our nation very well but they are off to a new career, they're earning potential is great, but they are still getting a generous military pension. meanwhile, a private first class who did two tours in afghanistan and leaves the military gets no pension whatsoever, i do not like that system. there are ways to reform that system and to make it more fair and economical to spend less. on the other hand, is it right to be asking anyone in uniform to accept reductions in their benefits when we are so

feverishly protecting every other entitlement at the rest of the country enjoys? part of the question is fairness. you do better in budget reduction when you have a sense of shared sacrifice. it troubles me that sequestration also targets defense and bruce's budget disproportionately and leaves entitlements and tax policies untouched. that is not fair. that is not a smart way to shore up our long-term national- security. i have problems at every level with sequestration. >> at the end, after we have done efficiencies, reformed the personnel, pension systems, health care, the real question is what role do we want to play in the world? and are you correct, that we should be prepared to have one major regional war and two other thing we are doing at the same time?

the question of how much we want to spend on defense comes down to that. there are a lot of efficiencies between here and there, but that is the big question we ought to be talking about. >> i agree, and in my book, i make a full part of defense for protecting that. a lot of people think we are wasting money in europe. we only have 75,000 troops. and most places where we have people, the europeans have built up the infrastructure and the cost of being there is not notably greater than being here. so you get savings by cutting back on the size of the military. in the western pacific, potentially against north korea, iran, or broader persian gulf region. i do not see a way to responsibly reduce our commitment to those regions. while there may be more modest ways -- in the mediterranean, we have cut back a lot. we may be able to cut back more. although, we have watched the libya operation unfold where the

u.s. operation was not trivial. there is some room for debate -- plenty of room for debate, but i tend to think the interest that we are defending justifies continued defense. they are inherent, in many ways, to our global economic system and security interest. i would look for ways to be more efficient and economical and how we protect them. alice is right. you need to have more fundamental revision of that which interests you are willing to protect us and maybe gamble more with. >> greg kiley. csis. there is an argument that we are still business as usual, even with the $450 billion. the cuts have already taken effect. the last chairman of the joint

chiefs, on his last day, said that the 450 was across the board, would not do it if he was in charge. we have not faced the really tough choices. we have 17 public depos. we are not tackling that. we do not have the will. anyone that had done a study, from the cdo from the beginning, says that that is a wasteful entitlement program. we can do it cheaper. i do not see the 2012 war 2013 as the serious problem. are we still currently in business as usual? i do not see the political will to tackle these issues. >> you mentioned commissaries. my recommendations, essentially, we eliminate them.

again, to get to 400, 450 in cuts, what was mandated by the august part of the debt deal, to get to that level of savings, we need to do the things the eager mentioning. on top of the other things i've mentioned it today, there are not $400 billion in additional waste to just scalpel off. there may be that much waste, but it is marbled into the muscle in such a way that it will take quite a process. you want to cut short-term company to make decisions about capabilities and these benefits and programs that are usually there. i'm not in favor of sequestration. >> there are a lot of the things

we have talked about for a very long time i left the cbo in 1983 and i have a sense of deja vu. we did reports on a lot of these seven reports and have not hand and. -- on these reports and have not happened. >> the go to any state in the northeast or midwest, you have thousands of municipalities. i think what is happening is that the fiscal situation is so dire that the initial phase is to consolidate services and backed off the rest of it. people like their municipalities and high schools. there is a way to drive a enormous efficiency through this consolidation approach and i do

believe that will be a legacy of this long recession. there is this depressed amount of demand. i think we will see a level of reform outside of this town and it will be quite remarkable. it allows the politics to catch up with the evidence. >> there are elements of hopefulness in this situation. yes, sir, in the 43? -- fourth row. >> from johns hopkins university.

in this formula, how are you going to define a civilization mission vis a vis a war? are there differences in terms of sending ground troops or not or in terms of budget preparations? my question for ms. alice, i am new in town and i have seen some reports about millionaires going to congress asking to tax me more. warren buffett said that rich people have been coddled. why do they say that? will it produce any effect in terms of influencing congress's decision on the budget cuts?

>> i think you raise something of a quandary. it is absolutely true that the income distribution has gotten much more unequal over the last couple of decades, and actually longer. particularly, recently when incomes have been growing slowly, if all, and lower income people have been falling behind over quite a long period. the top 1% have been making out like bandits. it is very tempting to say, "let's go after the top 1%." the question is how to do it. whether you have a surtax on millionaires, or warren buffett's idea which was quite

limited. it would make sure that people at the highest income pay at least the average tax. much of his income is capital gains, dividends, carried interest, which is all taxed at lower rates and that seems outrageous. all that is true and i would be happy to see both the buffett role and a surtax at the very high end. it does not solve the budget problem. the best way to solve the budget problem on the revenues is a thorough reform of the income- tax. that would allow an actual lowering of the rates and would raise a good deal more revenue in a more progressive way. once the progressives -- what they fail to recognize is that the loophole of the special provisions, the exclusions,

etc., are before the upper income groups. i favor a drastic reform of both income-tax. we had one in a license and- bolts and we had a slightly different one in the domenici- revlon. -- we had one in the simpson- bowles. we should get rid of the deductions, reduction, etc., and you will have a much more broader base for revenue. >> on the one plus two formula and on the ground forces, they need to think about western pacific, taiwan, korea, and maritime contingencies as well as persian gulf contingency's where they have operations separate from what i am talking about. this is sort of a big regional

war, not unlike what we had been planning for the possibility of another north korean aggression for many years, not on like operation desert storm or operation iraqi freedom. because i just listed several different conflict and several different characteristics, one thing need to bear in mind as we cannot be too precise in our image of what future demands we place on the american military. we do need a cushion and margin for error. i talk about those two and i'm talking about a mission in which the international community collectively, under u.n. authorization, would get involved as a part of a large multi-national operation, perhaps run by nato or perhaps not, were the role of the u.s. would not be on like we did in the balkans where we provide 33%. and i separate that from the operation in the middle east.

it is largely an offensive military campaign in the u.s. role is predominant among the foreign policies. for the one more i'm still focused on, the most likely candidate is north korea. there are other possible cases as well, but that is the most likely. the stabilization is just one issue. it might be, for example, that the looming civil war in syria becomes just that and gets much worse. say assaad leave the place in chaos. perhaps acting in collaboration with various sectors within syria itself, we would authorize come under u.n. auspices, an international mission, public with the cooperation of some syrians but cooperation with others to go and in and help stabilize the place. that will not be a full bore

more but a much classic -- f ull borne war, but a much more classic conflict. as to allow for reasonable worst-case scenarios. >> yes, in the second row. >> from citigroup research. i am just wondering what the next steps are. where did it go from here? is this something reflected in the sequestration from the fed uri budget proposal? is this an overhang from an election year with more panels? is this something we will kick until november 2012 the new "governing mandate?" they have said we're not legislating around the sequestration. with that in mind, what is next? >> alice? >> at the sequestration does not kick in until 2013.

i do not know the answer to your question is. i think it will be very difficult for the administration to put forward a 2013 budget. in the face of this, i would expect they would say, "here is a better thing to do in 2013 than sequestration." the next moment, i think, will be two things. there is a lot of unfinished business that needs to be taken care of it could have been folded into the super committee. that includes the alternative minimum tax and the so-called dock fix as well as an extension of the payroll tax and other extensions.

something has to be done about that stuff. it is expensive. it is all expensive. it will add to the deficit. that is why it is such a shame we could not pull the in. i do not know what they will do. i think some will go forward and some will not. the big moment is likely to be back to the election but before the end of the year. no matter who wins, are the bush tax cuts extended? that's so come under what conditions? >> after the election and before the end of next year, that lame- duck perido will be crucial. >> and you may or may not have a lame-duck president or may or may not have a chamber of control on behalf of the hill. >> i think, from our

perspective, state, metro, local come across many sectors, it is time to mentor the conversation. it is time to come up basically -- it is time to, basically, a cross-section of what people would believe would be the next federal compact. we see where washington is going, you know? the 2012 election will not resolve that. what is the new compact? whether it is along the lines of what alice suggested 20 years ago, which is still unbelievably relevant today, or whether it is at least two were going to start cutting in this across the board way. let's completely we imagine the way a whole host of federal programs are designed and then executed by those who actually

have to execute them. when i was chief of staff, my boss, henry cisneros, says we do not build one home in this country but it is all this to be interpublic housing agencies, private sector developers come on and they are the experts. they are the practitioners. we should be flipping the pyramid and having our policies beat in the service of the people who actually deliver all of this. that is the kind of aggressive stance that i think an increasing number of leaders in this country, some-national, are going to have to take. they are the innovators. they are the pragmatists. i think that kind of stance, actually, could begin to inform the presidential debate. frankly, it could inform the

governing that happens post- 2012. what to do not want to discourage that for one minute, but he is referring to, which i agree, is more relevant now than 20 years ago, and it came out in 1992. bill clinton loved it. the first conversation we ever had in little rock was about how great he fought my book was. his interest faded as he became president of the united states and he had a different agenda. presidents are generally able leery of putting things over onto the national government. 6thes, ma'am in the 5th or row. >> suasan irving. long term as the land that management. -- fiscal and debt management.

[inaudible] it seems to me that governors are in favor of federalism until there is a hurricane coming to much crime, a natural disaster, a court order to stop a double- bunking prisoners. last i checked, the state was keeping it in business. our decision of sorting this out, it is fundamentally an american. american history is not revolutionary but incremental. i do not see as solving the drivers of the aggregate in the long term. we have to remember that all american political thought can be summed up in two sentences -- "did the government off my back.

there ought to be a law." >> i disagree with your premise. i think it there is a story happening already in the united states. it is a work around. what is going on at the metro scale, and in a lot of states, it is ntot across the board. they understand that they have to make tough decisions. they understand that their economies are all distinct. they can all aspire to be silicon valley, but they are not. some of them are essentially consumption economies and need to diversify.

i think, what you will see in the next three-five years, and we have already seen in the state after state is making the kind of targeted investments in those infrastructure, cluster, or higher medication areas that really relate to with the best. -- higher education areas. as they do those things, they are also cutting other things, right? i do see a level of focus and discipline with regards to a certain segment of what could be considered transformative happening across the state, and most of it is a work around. the have not gotten to the point in what they're doing is taking a work around and making it the norm. that is a radical thought and a release as the last 30 or 50 years of federal expansion needs

to be radically rethought, not just with regards to entitlement but with a whole set of discretionary programs. i think that will happen. at a minimum, what you will see, probably, is a return back to what nixon did in the early 1970's which what board completed with the block grant, consolidation, and i think that is coming. we have seen so much secretion of these programs across these areas of public policy, that you need to be a rocket scientist. the legacy government cleanout this coming. it may also shift into this much more dramatic realignment with all of the caveats alice said with president clinton.

>> i hope bruce is right, but t o come back to the deficit problem. remember it does not discretionary spending more defense, but the entitlements. until we get on top of that, it is not only the retirees that will required this, but until we get on top of that, we have this thing hanging over our heads that we know will damage the economy sooner or later. >> next question. over here on the side. yes, you. >> nick farmer, retired citizen. for bruce, and the state and local level, there are two problems you have not mentioned equivalent to the entitlement,

revenue, or tax issue. public employee pensions and public education. can you address those two? >> you have 50 states, and presumably we can call them 50 different countries. how bad are there bad habits? in california, really bad. it has become something like a different democracy as opposed to a representative democracy. no one is in charge in california. everyone should read this piece that michael listed in vanity fair about the overextension of california government and the crazy liability. my sense is, in state after state, the rules vary, but what you were seeing our governor's trying to get a hold of the

major cost drivers. michigan, for example, gov. snyder was able to push through an emergency finance, management appointing is now managers to flint, detroit, and they will have to deal with these pension liabilities to reorder and restructure. the second issue you mentioned is k-12. it is a sort of amex for a need for investment and a need for radical reform. -- it is sort of a mix. what we have had is the kind of distribution of responsibility for schooling through charters, public housing innovation zones. it has been a really interesting period, right?

we have not had it in a whole nother area of, but they have been opened up, but not uniformly across the last -- across the u.s. what is happening is about how competitive should we make schooling? we should still have performance measures, but we should allow for a much more erratic distribution of the approaches. one thing about the states, cities, metropolitian, someone is doing something. they may bonot be doing everything, but if you want an example of state of the art innovation come you can find it. we operate less as a top-down

economy anymore. things go viral in social and traditional media. i believe that we do have a group of leaders, not uniform, but they understand the systemic challenges. there are a bunch of the vanguard innovators out there, right? they are basically showing the way forward. the viral cycle we are in where innovation is defined, and implemented, and disseminated is beginning to kick in. that is a much more optimistic view than the washington environment which is still much more top-down, more hierarchical of late 20th-

century than the 21st. i may be delusional. i hope i am not. >> two last questions together and then we will take our response of this collectively and wrap up. the woman in th 8th row. >> for ms. rivlin. can you talk about assuming the failure of the super-committee and prospects for unemployment insurance, tax extensions come and payroll tax cuts? >> my question is how big do you think the chance is forthe inaction and the leaders leading to another political fow downgrading?

what will the market reaction be? will it be strong enough for politicians in d.c. to carry out a great bargain? >> i do not know what will happen on the payroll tax extensions and the unemployment. i think there may be a majority for extending those. it is very desirable in terms of not taking a bigger risk with the economy right now and whether there is a majority of a congress that understands that are not, i am not sure. it is certainly harder to do now that we have had the failure of the joint select committee. a downgrade. i think new york would take it very seriously. i do not think washington would.

and rightly so. standard and poor's and the rest do not know more about the budget than we do. the last downgrade did not have much effect. the main reason being that the world still believes that u.s. treasuries are the safest investment there is. i think we have to be even more dysfunctional than we are, and we are pretty dysfunctional at the moment, to dissuade investors from that view. europe looks worse. what else do you do with your money? >> there was an interesting post this morning by ezra klein about the failure to move forward with the payroll tax and

unemployment because that will obviously have an effect on growth. you go back to europe and the interplay about what is received -- perceived as an interplay conversation. in the middle of a lost decade in the united states were the recovery is going to be anemic and whatever happens to the private side will be counterbalanced and scaled-back. this kind of crisis is going to come in my view, actually generate a more innovative response at the state and local level because the more growth is sluggish, the more the citizenry expresses their levels of concern and insecurity, and more the local in the state political class have to respond.

they have to respond to clean up the fiscal mess that you referred to, with regard to pension liability, but they also have to respond with a clear vision for growth going forward, job creation, a broad become more productive growth for the long haul. in some respects, the constant this function of washington is going to get the juices flowing elsewhere in the country. you cannot dismiss the kind of a cataclysmic environmental bent -- a fact in this, but it does send a signal that we are on our own and we better get control of our destiny. >> that is the silver lining to a very dark cloud.

i do not think there is anything fundamentally good about 9% unemployment or the prospect of getting worse. >> absolutely. >> and i will pile on with one sequestration scenario to lancaster afghanistan. we all know even if sequestration kicks in that it will not cut more spending which is treated separately, for better or worse, but sequestration will have to look at deep defense cuts across the board. people will say that needs to apply to the ground forces. they are not yet ready because we have a few more years of sustained effort that is necessary. but i will leave you with two words of hopefulness. if we stay patient, in the last year come violence initiated by the enemy have declined 25% looking at the summer and early fall time of 2011 vs. 2010.

the country come as a whole, has not yet internalized or believed that life is getting more safe and stable. other types of violence from crime may still be going up a little bit. we turn the corner fundamentally, but that is a hopeful sign. the afghan army and police, as i have repeatedly talked about, they are getting better, but they are not big enough or experienced enough yet. i have a lot of problems. if this were afghanistan, i would talk about them in greater detail come on but they do buy it and hold together as units. they are not ready yet. we need more years of sustained effort. once we're through with that, we will wind up in an o.k. place. probably not a great place, but not terrible, and not another essential rick, but sequestration gets in the way

because it cuts ground forces by 2013 which is it too soon. that is one more way to take a shot at this scenario which seems like we in bold in the coming days. thank you all for being here. have a happy thanksgiving. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> if you missed any of this discussion, you can find it on line in the video library. coming up coming today we will hear from the postmaster general, patrick don ho, live from the national press club. -- patrick donahoe. a look at the u.s. capitol here today where both the house and senate are out of session. the the focus remains on the joint congressional deficit committing his initial recommendations are due by midnight tonight to allow the congressional budget office time to review the plans. if the deadlines are not met, automatic spending cuts will go into effect and you can find

continuing coverage on the c- span networks. you can find relevant hearings, speeches relating to the work online anytime on c-span.org/de ficit. tonight, "the communicator's" looking at government-spot of broadcasts to other countries with brian conniff. >> our mission is to describe journalistically the events of the day. there is nothing that says we have to present american foreign policy, but that is a huge reason why we exist, because people want to know. what is the american position? they wanted explained and they want to know how it came about. they want to know if it is unified. they want all of those answers they are not getting from local

media >> "the communicators" tonight at 8:00 p.m. eastern on c-span2. >> the supreme court recently heard an oral arguments in the case of a 9-year-old boy born in jerusalem who want his passport is a his birthplace is israel. the dinar recognize israel's sovereignty over jerusalem. the district court and the court of appeals for the d.c. circuit both dismissed the case calling it a political question that the courts should not get involved in. a decision is expected before the end of term next june. this is just over one hour. >> we'll hear argument first this morning in case 10-699, zivotofsky v. clinton. mr. lewin. >> mr. chief justice, and may it please the court. in its recent decisions in medellin v. texas and in hamdan. v. rumsfeld, this court approved and applied the familiar tripartite scheme that justice jackson articulated in

the steel seizure case. when the president takes measures incompatible with the express or implied will of congress, his power is at its lowest ebb. in that instance, said justice jackson, his claim to a power at once so conclusive and preclusive must be scrutinized with caution to preserve the equilibrium established by our constitutional system. >. well, mr. lwein, what power is congress exercising here? >> justice kagan, congress has exercised its power over passport, the issuance of passports under the immigration, naturalization, and foreign commerce powers that congress has. it has enacted passport

legislation back in 1856, in 1926. it can control what the contents of a passport ought to be, when it's duration may be, how the application is to be made. and we say this is an identification portion of the passport. >> do you think it's relevant that the title of section 214 is "united states policy with respect to jerusalem as the capital of israel?" >> well, we think -- and we have cited, i guess, in footnote 2 of our brief a number of recent cases of this court that have said that you take each statutory provision in dependently and determine its constitutionality. true, congress has a broader view with regard to the policy of jerusalem being part of israel than the executive branch has had since 1948. however, that purpose is not determinative of what the constitutionality is of subsection "d." >> but you say, mr. lewin, that -- you are not claiming

exclusivity in congress. you say foreign relations is a shard power. so if it is a shared power, why does congress trump the executive? > because under the standard of the steel seizure case and this tripartite scheme, if congress determines that what the president has done -- and this is a statute which is really very narrow and deals with past conduct by the executive branch, as it were. it does not hobble the president in terms of future foreign policy. >> well, under your theory, and this is just a following on justice ginsburg's question, i think. under your theory, what foreign relations determinations are for the president alone to make? >> foreign relations determinations are not left to the president alone.

>> are there any foreign relations determinations that are for the president alone to make under your theory of the case. >> yes, justice kennedy. >> and those are? >> those are diplomatic communications. in other, it's the president you makes -- >> in other words, who gets the telegram? >> well, who issues the communication to the foreign government, who determines; there are certain things that the president alone does because he's the one who implements foreign policy. >> is there any treatise writer or decision of this court that supports such a narrow, crabbed interpretation of the president's foreign affairs power? >> well, with all respect, justice kennedy, we don't think it's crabbed. we think that that is exactly what justice jackson was referring to, and that's what this court has said in the medellin case and in hamdan as well, that if congress does not authorize -- >> the jackson tripartite division, this famous division

he had, i think assumes the validity of the congressional statute at the first step of inquiry. and here that's the whole question. >> i don't know whether it's limited to the assumption with regard to the congressional statute. if congress says, as it did in this case, we disapprove of the state department's view that passports should not contain the identification of israel for people who were born in jerusalem, that is congress disapproving of what the state department and past state department policy has been. >> mr. lewin, you were cut off earlier when you were saying this reading doesn't hobble the president in the future.

it says anybody born in jerusalem can have israel listed, correct? what happens if there is a peace accord tomorrow, and israel gives up any claim to sovereignty over jerusalem? is the president free to stop listing israel on the passport? or does he have to wait for congress to change the law? >> i think he does have to wait for congress to change the law. >> so you are hobbling the president with respect to situations that occur frequently as happened in egypt, sometimes overnight. >> no, but it may in some way, in a very remote possible way -- i mean, i think under those circumstances, if there were a peace treaty and if jerusalem were handed over to a palestinian state, i think congress would repeal the

statute. that's the point. congress has the power, has the authority under the constitution to enact laws, and it is congress that makes the decision even with regard to feign policy issues. >> the constitution requires ambassadors to be appointed with the consent of the senate. it gives congress the power of the purse. so why isn't the better view that we let congress express its approval and disapproval in the mechanism set up by the constitution to do so? meaning, if the president recognizes a country that congress doesn't want it to recognize, it can withhold approval of an ambassador, it could refuse to fund the embassy. it could do many other things. but what entitles congress to trench on a presidential power that has been exercised virtually since the beginning of the country? >> with all respect, justice sotomayor, i think history

demonstrates that that's simply not true, that in fact congress has had equal "recognition power," if in fact that's a power rather than a ceremonial duty. we have in our reply brief gone through the fact that from presdients monroe, jackson, taylor, lincoln, and even at the time of mckinley, congress said -- we have the authority to recognized. kleist this gets back to the question of exactly what congressional power you are basing our argument on. you started by saying you were bracing on congress's passport power, which is a function of control over immigration issues. now you're saying the havoc the week of recognition power. which is it, or both? >> in the alternative, justice taken, it is both. -- kagan, it is both.

>> those that go the full length of saying if congress passed a law that says the united states recognizes jerusalem as the capital of israel and jerusalem must be designated as the capital of israel in all official documents -- suppose the more the law. i take it from everything have argued your position would be yes, congress has that authority. >> we see congress has that authority, but i have to add them justice ginsberg, that congress has been very careful in the past and we believe it will be in the future to give the president broad authority. to the extent that congress has tried to do that, congress has consistently said that the president can waive the moving of the embassy to jerusalem, because congress recognizes -- and this is one of these very rare situations were congress has said what the president has

done and what the department of state has done is that the wrong. >> mr. lewin, it seems to me you are not arguing for a co-equal congressional power. you are arguing for is superior congressional power. you are saying whenever congress says, the president has to comply with. that is quite different from saying that the book of authority in the field. and of the above have authority in the field, and they are exercising in a different fashions, i frankly would not be inclined to intervene. i would let them conduct the usual banter-branch and rustling that goes on all the time. that probably means that if congress cares enough, congress will win, because, as you say, it has an innumerable number of clubs with which to be the executive. if the power is a co-equal power and they are but exercising it in a different way, might we not

just let them go at it? why is it any of our business which is the better foreign- policy position? >> the court is not being asked to determine what is the better foreign policy position. congress has determined -- what congress is supreme. that is your position. not that congress has co-equal authority, but congress's supreme? >> there are two aspects to this, justice scalia. one is the recognition power. as to the recognition park, if it exists, congress has it together with the president. with regard to foreign policy and with regard to the question of whether progress can trump the president, this is not a new proposition. the court determined in the steel seizure case. the court more recently, in approving justice jackson's tripartite scheme, approved it in medellin.

>> that involved a situation where the president purported exercise of authority changed domestic blog, and not simply domestic law but state law. that seems to be quite a distinguishable circumstance. >> what justice jackson said is that when the two are incompatible, then you look -- then the court looks and a scrutinizes "subject to scrutiny," and those were in justice jackson's standard. we submit in this case that the court were to look at the answers to the interrogatories in this case, what is the basis for the president's policy, if one scrutinizes it, we sit in our brief -- say in our brief that it is "trivial." the department has said that

the to thousand americans a does have the same passport as 100,000 other american citizens who were born in teleview -- tel aviv or haifa. it just says "israel." the state department says it is justified because arab countries are palestinians may be upset if they misperceive. >> so you're suggesting that the ad, this case would be different if congress said the eu has to say jerusalem, israel? >> i saved a different case, yes. absolutely. the important thing about this case, and this statute, is that it gives the individual passport holder retorts. >> why is it a different case? >> is a day -- it is different because if it were to say " jerusalem, israel" there would be more of an argument. i am not a valid and that is

impermissible, but there would be more of an argument. >> so there would be a greater concern on the part of the executive that would be adverse political reaction that would have a greater degree of credibility? >> somewhat greater degree. >> so we're supposed to decide whether or not the executive is correct in saying that it is a significant problem. he says that, but we know foreign-policy better? we do not think it will be a big deal? >> no, i do not think the court is being asked to describe a question of foreign policy. congress has decided that saying "israel" alone does not present a foreign-policy issue. congress recognized that with moving the embassy, there may be a foreign-policy issue, so that the president can waive that. with regard to this provision, congress has said there is no logic to be any foreign policy harm. the court is being asked to

enforce the congressional conclusion which is, we submit, exactly what the third level under justice jackson's test is. that if, in fact, congress decides that what the president has concluded or the executive branch has concluded is wrong, it may -- and it has the constitutional power to say so -- with regards to foreign policy, we can exercise our determination. >> i do not see justice jackson's analysis. but he is saying, and i guess i do not think it is as controlling the others might wind and he is saying when there is a conflict that it is a harder case. >> yes. >> when they agree, it is an easy case. when you cannot tell, it is in the middle. i did not see how that is very helpful. >> it says when it is in the third category that the court has an obligation under the circumstances if it is going to keep the equilibrium of the

balance of powers to look at what the president's justification is. the word "scrutiny" is in there. that is not just a bruise that justice jackson is taking out of the air. he says you're supposed to scrutinize it. if you scrutinize it in this case, there is nothing other than the possibility that there would be a misperception by palestinians. that is what the state department as saying. >> what were we scrutinizing in the steel seizure case? >> in the steel seizure case, the court was scrutinizing whether, notwithstanding the fact that congress did not give the president the power to seize steel mills, but nonetheless whether there could be some justification that, even in the contrary to congress's wishes, the president would be able to exercise that power. >> and what presidential power would have supported that? the war power? >> possibly the claim that as

commander in chief in the time of the korean war he would be able -- >> he was claiming that the korean war -- required and that these companies remained in business? and i guess we could scrutinize that. what did we conclude that -- with that? >> that it did not justify the exercise of the president's power. >> that was not a case in which the congress had said you may not seize mills. that is what your case is, so there is a difference. >> there is a fortiori situation. >> is if you assume that the statute is valid. >> the statute in this case, again i come back to the fact that the statute in this case is a passport statute. >> at the statute is invalid, we are in category 1.

>> yes. >> or two. >> but the statute is a passport statute. >> it is a passport statute that seems to have nothing to do with the emigration functions that passport statutes usually serve. it seems to have breathing to do with congressional declaration of a foreign-policy as opposed to congress's exercise the power relating to immigration control. so convince me that i am wrong on that. >> i think you are wrong on that, just as come and let me explain why. let me explain why. because it is clear from the history of this line on the passport that it is purely an identification of the individual. it is not an exercise of any foreign policy. indeed, the passport statute itself says that a passport is "a travel document issued by competent authority showing the bearer's origin, identity, and nationality."

in this case, the history of this line on the passport demonstrates, i think conclusively, and the state department has acknowledged it, that is purely a means of identification. congress has said, with regards to these citizens, we will permit them to identify themselves, like a congress permitted the taiwanese to identify themselves. >> are you suggesting congress enacted this because they thought that if these individuals passports simply said "a jerusalem" that there would be an identification problem? >> justice alito, not because there would be an identification problem, but because there were. congress recognized that with regards to 50,000 people have a passport that says jerusalem, they're being denied a certain sense of self-respect they feel they should be about to have in terms of their own identification. this is not a statute designed to create some political brouhaha or make a foreign-

policy statement. it is a statute that, frankly, fits in with what the state department as in accommodating individual passport holders. the state department says if you are a palestinian or an arab and you are born in haifa, you do not like seeing is real in your passport, so we will allow you to eliminate it. >> that may be true, mr. lewin. i think you'd have a better passport said the statute said you can pick a jerusalem, israel, or palestine. it does not say that. it says you can pick israel. why is it that a statement for policy -- of foreign policy as a recognition that jerusalem is the capital of israel as opposed to what you're characterizing it as witches is sort of choice provision? >> what you said the statute does not say it is exactly what

the statute does say. the statute does say that the individual passport holder can choose to say is real or can keep it as jerusalem. if they are born before 1948, it can sit palestine. it is an individual choice. >> you have to be very old to sit palestine. >> pardon? [laughter] >> i guess it is a reflection it in my own seniority that it is my generation that fits into that. the fact is this exactly. that is all that the statute does. the statute is a means of promoting self identification by an american citizen who says, "my berth in jerusalem, indeed in west jerusalem, which has always been recognized as a part of israel, i want my passport to

say israel." >> of but recognize that principle only with respect to a particular jurisdiction. an american citizen born in northern ireland it does not have this option because he thinks it is a part of ireland. >> no, but an american citizen born in taiwan apparently does have that option even though the united states says we do not recognize taiwan as an independent country. >> and your friend on behalf of united states says that is because of a state department judgment that in one situation is significant and in the other is not. >> is not to because of that. there is a recognition in both cases that it is a personal identification short with regards to what goes on the press corps. in that case the state department didn't take into litigation, although i submit

that it was chosen to litigate. >> the personal identification tourist enough to have significant foreign policy implications, can it not? >> this may antagonize some foreign nations that we do not want to antagonize. what they give them the choice of saying, "israel, the only democracy in the." middle east would that be okay? >> given the court's view about par with regards to passports, and again i go back to the fact that in zemel and rusk, haig and agee, ken dulles, we look to see whether with the court says it is authorized by congress. i submit with regards we need

authority whether it is implicit or expressed. with regards to your question, justice scalia, yes, congress could in in its exercise of its passport authorities say, "here is what the passport has to say." it would be a formal statute. with the court has said, it is not the court's job to determine whether congress is bullish or not. if congress decides that somebody born in israel, the passport should say israel, the only democracy, congress can say that. congress has passed for authority. >> what you have argued is that you're skipping over the question that the d.c. circuit court decided. take your view is that it is not a political question,