that area of the world -- i can give the past two some regard to the bush -- i can give up pass in some regard to the bush administration i said it the other night. look, i have been working the past five years writing about islam and the problems in central and south america. i am not coming to miami and saying, look, i want your vote. nope. i want you to understand, this is a passionate issue for me. the united states needs to have friends all throughout this hemisphere. we need to be a free, growing, and prosperous hemisphere, from cuba to venezuela to honduras, to colombia, to brazil.

they need to be our friends. they need to be open and free in trading relations. they need to be democracies. they need to be close allies to the united states. this is our backyard. this is the people -- the people, they share the values of the people of this country, and we have an obligation for our own security, for our own economic benefit, much less the people in this region, to have a policy to make sure that all of the country's i mentioned are free and safe and prosperous. [applause] so i look forward to working with the people here, because this is obviously the capital of central and south america from an economic point of view. i look forward to working with people here in south florida to talk to you and work with you about how we can, in fact, create that opportunity. for me, as president, both

economically and politically, to spread american free enterprise, to spread american values, and be able to one day say that this entire hemisphere is free. it is free, and people can live their dreams consistent with their values. thank you all very much, and god bless you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> senator, if you can stay up here for one second. thank you, senator. thank you for being here. we appreciate it. we welcome you back. we want to take a picture with you. directors, past presidents, please come up.

>> rick santorum at the latin builders conference in miami. we're going to open up our phone lines one more time to hear thoughts from you about the candidates. the numbers are on the screen. >> mute your television when you call in. this will be rick santorum's last event in miami.

he is headed back to pennsylvania, according to news reports, and his calendar later today shows an even bigger in west chester, pennsylvania. reports say he is leaving to focus on other states, but he will return to florida and head of tuesday's primary. writing about the financial support of rick santorum, in the "wall street journal" today, the headline was -- santorum's main backer plans to keep on funding. he says he plans to fund television commercials for mr. santorum in other states in february and march. that could help keep mr. santorum competitive against his better-funded rivals and is one reason the fight for the republican nomination will likely run at least through super tuesday, march 6, for rick santorum. also, the "wall street journal" and nbc news poll showing rick

santorum with 18%. newt gingrich is at the top with 37%. mitt romney at 28%. rick santorum, 18%. and ron paul with 12%. that poll just came out late yesterday. let's get to your phone calls. and it romney supporter in south carolina. welcome to the conversation. host: hi, i would just like to make a comment. i noticed a lot of gingrich supporters in to be very naive about newt gingrich. i just wanted to say that i noticed in his advertisement, he takes credit for being a leader, but all he is is a professional politician, and not a good one

at that, because he had ethics problems and was also released from the leadership of the house. and how people are so naive about that, it really surprises me. the thing about romney, at least he has a track record. he is not a professional politician. he has been a successful businessman and a successful governor. there is a lot of very influential people that perhaps backed him because of his credentials. i am disappointed in it newt gingrich because he is taking all of this credit, and he's not giving the credit to the time, nor during his of the congressman who helped support his republican ideals. those are not newt gingrich ideals at all, but it was the

republican party at that time. guest: ok, let's hear from a gingrich supporter. this call is from louisiana. host: first of all, i want to thank c-span for giving the type of programs we can listen to. the media, i cannot get anything but obama and romney. we cannot hear anything of importance about any other of the republican nominees. guest: we have had both of them today and newt gingrich. host: i appreciate it. thank you so much. i believe the opposite from the last caller. i do not think romney gives us specifics on what he will do to get us out of this trouble. newt, although he has made mistakes in the past, people do not seem willing to give him the chance to see that. maybe he has made a little conversion experience. maybe he has learned from his mistakes in the past.

and he has a lot of experience to back him up. i like the fact that he is actually very specific about his solutions, and he is very passionate. he has so much information in his head that comes out so specific, it is just exciting to listen to him. another comment on santorum, listening to the debate last night, he was also very excited and very passionate about the things that he was talking about. what i would really like to see is newt for president and santorum for vice president. host: we're going to give you a chance to hear newt gingrich's speech from earlier today. here is a call from michigan. caller: at low, i want to say that i think mr. santorum is the true consistent conservative. even when it was politically

disadvantageous for him, he stood by his principles, and i really respect somebody who is willing to do that. i do not see that in any of the other candidates. host: what do you think about his decision to forgo florida, at least not concentrate, and focus on other states? caller: i think mr. santorum's message will carry the day. i think he stands for a true family american conservative values. host: the ap reported about rick santorum heading back to pennsylvania, at least for the weekend, and head of the primary next tuesday. they say outside advisers are urging him to back up in florida completely and not spend another minute in the state where he is cruising toward a loss. but santorum insisted friday that he would return once he had readied his taxes for public release. he made those comments last

night on fox news. let's go to a ron paul supporter in california. caller: my point is with any of them, santorum, gingrich, romney, they are all in as professional system of debt that we're in it with the federal reserve. i think ron paul sees that system the best. he could be the next, like, andrew jackson. you know, shut down the banks. host: but from a political standpoint, don't you think ron paul has to get a caucus or primary win to hang in the race? caller: he does. the thing is, he has been depicted as not knowing or not knowledgeable, and that is actually not true. what he is saying about how our system really works and how the debt will never go away as long

as we keep this system in place. host: we have covered a number of ron paul events in the past, and you can find a lot of those on our website, c-span.org/ campaign2012. next is a romney supporter in washington state. hi there. caller: i am kind of still undecided, and i am going mitt romney. but i would like to see the people that are running to step off the basic platform that everybody is discussing, the basic, what i call, a black-and- white issues on what america is suffering right now and start addressing the underlying issues. host: what are some of those issues that you have not heard addressed? caller: well, if we're truly

going to make a change -- in, like, mexico, the talk about foreign policies and immigration and jobs overseas. if we are going to truly make a change, with and we go to the u.n. and demand a worldwide minimum wage to wear no longer it is anybody in this global market suffering from being paid nothing but 35 cents an hour, and that is why our jobs get shipped out? or we get our slave labor in other countries, it would really put a hindrance on that. caller: thank you for weighing in. one more call, a gingrich supporter. caller: good afternoon, sir. newt gingrich is the only one to really talk about -- i was listening to santorum here in miami. a very good speech, but when it comes to being a bridge -- newt

gingrich, they're trying to put him down. he is the only guy that is using his money, using nobody else's money. he is not thinking about the business like romney did. he has businesses here, and he leads a lot of people without a job here in miami, florida. host: what kind of work are you in? caller: i am in the taxi business. business in florida is slow, but it is going to get better. we have a lot of things. and we have the beach. las vegas, nevada don't have no beach. host: you will always have that. we will have more coverage coming up later. we will bring you a lot of the speeches we brought you today. you can always find them in our video library at c-span.org/

campaign2012, focusing on the social media networks, too. you can follow twitter comments and facebook postings, too. newt gingrich did focus on immigration issues largely in his comments to the hispanic leadership network conference this morning, which are about 50 minutes. [applause] >> thank you. thank you very, very much. we had a slightly more modest group downstairs who endorsed me. great people, great leadership, and i thought i would come up here to see it the rest of you decide to join us in launching a nationwide effort. we have folks came in from california, louisiana, texas, and a number of other places to form a national leadership council, working with my campaign. i am thrill. we helped develop the americano

-- with sylvia garcia, in miami about nine years ago, so we have had a consistent effort trying to build a nationwide approach to a center-right latino communications capability to talk about issues that matter to all of us. it is something that has no boundaries. every ethnic group that comes through america has the right to pursue the american dream. i think it is very, very important. it was captured perfectly in the book, and i was thrilled kathy came today to endorse me. we want to be one people of many backgrounds pursuing a better future. and virtually everybody in the latino community has aspirations that are precisely the heart of the dream. they wanted to work. they want to have family. the want to have independence. [applause] my wife and i are honored to be here with you. i want to thank everyone who put

this together. it really matters a great deal. your leadership team is all first-rate people of national caliber who have done a wonderful job. as a thrilled to work with the. if, with the help of many of you, i become the nominee, we will work very closely in every single state, and we recognize that, literally, working with the latino community is every single state. because there are people everywhere who have a background of having come from someplace, either in spain or latin america. let me talk about some practical things, but the domestic or foreign. a couple for a policy things first, because they're very specific. i would move to mexico from the northern command to the southern command here in miami to create an integrated capacity to deal with all of latin america. it makes no sense to divide mexico from the rest of latin america. [applause]

second, i would substantially strengthen the southern command and its assets, personnel, and resources. the idea that we invest more in bahrain or japan, we have more forces in okinawa -- you think about the scale of immediacy. in 1963, it was said we are neglecting this hemisphere. and here i am to tell you, almost 50 years later, we continue to neglect this hemisphere, and it is dangers. it is foolish. we should have fundamentally different policies. our commitment to every person in america -- we want you to have the opportunity to live under the rule of law and have private property, pursue happiness, develop prosperity, and we want america to be your closest friend and your closest ally and giving you a chance for your family to pursue a better future. i think that message, and a human level, would be received

by people across all of latin america who can help us truly break up. i was deeply influenced in the 1980's on the work of economics in countries and how we break through. i would like us to have the kind of program that gives hope to everybody. there are some specific governmental projects. hugo chavez has openly and publicly said he is our enemy peter i am prepared to accept that. [laughter] [applause] >> there have been few occasions. an administration filled with comparisons, there have been few more embarrassing than when president obama met hugo chavez, attempted to be pleasant with them, and chavez smiled and handed him an anti-american book. i just think that we need to understand, when chavez and ahmadinejad get together and say they want to harm the united

states, they mean it. i think we should take an aggressive strategy, a non- military strategy, but an aggressive strategy of replacing chavez and giving the people of this will lead the opportunity to live in freedom. [cheers and applause] i come to you as someone who, as speaker of the house, help pass and negotiate the helms burton act. burton is here today. as president, i will not wait article iii, which every president has waived, which allows people to start pursuing those companies which have exploited american property in cuba, and i think it is important for us to implement that. [applause] but we need to do more than that. it is amazing to me that president obama can look east

and worry about freedom in tunisia, were about freedom in libya, egypt, worry a little bit but not too much about freedom in syria. not worry about freedom in iran at all, because that would be embarrassing. but he cannot bring himself to look south. i would like a cuban spring in 2013 to help the people of cuba liberate themselves. [applause] and the fact is if you look at the non-military strategy is that president reagan, prime minister thatcher, and pope john paul ii used to defeat the soviet empire, and we were serious about communicating to the next generation and the cuban hierarchy, there will not be a transition to a dictatorship after castro. there will be a transition to free the but you get to decide whether you want to join the side that is going to win and be free or rather on the side that

would lose. we're going to notice who dote -- who does what, and will hold you accountable. i think you'd find the morale of the cuban totalitarian system collapse rapidly. we saw where reagan talks about an evil empire. and at the time, we had somebody who was in the gulag as a prisoner. to answer reagan, they had to say he used the word evil. when they published that reagan used the word evil, the morale of every guard in siberia dropped. and the morale of every prisoner went up. because, finally, a western leader had the courage to tell the truth about the soviet empire. the moral force of an american president who is seriously intending to free the people of cuba and the willingness to intimidate those who would be oppressors by saying to them in advance, you will be held accountable, and when the inevitable change occurs, those

of you engaged in violence against the people of cuba will suffer the consequences of your behavior. [applause] one of my goals would be to non- violently fled the island within the cell phones or video cameras that any act of oppression will get them to buy 20 people. this person will be on the list after the revolution did you will watch the morale of the police force drop dramatically, because they're no longer all that powerful. that is part of it. beyond those immediate problems and opportunities -- and by the way, we have to help the government of mexico when the war against the drug cartels. this is extraordinarily important. [applause] as speaker, i helped pass the plan colombia.

president uribe is a man of enormous courage. it was compounded by the drug cartels in the compounded by the power of the fark. plan colombia has been an extraordinary success, which is why almost nobody on the left talked about it. the fact is, we need to be prepared for a different situation with different complexities. we need to be prepared to help the government of mexico defeat the drug cartels on behalf of civil society, because it is a threat to everybody in the hemisphere to have the drug dealers surviving in mexico. that is a commitment we have to take as americans. [applause] there is a broader pattern, and that is the question of -- how do we maximize our trade, and how do we maximize our ability

to compete? i am very bothered when i see the chinese gaining ground in latin america, because their government cares. their government is engaged, and their government wants to maximize the opportunity to export into imports from latin america. we should take seriously our can encourage our businesses, what changes in regulations, what changes in tax laws, and the secretary is here, and he has been a leader. he understands this. i promise all of you that i will do everything that i can to maximize our opportunities in latin america and to maximize the opportunity for miami to become the center of commerce from the center of education, the center of opportunity, so that all of latin america feels comfortable. one up the steps will be to fundamentally overhaul the legal visa system so that people can come here inconveniently and easily to do business, to be tourists, to be students. when we make it harder to get

here legally that it is to get here illegally, you should not be surprised that we have too few visitors and to many people here illegally. we have an obligation to reshape the entire vis a program to make it user-friendly so people come here. i say this on behalf of all of america, but in miami, i say it on behalf of the cruise lines, on the behalf of disney world, universal. they are losing billions of dollars and many thousands of jobs because we have a visa program that is so complicated. now, let me turn to several things here at home. the first of which is one that, unfortunately, was not covered very well last night, and i regret that wolf blitzer did not ask the rest of us. i have a firm position on the right of the porter rican people to have a referendum -- [applause] let me be clear, i am not dictating the outcome of the referendum. there are several options. the puerto rican people have to make those decisions.

they have ever read, and i support the right to have a referendum to decide, and that is sending a would actively support, their right to have that referendum. and as every other state has, to negotiate the process of succession that that is what the people of puerto rico want to do. i look forward to working with the governor it that is, in fact, what is happening. i do believe the people of puerto rico have the right to clarify their status, and it has been a very long time. i think this is an issue -- this was my position when i was speaker. >> [inaudible] [applause] >> [inaudible] than any other state in the union? we have four million puerto ricans in united states who are voters. we have children who are in poverty. the question is very simple.

do you want our votes, yes or no? i do not want you or any other candidate, as obama did, to make that decision. we will be go to referendum. the question is, do you believe that puerto rico can be a state or not? simple. >> i just said what i believe, and if you do not like it, i am sorry we disagree. [cheers and applause] >> i think the part to ricketts need to make their decision. if they make the decision they want to be a state, i will work actively to help them negotiate the process of succession to the u.s. the people have to decide their future. i will not tell them what decision they should make, period. [cheers and applause] now, while we're at it, let me talk about one other

controversial issue. [laughter] which came up last night in one of its more baroque forms. i have a very simple, clear position on immigration. first, i do not believe you can pass a comprehensive bill. george w. bush could not. barack obama cannot pass a comprehensive bill. any bill you write that is comprehensive has too many enemies. i do believe you can set up a series of parallel steps that are pretty straightforward. one, you have got to control the border, and we propose to control the border by jittery 1, 2014, both by writing the bill with all the federal requirements, and second, because i made the commitment that there 23,000 people in holland security in the washington area, and i would be willing to move up to half of them to texas, mexico, arizona if that is what we need to do. [applause] the minute people think you are serious about controlling the border, things get easier and you can have the conversation.

second, i am for english as the official language of government. [applause] the fact is, english is the ultimate language of maximum opportunity. every parent who comes here knows this. they all want their children to grow up and have the maximum chance to get a good job. this should not be controversial. i met the other day with the president of miami dade, and they said they have 94 languages in their college alone. there are over 200 languages in cook county, chicago. clearly, we want everybody to be able to talk to these people. there should not be controversial. ok, we were inviting people to come to america to become americans. i will give you some the witches' personal for me. -- which is personal for me. i think people applying for citizenship should have a higher standard of knowledge of american history than they currently do. frankly, i think our own children should have a higher standard of american history

than we currently required. [applause] this is a remarkably unique civilization which integrate people from every part of the planet with the skill and the speed that no other country in history has. not wrong, not china, not britain. there is something unique, and it is all historically derived. i want to modernize the visa system. this can all be done tomorrow morning. i would also like to modernize the deportation system. if you're not an american citizen and you are a member of ms-13, the el salvadorean gang, you should be out of here in two weeks. the fact is, there are some people we candidly do not want to have here, and the neighborhoods do not want them here. they pray largely on their own community. now, years ago to step out on a limb, i think we have to have a guest worker program, and i think it has to be economically-

driven. [applause] i personally would outsource it, and would propose congress to outsource the to american express, visa, or mastercard, because they understand how to run programs with no fraud, and quite frankly, the government does not. if you have an effective program and an effective card system, there is no exclusive any employer hiring somebody illegally. that would lead to dramatically higher economic sanctions on employers who do it. we now come to the question of the 11 million plus or minus who are here. this is where i have a deep disagreement with governor romney, and i think is worth exploring. i hope if he comes this afternoon, we will explore it. i think once you set this up, a very significant number of younger unattached migrants would go back home and apply it to be a guest worker. self-deportation works for those groups. but i try to deal in an honest

with the complexity of what is going on. you have people who have been here 25 years, who have been in the community working, paying bills, grandchildren, in a local church. by the way, some of you will remember this from the debate in washington, i got attacked by romney and others as though i had sold out on america. they started yelling amnesty. what i said was, for folks who have been there a long time and have family and are clearly financially responsible, if they could have an american family sponsor, we should create a world war ii-style -- the way we did the draft, they have local citizen panels. we should have citizen review boards. they should be able to apply, prove they have been here, prove they have ties to american relatives, prove that they have a family sponsor, and they should then get it right of residence, not citizenship peter

to get citizenship, they should go back home and file like everybody else. it would not stop them from being a resident. there will take a trip, file, and in a lot of these countries, it is a matter of years. but here is my point. it is not enough when you get to people who have strong family ties to just say self- deportation and there you go. since they're not going to sell- the poor, all of you know the passion in hispanic families and most immigrant families. the idea that grandmother is not going to be supported? the idea that she's going to sell off deport? this is a fantasy, not a solution. that is when i have said, let's find a practical common sense local system which enables citizens to decide, yes, you should have residency, come in

under the law, be able to live the rest of your life with dignity i think it is is doable, and forcible, a practical step, and i would hope that you would support the idea that we could methodically get to the point where no one is in america illegally within five years. those without citizenship have the appropriate papers. and it would end one of the great challenges of our time. that is a very important way to reunify the country. [applause] let me just say, two last things. i really appreciate the opportunity you have given me. one, i do not actually think a lot about narrow specific ethnic-by-ethnic, how we go around and capture people. i think about how we create millions and millions of jobs so that people are all going to be better off, so everybody's going to be working. america works when americans are working.

it is true or in some communities where the unemployment rate is higher. but there is a brand new study out on the cost in the senate -- in the hispanic committee on the president's decision to veto the pipeline. it is a significant cost. construction jobs lost. a costs in higher price of energy. 30 to 50 years of working in houston in working in the ports of houston and galveston. this is a very bad decision the president made that has an impact on all americans. it also has an impact specifically on hispanic americans. on my web site, you'll see an entire jobs program. it is designed to say we want every american to have the chance to get a first job, to get a better job, and some day to only their job by owning the business. if you have a country of constant mobility -- at the hispanic chamber of commerce told us that there were 3 million hispanic-owned small

businesses now in the united states but this is an entrepreneurial community. it will do very well if we have an entrepreneurial tax code in system and a president who actually likes people who create jobs. i think we can start moving very fast -- [applause] the last thing i want to say to every his batting american and every american, both in economics and national security -- gasoline last year was the highest price in american history, twice the price when obama entered office. the environmental protection agency is looking at a new regulation that would add 25 cents a gallon. totally irrational in this economy. but it it gets worse than that. our dependence on foreign oil is an enormous threat to our national security. the fact is that when you watch the iranians threatened to close

the strait of hormuz, what they're telling you is part of our strategy for the middle east has to be oil and gas in united states. to is a tremendously in our interest to have an american energy program which would create american jobs, dramatically improve our balance to trade, give us the national security reserves to do it. i have a very simple goal to be at by the end of my first term. to have no american president ever again bow to a saudi king, because we do not need the oil. [applause] i will close with a very brief commercial. i am running for president. [laughter] i would like to extend americano to every person in the country, of every background. [applause] we have a primary here on tuesday. i would love to have your

support, your endorsement. i would love you to go on youtube, facebook, twitter -- whatever your techniques are. even talk to people face-to- face. [laughter] and i would be very grateful for your help. i promise you, i will try to lead all americans into a dramatically better future. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> in about 30 minutes -- and about 30 minutes after newt gingrich wrapped up his comte -- speech, mitt romney spoke to the group of interest -- he is introduced here by former senator norm coleman. [applause] >> thank you.

thank you so much. appreciate your welcome. thank you. i brought some of my family here today. as you probably know, i care about my family. [applause] and i have one sone here today. this is my youngest son, my baby. i do not think he likes being called the baby. i thought i will let him say hello to you. he lived for a couple years in chile, so i asked if he would speak to you in spanish. tell me how well he does, all right? around home, he is by far the best. [laughter] >> mucha gracias, papa. [laughter] >> hopefully you can do better than that. >> [speaking foreign language]

[applause] >> tucker is going to say sending in spanish, too. come here, buddy. >> hola. [laughter] [applause] >> i have another friend who i want to have say hello. my sweetheart of 42 years, ann romney. >> it is good to see some friends in the audience. an excellent president peter it is wonderful to have our son

here and our grandson. it is interesting, when we ran four years ago, parker was a big hit on the campaign trail. he was only one. he loved it. he loved the stage. he loved the microphones. he loved the balloons. he had no idea what was going on, but he loved the excitement. it is interesting to have him back here four years later. four years ago i was definite about one thing, i would never do this again. [laughter] i cannot tell you how much i really meant that. mitt laughed, and he said, you say that after every presidency. [laughter] and all the women out there know what i am talking about. yet, a year ago, we were making the final decision about whether we were going to go forward or not. i obviously had a change of heart. and i asked mitt one thing. i said, look, no one knows who

you're going to run against. i have no idea who the candidates will be. and what will the issues be when it comes down to it? but they only have one question to ask you. if you can get through this whole process and you can finally be the president, can you answer me this one question -- can you fix it? and he said yes. so that is all i needed to know. [applause] so i have to throw aside all those arguments i made about never running again. you know what, it is worth it. this country is worth it. and what needs to be done it needs to be done by someone who knows how to do it. you cannot have somebody turn something around if they have never turn something around before. you cannot have someone run an organization of that have not run an organization before.

we tried that the last time with someone with no experience, and how was that working? so i really feel so strongly. i have seen him in every avenue be successful. and, by the way, to meet the most important avenue where he has been successful has been as a husband and a father. [applause] he did tell me, when i was racing -- craig was not always as well behaved, as you saw him while he was on stage. when they were really naughty, mitt would be traveling and he would call home and he would hear a very exacerbated wife. he would say, do not worry, everything will be ok. but remember, what you're doing, your job, is more important than my job. what that meant to me was that we were equal partners, that our success was going to be measured

by our children's success and our relationships. and now we have the records of having that having it come true. and i will tell you, the other great part is watching my grandchildren. we have 16 of them. watching them misbehave. parker was very well-paved today. but i look in my boys and thing, that is so great, you guys deserve it. [laughter] mitt has exhibited his whole life and ability to figure out the core of the problem and then figure out how to fix it. it is not just having the answer. implementing it has been the hard thing. i think that is what is going to be hard in the next phase, too. i have all the confidence that he will be a great president, and we need everybody in this country to understand that as well as i do. i appreciate all of you being here. it is going to be an interesting day in florida on tuesday, we

hope. thank you. [applause] >> thank you. i want to thank you and this organization for having helped sponsor the debate last night. i thought it was a delightful debate. i loved it. you were an energetic and it is suggested part of that debate. i want to thank you. i also want to thank the many people in this room who helped me four years ago, and they're still helping me. i see some of you over there. i cannot start calling out all the names. i thank you so very much for your help and for the many who are helping me in this campaign. it means a great deal to me. i thought it would spend a moment talking about the president's failures as they relate to lead america and the nations of latin america as they relate to our homeland with regards to the immigration policies, and also as they relate to the ability of our economy to help people find

work. not only the people who have lived here all their lives but those to come to this country, immigrants, as well as hispanic members, who are suffering more than the population as a whole. a couple of thoughts. it is more of a discussion, if you will, than a lecture. first of all, with regard to immigration, i like immigration. i like legal immigration. i think it is important for america to recognize that immigration is an extraordinary source of vitality for our nation. bringing people from different cultures here creates opportunity and growth to the economy. demographically, we also need immigration. it is one of the advantages we have over the european nations. we have populations who want to come here and grow our economy. it is an extraordinarily support aspect of america's vitality. at the same time, i believe to protect illegal immigration, we have to stop illegal immigration. so i would build a fence.

i would have enough border security agents to make sure we're able to protect the border. and i will put in place a system that allows employers to know who is here illegally and not. so as people want to hire someone, they can ask for a card, and they can identify if that is a valid are counterfeit. if it is counterfeit or the person does not have a car, if that employer hires them anyway, i will crack down aggressively on those employers colleges like we do want companies to do not pay their taxes. we will stop the flow of illegal immigration into this country. i am convinced of that but i am concerned about those who are already here illegally and how we deal with those 11 million or so that are here illegally, and my heart goes out to that group of people. my heart also goes out to the people that are being helped by the so-called coyotes and brought into this country and that used in many cases and victimized. my heart goes out to the 4.5

million people who are in their home countries waiting to come into this country legally. many of whom have been sponsored by people in this room, by family members here. i care about all three groups. our primary responsibility as a government is for those last two. those were waiting legally to come here, i want them to get here. i would like for them to be able to go on the internet and see where they stand and how long it will take to get here, rather than having to go through this labyrinth of loopholes in laws and a maze of regulations to try to get to this country legally. i want to make that easier. i'd also want to make sure that those being brought here illegally by the coyotes, that are being abused, that that in speed up because there will not be the demand to come here illegally. those that are already here illegally, those people that come here illegally should be able to be given a temporary status, a temporary work permit. but at the end of the temporary

timespan, they would return home and apply for permanent residency if they want to obtain that. they would get in line with everyone else was to come here. other people call that self- deportation. we're not going to round people up in buses and ship them home. instead, we will let people make their own decisions based on their employment opportunities here or lack thereof if they do not have a valid work authorization card for this country. i make this points to say i want to protect illegal immigration. i would like to expand legal immigration. i would like to have a visa program that meets the community. high tech v says. agriculture. we should measure those to conform with the needs of our employment community. i see substantial expansion of our visa program. at the same time, apart -- clarification of our legal

program. conviction across this country that we do not let the mainstream media confused -- we're not anti-immigrant. we're not anti-immigration. we're pro-immigration, pro- legality, pro-citizenship nation. [applause] let me mention a second topic. that is latin american policy. on a regular basis, every four years, your candidates stand up and said that latin america is being ignored by their predecessor, and they are going to change that. and th the question is, why? there is an answer to that. people who are living in the country typically decide what is in their best interest, what is in the country's best interest. foreign policy is guided by the best interests of the nation involved. so the people who have been leading our country for some time have, frankly, thought it was more in our best interest to

be looking at china and be trading with china, japan, and so forth because of the high growth there. others in the past have said, no, it is europe, so we devoted our time and attention to europe. looking at the world today, i have to say that they're out of date. because what is happening in america, whether it is mexico, the caribbean, central america, south america, such extraordinary growth. economically, not to mention it demographically. there is a huge economic, political, and military opportunity and a series of challenges and obligations right here in this hemisphere. while china is important in europe is important, right here is an enormously important aspect of american foreign policy. [applause] i think there has been the perception for way too long that

economic ties with latin america are somehow charitable endeavors by american business. that is simply out of date. there are enormous opportunities for american enterprise to become involved in latin america, and vice versa. trade between two nations were the huge trade the products and services at which they xl raises the standard of living of both nations. it is one of the most remarkable aspects of free trade. and we have that opportunity right here in this hemisphere. it is astonishing to me that more businesses have not become aware of that. but some are. i have a long and unfortunate history in the airline industry. unfortunate because some years ago, a fellow came to me and asked if i would invest in his start-up airline, and i said i would never do that again. i cannot imagine it will be successful. they never are. well, that was jetblue. [laughter] so i have made some mistakes. i watched him. he was successful as chief

executive of jetblue. then he went to brazil and bought an airline they're called azul. he brought american techniques to the airline, and is doing spectacularly well, according to what i have heard. you'll find more and more people that recognize the massive opportunity for exchange and trade. if president, one of the first things i will do is to begin an economic initiative of a drawing that american businesses and american businesses closer together. this is a massive opportunity, not of charity, but of opportunity. it will help lift both parts of the world. [applause] besides that being in our mutual self-interested, there's something else which i think we have ignored too long. that is the geo-political of locations of what is happening in the world and how it relates to latin america. i think many of us in our country still have the holiday

from history that has been spoken about by a number of folks, and that was the following the collapse of the soviet union, the idea that america was so far had from everyone else that we did not need to worry about the rest of the world, they would try to be like us. we were the model for the 21st century but that is how we felt. actually, they're now four competing models for leadership in this century. ours is one, based on freedom and free enterprise. china has proposed a different model. their model also encompasses a free enterprise, different than ours in some respects. they combine that not with freedom but with authoritarianism. that is a model they are selling at around the world, and it is doing pretty well. they're selling pretty well in various places. then you have russian researchers, and they want to become a superpower again. then you have the jihadists. their view is they will be the

last man standing to these four major forces are in competition today, and they're not just playing in asia and europe or the middle east. they are playing here. and our nation's sits back, looking again to the left and looking to the right. not saying, what is happening right here in this hemisphere? we have to compete here. we have to recognize the movement under way with chavez, castro influencing nations like ecuador and guatemala. this is an extraordinary threat to this region and an opportunity for us to say we must now stand up and fight for what we believe and promote democracy. let me tell you how i will do that. we have ambassadors in all these different countries, at least one. cliff, former ambassador to brazil. ambassadors are doing the best they can, reporting to a big state department with bureaucrats.

it is not highly coordinated. if the ambassador from brazil says, look, it would be helpful if we could help the brazilians in developing medical technology for one of their new hospitals, and he even goes to the health and human services department and says i would like to bring some people down here to help build a wing at this hospital -- good luck. how many committees he has to go through, how many bureaucrats -- we would never get it done. i want to appoint one person as the presidential envoy, responsible for democracy and freedom in latin america. and this person -- [applause] this person would be given responsibility with budgets and would be annually measure, looking at each nation. are we making progress? are we falling behind? how we work with the various nations and have the capacity to draw on all of the resources of america? stand behind those nations reaching towards freedom. and oppose those that are falling in line behind chavez or

castro. there is a battle going on. we used to recognize that. when we were up against the soviet union, we had people working to pursue the freedom agenda, to push back the forces of evil from the soviet union. we need to do that now, and we need to do it in that america. if i am president, i will get that job done. [applause] there is a time coming soon where cuba will be free. that is going to happen. we are going to have to get organized for it. we're going to have to recognize the the people there want freedom, as to people all over the world. and america cannot sit back. we watched across the world as iran had over a million people taking to the streets demonstrating for freedom. this president had nothing to say. can you imagine ronald reagan having nothing to say in the kind of circumstance? even bill clinton would have said something. [laughter]

i can tell you, i will not only say something when fidel castro finally leaves this earth, i will do something. i will be behind the voices of freedom here and there. we will help cuba when they become free. [applause] let me -- thank you. let me also note in that regard that i am looking forward to appointing this person and finding a person who hopefully has extraordinary marketing skills. i come from the world of business. i spent 25 years in business. for the first tenures of my business career, i was hired by big companies to try to make

them more successful. i was impressed by how well american companies can compete at around the world, how effective we are in marketing our ideas. think about this. we convince people around the world to buy brown water called coca-cola and pay half a day's wage for, and they will buy it. we are able to convince people of things that sometimes you scratch your head. i mean, it is a great product. i like coca- and yet democracy, we don't sell that so well. we send billions of dollars around the world, giving out money, and we are despised by some people. i don't understand why. in some respects, it is because we are not using the kind of marketing skills that we have in this country look at what fidel castro does with his marital -- miracle operation. that is the cataract operation. for a tiny amount of money, he can get the good will of people all over latin america. and us, for billions and

billions of dollars, we get resentment. how can we be so short-sighted as to not bring into our government the scale of people in our business world, in our terrible world to say let's promote freedom and democracy and make a model for the entire world to see? [applause] part of that experience is to stand by your friends and to have been so successful that those around them look and say look what it is like if you follow the freedom agenda. if you have free enterprise and free trade and people have elections, look what happens in wonderful places like columbia. how can the world did this president stand around for three years and all of our best friend fighting hugo chavez? i don't understand. we should have done this on day want. colombia what a friend. one more trade. let's make an example for less take -- let's make the people in venezuela look over the

border and say they got a better deal that averted disaster happened in panama. i am looking forward to the time or the people of puerto rico make a decision about becoming a state. [applause] wow, we've got some friends here. luis fortunio is there somewhereo,h, he is coming later. he is passionate about state and i think you'll have a referendum in november? i expect the people of puerto rico will decide lecky feels that they want to become a state. i will work with him to make sure that if that vote comes out in favor of statehood, we will go to the process in washington to provide status to puerto rico and create a model in the caribbean of the benefits of having freedom. [applause]

let me also just note that i think there are threats we face around this hemisphere that have to be addressed together. terrorism and drug trafficking and other forms of crime is one more of those areas of concern. one of the first -- one of the first things i will do is form a hemisphere taskforce, bringing nations together the willing to become together and deal with these issues. there a number of places where drugs are being brought and puerto rico is one that is being used given the fact that there is more difficulty getting to the mexico border. people have looked at puerto rico as a way to bring drugs into the united states and from there into florida. we have to be far more vigilant to look at the cross-border implications of crime.

this does not affect latin america so much in terms of putting pressure on latin american leaders as it does to put pressure on us -- we have got to do much better job communicating to our children in this country whether they are hispanic or non-hispanics, that drugs are causing death around the world. [applause] our young people have a great deal of concern they are a humanitarian people and are concerned about issues like global warming and things of that nature. they are concerned about humanity. how can they understand that if they take one of these drugs being smuggled into this country that they are partially responsible for deaths. i want them to understand the tens of thousands of people who are being killed by virtue of drug use in this country. it is time for the united states of america to take responsibility for the pain and suffering and torture and murder that is going on throughout latin america. we're not a good example in this regard and that -- i will campaign in a very aggressive way to our young people if i become president, stopped taking

drugs the your killing people. [applause] -- because you are killing people. [applause] i am very concerned about the fact that we have so many people out of work. i watch the president give a speech the other day and he talked about how swimmingly things are going [laughter] in the united] i am afraid he got it wrong. he is detached from the reality here. 9: 9% of floridians out of work and 7% of latinos out of work. this is unacceptable. it was one thing or it to happen for a short period of time but now it is gone for 35 straight month. this is a failed presidency. he did not cause the recession. he made it worse. this recovery is the slowest and most tepid we have seen since herbert hoover agree we need to have a president who does not to spend his entire life in academics and in washington but instead has been in the real economy working in a

real double understands how to compete in how to get america to create jobs again. [applause] the was a great line that was spoken by mitch daniels the other night. he said america will have a choice. the choice is to follow the path barack obama is leading us down to become a european-style welfare state and if you believe in that, he said that as government trickle-down economy. i do not believe in trickle-down government. that does not work. the $787 billion stimulus bill did not trickle-down to the private sector creating jobs. that is the long way to go. the right way to go is to believe in the principles that made america the economic powerhouses. it is those are the principles outlined in our declaration of independence. those who wrote it said that we are endowed by our creator with certain unalienable rights,

among them life, liberty, and the pursuit of happiness. in america, we are able to pursue happiness as we to. we are not prevented from pursuing our dreams by virtue of the place of our birth, by our circumstances of our birth, instead, we can pursue our greatest by virtue of hard work, education, a lot, dreaming. as you probably know, hispanic americans account for a disproportionate share of new enterprises in this country as do immigrants generally. this is a great source of vitality for america. if you are republicans in this room, and i think your -- [laughter] people say i'm not sure i could vote republican. you hear that in your community. you remind people that the reason we are so anxious to be in america and we are so in love with america is not because of the check we get from governments. it is because of the opportunity that exists in

america. ours is the party of opportunit devoted to the declaration of independence and the pursuit of happiness. [applause] i will fight to get more opportunities for americans and that is the way we will create jobs for latinos, hispanics, for our entire nation. thank you, guys, i love this country, i love your support, we will make a strong hemisphere, thank you. [applause] [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> you're very kind. >> we will see you tonight for sure. >> mitt romney and one of his three campaign events today in florida ahead of a primary. ahead of that primary, we will bring you the head of the

florida republican party. that is coming up sunday. if you missed any of our coverage today from florida or elsewhere, you can find more from the campaign trail and at c-span.org. president obama wrapped up his five-state tour this morning. he laid out priorities for helping students afford college. he called on congress, states, and colleges to take action to make higher education more affordable and said the consumer financial protection board would begin grading colleges on the quality of education students receive for their money. >> ladies and gentlemen, to introduce the president of the united states, please welcome christina banks.

[applause] cresson did morning. my name is christina bachmann. i am a sophomore at the university of michigan. in my hometown, a small committee, east of grand rapids. i am pleased to be here today. i followed my two sisters to the university of michigan and could not be happier about my choice, but i will not say it has been easy. my parents and i have worked hard to support this choice. and --ken out subsidized loans, and as my sisters position, too. i know the importance of a college degree, but the importance the university has to manage resources sell to cushion increases to not become a

burden. i recognize the role the state has to play. i am very happy president obama has chosen the university of michigan to make additional comments about college affordability. i joined everyone in this room and awaiting his remarks. please join me in welcoming the president of the united states. [applause] >> hey. how are you? [applause] >> hello, michigan. [applause] >> it is good to be back in an arbor. -- ann arbor.

thank you, christina, for that wonderful introduction. i also want to thank your president, mary sue coleman. [applause] >> the mayor of ann arbor is here. my outstanding secretary of education, are the duncan, is in the house. we have somea -- arne duncan is in the house. we have some outstanding members of congress here today who are representing each and every day. give them a round of applause. come on [applause] -- come on. [applause] >> now -- i love you back. [applause] >> so, in terms -- boy, we have

all kinds of members of congress here, sell -- [laughter] >> where is denard? denard robinson is in the house. [applause] >> i hear you are coming back, man. [applause] >> that is a good deal for michigan. [unintelligible] >> they are trying to address you for president. -- draft year for president. he has to graduate before he runs for president. if there is an age limit. [laughter] >> it is wonderful to be here. thank you for coming out this morning.

no for folks in college this is still really early. [laughter] >> i remember those days. it is good to be in the home of the sugar bowl champion wolverines. [applause] >> with denard coming back, this will be 18 to be reckoned with, and i understand your basketball team is pretty good this year, too. all right. go blue. [applause] >> it is always good to start with an easy applause line. [laughter] >> look, the reason i am here today, in addition to meeting denard robinson is to talk with

all of you about what most of you to hear every day, and that is to think about how you can gain the skills and the training that you need to succeed in this 21st century economy. this is going to be one of the most important issue is that not just you face, but this entire country faces -- how can we make sure everybody is getting the kind of education they need to personally succeed, but also to build up this nation. in this economy, there is no greater predictor of individual success than a good education. today, the unemployment rate for americans with a college degree or more is about half of the national average.

their incomes are twice as high as those who do not have a high- school diploma. colleges the single most important investment you can make in your -- college is the single most important investment you can make in your future, and i am proud all of you are making that investment. [applause] >> the degree you learn from michigan will be the best tool you have to achieve the basic american promise -- the idea that if you work hard, if you apply yourself, if you are doing the right thing, you can do enough to raise of family, by a home, send your own kids to college, put away a little bit for retirement, create parts and services, and be part of something bad is adding value to this country, reaching that is -- something that is adding

value to this country, and the rest of the world. how we keep that viable is something i want to be a part of. we are not looking for a country for success for a small group of people. we want a country where everybody has a chance. [applause] >> where everybody has a chance. we do not want to become a country where a shrinking number of americans do very well while a growing number get by. it is not the future i want for you or my daughters. i want this to be a big, bold, generous country, where everyone gets a fair shot, everyone is playing by the same set of rules. that is the america i know, the america that i want to keep, and

a future that is within our reach. [applause] >> in the state of the union on tuesday, and laid out a blueprint that gets us there. blue print. it is blue. [applause] >> that is no coincidence. i planned it that way, michigan. [laughter] >> a blueprint for an economy that is built to last -- an economy that is built on new american manufacturing because michigan is all about making stuff. is there is anybody in america who could teach us -- if there is anyone in america who could teach us how to bring back manufacturing it is the great state of michigan. [applause] >> on the day i took office, with the help of your senator

and carl levin, the american auto industry was on the verge of collapse. some politicians were willing to let it just died. we said no. we believe in the workers of this state. [applause] >> i believe in american ingenuity. we placed our bets on the american auto industry, and today the american auto industry is back. jobs are coming back. 160,000 jobs. [applause] >> to bring back even more jobs i want this congress to stop rewarding companies that are shifting jobs and profits overseas. start rewarding companies that are hiring here, investing here, and creating good jobs here, in

michigan, and here, in the united states of america. [applause] >> so, our first step is rebuilding the american manufacturing. by the way, not all of the jobs that have gone overseas are going to come back. we have to be realistic, and technology means a larger portion of you will work in the service sector as engineers, and computer scientists -- there you go. we have the engineering. there you go. so, there will be a lot of activity in the service sector, but part of my argument and the argument of michigan's congressional delegation is that when manufacturing does well, then the entire economy does well. the service sector does well is manufacturing is doing well.

-- if manufacturing is doing well we have to make sure america is not just buying stocks, but we are also selling -- well. we have to make sure america is not just buying stocks, but also selling stock all around the world with those three proud words, made in america. [applause] an america built to last is one where we control the energy needs. we do not let foreign countries control our energy supplies. america is producing more of our own oil than we were eight years ago. that is good news. as a percentage, we are importing less than any time in the last 16 years, but i think young people understand this -- no matter how much oil we produce, we only have 2% of the

world's oil reserves, which means we have to focus on clean, renewable energy. [applause] >> we have to have a strategy that yes, is producing our own oil and natural gas, but we also have to develop wind, solar, and biofuels, and that is good for our economy. it creates jobs, but it is also good for our planet. it makes sure this planet is sustainable. it is part of the future you deserve. we subsidize the oil companies for a century. that is long enough. congress needs to stop giving dollars to one oil industry has never been more profitable, and double down on a clean energy

future that has never been more promising. [applause] >> i do not want to see the wind, the battery, or the solar industry to china because we were too timid or did not have the same commitment. i want those jobs created here, in the united states of america, and i want us to think about efficiency. we have already doubled fuel efficiency standards on cars. part of detroit coming back is creating more fuel efficient cars here in michigan, and more fuel efficient trucks. we have to revamp our buildings to make them more efficient. if we are focused on this, we can control our energy future. that is part of creating an america that is built to last. and, we have to have an economy in which every american has

access to a world class higher education, the kind you are getting right here, at the university of michigan. [applause] >> you know, my grandfather got the chance to go to college because this country decided every returning veteran of world war two should be able to afford it. my mother was able to raise two kids by herself because she was able to get grants and worker way through school. -- worked her way through school. i am only standing here today because scholarships and student loans gave me a shot at a decent education. michele and i can still remember how long it took us to pay back our student loans.

i will tell michele you said happy birthday. [applause] >> but, i just want all of you to understand, your president and your first lady were in your shoes not that long ago. we did not come from wealthy families. the only reason that we were able to achieve what we were able to achieve is because we got a great education. that is the only reason. and, we could not have done that unless we live in a country that made a commitment to opening up opportunity to all people. the point is, this country has always made a commitment to put a good education within reach of all who are willing to work for it, and that is part of what

helped to create this economic miracle, and build the largest middle class in history. this proceeds even college. we help to begin the move meant industrial -- industrialized countries -- the movement in industrialized countries to create public high schools, understanding that as people were moving to an industrial sector they would need training. we have moved to an information age, a digital age, a global economy. we have to make that same commitment today. now -- [applause] >> we still have, by far, the best not work of colleges and universities in the world. -- network of colleges and universities in the world. nobody else comes close. nobody else comes close, but the challenges is getting tougher

and tougher to afford it. since most of you were born, tuition and fees have more than doubled, forcing students like you to take a more loans and racked up more debt. in 2010, the graduates that took out loans left college all in an average of $24,000. that is an average. are you waiting because you all $24,000? -- 0 $24,000? $24,000?34,000 ne -- [laughter] >> student loan debt has exceeded credit card debt. think about that. higher education is not a luxury. it is an economic comparative

every american should be able to afford, and when i sit higher education are also mean community colleges and providing life-long learning for workers who might need to retrain when an economy shifted all of those things cost money, and it is harder -- shift. all of those things cost money, and it is harder to afford. [applause] we have to do something to help families and students be able to afford this higher education. we all have a responsibility here thanks to the hard work of secretary duncan, -- here. thanks to the hard work of secretary duncan, my administration is increasing federal tuition aid so more students can afford college. [applause] >> one of the things i'm proudest of with the help of these members of congress is we won a tough fight to stop

handing out tens of billions of dollars in taxpayer subsidies to banks that issue student loans, and ship that money to where it should go, directly to the students and to the families who need it. [applause] >> tens of billions of dollars that were going to subsidies for banks are now going to students in the form of more grants, and lower rates on loans. we have kept student loan payments so that nearly 1.6 million students, including a bunch of you, are only going to have to pay 10% of your monthly income towards loans once you graduate. 10% of your monthly income. so, that is what you -- we have been doing. now, congress has to do more. congress needs to do more. they need to stop the interest

rates on student loans from doubling this july. that is what is scheduled to happen if congress does not act. that would not be good for you, so you should let your members of congress now, do not do that. do not do that. do not do that. they need to extend to wish in tax credit that we have put in place that is -- the tuition tax credit that we put in place that is saving some of you and folks across the country thousands of dollars. and, congress needs to give more young people the chance to earn their way through college by doubling the number of work steady jobs in the next five years. -- work-study jobs in the next five years. [applause] >> so, the administration has a job to do, congress has a job to do, but it is not just enough to

increase student aid, and you could a imagine why. look, we cannot just keep on subsidizing skyrocketing tuition. tuition is going up faster than inflation, faster than even health care. no matter how much we subsidize it, sooner or later we're going to run out of money, and that means that others have to do their part. colleges and universities need to do their part to keep costs down as well. [applause] >> in all, recently, i spoke with a group of college presidents who have done just that. here at michigan you have done a lot to find savings in your budget. we know this is possible. from now on, telling congress we should steer federal campus- based aid to those colleges that could keep tuition affordable,

provide good value, surge their students well. we are putting colleges on notice. you cannot assume they you will just jack up tuition every single year. if you cannot stop tuition from going up, then the funding you get from taxpayers each year will go down. we should push colleges to do better. we should hold them accountable if they do not. [applause] >> now, states also have to do their part. i was talking to your president, and this is true across the country. states have to do their part by making college education a higher priority in their budgets. [applause] >> last year, over 40 states cut their higher education spending.

40 states cut their higher education budget. we know that these state budget cuts have been the largest factor in tuition increases at public colleges over the past decade. so, we are challenging states to take responsibility as well on this issue. when we are doing is today, we are going to launch -- what we are doing is today, we are going to launch a raced to the top four college affordability. we are telling the states that if you could find new ways to bring down the cost of college and make it easier for more students to graduate, we will help you do it turned we will give you additional federal support if you -- do it. if we will give you additional federal support if you make sure all of you are not loaded up with debt when you graduate from college. [applause] >> finally, i'm calling for a new report carsd for college.

parents like getting reports cards. you might not afford to them, but we, parents, like to know what you are doing. now, colleges -- students deserve to know how a college is doing all affordable is it? -- doing. how affordable is it? how are the students doing? we want to know how a car stacks up before you buy, you should know what your -- how your college stacks up. one of the things we are doing with the consumer financial protection bureau the edge of setup with richard cordray his to make sure people understand the financing of colleges. he calls it know before you owe. we want to push more information out so consumers can make good choices come in you, as

consumers of higher education understand what -- choices, and you, as consumers of higher education understand what it is you're getting. we are doing everything we can to bring down the cost of college, and that goes along with strengthening american manufacturing, investing in american engine, doubling down on jobs creating -- and green jobs in this state. it also means we renew the american values of shared responsibility. shared responsibility. [applause] >> i talked about this at the state of the union. you know, we have to make sure their s we are paying for the investments -- that as we are paying for the investments of the future, that everyone is doing their part, the weird

looking out for middle-class families, and not just those atop. the first thing that means is to make sure taxes do not go up for 160 million working americans at the end of next month. [applause] >> people cannot afford to lose $40 out of every paycheck. students who are working certainly cannot afford it. your voices encouraged and ultimately convinced congress to extend the payroll tax cut for today will months, and now we have to extend it for the whole year -- two months, and now we need to extend for the whole year. i need your help. tell them to extend the tax cut for the whole years. -- whole year. he is good for the economy. [unintelligible] >> ok. >> in the long run we are also

going to have to reduce our deficit. we have to invest in our future and reduce our deficit. to do both, we have to make some choices. right now, we're scheduled to spend nearly $1 trillion more on what was intended to be a temporary tax cut for the wealthiest 2% of americans. that is not fair. one-quarter of all millionaires pay lower tax rates than millions of middle-class families. not fair. warren buffett pays a lower tax rate than his secretary. i know, because she was at the state of the union. she told me. is that fair? >> no. >> does it make sense to you? >> no. >> do we want to keep these tax cuts for folks like me that do

not need them, or invest in things for the long term like student loans and grants, a strong military, care for our veterans, basic research? [applause] >> those are the choices we have to make. we cannot do everything. we cannot reduce our deficit, and make investments we need at the same time, and keep tax breaks for folks that do not need them, and were not even asking for them. well, some of them were asking for them. i was not asking for them. [laughter] >> when it comes to paying our fair share, i believe we should follow the buffett rule. if you make more than $1 million a year, and i hope a lot of you do after you graduate, then you should pay a tax rate of it least 30% -- at least 30%.

[applause] >> on the other hand, if you go into a less lucrative profession -- if you decide to become a teacher, and we need teachers. [applause] >> if you decide to go into republic's surfing -- a public service, and make less than a hundred thousand dollars a year, like many americans do, then your taxes should not go off. [applause] this is part of the idea of shared responsibility. a lot of folks have been running around calling this class warfare. i think asking a billionaire to pay at least as much as his secretary in taxes is just common sense. [applause] >> yesterday, bill gates said he does not think people like him

are paying enough in taxes. i promise you, warren buffett is doing fine. bill gates is doing fine. i am doing fine. [unintelligible] >> they are definitely doing fine. we do not need more tax breaks. if there are a lot of families who are struggling and is seen their wages fall, and the cost of everything from college education to grosses -- groceries and food have gone up. you are the ones who need the -- that. you are the ones that need help, and we cannot do both. some have been saying the only reason you are saying that it is you're trying to stir people up and make them and use of the rich. people do not and the the rich. when people talk about paying my fair share of taxes, the reason they're talking about it is

because they understand that, you know, when i get a tax break that i do not need, that the country cannot afford, then one of to the google things are going to happen -- alternately the deficit will go up, and you will have to pay for it, or alternatively, somebody else is going to foot the bill. some senior might have to pay more for their medicare. or, some veteran who is not getting the help they need readjusting after they defended this country. or, some student who suddenly has to pay higher interest rates on their student loan. we do not begrudge wealth in this country. i want everybody here to do well. we aspire to financial success, but we also understand that we are not successful just by ourselves. we are successful because somebody started the university of michigan. we are successful because somebody made an investment in

all of the federal research labs that created the internet. which are successful because we -- we are successful because we have an outstanding military that costs money. we are successful because somebody built roads and bridges, and broadband lines. these things and not just happen on their own. and, -- these things did not just happen on their own. and, if we all understand we have to pay for the stuff, it makes sense for those of us that have done best to do at our fair share, and to try to pass off the bill on to somebody else, that is not right. that is not who we are. that is not what my grandparents worked hard to pass down. we have a different idea of america, a more generous america. [applause]

>> everybody here is only here because somebody, somewhere down the road decided we are going to think not just about ourselves, but about the future. we have responsibilities, yes, to ourselves, but also to each other. now, it is our turn to be responsible. now, it is our turn to leave an america that is built to last. i know we can do it. we have done it before, and i know we can do it again because of you. when i need young people across this country with energy, drive, and vision, despite the fed to of come of age during a difficult to the tumultuous time in this world, it gives me hope. you inspire me. you are here at michigan because you believe in your future. you are working hard.

you are putting in long hours. hopefully, some at the library. some of you are balancing a job at the same time. he now doing these things is not easy, but you are not giving up -- you know doing these things is not easy, but you are not giving up. you have the whole world before you come in u.n. body -- and body that feeling that is quintessentially american. we do not shrink from challenges. we stand up to them. we do not leave people behind. we make sure that everybody comes along with us on this journey that we are on. if that is the spirit right now that we need, mid--- that is the spirit we need right now, michigan. here in america, we do not give up. if we look out for each other. we make sure that everybody has a chance to get ahead. if we were in common purpose with common resolve we can build an economy that gives everybody

a fair shot, and we will remind the world just why it is that the united states of america is the greatest nation on earth. thank you, everybody. god bless you. god bless the united states of america. thank you. ♪

♪ ♪ >> april 15, 2010, and arrived in paris, walked into the hotel lobby, met general mcchrystal for the first time,

and he tell me i do not care about the article, i just want to be on the cover. >> that hastings -- michael hastings road -- wrote an article about general mcchrystal. >> he said put me and lady gaga in a different tub. >> just months after the article, general mcchrystal had been fired. he talks about his new book, "the operators call call on c- span's "q&a. up next, remarks from senator mark calabria from florida. this is about 25 minutes -- marco rovio. that was a kind introduction.

thank you. this is staring at me here. it makes me nervous. is rick here? [speaking spanish] [speaking spanish]

[speaking spanish] >> to those of you that do not speak spanish, i apologize. i was basically describing how i saved a bunch of money on my car insurance. [applause] [laughter] >> thank you fortunes in miami. i got a tax from a friend the said someone is flying a plane. that means we are not blonde. by coincidence, neither am i.. although, if i am in the senator for another year, i

might start being a little more gray. anyways, thank you for choosing this place and for being a part of this, and giving us the opportunity to speak of this key moment our nation's history. when people talk about americans of hispanic descent, the first issue that comes to mind is immigration, and rightfully so. it is not always even an issue of right -- law and order. it is an issue of their lives and the people they love. whether you came here from another country, whether your parents did, or whether you been here generations, there is no one in the community of hispanic americans that do not love someone who is on themselves in limbo, or in a situation it is impossible to walk a block in miami, los angeles, and san antonio without running into someone who was been deeply contacted by a broken immigration system. when politicians and political figures speak about the issue,

they are not just talking about a legal issue. speaking about real lives of real people that so many of us love and care for. it is a gateway issue. >> why are you not supporting documented immigrants? >> please help us. you are an immigrant yourself. so is everyone else. [unintelligible] >> will you look at me for a second ex -- for a second? listen, these young people are very brave to be here today. they raise a legitimate issue. if you would allow me -- if they would give me the courtesy of finishing my speech where i will speak about this, then i ask you let them stay, because i think it will be interested in what i'm going to say.

[applause] -- i did not want them to leave. i want them to stay. these young men and women raise a very legitimate issue. they came here to a crowd they know might not be friendly to their point of view, and they had the birth rate and the courage to raise their voices. thank god i'm a country where i can do that. [applause] >> i want to hear what i have to say, because i think i am not clear think i am, and i do not

stand for but they claim i stand for. so, unfortunately, they're not willing to be a part of it or listen to it, so i will speak to you, and hopefully those of you with cameras and tape recorders will report to them and the rest of the world and the rest of the country. it is critical and it is important because it is it the issue. let me say there is no community in america that understands the american dream better than ours, and the reason is that the number one issue is the desire to accomplish your dreams and hopes and to leave your children and grandchildren with opportunities that you never had. every single day people are obsessed with that notion, but no community is more obsessed with it than ours. it is -- there is none. it is do we are into this -- and typifies our life and what has made our country great. i would submit to you that

there has never been an economic system that provides the opportunity to do that better than the american free enterprise system. no economic system is perfect but nowhere in the world have more people from all walks of life been able to empower their children and grandchildren more than there were able to do here in the 20th-century and in the american free enterprise system. today it is under assault. our country today is run by a president that is divisive as any figure in modern american history and 27 has chosen the route of divided americans against each other for the purpose of gaining votes and political support. [applause] his message is one that says to people that the way to protect

your job is to raise your boss is taxes. the way for you to do better is for someone else to be worse off. the only way could climb up the ladder is if we pull people down. that language is common all over the world. you find it often in the third world. it has never been who we are. [applause] as i said in a speech at the end of last year, we have never been a nation of haves and have- nots. we have always been a nation of has and sin to have -- nation of haves and soon to haves. if we lose that, we lose was great in economics. the choice is put before to get -- today are dangerous was because if we choose this path of pitting people against each

other and buy into the notion that our economy cannot grow fast enough for all of us to prosper so we will have to empire -- empower government to distribute wealth among us, we have chosen to become like everyone else. we've chosen to become like the country's your parents and grandparents came here to get away from. that is a powerful message. [applause] that is the message that we need to deliver. that is the message we need to work on delivering. it is a winning message. it is a difficult message to get to. the gateway issue of immigration stance in the minds of some money people we lived next to and love. our country has a broken legal immigration system. the status quo is not sustainable. we don't have a functional guest worker program in a nation that knows it has a need for temporary workers especially in agriculture. [applause] our nation has a complicated and burdensome visa process where even if you want to enter this

country legally and you want to stay here legally, it cost so much money and is so complicated that it is difficult to comply with. the things i just outlined are the things of massive, overwhelming support in our country. there is broad bipartisan support across the board for the idea that america needs a legal immigration system that works. that is why i challenge the republican nominees and all republicans not just to be the anti-immigration policy -- party. we should be the pro-legal immigration party. [applause] a party that has a positive platform and agenda on how we can create a legal immigration system that works for america and immigrants. i think you can find brought broad bipartisan support today for the idea that our legal

immigration system is broken and needs to be modernized. when he taken the realities of the 21st century and tailor a system that takes care of that. i think you can find broad bipartisan support for the notion that our immigration laws need to be enforced and we need some sort of electronic low-cost verification system for employers and that we need increased border security and ways to protect our borders and that we need to invest. >> you would find support. so the construction gets finished, or whatever the industry might be. a functional test worker program, where people can apply in their own country, receive an identification card, and enter

the u.s., you are here for a defined time, and then you go home when it is done. by the way, they want that, too. [applause] >> you know why people overstay visas? in know why they overstay the temporary worker desist? they're afraid if they leave they could never get back in because it is so cumbersome. you can five broad bipartisan support for all of these ideas, so why have they not happened? they have not happened because the issue is a powerful one politically, in dividing people along the lines of immigration have proven to be rewarding to politicians on the left and the right. for those of us that come from the conservative movement we must it be -- admit there are those among us who have used rhetoric this harsh, intolerable, and inexcusable,,

and we must of mid-, myself included, that sometimes we have been -- and we must admit, myself included, that sometimes we have been too slow in condemning that language for what it is. there are some on the left using that issue for pure politics, creating unrealistic expectations for those in the latino community across the country, advocating that our country should be the only one -- is the only one in the only -- in the world. both sides are using this issue to divide a. that needs to stop. if you saw the guest worker program issue, the illegal immigration that is to be reformed and modernize, you are a lot between nine and 1 million people that are in this country on documented. they came for different reasons and found themselves in this predicament in different ways. it is a real challenge for our country.

on the one hand there on the one hand, it is a situation where there is not enough support. it is just not there. on the aside, it is not realistic to think that you can deport of a million people. and what is the solution? there is no magic solution. that is why it is so complicated. and that is why the politics makes it so complicated. and the people that were here a moment ago, they are concerned about young people. i am confident what i have said throughout my political career. there are broad -- is broad support for the notion that those young children who are here and were brought a very young age and have grown up here and now want to serve in the military and our high academic shachievers, i think there is broad support for the notion that we should figure out how to accommodate them, figure out a

way to accommodate them that will not encourage illegal immigration in the future. unfortunately, some of the proposals out there today to go too far. but i think we can solve that problem. and i hope that we, as republicans, and conservatives take the lead in solving it. it is not the right thing to do and it speaks to our hopes and dreams in the nation. how about everybody else? i do not have imagined -- magic answer for you. this is a difficult issue. but we need to stop pretending like difficult issues have easy answers. they do not. it will acquire an open conversation across this country about what we want to do. how can we deal with this issue in a way that honors our legacy as a nation of immigrants, but also honors our legacy as a nation of laws? how do we balance those two things? that is at the core of this issue, and it must be confronted because the status quo is unsustainable. this issue is a deeply personal

one for so many in this room. i know it is to me. a few months ago, you may have read about it -- maybe you did not. i got some dates from in my parents had immigration history. [laughter] and it created some uncomfortable days. it was a blessing in disguise. it made me do something that we do not do enough of, and that is, go back and discover who our parents were when they were our age. what are their hopes and dreams? what did they want out of life? what did they want to do with themselves and where did they want to go? i had a chance to do that. and from the tattered pages of passports and yellowed papers of old documents, across five decades, i clearly heard the voice of people i never met. my father, who came here as a young man and did not find success. he went to new york. it was too cold. he came to miami.

it was too hard. he went to los angeles. it was to california. [laughter] [applause] he went back to las vegas the first time. he came back to miami. he was discouraged. he had hopes and dreams for himself. he wanted to own a business and he thought america was the place to do it, and he struggled. he was discouraged and even made plans to go back to cuba because of that. i discovered that my grandfather, who are thought i knew very well, but in fact, he grew up in an agriculture family and as a young man, he suffered polio. he lost the use of his legs. they sent him to school. he was the only one in the family that could read and write. he got a good job running a railway station his family lived well. he had five daughters. it was a have the undertaking in

that climate. he was a disabled man in the early 20th-century cuba trying to find a way to feed his five, almost six daughters. my mother tells the story of how he would spend all day looking for work, sometimes having to walk miles and come home at night with his knees bleeding because he would trip and fall because he did not have the use of one leg. a tough life. why am i different from them? why do i have opportunities that they did not have? it is but for the grace of god. that is true of all of us. i have been able to do things that they didn't because i am here in the single greatest society and the single greatest nation in all of history. it reminded me that their stories, although they are done, are still alive all around us. you find them at home depot when i drive in my pickup truck and

the desperate faces of men who are looking for work. if you find it in homes across this community and this country, where women work hard, long hours, sometimes without documents, to send money back home. of course there are people that abuse the system. but the enormous majority of those that come here, legally and illegally, do so because they want a life that is better, and for their children. what if you were them? what if you live in a country where your children have no hope and no future, where your wife stayed up all night crying because she was afraid your son would draw in of a drug game -- to join a drug gang? if i was there, there are very few things i would not do. there is no fence high enough. there is no ocean wide enough that most of us would not cross to provide for them what they do not have. and that is at the core of this issue with these people we are dealing with. yes, we have to have laws.

they have to respect them. and we cannot legalize 11 million people. but they are people. they're human beings with real lives and real stories, and the complexity of the issue challenges the core and soul of our nation, perhaps, more than any other issue that we face. because in the end, without immigration, there would be no america and we would be just like everybody else. the challenge on this issue is how we can once again make this issue a source of pride, not conflict. something that unites us as a people, not divides us. something that we brag about, not something that we fight over. how can we do that? that is what i hope to be a part of. that is what i hope events like this will be a part of. i hope that never again young people will have to stand up in an event like this and hold up a sign because the issue has been taking care of in one way or another. that is what we need to work toward. and it is not easy -- easy.

it is difficult. but it imust be done. most societies teach people that who you are is determined by who you come from. who are your parents? what family were you born into? what neighborhood did you grow up in? what school did you go to, and what social group did you run index based on that, that is who you will be. that has been much of human history. that is the way it is today in much of the rest of the world. and then came america. we said we did not care if your parents were poor, if your grandfather was disabled, or if your dad was not connected. you can be anything that you wanted. in fact, we brag about it and we welcome to the world to come here and prove that anyone from anywhere can accomplish something. today, -- this is the only thing i wrote for today's speech. well, i printed it.

if you go to new york, there is a famous statue of liberty. on it is engraved the poem from emma lazarus, called "the colossus." id speaks to our nation and who we are. i am not a good poet person -- a big paw one person. there's nothing wrong with poetry. i'm going to get the literature people angry. [laughter] this poem speaks to those who believe that you are is determined by the circumstances of your birth, and us. not likely giants of greek same with conquering lem's aside from land to land. at sunset gates shall stand in my woman with a torch was blamed is imprisoned likenelightning from her beacon hand grows

worldwide and she says keep ancient lands your story lands. give me your tired, your poor, your huddled masses yearning to breathe free send these, the homeless, the tempest tossed, to me i lift my lamp beside the golden door. this is who we were. but for 225 years this is who we have been. the question now is is if this is well -- not the question is if this is who we remain. if we walk away from this, we walk away from what makes a special and unique from all the nations on earth. it is a great challenge, but one

that must be confronted. for in the end, we draw our strength not only from the laws of man, but from the laws of god. we believe that our nation was not just found on spiritual principles, but that our inherent to them has caused great placing upon us. -- our adherence to that has caused great blessing upon us. we live with the knowledge that there is a higher law yet, a law that commands us to feed the hungry and clothe the naked, and be kind to the alien in search of a home. because america has, i believe, -- i believe god has blessed her. we are not just great because we are great. we agree because we are blessed. and with that comes great responsibility. we are not just blessed so we can have. we are blessed so we can give. and what we have given the world on issue after issue is a light, a light that shines upon the world and says that all human

beings are endowed by god, their creator, with rights. the source of those rights are not your team or your president, your laws or your government, but that you are born with them and because of that, anything you want to do, you should have the chance to be. it does not matter where you were born or where you came from or with your last name ends in a vowel. if this century is to be an american century, we have to figure out a way to make sure that is who we remain. thank you for the opportunity to give you this speech. i appreciated. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> c-span's road to the white house coverage to live to florida, leading up to the

tuesday gop primary. the >> by the sec -- by the end of my second term -- [applause] we will have the first permanent base on the moon and it will be american and by the end of 2020, we will have the first genuine propulsion system in space capable of getting to mars in a remarkably short time frame. because i'm sick of being told we have to be ticketed -- timid and limited to 2 technologies 15 years -- 50 years old. >> we are endowed with certain inalienable rights, among them the pursuit of life and liberty and happiness -- among them life and liberty, and the pursuit of happiness. we do not need a government to tell us what kind of car to get.

we do not need a government to tell us what kind of light bulb to have or the kind of health care to have. >> go to c-span.org/campaign/20 guelph -- c-span.org /campaign2012. >> vice-president joe biden said believes president obama can win back the presidency in 2012. this event last about 50 minutes.

[applause] >> ladies and diamond, i know that our members from maryland, from our whip, steny hoyer, to each of our proud delegations from maryland to would like to send a warm welcome to the private -- the vice president at our issues conference. i think, mr. vice president, you find yourselves not just among friends, but i would say, family here. you have always been gracious to accept our invitation and not

just come and talk to the members of the house democratic caucus, but to listen and to work with us. in fact, i think most of us would say that mr. vice president, every time we have asked, you have had our backs. not only that, but you have been gracious to join us to the -- invite us to join you in your home to talk about not just policy, but about the things that make america take. and for that, we thank you. and we thank you as well for your service. you are among the 15 longest serving senators in history. [laughter] still very young. lots of hair there still. and it is important also to note eau, gave son, b

service in iraq. he is back home now and we give thanks for that. [applause] and now, the attorney general of your state of delaware. at the guidance -- the bidens have served and continue to serve. and we are very fortunate to have a man that has proven not just to be our friend, not just to be a member of our family, not just a man who has served in the senate and to make sure that his family serves this country with pride, but a man who is a great leader in the history of the u.s. -- united states of america. we are allowed -- proud to introduce to you one of our family members, vice president joe biden. [applause] >> thank you. thank you.

javier, thank you very much, and happy birthday, by the way. i think i have told the speaker before that when i was selected with barack obama as vice president, i was also elected that year to the senate for the seventh time. i got sworn in for the seventh time because you may remember we had some early votes in january. i apologize for my cold. the day i had to make a choice, which everybody thought was easy, but it was not that easy in one sense. i did not want to leave the senate. i love the senate. the day i left the senate for days before we were sworn in, and i'm sure you all do it in your caucuses, the senate

historian and came in and was trying to think of something to say that was nice about senator biden and he said the caucus should know that only 13 people in the history of the united states ever served as long as senator joe biden. all i could think of was my father saying, that is the definition of a misspent adulthood. and i do not think you doubt for a second that i mean what i'm about to say. i admire you. and i admire the circumstances within which you do it i am one person who has not forgotten there are three equal branches of government and quite frankly, i continue to think the congress is the most important one

because you are the ones who are there every day back home. it is a great honor to be back with nancy, who i think is not going to be remembered just for being the first woman speaker. and she will be remembered for being the second woman speaker. [applause] popeyes sincerely mean this when i say it. and steny hoyer has heard me say this -- i sincerely mean this when i say it. and steny lawyer has heard me say this over the past three years. i think, nancy, i think you're going to go down as one of the most significant speakers in the history of the united states of america. [applause] your several years stand is going to extend. you are the most effective people i have ever dealt with. i knew that i have time, but

until i saw that a close, there is not a single, solitary thing on our agenda that would have gotten done without your leadership. i mean that sincerely. and by the way, all of you, and a lot of people who are not here today, i think there are over 75 house races in this cycle. a lot of people who are not here should be here. it was a really tough year. but it was because they took some really, really tough votes. and that old expression, approve of the pudding is in the eating? the proof of the pudding is being cleared to the american people. those decisions you made, the risks you took, the losses we incurred, really did save this country, and the american people are beginning to figure out. the american people are focusing on a more and more. i have a great speech here for you.

but because i am late and because you've just eaten, i'm going to shorten it. i'm just going to talk from a few notes here. if anybody wants a copy of the speech, the press wants a copy, i will be happy to give it to you. look, the front end of this is, to me, pretty simple. it is becoming absolutely clear that decisions that we made and you implement are actually working. the public is beginning to understand that it is working. they are also understanding another thing. you know, god love john boehner -- and jon is a good guy. i sincerely like him personally. but john, when asked about compromise, said "i reject the word." well guess what? the american people are figuring amount that they reject the word, they reject the notion of compromise.

i thought it was pretty stark and remarkable the different mood at the state of the union, not just the quality of the state of the union, but the mood on the floor. i think it is become pretty clear to every republican the folks have figured out that they reject the notion of compromise. i think the american public understands that we have never been able to move this heterogeneous country along without compromise. you can compromise and be true to your principles. they're not inconsistent. leader cantor, when it came to the debt ceiling vote, called it -- and they meant it, because i was doing the negotiation, and steny and jim and others know, trying to deal with the debt ceiling -- he said, and he was honest about it, that this is a leverage moment. a leveraged moment.

a leverage moment in which they were using may be the second most significant thing we inherited from our forefathers, which was an absolutely gold- plated reputation around the world, that there was never a doubt about america's commitment to honoring its debts, that was used as a leverage moment. and i think the public saw it. and mitch mcconnell, who worked with for years and still work with, mitch was straightforward. he said the single most important thing we want to achieve is for president obama to be a one-term president. so the generic point i want to make here is i think a lot of things are becoming clear to the american people. that is not the way they want us to do business, and that is not the way we did business when it was reversed.

we had our issues. for years, i was chair of the judiciary committee with reagan and both bush's. the truth of the matter is, we never took the position that our fundamental objective was to defeat the incumbent president. obviously, we wanted to win. tom davis, a retired tom davis, republican john davis -- tom davis said just this week that for democrats to take 25 seats, they will need a wave. then he said, continued polarization can create that wave. that was not our tom davis. that was there tom davis. these guys know it, but i am

afraid they cannot help themselves. and right now i do not see any change yet in this policy of political strategy of obstruction and division. i think the people may straighten this out for us. we are not going to straighten them out on this, but the american people may straighten them out between now and november, capitulating, but on actually cooperating in compromising -- not on capitulating, but on actually compromising and cooperating. last september, that was a tie between republicans and congress and you. boehner, cantor, mcconnell, they made it clear. it is about obstructing the

president's agenda. it is about defeating barack obama. but i think mitt romney and newt gingrich -- and i am not trying to be funny. in deadly earnest here. i think they are slightly different. i think it is more than about obstructionism. i think they actually believe what they're saying. when these guys are out there saying, let detroit go bankrupt -- that is the front and of the quote, and it gets worse. let foreclosures continue and the housing market hit rock bottom. poor people have no habit of working. barack obama is the food stamp president. i think it is more than political theater and tactic. i think they believe it. and the reason i say that is --

and i do not want to get going on these guys, i know that is not appropriate. i do not want to begin, but i know where events. -- where it ends. i think it ends on january 20th of next year. barack and i once again standing with the majority -- [applause] folks, i will talk about this a little later, but you are lucky to have steve is there doing the job he has. as steve and i are meeting to get down to brass tacks next week, i really do think we're going to win back the house. i think you're going to win back the house. [applause]

look, the president is always kidding me, and you're going to hear from him shortly. he gives me credit for this quote. it is not mine, it is kevin white's. he said, "do not compare me to the almighty. compare me to the alternative." i think, like every election, the comparison is to the alternative. and these are not, in my view, and i mean this sincerely. these are not bad guys, but they really believe as strongly as we do the direction they want to take the country. i was talking to mike donovan,

who i think is one of the smartest guys in politics. the big difference between us and them, i think, can be distilled to a phrase. the difference between us and them is we are strongly supportive of the private sector. they are strongly supportive of the privileged sector. i think that we will be able to show, and americans are beginning to figure out, that we are committed to bringing back the private sector because we know that is the engine. we do not create jobs. we create opportunities for people to create jobs. they create jobs, the private sector, and we're committed to bring it back. and i think they are determined to preserve the privilege sector. because again, i think they really believe that what i would refer to as the privileged sector, wall street

unabridged, the super wealthy who are not prepared to contribute, and i could go on with a whole range of other identifications, the you know, america is going to get an absolutely clear comparison this year. i have been doing this, as has been pointed out by others, and i guess i look it too, a long time. i have been in as many elections as almost all of you except a few. i can honestly say, to my memory, this is the first election were the opposition is not trying to hide the ball. i mean it sincerely. think about it. i'm being deadly earnest. usually, every race i have run since getting elected as a kid in 1970 to a local office and

the senate in 1972, every election -- and it was admittedly a different republican party than as well -- i remember riding up to the university of rochester in a small plane, and we were talking about the history of the social policies of this country related to social security etc. i remember them saying that the republican party since dewey has been me to, just not as much. me too, just not as far. me too, does not as bold. and then they gave up on the me too, because they did not really mean me too anymore. then they were going to extend medicare, preserve social security, compassionate

conservatives. well, they're dead thing about -- the good thing about this election is they are being unvarnished now. they are making no bones about it. they are not trying to hide the ball. they're not trying to pretend, not only in their rhetoric, but in their actions, how they vote, what they propose, what their budget is. it is a start, stark, a star, a stark contrast -- stark, stark, stark, stark contrast. i respectfully submit it is different from the traditional republican party of the 1950's through the 1980's.

it is fundamentally different. i know there are some even among the republican leadership who still are the party of the 1970's -- or of the 1990's -- but they cannot control their party. the was asked at a function -- and i'm going to get criticized for saying this -- i was asked by a group of people what we can do to help and i said, give me a republican party. i'm not being facetious. nancy can tell you. a lot of people do not like cantor. i personally happen to like him. he has always been straight with me. jim, you were in those meetings. when cantor walked out of those talks, he did not walk out. he said joe, i cannot get it done, i cannot come back. whatever his policy is, it is fundamentally different than ours. the truth of the matter is, who do you make the deal with? who can you reach out and shake hands with and say we have a

bargain? that is the way this country has always functioned. right now -- and the public saw our lead in the debate over the -- and the public saw it in the debate over the extension of the payroll tax. when the wall street journal had to come in and say to the republicans, basically, what you doing? so, the fact of the matter is, there are a number of things that are clear as well. the way i divide this up, i think of what is clear, what is new, and what is at stake. to me, what is clear, and it is clear to the american people now, we inherited an awful lot. you know, the metaphor that was used, osama bin ladin is used and general motors is alive to sum up where we are. the metaphor is a lie.

-- is a metaphor for a lot. we inherited a world where we had 150,000 combat troops fighting in iraq, no political solution in sight and no way out. no clear path. what is clear is that we kept our commitment to the american people, and one of the greatest honors i had -- nancy and i -- and i called the president from baghdad. i got to stand there in one of those body palaces of saddam hussein with the president and prime minister of iraq, with the chief of staff of the iraqi army and the chief of staff -- chief of our armed forces, american, and i got to say, mr. president, america is leaving. having kept our commitment, we're going home completely, and in the tradition of all american soldiers, we're leaving with nothing but our honor and our dignity.

[applause] that was the most important cigna the moment in my career. -- significant moment in my career. what was clear was we were engaged in a war of afghanistan without having any idea what our objectives were. really? what was it? we stated our objective, and we have, a long way to accomplishing it. that was to decimate al qaeda, the single threat to the u.s., and that existed in the region. and --or the president's through the president's actions -- and we have all been in committees. we have all been in groups. we all -- when something goes well, we all deserve a little bit of the credit, but it is usually somebody. i tell you, this guy has a

backbone like a ramrod. for four weeks, only four of us -- only six of us knew the possibility of where bin laden was. about a month later, the call came, and as you know, colonel, you end of making decisions based on the moon. will there be enough light? and we had to make a decision. the president went around the table and said, i have to make a decision. what is your opinion? he started with the national security adviser, the secretary of state, and ended with me. every single person in that room hedged their bets except for leon panetta. leon panetta said go. everyone else said 49 of this, 51 of that. he got to me and he said, joe, what do you think? i said, i did not know we had

so many communists around the table. -- e. economists around the table. give the man a direct answer. i said, you should not go. we have to do two more things. he said, i will give you my decision. the next day, he said go. -- the next morning he came down to the diplomatic entrance going to michigan or something like that and he said, go. he knew what was at stake. not just the lives of those great warriors, but literally, the presidency.

and he pulled the trigger. that is clear to the american people. that says less about bin laden than it does about character, about this guy leading from behind. this guy does not lead from behind. he just leaves. -- he just leads. that is clear. we inherited the world where we were not feared by our foes and not respected by our friends, literally. we're now the most respected nation in the world again -- [applause] leading not just by the example of our power, but by the power of our example. the american people know it. it is clear that we inherited an economy that was in free fall. as the president pointed out and you know because you have lived it every single day for the last three years, we lost 8 million jobs before our first pass at the recovery act.

we've now added jobs for 23 straight months. over 3 million jobs. i have a chart. you do this in focus groups and they say, that is good. and then you hold up the chart showing all the jobs going down, and then what happened from the time we pass the recovery act and what happened on the stock market, and they go. they understand it now because they're beginning to feel it. they're not talking about reorganizing the auto industry. we were talking about

liquidating two pieces of it. it is clear now that with your help, and i know there was weeping and gnashing of teeth even among some of our democratic friends. we insisted on a reorganization. and instead of losing four hundred thousand jobs, we have now gained 176,000 jobs that pay people real wages. [applause] i could go on but i will not. the bottom line is, you have been educated. when i was here last, you had two messages for me to take back to the president. steny's message, make it in america, and nancy and everybody else's message to get tough with these guys. enough is enough. let's lay down our cards and stay pat. well, the message was heard, folks. the message was heard. and i think we have delivered on our message since then with your help.

the most interesting conference i have attended since i was vice-president was two weeks ago in the white house. it was a conference on a word that america had not heard very much, in sourcing. there were ceo's or presidents from dupont, ford, master lock, rolls royce, chesapeake bay, candles, and you know what they wanted to talk about? they wanted to talk about why they're coming back home. is not because of the democrats. it is not because of barack obama and joe biden. it is because of america's incredible underpinning of strength and resilience and the productivity of our workers. i'm going to send a copy of. some of you may have seen it. there is a study done by a boston group that these guys hired pointing out why people are coming back, why it is

economically sound to bring manufacturing back to america. it ranges from everything from escalating wages and costs in china, vietnam and the rest. it literally makes more sense to come back. it is because nobody steals your ip here in this country. it is because your trademarks do not get stolen. it is because it makes no sense. they have figured it out, not to separate the factory floor from innovation and research and development department, making them 10,000 miles away. the list goes on and on, but it is coming back. it really is. it is not a joke. it is not a joke. it is coming back. and we are in a position now,

with your help and your leadership, stuff you have already done, to record -- reward companies that come back and not reward them for leaving. is there another country you can think of the rewards companies for coming to the united states? i am being deadly earnest. is there any other country you know? we pay your moving expenses to leave. we do not pay your moving expenses to come back. we let you deduct the corporate bond interest to build a new plant against your income back here because you do not have to bring your in come home from abroad. but the company that does it here has to deducted against their profit here, which is less consequential. why do we do those things? there are a whole lot of things we can do. we are in a position of what is new is, we have gotten the message. your leadership in the house particularly, on being made in

america -- you can make it in america without violating any, any international standards. [applause] you can make it in america now because it is economically more feasible to make it in america. and i will summarize this whole conference. if you're going to build a factory, the cost of building the factory has to be advertised and you have to look at it over 30 years. within five years, even the wage advantage is that exist in going to china will be less than 5%. by the way, the other thing we have to do -- and you guys have been doing it all along -- we have to convince the american people out there of the truth, the facts. everybody thinks the chinese people the party even our lunch. -- how already eaten our lunch. i want the chinese to grow force -- have already eaten our lunch. i want the chinese people to grow, but the truth is, we are the most reliable nation in the world.

they make of 19.6% of manufacturing value added worldwide. do you know what we make up in the middle of a recession? 19.4%, now, without any change. so this idea that we have to yield to the inevitable i find offensive and historically inaccurate. where is it written that we will not be the manufacturing capital of the world and the 21st century? where does this say that? i'm serious. how many lectures do you hear from economists, even liberal economists, saying we have to be a service economy. we're never going to do that again. what is new is you are out there with the president and me and you are saying,guess what? with all those jobs having gone abroad the last 30 years,

outsourcing, now the they are coming back, now that it is making sense to be here, guess what? we are lacking skilled workers. we do not have enough tool and die makers. so what are we going to do? we're going to make a deal. a direct correlation between the help we give community colleges and partnering with major corporations. i will not start to name your districts, but seven of you are already doing and in their districts. creating jobs, providing the talent for the new investments that are occurring here in the united states of america because we have the most productive workers. we decided not to take mitt romney's advice and figure out that you can help people who are in trouble with their housing, and there is a way to do that. ok, i know that people do not want to help a guy who took a mortgage out on his home and bought a boat and now he is under water, but guess what, there are 14 million americans out there --

14 million families who never missed a mortgage came -- mortgage payment. and those people are paying between 6.1% to 07%. the neighborhood i -- dinara i come from, that makes the the press between whether or not you can keep your kid in a community college. that is the difference between whether you can keep the heat at 69 or 65. it makes a big difference for people. and guess what. and we can do that without costing the taxpayers money. when the president said that now the banks are going to have an opportunity to make a

contribution to the trust deficit, it is simple. you can take banks that have -- and charge them pennies on the dollars. you can come up with a fund that is sitting and $9 million over here, which the experts tell us, if you take a chance on all 14 million homes being refinanced, the probability of exposure to foreclosure would be $9 million. so you've got to fund all of this. now when you go to the local bank in debt -- in wilmington, iowa, the banke or in cannot say to you because i cannot take a chance to you because you are under water. yes, you are under water. now you can do it.

what is new is a lot of what we are proposing -- and the generic point i want to make without going through the rest of it is this. it is common sense. not only have the american people figured out what we did, which was complicated, is bearing fruit, which gives them more willingness to excepted that what we are proposing may work, the things that we are proposing are not ideological. what is ideological about the american people having bailed out institutions at $50 billion more? they are not bad guys. i am not making them demons. but what is the big deal for them to come along now for pennies on the $100 of their assets and make sure that the very people who bailed them out get above the water, have a chance? this is common sense to people. as i said, the other thing going

for us is, these guys are helping us. they're helping us by saying what they believe. the last point i want to make is this. what is at stake, as you all know, because i know so many of you so well -- what is at stake here is literally about restoring the bargain. this is not a political slogan for us. restoring the bargain for the middle class. it is not. again, not bad guys. i do not think they get it. you hear this analysis that it may be cheaper, it may make more sense long term for people to rent rather than own. you know, all of those studies that we have made available to us. we also are told that it maybe -- kids are qualified for

college. it is not that important if they go to college because it cost a lot of money. and the president will have a lot to say to you about our college initiative when he gets here. but folks, the part they do not get that you get, jim, that all of the rest of you get, is you know, it is about that connected -- connective tissue that holds this country together. at what is it? my dad used to say to me, joey, a job as a lot more than a paycheck. it is about your dignity. it is about respect. it is about your place in the community. [applause] and a home is about a lot more than whether or not it is cheaper or better or more rational to own or rent. and when you own the home, it matters to you whether there is a little league team. when you own a home, it matters if you show up to the fire department to volunteer. and when you own a home, it

matters if the street looks very good. renters do not care. they are not psychologically invested. what makes community in this country? i would argue that the two central element that makes the middle-class dream -- this is pure joe biden. there is no study about this. it is simple to me. the way i grew up and all the people around me, what are the two dreams? you get to own a home and send your kid to college. you take those pieces out and you put it on a purely flat economic scale and say, this is just more efficient to do it otherwise, you take part of what we are about as a country. you take the piece of community and the sense that i can be, might it -- my kids can do something better than me.

i robert -- i remember my dad. my dad was a decent, well read, uneducated guy. he ran an automobile agency. one nice thing was, all of my prom date, i got a new car. [laughter] not a joke. i would drive down in my 51 plymouth -- and this is in 1961. i would drive down and i would pull up in the lot, and my dad would have the nicest, shiniest, and it had been simonized. the remember simonized? [laughter] and i could have any car on the lot. i remember my baseball games. we had a baseball game where i went to school in clayman, delaware.

i put on my sneakers and i blew down the highway to get to my dad's place to trade cars to take my girlfriend, who was a junior in high school to her junior prom. and i walked in and the secretary, mary was there and i said, where his dad? and he said, -- she said, he is in the side lot. a job is about more than a job. i walked out and i said, -- and my dad was a graceful man. sorry.said, joey, i'm so i thought, something happened to my mom or something. for real. i said, dad, what's the matter? and he said, i went to the farmers bank today. that was the state bank at the time. he said, i asked if i could borrow some money to send you to

school. they will not lend me the money. i'm so ashamed. i'm so ashamed. how many mothers and fathers today, what is the most damaging thing that can happen to a parent -- in my view -- to look at their beautiful, talented kid and to know that there is not a damn thing they can do to help. this is about more than the money. it is about who we are. it is about whether or not we really mean what we say when we say we value family. we value community. we value neighborhood. the core of it is the middle class, and those people aspiring to get into it. that is what is at stake. and the president means it, by the way. that was not a political line in

his state of the union. i know this guy. i spend four to six hours a day with him when we are both in the country in washington. and guys, these guys -- they do not get that part of it. they do not get that part of it. and the other thing i think, the simple judgment of whether or not we have met the test -- at least, barack and i. and we ever talked about it, about the burning of this economy back. -- bringing in of this economy back. is bust changing the economic environment so ordinary -- it is us changing the economic environment so ordinary people can look at their kid and say, honey, it is going to be ok. whatever it is, it is going to

be ok. a lot of you guys came up harder than i did. i did not come apart. i was a typical middle-class kid. and when things got bad, my dad would look at us and say, honey, it will be ok. because he believed it would be. go back to your old neighborhoods. literally, go back to your old neighborhoods. go to your old friends. asked them whether they are confident that they can turn to their kid and say, honey, it is going to be ok. that is what this is about. it is not about numbers. it is about, "honey, it is going to be ok." and i am convinced things are going to be okay because i think the american people are tired of being tired. i know that is a bidenism, but i

do not know any other way to express it. but i think they are tired of being tired. my dad would say, just get up. they are ready just to get out. all they need is a glimmer of the possibility, just to get up. some of it is not going to hold them up, but somebody is not going to push them back down. >> we know what they are going to say. the opposition. they are going to say i found mitch daniels -- he talked about trickle-down government. i started thinking about that. about how they keep talking about how we are a big government and the trickle-down government. they are free enterprise. i started thinking -- remember

nancy when you ever came up with the idea -- we said we are paying banks $60 billion the next 10 years to process loans to seconds -- send kids to college. that was free enterprise. that was the market. so we came along and said why not use the taxpayers' money even more directly, say? why not take it and put it with -- was it george miller? give it directly. what was that? that is trickle-down government. i'm serious. think about it. try to be completely logical about their arguments. my recollection is we did not get one republican vote. we may have. because they are for free

enterprise. they will spend $60 billion of your money to help someone as long as it goes to the bank and banks are not that. but if you could put $40 billion sending poor kids to school through pell grants -- that is trickle-down government. ladies and gentlemen, i can give you and you could think of 50 different examples of that. the one that you just did was the payroll tax. the first thing when i raised that, and i know some of you are mad at me when i negotiated that peace two years ago. we all thought we needed the payroll tax extended. and what is the first thing the opposition said? we will do it anyway. we have to pay for it. we said ok. then you take away things to say and middle-class people need and that's how you will pay for it. i will not mention the

republican congressman i was talking to. i said let me get this straight -- you want to extend the bush tax cut that cost $800 billion? how are you want to pay for? what do you mean? tell me, how are you going to pay for it? these are job creators. meat isone man's another man's poison. the only thing we have to make clear to the american people -- what is the meat and what is the poison? ladies and gentlemen, i am convinced we will do just fine this year as we work as hard as we can. as i said last time, i have been meeting and will meet a little bit with steve. i am willing to do what ever you want me to do.

i have been given five states as a focus. i will be in a lot of states with a fiver 6 -- pennsylvania, ohio, michigan, iowa, new hampshire and zero -- in florida, that is where i will be spending a lot of my time. as was said to me in 1978 when i was running for election, jimmy said young man, what would i do for you in delaware? he i said some places you help, some places you hurt. he looked at me and said i will come to delaware and campaign for you.

i am prepared, steve, to go anywhere and to campaign for you. thank you all very much. [applause] >> eric holder announced a joint federal and state initiative to investigate more urgent -- mortgage-backed securities that have triggered the hearts -- housing market collapse. he is joined by shaun donovan and one of the investigation chairs. this is 35 minutes. >> good morning.

this must be about the safest place in the united states right now. today i am pleased to honor so many key partners, including the director of enforcement for the united states security and exchange commission. secretary of the department of housing and urban development. the attorney-general for the state of new york. the united states attorney for the district of colorado. the assistant attorney general for the justice department, civil division. and other critical leaders including lisa madigan, sally yates and mike bresnick. we are here to announce an important step forward in investigating the financial misconduct in the market for mortgage-backed securities that contributed to our nation's economic crisis. along with the assistant attorney general for the criminal division, the team

standing with me will be leading a new initiative. the residential mortgage-backed security group will operate as part of the task force. this working group brings together a variety of federal, state and local partners, including the fbi, irs, the consumer financial protection bureau and the federal housing finance agency. these and many other task force members have been conducting investigations into the residential mortgage-backed securities market, as well as related aspects of the housing market for some time. they have seen firsthand how massive failures in the market were a driving force behind the nationwide collapse that has had a devastating affect foreign investors, consumers and for entire communities across this nation the first meeting will take place immediately after

this press conference. the working group will streamline and strengthen current and future efforts to identify and investigate instances of wrongdoing in the packaging, selling and the valuing of residential mortgage- backed securities. i'm confident that this new effort will improve our ability for victims to help restore faith in our financial markets and institutions and allow us to answer the call that president obama issued earlier this week in the state of the union address. on tuesday night, the president referent this initiative asking us to hold accountable those who broke law, speed assistance to home owners and help turn the page on an era of recklessness that hurt so many americans. that is precisely what we intend to do. the good news is we will not be starting from scratch. over the past three years, we

have been aggressively investigating the causes of the financial crisis and we have learned much of the conduct was unethical and extremely reckless in many instances. when we find evidence of criminal wrongdoing, we bring -- we seek justice. my number one commitment to the american people is that we will continue to devote significant resources to combat in financial fraud. in the last six months, the department has achieved prison sentences for many years in a variety of security, bank and

investment fraud. last month, i announced the largest lending settlement in history, resolving allegations that a practice of discrimination against minority borrowers occurred from 2004- 2008. with this new group, we will marshall our civil and criminal capabilities to build on these efforts. i am pleased to report that this working group has considerable department resources behind it. currently 15 attorneys, investigators and analysts are supporting the investigative efforts that this group will be focusing on going forward. the fbi has assigned 10 agents

and analysts to work with the group immediately. another 30 attorneys, investigators and support staff from the u.s. attorney's offices will join the work. we are wasting no time in pursuing any and all leads. as part of our current investigation, the department of justice over the last few days has issued civil subpoenas issues -- focus on issues related to the market to 11 different financial institutions. you can expect more of the following. i cannot go into detail about our existing investigations but i can tell you that significant efforts are moving forward by both federal and state authorities. i can assure you that if we uncover evidence of fraud or other illegal conduct, we will bring the appropriate criminal for civil charges. these teams will hit the ground running. already these roby -- working groups are running.

with a focus on bringing our government resources to bear, i have no doubt that's we will recover losses to prevent fraud and bring abuses to light and hold those who violated the law accountable. that is what the challenge before us demands and it is what the american people deserve. i want to thank all of our members for their dedication to this effort. i would like to turn things over. >> thank you. mortgage products were in many ways ground zero in the financial crisis. individual mortgages were pulled and sliced into sophisticated securities that were a world away from the

house, in a town. somewhere where a family realize their dream. if you invested directly in these products called residential mortgage-backed securities. many more had exposure to these investments, even if they did not own them directly or had other investments tied to these products. regardless of how they were connected, many share the belief that the investments were safe and secure. and to pay for their kids' education and fund their retirement. that turned out to be wrong. these mortgage products suffered unprecedented losses and the pain and loss that followed is well known to all of us. the job of my fellow law enforcement colleagues is to hold accountable those persons and institutions who lied,

cheated and misled investors in the sale not every failed investment law was broken but all of us are committed to identifying the violations that did occur and prosecuting them fully. that is why i am pleased to be a part of the recruit. each of us may have different jurisdictions or expertise but the one thing that unites us all is a drive to do what it takes to do -- to make sure our efforts leave no stone unturned, no dark corner on exposed to the light. we have been very busy. we are not starting from scratch in this effort. we are focused on misconduct by those at the highest corporate levels and by institutions with the greatest involvement with the products, transactions and that gave rise to the crisis. we have charged more than 90

companies that fail to expose the rest of the mortgage business, including countrywide. advisers that made misleading disclosures when offering funds that held mortgages or other printer products such as state street bank, schwab. and banks making misleading disclosures about their sometime exposure and the structure of even more complex instruments such as cases involving goldman sachs, j.p. morgan and walked over yet. we have named over 45 cdo -- ceos or other corporate officials. the expertise we have gathered will be greatly enhanced by our participation in this working group. we have a history of successful collaboration with our law enforcement called it, including the fbi, the u.s.

attorney's office, the state attorney generals and other authorities across the country. many of us are on the phone moving our investigations weekly if not daley moving them forward. we have strengthened ties, sharing knowledge, leveraging skills and resources in a way that helps all of us to hold my leaders accountable. today's announcement is another strong, positive step in that direction. the working group will enhance coordination, and efficiencies and the sharing of expertise. it will insure different capabilities, resources and legal remedies that each of us bring to the team. information sharing and collaboration amongst the widest group of law-enforcement parties, including the state's attorney general's part of this working group, is in everyone's interest. investigations into offerings have been ongoing at the sec for some time.

we have over 30 stafferzs focused on the effort. we have issued scores of subpoenas, analyzed more than 25 million pages of documents, dozens of witnesses that we have spoken to and the work with experts to analyze the terms of these deals and the accuracy of the disclosure. we're looking for evidence that the firm failed to disclose important information -- for example, misleading disclosures about the credit quality, underlying properly -- property evaluations. these efforts will be greatly aided by the contributions of fellow working members. thank you and now let me introduce shaun donovan. >> thank you. on tuesday night, president obama laid out a blueprint for an economy to last.

he said this is a make or break moment for the middle class and those trying to reach it. and that what is at stake is the basic american promise that if you work hard, you can do well enough to raise a family, own a home and put away a little for retirement. unfortunately, that did not describe our economy in the years leading up to the crisis. nowhere was that clearer than in the housing market. mortgages were sold to people who could not afford or understand them, banks made huge bets and bonuses with other people's money. we all paid a very steep price. house prices sank for 30 straight month in a row. by the time the worst of it was over, our economy lost 8 million jobs. since those dark days, we have made very real progress. foreclosure notices are down 45%

since early 2009. more than 5.5 million families have received mortgage modifications with affordable monthly payments. we will be announcing more relief for straggling home owners later today. we have created more than 3 million jobs in the last 22 months. at the same time we need to move forward from this crisis and rebuild an economy where hard work pays off and responsibility is rewarded. we still have the unfinished business with those responsible for this crisis. to be clear -- to ensure a crisis like this never happens again, president obama signed a law to reform into law. but millions of american families who have been harmed, countless families, have lost everything, not just their homes but their reputations and livelihood. these families deserve justice. they deserve relief. that is why this investigation is a were important. with a new residential mortgage- backed securities working group

led by attorney general holder and general schneiderman, we will build our work force by investigating misconduct in the sale of credit -- residential mortgage-backed securities. i am proud that the office of the hud inspector general which has been central to uncover and wrongdoing, will play critical role in the mortgage origination component of this review. his office in expanding the number of lenders for compliance with the underwriting requirement of the federal housing administration. they are charged -- their charges to quantify the extent to which the requirements were not adhered to and to assess the impact on homeowners and taxpayers alike. the goal of the investigation president obama announce is clear -- to hold accountable any

institution that violated the law, to compensate victims and help provide relief for homeowners shuttling from the collapse of the housing market. and to get to the bottom of what happened so we can turn the page on this destructive moment in our history. this is about building a nation where, as the president said, everyone gets a fair shot, everyone does their fair share and everyone plays by the same rules agreed that is what this investigation is about and that is why i am so proud to be a part of it. but that, it is my privilege to introduce a tremendous partner and one of the most fierce advocates for holding banks accountable i have ever had the privilege to work with -- state attorney general eric schneiderman. let me just say, having gotten to know him and work with him closely as we were building up to this day, it became very

clear to me that we shared a vision that it would be a grave injustice to hold these institutions accountable and potentially have tens of billions of dollars be paid to private investors, law enforcement agencies, state agencies, pension funds but not make sure that homeowners who depend on being able to get those loans fixed to stay in their homes and provide for their families. it is that connection of bringing together all of the disparate pieces of this, federal and state, that i think gives the potential that this group can set a template and not just for accountability but also for real relief to homeowners.

t thank eric for his vision and welcome him up to the podium to read >> -- podium. >> thank you. director, collegaues, -- i went to a knowledge that there are three other state attorneys general to sign up for this effort in working with us. what happened on tuesday when the president announced this working group essentially was the sign of approval that we

would be able to go forward with the broadest, the investigation into the misconduct that blew up the economy. we need three things to address an issue this vast -- resources, the jurisdiction and will. the days and weeks to come, i think you will see that we will have the resources to undertake this, the groups involved to be part of this group collectively, we have jurisdiction to go after every aspect of the artificial inflation of the housing bubble and the crash that led down the economy. whether issues relating to the pieces of tax laws, securities fraud, looking at the trusts.

we have the resources and i assure you we have the will. as the president said, people want real accountability. people want to know there is one state -- set of rules for everyone in this country. equal justice under law is alive and well and this administration and every member of this group is committed to it. i am honored to be here. i am even more excited that we are going into a meeting to continue our work and did the investigation. we started having different members -- conversations a few months ago about the possibility of joining forces to ensure we have the resources and collected jurisdiction to pursue everything we need to pursue. it did not take long for us to realize this was the only way we

were going to restore the public's confidence in the financial-services industry and to take steps to get the economy moving again. the president heard about what we were doing and he decided to create a working group, direct us to go forward. i am honored to be a part of it. i'm confident that you will see action in the weeks and days ahead that will demonstrate this will be a very aggressive effort with a will, jurisdiction and resources. thank you very much. now back to an attorney general holder. >> any questions? >> in the press release, you talked about how this will provide relief for homeowners.

how as attacking the mortgage- backed securities going to reach the individual home owners? who will get into the mortgage servicing? >> on the second part of your question around servicing -- the focus here really is on securitization conduct. if you think about the action that really led to the devastating impact on homeowners, on the entire world economy in fact -- it really was the origination securitization of these products that created those devastating problems. the servicing problems we have been investigating are contributed to that. they were sent those problems but frankly, and they did not fundamentally create these problems. i would say those problems are a small part of the

overall set of problems. the focus here is on that original, that that led to the inflation of the bubble and the crash after word, not the servicing. in terms of the way the connection between those can work -- the fundamental problem is that there is a riskier that billions of dollars are paid to private investors. state pension funds were hurt dramatically by purchasing these private securities. the people of those states have been harmed. they need to make recoveries.

but fundamentally speaking, as those recoveries are made and payments are made to investors and law enforcement agencies for accountability, we need to make sure that at the same time is in those payments are to be made, there's also relief that happens for the home owners with in the securities. those loans that underlie those securities. it would be a tragedy if the investors were getting help but homeowners -- if we can survive a structure where simultaneously with those payments being made, there are benefits providing homeowners in the underlying structure, that is very much is achievable. that is a fundamental principle

i feel very instant -- optimistic about this work going forward. >> we are three years away from the meltdown. some skeptical lawyers are saying why now -- why should people expect results this time we have not seen major results before? >> there have been 2100 or so mortgage related matters that we have brought here in the united states department of justice. the notion that there has been inactivity is belied by troublesome gang called fact. -- thing called fact.

we are here to work together, and efficiently, effectively. i'm confident that with the will and resources that we will come up with results that will deal with and hold people accountable. we will get resources to those who were harmed and turn the page on this so that we can get our economy focused on things that provide jobs and growth for this nation. it is not as if we have not been doing anything. i'm confident that with this new structure we're putting in place, our efforts were be enhanced. >> you're bringing in 10 f.b.i. agents . the fbi was investigating 38 companies directly involved in the financial crisis in 2009. the former head of tarp said he

was a little puzzled by it. here we are three days -- three years later with a similar effort. >> with all the respect to my former colleague, i think he got it wrong. the reality is that we have done a substantial amount. we are looking now at a specific area in which we can -- in which we found a great harm to the consumers in this nation. we are determined and will hold people accountable. as a result, we will bring great relief to many people who were harmed. this is a new effort. we are coming up with ways -- in this effort we're talking about not only involves new agents,

new attorneys -- we are also bringing in people from the states. we will have the ability to tap the resources from the state and federal level, use statutes that exist on the state level that perhaps we do not have on the federal side. and, with ways to best handle these investigations. >> a few months into my tenure, i learned about the depth of the harm and ongoing harm and how things are getting worse. for a regular americans and a financial services institute. the amount of negative equity is impeding our best efforts to move the economy. there is a recognition that you have to have accountability.

we know what they did, they know they did. they know we know what they did. we are putting our resources together to do this. having all of us together is critical. it enables us to go places where each of us could not go. we have jurisdiction over the trusts that are the bricks and mortar of the structure. the act is more flexible. this opens up the possibility of looking into tax issues. as far as resources and staff -- people who are specifically deployed to this working group only. that does not mean the 15 people in my office are stopping work. this is to create a vehicle for us to share resources and

information and proceed in a more coordinated and effective way. >> will states have access to documents and findings at the u.s. attorney level that has been reviewed for the past three years? investigators have said they had been stymied by their efforts. but they deny it to him -- prove intent with the martin act. >> we signed confidentiality agreements. the view is to share documents and to collaborate. one of us may proceed with the case. not everyone will be named as a

party in every case. >> there are no prohibitions on document sharing? >> if there is some provision -- prohibition. we are looking to share everything we can share. >> there are ways in which we can deal with those issues and structure in these investigations so that prohibitions on the federal side will prevent us from sharing information with our state partners. how does this affect your thinking about the settlements mentioned earlier? >> i am happy to be here launching this investigation and working with my colleagues on this.

>> how will this investigation of fact that settlement deal? >> let me go back to the comment made earlier about how these issues really are separate in the sense that the origination thed securitization was conduct that led to the crash. the servicing of the mortgages compound and the harm but did not create it. in that sense, the issue we're looking at are the larger issues. i would also say we would not be standing here today if we were not absolutely confident that the releases being contemplated were quite narrow, focused on the conduct actually investigated, on the conduct that we have found significant

problems with. going beyond that -- if those releases are narrow enough to allow us to go forward aggressively with what we are describing today. i would give some real credit not only to the attorney general eric schneiderman but others who are part of this group -- zero biden, lisa madigan -- bo biden, lisa madigan. all pushing to make sure those resources -- those are narrow. they are not only consistent in what i think this announcement today made very clear that the focus we have and the release is being contemplated are narrow enough to allow us to go forward with this. >> he talked about the

accomplishments of the financial fraud enforcement task force. this is a pretty significant announcement of additional resources today and collaboration information sharing. it has been more than three years since the market crashed. looking back on it, do you wish you had done something like this sooner? >> i think we always want to make sure that as we do an investigation or take on an effort, you want to check along the way. what we are doing today makes sense given where we are and the work we have done. this built upon the work has already been done by the task force and by our colleagues in the state. i think we're doing this at the right time. i do not think we would be in a position to do what we are doing

today had we not done the other work. >> there are thousands of pages of documents. are you covering the same grounds that has already been covered, including some of the same firms are well as all the new things not investigated before? >> this is a good way -- example of how this task force will work. he made a determination as to where they should go and talk about the things they are looking at and we are not going to be looking at the same things. we will be working with them but looking at a separate group of institutions. >> have we seen the video released yesterday by the u.s. attorney's office of the

military shooting spree in what was your reaction to that? >> thank you very much. next week, the senate select committee on intelligence hold their annual hearing on global threat to the united states. we will hear from the director of the national intelligence, david petraeus, fbi director robert mueller. live coverage next tuesday at 10:00 eastern here on c-span and c-span radio. the road to the right health coverage takes you live to the event in florida to the weekend, leading up to the gop primary on tuesday. >> by the end of my second term. [laughter] we will have the first

permanent base on the moon and it will be american. by the end of 2020, we will have the first continuous propulsion system in space capable of getting to mars in a short time. i am sick of being told we have to be timid and limited to technologies that are 50 years old. >> when the founders said that the creature had endowed us with certain unalienable rights, among them life and liberty and the pursuit of happiness, they laid out a pal -- path for america that was in during. a path that says we can pursue happiness as we choose. we do not need a government to tell what kind of car to get, what kind of light will we can have, what kind of health care we're going to have. >> political reporters and viewers like you -- cspa

n.org/campaign2012. >> i am scathing in my book in discussing these shortcomings. they have to be admitted. the west still today represents the most acceptable and workable political culture. >> in 1991, the united states was the only global superpower. today, how to restore its status "strategicd from vision." also this weekend, and did fdr use ww2 as a cover? saturday at 11:00 p.m. lori andrews on how your

rights are being eroded by social networks. the center for strategic and international studies how the discussion today on the newly released the fiscal year 2013 defense budget. leon panetta unveiled a package with an additional request of $88 billion for overseas operations yesterday. defense and budget experts who participated expressed concerns over automatic cuts mandated by the debt ceiling agreement. this is an hour and 35 minutes. >> we want to get started. i want to say thank you for coming out on a rainy friday. normally this would produce about seven people that are retired and do not have anything else to do. it is kind of the way they fill up their day by going to think

tank advance. but this looks like it is a 12 step recovery team that has been through this before. will we get it right are better this time? i am john hamre. welcome and thank you for coming. i feel a little bit like a groundhog movie. this has been promised for several years but it looks like now we are there. the question is -- are we going to do it better this time than we did the last time? everybody says we will not -- we will not do that again. or will we make the same mistakes all over again? it is not that people choose to make mistakes. is that the dynamic that governs all the complex actions that

brings several hundred thousand people together to make choices produce this outcome. the question is, can we with thought and direction and intelligence, supersede that? we are trying to think that 3. -- that through. we saw the first details yesterday. lots more yet to unfold. i think we are just on the front end of this. we do see the large central direction where this is heading. it is grounded in a strategy that i think has a fairly broad consensus in the country. but all budgets have to have a certain policy coherence at the top but then the details really matter. that is what we are starting to

get to -- the deeper face. we will try to understand all of that. i would like to say thank you to our friends at rolls royce that made it possible for us to offer this policy series to the defense committee in washington. let me turn it to you -- david, are you in charge of this bunch that will guide us through this? >> more are lost. >> -- less. thank you again for coming. this will take a long time. we will -- are appreciative for all of you. >> good morning and welcome not only to those of you in the room but do -- to our audience on the web.

if you would silence your cell phones, i woudl appreciate it. if you would like to e-mail questions, you can do that to dberteau@csis.org. we will try to answer those questions as well. the panel we have today is particularly well-suited to addressing what is an issue of where are we in the defense budget drawdown at a time where we have some information to speculate about what it really means but not enough to know what it really is. c had the new strategi guidance issued.

in both of those cases, the president's announcement three weeks ago and the secretary's announcement yesterday, it raises more questions and answers. we are calling to try to fill in a based on our knowledge, experience and speculation on some -- what some of those might turn out to be. i have a set of charts here. those will be posted online as well afterwards. i want to make some additional comments and then introduce our panel. we tend to have a lot of time for questions as well. let me have the next chart. this is not the first time that

we brought the defense budget down. this chart takes you back to the pre-korean war period. the blue bars are the base budget amounts that the defense department put into place. the white bars on top are the supplementals, the funding done on the emergency supplemental bases. while there is a substantial amount of that in recent years, big chunks of money being appropriated under the overseas contingency operations account, the same issue in korea and vietnam in terms of large numbers. the process is that we do go up and come back down again. the black line on this chart allows you to see that the up and down is not just follow, it

is also the active duty. the in strength goes down. it is not purely cause and effect. one of the challenges is that even though there are some reductions projected, they're not commensurate with the long- term dollar reductions we anticipate. allows you to see that in a numerial rate. there are four draw downs. post budgethe control act. i do not think that name will survive over the decades. we are seeking a new and better name for it. that allows you to benchmark the

peak in the trough. would you have on the first column is the peak and those dollars are in millions. the projected trough is about 567 million. that includes base budget and overseas contingency operations. as laid out in yesterday's announcement by the secretary. so those numbers are updated as of yesterday. it is a reduction of about 21%. on a percentage basis, this drawdown is not as dramatic as the previous three have been. on the right hand side, you have active-duty troops. that is where the challenge lies. if we are taking a drawdown that on a percentage basis is three times higher than the percentage

reduction in active-duty in strength, that implies there will be pressure in this budget on something other than personnel costs. that is one of the dramatic challenges we face. this depicts it notionally so you can see that in fact for today, the steepness of the curve is not that much less for dollars. timeline -- how did we get here? last february, the city -- the president submitted his budget. all the numbers calculating how much the budget is down is off of the benchmark of the president's budget request for 2012. that request had a significant increase. add them -- in a typical reduction parlance, a reduction is not necessarily a reduction. what it actually means is you have less money this year than

he originally planned to have. that is the nature of these reductions. in terms of the actual year over year spending, really only fiscal year 13 base budget, which is about to be proposed by the president, compared to fiscal year 12, that is the only real reduction in real dollars. the other years is essentially when inflation is taken to account, flat. the reduction is from what they planned to spend. congress passed the full year continuing resolution in april. that had in it a defense appropriation bill for f-111 -- for fy11. the budget control act was passed that set a fiscal year 12 cap.

it also set in place the super committee that announced it had failed to achieve one of their objectives which was to come up with numbers. another detective was a universal agreement that it was the other guy's fault. they did achieve that goal. there were additional cuts to combat kick in on generous second, 2013 -- cuts to kick in in january 2012. if anything will be done about that, it will have to be done by the 112th congress.

the baseline for the budget we will be discussing this morning is actually the fiscal year 2012 appropriations which was passed by congress in december. there are two interesting dynamics here. one is that the secretary of defense has made it clear that he anticipates the reductions he has taken so far, all that he wants to take. he does not want sequestration. there is a little bit of ambiguity. when you do not have numbers, you have to look at words. the words yesterday have a little bit of deviation between the written word that was approved by the communications -- professionals. the spoken words in the transcript of the speech and the expected words of what will

really happen. we will look at some of those nuances as we go. the law of the land is sequestration will take effect unless it changes. the president has stated unequivocally, i will veto any attempts to change it. this is a little bit of a dilemma for the defense department. i do not want to take any more cuts and have a president who seems to be in line with that. on the other hand, i have a president who says he will veto any attempt to release me from the responsibility of taking any more cuts. with that, i will throw the floor open to our panel. we're joined by three wonderful people to comment on this. todd harrison is the senior but a person for the center for strategic and budgetary assessment. he has a constant, amazing

ability to find useful information in the budgetary process that i love to take advantage of. he will be followed by stephanie sanok, a senior fellow here at the center for strategic international studies and clark murdock, a senior adviser here. then we will open the floor for questions. i will slide this back so we can see the audience. thank you. >> a good morning, everyone. thank you for coming out. i will start by saying that the numbers that came out yesterday are really not that much of a surprise. the base budget fod dod, not including more funding, will be five to $25 billion. more funding will be about $88 billion dollars.

that was the deal passed by congress last august that allows the president to raise the debt ceiling, that put caps on the defense budget for the rest of the decade. that is what is driving this budget. the real question now is that the budget reflect the new strategic guidance the department came out with back on january 5? fundamentally, when you're talking about strategy, you're talking about choices. those choices are often expressed in the budget and that is why we're looking for details about what the strategy really means in terms of choices and the budget. so where did they cut and are those cuts consistent with the strategic guidance? they obviously talked to a great extent about cuts in gramm sources. they are taking the army down to a pre-9/11 size. they are taking the marine corps down as well.

these were expected but they did not spare the other services from cuts either. they are taking about 17 ships out of the navy. they are retiring 10% of the air force. they slipped some major programs. like the virginia class submarines. no one was spiritedness. given the delta from what the pentagon has been planning, the growth of a have been planning to the relatively flat budget that they are constrained to now, it does require painful choices across the board. the three things i will be looking for when the details of the budget, out are the following. first, the budget share of each of the services. it is interesting that the

services had maintained equally budget shares over the years. clearly, the army and marine corps got a greater share of that. but i looked at last year's budget request and they already showed last year that the air force would gradually increase its budget share over the five- year plan. the army would gradually lose budget chair over those five years. and the navy and marine corps would basically stayed flat. one thing will be looking for when the new budget comes out, strategy says that there will pay more attention to air forces and less to ground forces. will they maintain that or do what they did in the last budget? the second thing i will be looking for is the mix of active component versus the

reserve component. it seems like the army, while they're making active cuts in the active duty force, they are working on the reserve. there force may be cutting more deeply in their reserve component to protect some critical parts of their active component. that is one of the competitions in the budget i will be watching as well. the third one, which is one that we do not like to talk about because it is politically sensitive, nevertheless, it has a real competition in the budget between retirees and active duty. what the pentagon has to budget and pay every year for retirement benefits, not just retirement pay, but health care as well, versus what they do to support active duty troops in terms of pay and benefits. we didn't get a lot of details

yesterday. they talked about creating a commission to look at options for reforming the military retirement system. i think this is a great idea. this is a good approach. you do not want to go into this in a haphazard manner and say, well, you know, we think we can get this and we can cut that. x.u do not want another reduct in the 1980's, we thought we would just cut the retirement benefits. the ad did that we would just ship, everyone who would enter the service from no one would get less of a retirement benefit. that did not hold. it created a discrepancy within the force where, as we got closer to 20 years after that point, when people would retire, back toed and we went

the old system. hopefully, if this retirement commission is formed, they will take a broader view. this should not be about finding ways to cut. it should be finding ways to get better value. they do this in the private sector. companies do this all the time. you need to understand before you start making changes how people value various components of their compensation. and then you can make smart trade-offs. if they do not value something commensurate with what it cost to provide, then you can cut that were you can give them something out -- you can cut that and give them something else where they do have value. perhaps, we can get the legislation together to bring that forward. overall, one of the trades received in the budget -- personnel costs make up about a third of the pentagon's budget. when you include military personnel costs and the health program. it is a third of the pentagon

budget. they said that personnel costs were only taking one night. that means the other parts of the budget will take a disproportionate share of the cuts. ultimately, this is a zero sum game. they have a budget cap required. so procurement will be hit the hardest. we heard a lot of the program decisions yesterday. i imagine there are many more. those will come out in the next days and weeks. the total savings they're talking again -- again, this is savings alert to to last year's budget, $259 billion over the five-year plan -- 25% of those savings should come from proficiencies. that is another 60 billion those inefficiencies -- in efficiencies. that is very optimistic to think

you can find those in efficiencies. i think it is incredibly risky to be banking on those savings before they have been achieved. it is always a good goal to find efficiencies, to try to get more efficient, to root out waste wherever you can in many diriment asian to see -- in any government agency. but to count on it on the budget is risky. if the savings do not materialize, where will the savings come from? this is a zero sum game. the cities will have to come from something else. the brac proposal i found interesting. if you do another round of base closures, you'll like it savings in the next five years. in fact, it will probably cost you a little money. they did not budget for another round of brac. i would not read too much into

the suggestion that there will be another round of base closures. in an election year, i think it is highly unlikely that congress will want to enact that legislation. the final 0.0 make -- i have made this before -- -- the final point i will make -- i have made this before -- sequestration is a real possibility. i think it is highly likely to occur. but there is a finite chance it really will happen because is the law of the land. if congress does nothing, it will happen by default on generous second next year. -- on january 2 next year. the deal was take-it-or-leave- it. this is what you have got. the reality is that that will not hold. there are things that congress will not go along with. and there are probably further cuts that will be needed in the years to come. even if we avoided

sequestration, it is not good to think that the budget were flat enough for the rest of the decade. history shows that that does not happen. they talked a lot about how strategy was flexible, adaptable, agile, versatile, and beginning to think that they need to budget the pentagon for a new thesaurus for using those words many times. the same is true of the budget. it has to be flexible and adaptable. the reality is that for the cuts are likely, even if we avoid sequestration, and the budget is likely to decline in years to come. i would urge the pentagon to start working on a plan b. if that means you have to start over and come up with a new budget that is flexible and adaptable, so be it. >> thank you. stephanie, do you want to pick it up from here? >> absolutely. thank you for joining us this morning.

i have a different interest in tracking yesterday's announcement. my perspective looks at programmatic vetoes and the kinds of risks that these documents we have seen, whether it is the strategy or the strategic guidance earlier this month or yesterday's budgetary announcement. i will say that the tells really do matter. we do not have sufficient detail about the budget right now to make specific recommendations or to cast particular stones as considerations -- at considerations or decisions that were made. in the meantime, what we can go over is the broader context. i am thinking more about what the budget information says strategy?nation's where is the context we should judge whether they're the right or wrong decisions?

what are the assumptions, the risks, and the priorities laid out in the guidance? like secretary panetta, i would like to provide an overview of what the five key elements were. you probably all know these, but it is worth repeating in this forum. one, that the military be smaller and leaner. yet it will maintain a jolie, flexibility, and its technological advantages. we will rebalance our global posture. we will build innovative partnerships. we will defeat aggression from any adversary and protect and prioritize key investments. that is motherhood and apple pie. there is broad consensus. absolutely. who could really argue with any of those things. in fact, if you go back to the bloodshed mission, first -- the bush administration, it said the same thing. but it lasted roughly eight

months to nine months before the global strategic environment caused huge ships. this was back in 2001. when i am wondering is what the budget information that we have gotten talks about for versatility. it talks about the partnerships. talks about the kinds of wars we will face are the conflicts we will be facing in the near future. i have concerns. i am in a think tank and that is what we do. we have concerns. [laughter] first summit it appears to me that the primary planning sarah -- plan scenario is a high-tech war. if you look at where they are placing their investments and what they're getting rid of, they are not contemplating a stability environment that we have been operating at in the last few years. i have some concerns about deemphasizing some of the capabilities that we have been developing over the last few years.

i am not saying that we should not invest in cyber technologies and space. those are things that are important and things that only the state can handle in terms of protection. we have heard a lot about the air-sea battle. and the budget preview yesterday seemed to us from that bit it says in the strategic guidance and in yesterday's announcement that the defense department is not anticipating a prolonged large-scale stability operation that requires land forces in a rotational basis. ok, what in the strategic environment leads them to think that? if you look at under-governed spaces, and governed spaces, the probability of long-term instability, i do not see how they draw that conclusion. i root argue that, from a u.s. perspective, we certainly have an interest in maintaining a capability to address instability in places like jens

tijera, the middle east, and in asia. i wonder what is in this scenario, which appears high- tech, but ignores what we have done in the last two years. the focus on innovative partnerships, if the u.s. is going to focus on technology, who will handle the rest of the issues? we have something called global training equipped to train military forces around the world to handle counter-terrorism operations and civilian operations. will we see an increase in that activity? will we depend on partners, whether it is the united kingdom, whether it is molly, to address those concerns? that is something i will be watching closely. what are we asking your partners to do? last year, the united kingdom came out with their strategic

defense review. we talk with them as a nation about what they are giving up. i wonder whether we have similar conversations before the rollout of this strategic guidance and the budget with our reliable, shoulder-to-shoulder partners. have we talked with our partners, the brits and the australians, enough? will they accept the same risks or will they feel that niched? how did this conversation go? based on my experience, they probably went very quickly. [laughter] they probably went about two days before they rolled out and called them consultations. it remains to be seen what our partners can do. building partnership capability partners, whatg ca they're willing to do with their capabilities vs innovative

partnerships, which is code for partners -- nontraditional partners, the mullions, the champions, the indonesians -- the mahlians, the chatians, the indonesians. mean?oes reverse abilitability when you're talking about retirement, how you unretire something? from an industrial perspective, what does reversability mean? is it possible?

if you have to slow down your production line, how fast can you raise it? we had congress go out and walk factory floors. really focusing the executive branch on what it means to use the industrial base. i know secretary panetta mentioned protecting -- we will not use the word protecting -- working with the industrial base, to have a strong one. i am not sure what that means. i am not sure what they have done to ensure that that happens. wk, you turn a global ha how do terminated? -- how you terminate it and bring it back? >> is always a little daunting to come at the end, particularly

when such conference and professional colleagues preceded you. the think tank is having concerns. my role of the think tank is to talk when it is my turn to talk. i will do that. one of the things that we constantly look at in washington and the pentagon is between strategy and resources. we always talk about the strategy and resources mismatch. it is very interesting that we had a base budget that had a strategy. it was right there. then that defense budget, which projected a 1% increase in real dollars, was flattened. it was not completely flattened.

as president obama mentioned, there was a slight increase in the defense budget. i have put together a defense drawdown working group. we had a big debate over where is the difference between a strategy and strategic guidance? that is really just guidance emanating from the 2010 strategy. but that was dispelled right away because both panetta and general dempsey referred to them as a new strategy, although it is a strategic guidance. it is true that more attention is paid on the precise items in it. it is a new strategy. the sequester is another $600 billion or maybe $525 billion, depending on how you estimate it. will that mean that we have another new strategy? sequester is like taking a chainsaw to the budget, as he

said. at of the rubble of the budget, you create a new strategy. i am actually a strategist. and i had not realized that our strategies were so vulnerable to relatively modest changes to the resource level. we have been told right now -- the first strategy could not withstand a 1% decrement. and now have another decrement that will be another 5% or 6% and have a new strategy at of the old rubble of the budget. i think the strategy can be more robust than that and maybe we should be looking further ahead to say, well, maybe we will have a real reduction. a real reduction along the lines of 25% to 35% of kraft's reductions. we should think about what our priorities are under those assumptions.

there is no real pain. in the press conference issued, they were all very eager to said lots of hard decisions, very complex, very tough -- i think carter said at one. that there 50 or 60 things in this budget that we want to do and we cannot do any more. this is a subtle view of the washington monument strategy. they could have taken off the 11th carrier. it could have done deeper cuts in ground forces. but there is negotiation over what will replace sequestered. nobody wants sequestered because

it is across the board. but is not just the size of the reduction, but how steeply it is administered during that time. so there will be a negotiation over what will replace sequester. the only way to avoid sequester is to have an agreement to replace sequester. that will involve more cuts to defense. there will be a more reasonable guide that put it will be targeted. it will be across the board. the other thing that it underscores is that we have to do something about pay and benefits. our current rate of increase is unsustainable. one of my colleagues said this before the announcement of yesterday. if you look at the current trend lines and you hold the budget flat, by some nearly 2039, all

we can afford our military personnel costs. it is like the norm augustine issue, but not with all we can afford is one large aircraft. it is all we can afford is people, nothing to be cooked them with, nothing to make them ready. -- nothing to equip them with, nothing to make them ready. everyone is determined to avoid a hollow force. when you have too much force structure, you undermanned them. you do not equipped them, and you do not train them. i think they're doing a good job at trying to match for structure and force structure cuts.

we have had a tremendous increase in dollars being spent, but not much increase in the and strength. we cannot just the people and get the savings that we need. i think what we will find is that come out of this process, the executive branch and the legislative branch will come together to do something about personal costs. and then decide how deep that cut will be over what time, what glidepath. >> thank you, clark. let me provide a few wrap up comments, if you will, and then we will open the floor for questions. i think it is useful for us to observe that we are not really trying to diminish the difficulties that the defense department had in making the decisions associated with the $487 billion in cuts. i am quite confident that inside the room, as the decisions were being debated, it felt really hard.

and for all the constituents involved in those, it was really hard. nonetheless, it is fair to say that there is not a lot of visible damage from $487 billion of production. and that would leave the casual observer, like an appropriate, to say that surely there must be more. sequestration actually takes more. there is a great deal of language out about sequestration that does not actually take into account a careful reading of the law itself. and this is worth pointing out. the basis of any change in the sequestration process will not be the language that is out in the ether. it will be the law as passed and signed by the president. that sequestration, unlike all ,roceeding sequestration's provides enormous flexibility to

both the executive branch in general and the defense department specifically in allocating sequestration cuts across a broader base. all previous sequestration's were done and what we call a program project or activity level. every single item had to take a chainsaw approach. this sequestration is at the account level. that means the appropriation account level. that means that the chain saw just cuts off, for example, milkers air force. milpers is exempt, action so everybody else would get a bigger cut. -- is exempt, actually, so everybody else would get a bigger cut. if is also easy to conceive of an agreement which would leave the pain of sequestration by

providing even additional flexibility, including perhaps some-flexibility year over year. so you can slip some of fiscal year 2014 and beyond. unlike all those other drawdowns, we have today, present as part of the dynamic, the global financial market. the reason why we got the budget control act and sequestration production is because of the threat of default over the debt ceiling. i think the president submitted his request to increase the debt ceiling on the day that the house came back. so that would have been a week ago monday. so the 15-day clock will probably be reached next tuesday. then something on wednesday as aing, the debt ceiling on u nation will go up.

so the debt ceiling will go until we hit it again. so when will we hit it again? how the economy th is doing. we had good news today. it indicated a little more revenue, less expenditure, and less pressure on house and we will reach the debt ceiling. the election throws all of the soft. we will assume that cbo and of omb are doing sufficient. let me make some points. i think several in the panel noted that we have the strategic guidance. we have the initial information from the secretary of defense and the pentagon. but we are still missing the real element, which is the budget itself. we have three weekends and two weeks left before we see that

-- february 13, monday. it will be the third time in four years that the administration has been late in submitting the budget. what should you be looking for it in that budget as it comes forward? number one, as todd mentioned, there is the question of the deficiencies. there are $60 billion that the secretary cited. you will not be able to find this as a line-item in the budget. aggressive and competitive contracting practices. that is actually not done efficiency. that is a tightening on margin fees and presumably on performance. better use of information technology. ever since we created information technology, we have saved money by taking money out of the budget in anticipation of better use of information technology. i will not be surprised if we do

that again. streamlining the staff. i will confess -- i will confess that i am totally baffled as to how we will be able to tell that or not. i know what getting rid of staff means. that does not necessarily mean streamlining. reduction in contract services. this is not line-item. most operations services are paid for from the administrative account. but there are disturbing trends in the industry itself. it is not an elimination of contracts. it is a de scoping of the requirements for the position. i expect that many of you that work out their are seeing this already. i really do not need a master's degree in 10 years of experience in that job. i can take a bachelor's degree with three years' experience. that is fine as long as, in

fact, that three-year experience bachelor degree person can do it. let's hope that somebody made that evaluation before they descoped that position. and then better inventory management. again, this has been a hallmark. i have only been at this business for 35 years. we have been preaching better inventory management for a long time. the australians call it efficiency dividends. we took out the money out -- we took the money out. now you figure out how to be more efficient. there are some unanswered questions. this was a difficult budget process because the stock point was not determined until these guys were already racked up and then they had to go back and take into account congress had figured out. the 2013 fiscal year

issues will be looking at fiscal year 2014 and beyond. you'll have a hit on those things. and there is the congressional review cycle -- many of those punted issues will come to life. why? because the pentagon has to start coming to grips with those fiscal year 2014 issues posting yearly. they are already working on the 2014 budget and it is critical that they get that in place. that is where the impact of failing to account for the additional reductions, whether it is through sequestration or anything else, begins to become long-term consequences. i have to say something about base closures. for a quarter of a century, i have been heavily involved in base closures. i receive any millions today from someone who reminded me of a quote that i made a few months ago.

,ou'll never see a brac especially not in an election year. i have to eat my words. there will be one as secretary panetta mentioned. base closure rounds is part of their first objectives. there is also, in fact, a push for an expanded overseas basing presence as part of the second element of the strategic review. from the pentagon's point of view, these two are not connected. you can be making reductions for efficiency purchases at the same time that you're expanding your overseas structure. but from a commercial point of view, these two are absolutely linked together. we have seen this in every previous base closure round, where the typical mentality is

to say, if you know what, before you close my days, why don't you go get those blank aircraft and blank tanks overseas and put them here. we're not likely to see movement forward. there's also the question of the role of politics. each passing administration, each passing election cycle sees a little bit more penetration of politics into the pentagon. many of you have been at this over the course of careers that stretch back over decades. we have all witnessed this, if you will. the attempts over the past month or so to align the white house's own objectives with the pentagon's objectives are actually worth lauding. it is useful to have some

alignment, if you will. on the other hand, the political folks need to be a little bit careful. historically, the greatest contribution that the defense department can make to any election campaign is in fact to be allowed to do its job very, very well. and that was the fundamental premise in which the framers created branches of government in the first place and set up the friction between the executive and legislative branches. i think it behooves us, as we move forward, to be able to separate out those decisions and activities that are being driven for political purposes and those that actually contribute significantly to the capability that provides for the national security of the united states. i will close my remarks at that point and we will prepare to open the floor for questions. let me just remind you of the process. we have microphones here. we would like to wait for the microphone so that come in fact, the audience on the web and television can hear you as well.

you raise your hand. i will recognize you by pointing to you and saying something. wait for the mike. identify yourself by giving me your name and identify your affiliation. if you do not have any, you can do what a registered person in maryland does and call yourself an affiliated. i think we have a couple of questions here in the front. wait for the mic here. thus do the one on the side first. and then you can pass it across the aisle. >> jeremy at emt capital markets. we have heard a lot about the consequences of sequestration. yesterday, the question was asked of the pentagon whether or not they plan for a sequestration, but the answer was consequence and not the plan. could you expand on the comments on the alternatives to sequestration? do you see a logical path for a legislative rollback of

sequestration? what do you think the dod is doing to plan for sequestration and how is industry reacting? >> let's talk about the alternatives to sequestration. basically, the super committee failed to find $1.20 trillion in deficit reduction. that means, under the law, you will find that they will take $1.20 trillion out of the budget. they do that by allocating half of the cuts in defense, have the guts to non-defense. of the $600 billion allocated, you get to take out of 80% in interest savings. you will not be boring as much over the years. so you now are down to $492 billion. 96% of the budget function is dod. the other 4% goes to the department of energy for nuclear weapons, stockpiling, and things like that and other agencies. so out of the 490 two billion

dollars that you actually have to cut, about 96% of that will presumably come out of dod, although there is some flexibility there. so now you're talking about $472 billion that has to come out of dod and it has to be evenly divided over the next nine years. that is what the law says. it ends up about $52 billion coming out of the dot budget. so the fiscal year 2013 budget, $52 billion, you have to take the uniform cut across all of the accounts. it ends up about being -- and the being about a 10% cut. with that said, what can you do to avoid the messiness of that and the and targeted and and strategic nature of these .cross-the-board cuts -

the government could support -- technically, the with the law is written, for 2014, the sequestered will take $52 billion, no matter how much you appropriate below the cap. what you have to do is write your bill, your appropriation bill so that it comes in at the lower number. then at the very bottom, you say to increase every account in here by 11%. then sequestration hits and you end up where you want it to be. but what is the advantage of that? i know it is a game. but that is how you have to do these things. the advantages that you have to target the cuts. that is better than untargeted, but it is what you have to do. it is better than a 10% reduction the president said that he will not take off the pressure on the congress to handle the deficit. so what can you do that is deficit-neutral to alter

superstation, to make it easier for dot? you can reality the cuts across the years. instead of them coming down suddenly in 2013 and staying flat for the rest of the decade, you can have a gradual decline that achieves the same dollar amount of savings over the decade. i ran some calculations. you have to decline the defense budget at about 2% real rate, adjusting for inflation, a 2% decline in real terms over the rest of the decade. that gives you about the same level of total savings as you would under sequestration. it is a more gradual ramp down appeared it would be smoother and easier for dot. >> are any agencies looking at the $1.20 trillion today in total? >> the way the law is written, it does not take into account the time value of money. it is $1.20 trillion. and all the dollars in their art

in then-year numbers. are in then-year numbers. >> [inaudible] >> you have to change the law. the super committee was to avoid it. the super committee had this unique authority to produce a plan that would get considered by the house and the senate without amendment and would not be subject to the 60-vote cloture rule in the senate. that was the easiest way to avoid this. that opportunity has passed. now congress, if they want to avoid this are modified sequestration to the regular legislative process, they have to get 60 votes in the senate to do anything. >> the only thing i would add to that.

what are the circumstances under which the law might be changed? to reach a bargain. bargaining has not stopped. you know that everyone of these organizations, including up on the hill, including more public ones like here, have teams out there thinking about life beyond sequester and have to deal with that. there are two kinds of deals out there been one is a deal for the $1.20 trillion. the other deal is the grand bargain where most outside analysts say we need between $3 billion and $4 billion in deficit reductions and revenue increases -- otherwise known as tax increases. if there is a grand bargain, defense will be a part of that because it represents 40%+ of discretionary spending. i think at this time, there is a subtle form to the monument

washing -- the washington monument strategy. the reason why you did not see cuts in his first-round is because they're being saved for the second round of negotiations. it could be the $600 billion s for or it could be the two billion dollars to $3 billion to address the fiscal crisis this country is in. >> but also emphasize that part of the process of the bargain and the debate and the compromise has to take into account what the ratings agencies think about this. this has never been part of our equation before. go back to november 21 when the super committee failed and they announced that we would have to move toward sequestration. from the point of view of the ratings agencies, this was

irrelevant. the dollars were still coming out. it did not matter to them where. from the point of view of solvency of the u.s., this was fine. if we are not careful -- and i am not quite sure how congress can be careful on this matter -- if we start sending the wrong signals at the wrong times and it provokes a reaction by the ratings agencies and they say, if you know what, you guys have just crossed the line, a line you did not know was there, along with did not define for you ahead of time, a line that may be subjective and irrelevant, but never less visible and public and potential significant impact. this is part of the equation. in other words, you can just let defense off the hook without finding that $475 billion somewhere else. >> george nicholson. you mentioned that the pain

where the cuts are is to retire and large number of c-130's, retire squadrons -- for the national guard, that will be a red flag. how much of a contentious issue will that be with their lobby on the and hill -- on the hill? >> you cited a lot of the cuts in the air force. i will admit my bias as being part of the air force. yes, there will be taken. i think you will see a lot of push back once the guard and reserve lobbying groups get mobilized. i think that they have a lot of influence on the hill. i think we will see real fight about where those cuts occur in the air force. i do not think this is a done

deal. >> i do not really have anything to add to that. >> you still have the mike, george? let's go over here to the right, my right that is. then we will come back to the middle. we have two guys over here. byron, you get the my first and then pass it forward. >> i want to ask your question first. >> make sure you -- i identified it, but that is not enough for the audience. >> bair in capital. when you talk about the program changes discussed yesterday, was anything that struck out as a threat to the industrial base? and do know what the accounts may be in 2013 based on what came out yesterday? >> the industrial this question is really intriguing. i think what we sell is some evidence of potential concern.

what the pentagon has told us is that there is an increased consideration of industrial base concerns as these considerations are being made. that is all well and good. the question is not whether there is increased consideration. but you may decision to reflect the increased consideration. let me give you one example. this is what you need to know the rest of the details for. announced yesterday was the determination of global hawk flcock. we do not -- one might assume, if one wanted to give them credit for having that additional consideration, that, in fact, looking across the

board, the usb infrastructure supports these large plant -- the uav infrastructure that supports these large airplanes is in agreement. >> we have to take into account with these cuts will mean for the defense industrial base and we have to take action where necessary to preserve a critical and vital sectors in the industrial race. the devil's work is in the details. the reality is that coming in this budget and term a, you cannot do everything that everyone would want you to do to preserve every sector of the defense industrial base. the question is not what you .ut, but what you keep hearin in terms of the procurement and the account, we do not know yet enough to say. based on what they said yesterday, my hunch is that

procurement will take a deeper cut than other parts of the budget. they're talking about protecting your s and t investment. so if they do that, r d t. and e. may not take much of a cut in procurement. >> i will put in a plug. we do plan here on wednesday the 15th of february to have an event specifically focused on the industrial base implications of the defense budget, assuming they actually do release it on the 13th as is currently planned. we will be able to answer our own questions and many of yours as well at that point in time. go up in the front here. >> rick mcfarlane with parsons. heading in the way of a seer are -- of a cr.

i see another six months to eight months of cr that we faced last year. do you think the government is trying to prepare some kind of strategy to deal with that in terms of trying to rescheduling procurements, etc. if not, please ask them to do so. [laughter] that is really after you, stephanie. >> to be honest, i think the executive branch has been so wrapped up in what we have been seeing lately that they have not given it much thought. this could be the former legislative staffer in me going, oh, c'mon. i tend to think it will be longer than eight to nine months. for defense, you're looking at a year-long cr. for other parts of government, it will be shorter and there will be much gnashing of teeth. >> there are a couple of other

aspects. the real wild card is two wins in november, right? but only in the presidential level, but in terms of will the republicans take back the senate? will it be a tighter margin in the house or a larger margin? the incentives for making a decision during a lame duck session will be directly driven by what happens in the first two days of november. the difference between a cr level, which is continuing to 2012 funding into 2013, which is pretty minimal. there are not enough anomalies written into the continuing resolution so that the defense department can make adjustments it plans to do for fiscal year 2013. the potential impact would not necessarily be that great absent the $52 billion in sequestration. the uncertainty freezes the customers. programs tend to take one of two diametrically opposed views.

one is i do not know what my future money will look like so i will be very prudent and go slow and be very cautious and slow everything down. the other dynamic is i do not know what my future many will look like so i better spend every nickel i got right now before they take it away from me. that will be a program-by- program dynamic and we cannot predict where that will go. i think we have another question back here in the front. >> getting back to the sequestration, would be unprecedented degree of flexibility that you described give the defense department a once-in-a-generation opportunity, is this the chance to cut the program in the subcommittee chairman's district? >> what an astonishingly clever question. [laughter]

it reminds me of richard nixon's secret plan for ending the war in southeast asia. it was certainly potentially provide a once-in-a-century opportunity to do that sort of thing. i will tell you, though, i see not only no indications that anybody is willing to step up to that, but i suspect that the bulldozers are lined up outside the building if that would occur. however, what it does do is provide the opportunity, i think, for those of us who want to contribute to the discussion and provide advice to begin thinking more creatively about what flexibility need to have. i think the thing we all agree is that this is not the end of the reductions. in fact, even though the document that was released by the pentagon yesterday said that, if you look at the words

in transcript, general dempsey called this a down payment. that implies, at a minimum, a second payment. right? secretary panetta called it the beginning. that implies at a minimum, some subsequent staff. so this is not the end of the game. the fight over sequestration is not a fight over now reduction. it is a fight over the process of doing that. what you have indicated the stakes in that process, something changes, not a strategy. >> if i may comment on the political climate we are working impaired i do not think we will have a lot -- it may be a great opportunity if you look at the broader strategic construct of can you action cut programs that have been sacrosanct or sacred cows in the past? there is that opportunity. but the political will, in my

view, does not necessarily exist. i go back to who will want to sacrifice something in their district in an election year where it is so very partisan right now. it is a syrup -- it is a zero sum game. if i lose, you win. if i lose, my opponent wins. for a host of reasons, but purely political, in a policy world this would not be so hard. but it is not reality. that is just my perspective on it appeared >> i think we -- on it. >> we have had her rope programmers in the past to have used these kind of financial crises to cut programs that may have been sacrosanct,--funding wedges. -- may have been sacrosanct, negative-funding wedges.

i think that is a practice that has gotten too risky. but i do believe, and i mentioned this before, that there is a common understanding that we have to do something about pay and benefits, that it is unsustainable. and i do think that this is an opportunity where they are hopeful of reaching some kind of an agreement with congress, either through the commission or through other means as well, where they are able to at least cap the growth so it leaves room in the budget to actually equipped and trained the forces that we it -- actually equip t and train the forces that we have. >> the commission that the defense the proposed yesterday was solely on retirement. our work says that that is too narrow a downgrade could you actually have to look at retirement changes in the context of a broader pay and

benefits cuts across the board. the idea of a brac like process is to produce something that is only an up or down vote. there are things should be included here, including robust public opportunity for debate and input and for the members twho will potentially be affected to participate. then they can say we did all we could. >> i think that is exactly right. the retirement commission is not quite enough. you really need to broaden it, to look at military compensation comprehensively. i think the key thing we need to do here, like i said before, should not be just about what you cut, but working to get better value. if you do that, you have to get data. you have to understand how service members actually value the various forms of

compensation they get. it is a complex mash of different forms of compensation. that is something that the department has been reluctant to do. it is not something you can accomplish through focus groups or just talking to senior enlisted leaders. you really have to go out and get input from a broad sector of the department. i will take a moment to plug a steady we are doing. we're actually trying to do this. we are conducting a survey of military personnel where people can go in -- it is an online survey -- and they can access our to show us their utility curves, if you will, for very different forms of compensation. and then the make trade-offs in the tools. would you prefer a little more of this and a little less of that? or some other combination of benefits. it is all mine. we encourage them to go to it. we need to get a lot of results in. once we have that, we will share

that with leaders here in washington and the department in forums like this in the future. >> we will be here for a little longer. todd harrison has to leave shortly for another commitment. if there is a question particularly on the side of the room that you want to direct towards todd, this would be the right opportunity to do that. i do see one here. if you would bring the might up here, terence, thank you. >> you said earlier -- which once more you counting to drawdown in lcs and the joint high speed vessels in addition to retire in the cruisers. where do you get your 17? >> i got it from the department, street from the horse's mouth. i do not have the list of how it all adds up. i think they're cutting seven

cruisers, slipping the virginia class sub, high-speed vessel, a number of ships that are involved here. but that is the number that they're using, taking out. that is a significant change from what had been planned previously. i think that just goes to reinforce the fact that these cuts are not solely put on the army and marine corps. their force and the navy will take a share of the cuts as well. >> any other questions? we do have -- we have one. 0 and we have one over here. i am sorry. the lights are so kind to me that action cannot see people right in front. >> emily rutherford. stephanie talked about reverse ability. i wonder if the other panelists had any thoughts on that, concerns on that.

and how you're defining it or how you understand it to be? it also applies there will be some cost. they have said they're going to try to protect the mid-level officers. that this march because if you need to rebuild your forces -- that is march because if you need to rebuild your forces quickly, those are the people that you need. it is never without a cost. those personnel are more expensive than junior personnel. your mix of personnel will be changing so that your cost per person is going to be a little bit higher. your keeping more of those middle rank people. the same is true with the defense industrial base. you can cut programs and make some investments that mitigates the downside to the industrial base. what will happen is you're unit

costs will go up and you'll be paying money to support overheads and infrastructure capacity that you are not actively using. there are good reasons to do that, but it's hard to defend that. in front of congress year after year. >> i would not pay too much attention to the word itself as promising a new concept. this is the case of -- we used to hedge against things. we used to synchronize the things. now it is energy. it is a different adverb that presumably connotes more content than it really does. [laughter] >> thank you.

i have two questions on the back row. >> and his comment about the mid-level officers, during the post-world war i . and the german army did not exist, they kept their mid-level officers. guess what? they expanded fairly quickly. >> [inaudible] >> last july, the defense business board recommended the department to of defense follow corporate downsizing policies. is there any sign that they're taking that recommendation on

board were rejected it? any of the new data released yesterday suggesting that the defense business board recommendation is being pursued? >> are there any signs that it has been rejected? no. none of us can really speak for the defense business board. i think some of the language that was used in the announcement yesterday, i saw for the first time in a long time defrays "reduction in overhead" and that is intriguing to me. there is no line item in the defense budget that is called overhead. it is hard pressed to validate that such reductions have taken place. the mentality is potentially a there. i hold out some hope for a recognition that one of the ways in which to reduce the budget is

to figure out things you are doing better not adding a lot of value. and just simply stop doing them. we will see whether that occurs. we have a question down here in front. >> thank you. i wanted to ask a question about the comment he made on the grand bargain that may be necessary at some point to fix the deficit. if that were to happen, what kind of cost would you see for defense that would be on the table that would be politically acceptable? do you have a number in mind? >> people pull grand bargain at of the had to describe a serious

problem. if you can solve it, as you have to bring in a lot more into the picture. the first time it was brought in was last july and august when president obama and speaker john boehner are talking about the deal that was much bigger than 1.2. they were talking about a deal that was twice as big. how do you get there? we have a grand bargain. who determines what the grand bargain looks like? --re trying to think through it will take us six or seven months. this is something that will be relevant after the election. you cannot have a grand bargain until you know who your bargainers are. we will not know that until after the election. that is behind the scenes. if they do not address this at that level, we will have another

four years that look like the last two. i do not think anyone wants that. grand bargain just means how do you generate a combination of spending reductions and taxing that add up to a total of $4 billion? that is a lot of money. over how many years, i do not know. i think the pack -- the defense department -- they are one of the big stakes in this bargain. they represent 40% of discretionary spending. there is no way you have a grand bargain without avoiding more. one of the reasons he did not see big cuts in this first round is because there is a second round. everybody knows there is a grand bargain out there that we all

hope addresses the fiscal crisis that this country faces. i think there is an awful lot of jockeying going now to determine where it is. as to what my personal ideas are, stay to endeavor six months and i hope to have them. >> -- stay tuned for six months and i hope to have them. >> while the microphone is moving that way, let me point out that we have been talking this morning as if the debate on capitol hill over the fiscal year 13 defense budget is going to be whether to fund the request the president makes or to cut it further. that is not the debate. the debate is going to be whether to add money back. the fundamental underlying reality, between the fy13 level

and something lower is not going to be reflected in the house when the debate is over whether or not the defense department cut too much. the disconnect between the grand bargain and the reality we face today are going to be amplified by a perceived debate that is irrelevant to those long-term reductions, but irrelevant to the programs and cuts embedded in that budget and the first place. >> this question is talking about what you just said. regarding contingency operations overseas. we have seen the model for conflicts, the companies in this room get hired to support them. is there anything else described in the budgets regarding future

conflict? what i found a remarkable yesterday is finding the word contractor, somewhere, anywhere, was impossible. what this means to me is if there is something they do not want to talk about. i think this is a debate that really does need to happen. i would not be surprised if the authorizing committee takes this up as part of the ok, you are cutting and strength and you will not be doing stability operations on a prolonged basis. but we need to be involved. how are we going to do it? contractors will come up.

from my perspective, i think every move forward to -- just watch this space. i find it remarkable that you can have an entire press conference and not talk about it. david, you might have a different view on this. from my perspective, it is a conversation that we need to have in the next week. >> dod put out a fact sheet. using the word fact in conjunction with the budgetary figures is perhaps an oxymoron, but nevertheless, we used to project in terms of the out years, 88 billion in fy13. they do not do that now. it is 88 billion -- why? because they will ask for 88 billion. and then there is tbd. they are not making projections.

>> let's take a question down here in a row for. -- 4. and i believe there might be one further back. >> in your opening remarks, you talked about ground forces and possible future requirement. if you look at the discussion we've had here, it seems to be the army, the budget numbers seems prettyt t, unrealistic. at the end of the day, we will be a lot lower than that. can you talk about strategy ground forces and your ideas? >> thank you for that question. it is a concern when you looked at the glide path forward, you are talking about -- 2017.

from a strategy perspective, i go back to what kinds of engagement are we expecting are in for -- our forces to operate in? they are not gone to be in iraq and afghanistan kind of situations. you cannot rely on relatively scarce special operations forces to take care of all the training, advising, assisting that we will be expected to do. by 2017, it might be a realistic number, but it depends what the next few years show us. if you have a strategy that requires an adjustment every year or so, what kind of strategy is it? my concern about this current strategic guidance is that it talks about will not be during prolonged large-scale stability operations on a rotational business -- basis. i see no evidence of that.

large scale, maybe. but prolonged, we will be places in the world. the alternative is having friends and partners were willing to do things that we are not going to do. i am not sure -- >> tomorrow, on "washington journal," a professor previous the florida primary. cedric leighton discusses the pentagon reductions and how they might impact policy and counterterrorism. "washington journal" at 7:00 eastern on c-span. >> next tuesday, a hearing by the senate select committee on intelligence. the committee holds its annual

hearing on global threats to the united states. cia director david petraeus, and fbi director are scheduled to testify. we will have live coverage beginning tuesday at 10:00 on c- span and c-span radio. >> the road to the white house coverage takes you live to the candidate events in florida through the weekend, building up to tuesday's gop primary. >> by the end of my second term -- [applause] we will have the first permanent base on the moon and it will be american. by the end of 2020, we will have the first continuous propulsion system in space capable of getting to mars in a short time because i am sick of being told we have to be timid and i am

sick of being told we have to use technology that is 50 years old. >> when the founders said the creator had endowed us with certain inalienable rights, they laid out a path for america that was not temporary. a path that says that america, we can pursue happiness as we choose. we do not need a government to tell us what kind of car to get. we do not need a government to tell us what kind of health care we will have. >> see what the candidates are posting on social media along with political reporters. c-span.org/campaign2012. >> from "washington journal, this is 45 and minutes.

where are foreclosures moving along and what states are still far behind unsettling some of these foreclosures? guest: many of your viewers are still feeling a lot of pain as a result of what happens in this recessionary he, me, brought on in a significant way by this housing crisis. we are a lot better off than we were three or four years ago. 30-day delinquencies are down now over where they were a year ago but we still have this backlog of 90 day-plus delinquencies which is not recovering. a lot of it is due to several things.

there are several states -- five states in particular hold about half of the loans in foreclosure in this country. we have significant concentrations in certain states. also a difference between judicial and nonjudicial states, more of a process standpoint, producing what is called the shadow inventory of overhang, homes passed the 90 day period still working the way through the system here that is what we need to focus on to get the housing market back on track. host: secondary issue, not homes gone to foreclosure but the number of homes under water, a distinction between what they mortgaged and how much they equity value is. give us a sense of where that is right now? guest: there are a lot of proposals dealing with the negative equity problems. the president's announced a program called harp, and extended it to harp 2.0. it allows for people with

negative equity to refinance at a record low rates which certainly could add so weak -- released. host: overall, i would imagine you would like to recover because it means more mortgages. what is your official policy on ways that it can and should be addressed? guest: i spent a couple of years in the administration. i was federal housing commissioner for the obama administration and i have been in the industry for about 30 years. our policy is that there is no

single solution that will deal with this crisis we are going through. people who lost their jobs who find themselves unemployed. there are forbearance programs that can defer payments for a period of time. people have no equity, there is the harp program that allows you to refinance at a higher loan to value and it needed cash flow back to your family. restructuring, short sales, other efforts permitted under the making home affordable program by the administration. so, it is not one single federal solution. we support, i support, and it is very important consumers have access to any program that can help them. this is a very personal situation, when you find yourself not able to make your mortgage payment. and the solution that best meets the needs of an individual will vary on the personal situation. host: let me tell you about his background.

first of all, from colorado -- bachelor of arts from the university of colorado in boulder. started out as a mortgage banker and an progressed at -- to senior vp at freddie mac, senior vp of wells fargo, president and ceo of long and foster, the nation's largest private real- estate firm. an assistant secretary of housing and federal housing commissioner at hud, housing and urban development, during the obama administration. we are going to play a clip from president obama about mortgages and housing in the state of the union tuesday night. >> while government can't fix the problem on its own, responsible homeowners should not have to sit and wait for the housing market to hit bottom to get some relief. that is why i am sending this congress a plan that gives every responsible homeowner a chance

to save about $3,000 a year on their mortgage refinancing at historically low rates. no more red tape, no more runaround from the banks, a small fee on the largest financial destitution will insure it will not add to the deficit and it will give banks rescued by taxpayers a chance to repay the deficit of crust. let's never forget, americans who work hard and play by the rules every day deserve a government and financial system that does the same. host: reaction to the president's proposal. small good -- sounds good, a small feed taking care of the deficit and refinancing may be easy without red tape. guest: i think it has been a tremendous asset to have the administration at least working to implement as many plans as possible helping consumers in need. interest rates, as we know, are at historic lows and the ability to refinance at these nearly 4%

rates can put a lot of needed cash flow into family's hands as well as stimulate the economy. host: how would it work? guest: we have not seen his plan. there is a lot of speculation about how it could work but my sense is it would require legislation. perhaps the fha would be involved. but it would have to be, in a way, and essence to give consumers the ability to refinance, if they are not harp eligible. and there are also existing refinance programs available for any borrower who could qualify. fha allows refinancing up to 97.75% of the property's value within the loan limits standards. i think this will probably be for non-harp eligible borrowers who cannot get in the program

because they have a loans financed by freddie mac or fannie mae or faa which already streamlines. the question is who will provide the financing for it. if it is a government agency, it is likely to be the f h a. we look forward to seeing the program the president and the administration may present and we will support any reasonable effort to help consumers take advantage of the financing options available. host: a note more on harp, but does it stand for? guest: hoh affordable refinance program. host: reporting i have done on it, the readings suggest that people are not accessing its at the levels anticipated. why is that? guest: a national -- natural resistance. talking about the trust deficit -- who do i call? how are they offered?

in many cases, the borrower must call their servicer, and the servicer may be the only institution that can offer the program. but there are two ways you can access and find more information. one is to call your servicer directly and the other is to call the hot line set up by the administration to help consumers in need and they can direct them to how to find out more about the harp refinance program. but it is restricted to fannie mae and freddie mac. the first question is, when you buy your home, get your mortgage, most of your viewers the not necessarily know who owns your loan. it could be private investors, the fha, freddie mac or fannie mae -- host: or bundled into derivative packages. guest: private label securities. but if it is freddie mac or fannie mae -- it is certainly available and i suggest any viewer or anybody wondering if they can qualify, make the call and find out if you are eligible.

host: in a general sense, when people are under water, there is a big gap between the amount of money they owe and the current price their of the house. does somebody week that in the process, or does -- do they still allow the same amount? guest: under the harp program, you get much lower rates. it varies depending on the need. the negative equity challenge for this country, if you are at 105% negative equity, that could be made up while taking advantage of low interest rates. it is more severe, 120%, which is less frequent, but definitely exists in certain markets, there needs to be other

solutions potentially offered. the administration has to refinance program that provides for the opportunity for any homeowner to get a loan with a principal right down. there just needs to be more potential things offered. host: one more issue from the state of the union -- the president talking about people involved in criminal activity related to mortgages. [video clip] >> i am asking my attorney general to expand our investigations into the lending and risky mortgages that led to the housing crisis, holding accountable those who broke the law, speeding assistance to homeowners. host: david stevens, what is the industry reaction to that new unit?

guest: the vast majority of them are out of business. there are investigations that have gone on. some would argue not enough has been done, but anyone who has violated the law should be held accountable. the president appointed a state attorneys general, that should be done, did we advocate getting it done as quickly as possible. america needs certainty going forward. as long as there is turmoil and unrest, it means fame is that what to buy homes and want access to credit, this will impact their ability to move forward. we support going after adding one that has committed wrongdoing. host: let's begin with donald, a democrat in texas.

caller: i am under water in my home. i have been here for five full years, and not earned one drop of equity. i went through some of the programs you spoke of and found no relief. are the biggest holding might de -- mortgage -- when are they going to put true inventory out there? thank you. guest: first of all, i really appreciate that question because there are so many people like you better city in negative equity at -- that are sitting here that negative equity. the challenges the bank that

originated that mortgage might not even all the bad loan. we have a complicated international services market, where many people are involved, and where those mortgages said. i would suggest calling the hope hot line -- 1-88-955-hope. there might be solutions available to you, and i wish the best to you. host: i am sure you understand the frustration. we're getting thomas to that effect. this from twitter from mike freeman -- guest: hi understand that frustration.

i have hundreds of calls coming in when i was in the administration. i think the fault is in many places. banks are clearly one of those. most of those banks and not in business. the problems do not go away. we have roughly two thousand, two hundred financial institutions in our membership, most of which are small community banks or credit unions, a handful of large institutions that dominate the market. without question, that frustration is there. that of regulations, over exuberance for mortgage product among all of this network, of this atm of housing that drew the bubble up can never happen

again. it has destroyed the wealth of to many americans. it is something that we have to change and make sure there is a sound and stable system and the future. host: the macon help attract crime. guest: the most difficult aspect is where other homes are vacant and there is crime. the homes it completed get it or they're not maintained. more often than not, that is due to abandonment. once the homes were goes wrong, it is the obligation of the servicer or the investor to maintain that property. but it is that time in between, where there is the extended foreclosure time and since the family has picketed the home and the home is not repaired. there is -- the family has left

the home and the home is not repaired. again, there is a myriad of solutions to this challenge. none of them are working as well as anybody would like individually. caller: for the last three years, obama has implemented these policies and it is irksome that these new policies are not any different. you simply want to believe him because he is so charismatic in the way he speaks. i hope people know that a lot of these policies in the last three years have not worked. as a matter of fact, before he came to congress in the '90s, he was an activist demanding home loans for people who could not

afford to put money down. he is part of the problem. and he acts like he is not. when did anybody hold a gun to anybody's head to by the realistic that they bought. it is irks some that, after hearing how great realistic as and that it is the old men investment and everybody walks away. -- it is the ultimate investment and everybody walks away. the people, sure, who got hoodwinked and did not know any better, i understand that. but there are people who got -- you draw up this bubble, like an attack bubble. that is the big problem. it really is not more complex than that. when a person walks into a bank and says here is for grant for a decent -- for a cd, give me a

cd and the next person walks and and asks for 400 grand, that is not the bank's money. and then you want to give the homeowner a break. there is no one that made that homeowner sign up or overextend themselves. for the people who walked into something that they did not know about or got covered, that is one thing. guest: i think you point out a real challenge. it becomes the reason why some of these programs are so hard to employment. what this caller is highlighting is the moral hazard issue of who you bailout. who do you provide programs to? in some cases, for those who speculated in the market or perhaps did not fully disclose their income, perhaps that is

their problem in terms of responsibility. there are other people in the recession who are impacted. because you have a job loss. you work for us on a manufacturer in the midwest and the downsized and you lost your job through no fault of your own. in a recession like this where unemployment went to the 9% level, are their solutions that you provide to those families? that has been the challenge of many of these programs. this administration is pressing the difference between the moral hazard concerns of not providing free money to those who made bad decisions, which are those who have been impacted by this recession through no fault of their own. as a result, it has made these programs much more difficult. and the make a home affordable program, this is modified more

than 1 million families. but there are a total 5 million modifications in this recession. it has been helpful, but it is not enough. i think that is an important part of the debate that the caller brought up. host: we hosted a conversation with you on our facebook page.

guest: well pointed. it is not evenly applied across the country. unemployment and negative equity is difficult in other states. i think that post points of those issues. host: here is another one.

90% of all mortgages approximately our programs that are out of fha or usda. we have the government playing e, not tordinary rol mention the refinance programs provided by the federal government. this role is unprecedented. but we are in an unprecedented recession, something that has not occurred since the great depression. we have to be thoughtful to get through this recovery and not provide a free bailout for everybody, to help those in need. the one. would make, which it think everybody understands is that, if you have a home in foreclosure in your area or in your street, that home will sell at a discount and it will drive

down home values for all the neighbors around you. so the first line of defenses to keep a family in their home using every means possible. the second step is, if they cannot stay in the home, transition them as soon as possible. host: good morning. caller: i enjoy watching your every morning. i called a while back. you had people on about three months or four months ago and talking about the program of which are called. i began working on a heart program in august. they just declined me this month. so for six months, i have idled and waited for help. i think it is important that people understand that not everybody did things wrong. i came from a poor family. i am a single mother with five

children. i work every day. i scrimped and saved and came up with the down payment. i was taught by terror life that, when you went to the bank, the man at the bank knew what was right. he knew what was fair and he would help you. i did that stuff. i put $15,000 on my home. in the first month, they sold my loan. the first company that took it raised the payment $50 within the first year with no explanation. i do not know what they're tree believe people are supposed to do. -- believe people are supposed to do. the biggest problem with the harp program, and i learned this from you, suzanne, all of all mortgages are insured by these banks, and it is not in their interest to cut interest rates or shave my mortgage. it is in their interest for me to declines of their insurance will pay them for their loss.

-here, id eleanor, and outside of chicago, -- in illinois, i am outside of chicago, we just had 110 houses torn down, foreclosed by the banks, and they gave this land back to our city. because they did not want to pay the taxes. so, it is again on our books with no people and nobody paid property tax. i think people should remember clearly george bush during his presidential debates promised to put 1 million new homeowners in homes, and he did. all of these things were fixed so that we would have a housing bubble, so people would make enormous profits, taking a vintage of poor people. -- advantage of poor people. host: lots of topics to follow up on. guest: first of all, that is

the story that there needs to be focused on -- the single parent with children bought a home, put her down payment down, and finds herself in a situation where she cannot afford her home. the question i really would like to know was the purpose of that definition, and i will reemphasize calling the hope hot line if she has not done so already. there are a lot of issues here that are being brought up. without question, one of the points i would assizes this pursuit of how will the ship was far too extensive -- homeownership was far too expensive. homeownership that all costs was a way to get rich quick. there was speculation involved.

product offered with no down payments, no documentation in the markets and institutions no longer exist, exacerbated the bubble and it was policy makers as well that participated. host: from the policy-making aspect, it was cited debt holders have a greater bill -- that homeowners versus transients have a greater investment and stake in the community, so let's encourage home ownership. this caller believes it was -- let's make everybody rich. guest: there has to be a balanced housing policy. bondssecretary donna the end of -- donovan of hud has said there we need an extensive balance. there are people not prepared for ownership. sub-prime mortgages are a

credit simple. -- are a perfect example. there were typically fixed for two years and the theory was that the bar were compelled credit would improve and -- the bar were's credit would improve -- borrower, the credit would improve. there are studies that show that for the right committees 0 motorships in -- home ownership can create better communities and stability. if you are qualified did have a good job, home and -- homeownership makes sense. for people where it is short- term, or wait to make interest -- instant money, that's an area has to be stopped. right now, we have moved credit to the other side, where access to credit is more conservative

than i have seen in well over a decade, and we need to find a right balance. host: c-span junkie from twitter -- guest: i am not sure what he means by consented to the housing industry. -- what he means by incentive to the housing industry. there is a glut of homes in certain markets. judicial states are a perfect example, whether foreclosure time and process takes a long time. the challenges, if a home is going to be foreclosed on, and it is abandoned, the servicer cannot access the home because they do not own it until it goes to foreclosure. it is a challenge for this process. we see high abandonment rates, and that impacts the homes in the committee.

there are maintenance concerns. this individual must be in one of those communities for this post. host: we're talking to david stevens, the head of the mortgage bankers association, and it comes to that job from beijing positions and public policy positions. -- banking positions in public policy positions. and i wanted to s to about your -- to ask you about your job at freddie mac. from your inside view, what should be done about freddie mac? guest: well, freddie mac and fannie mae have cost taxpayers $175 billion so far. it was not their primary business for -- that was the reason for their default. their 30-year fixed rates,their standard line of business is essentially still performing well.

to the elected default rates are still around the -- cumulative default rates are still around 5%. the challenge is risking -- they were allowed to invest -- investing in risky assets, which ultimately brought them these institutions. the challenge for the taxpayer and for everyone is the government guaranteed the institution itself, which means we are paid for the bad behavior of their investment activities. how do we get a system that goes forward? i think we need to have a guarantee, at least some level, of mortgage-backed securities just to ensure continued availability of mortgage credit. it should never be a mortgage- backed institution, because that is how we pay the price.

host: the next call comes from raleigh, north carolina. greg is a republican. caller: thank you for taking my call. thank you for this guest. i think the cry from our federal government for decades was that everyone is entitled to a house without exception. it was the government's decision to put people in houses, whether or not they could pay for them, whether or not they could qualify for them, whether or not they could keep them, and when the chickens come home to roost, it was like a house of cards. it fell down. this fannie mae and freddie mac situation, where we are about $700 billion already, this is a

mess. -- this is a morass. i'm not a ron paul fin, but he -- i am not a ron paul fan, but he said last night we live in a free enterprise system, and if we let the free enterprise system work, this would not be a problem right now. it would continue to be a problem. guest: it is an interesting point. without question, the role of government has been too big, and the over the exuberance promoted by all parties threat the last several decades was clearly to strong. i would say the housing bubble from the worst years of 2006, 2007, in 2008, which were the peak years, much of the products were from the private market.

fannie and freddie invested in those to some degree, but they were really not alone. these took down companies like lehman brothers, and they were sub-prime mortgages, and these programs were financed by the private markets. i go back to many decades and every member of the savings and loan crisis of a few decades ago, -- i remember the savings and loan crisis of a few decades ago when private institutions invested aggressively in the mortgage market and that impact of the savings and loan market. i am a huge proponent of balance. extremes on any side can ultimately cause significant disruptions. this is the most severe any of

us have experienced, but without question, going back to a fully privatized market does not remove the ills. host: wanted the dodd-frank reform due to address the concerns -- what did the dodd- frank reform due to address the concerns? guest: several things. it created the consumer financial protection bureau, and richard cordray is now their director. more specifically, there are two rules -- one is called qm , the qualified mortgage, and then the qrm. the qualified mortgage standards require that loans must be fully documented with a proven ability to repay. standards have never existed before. under the qm rule, these loans

that destroyed so many americans, because they did not understand what they were getting into, or made bad decisions themselves, those will not exist anymore under the qm guidelines and the qrm guidelines. we have concerns of some of this might go too far and the limited access to ownership because of these roles. that is why we need balance -- safe, sound, sustainable, fully transparent mortgage programs and disclosures have to be the role of the land going forward, and we also have to make sure we do not eliminate excess simply because they do not have 20% down payment. host: free lancer tweets --

guest: they were not made for people with great credit, which is why they were rated sub prime. the point is clear. there is to much salesman ship, as it were, in the markets, with programs in needed far greater explanation. -- that needed far greater explanation. most of those programs are prohibited in dodd-frank. host: also, people cashing in on their mortgages, and people are finding they were building the debt responsibilities -- has a practice banned regulated? guest: it has been curtailed because the institutions that

events that credit are not available anymore today. from a regulatory standpoint, they will be controlled through this qualified mortgage standard requirement. yes, indeed exchanged -- in the extreme, you could buy a home that would appreciate to%, or 3% a month, and that money gets spent, but your mortgage payment stays there for 30 years. those practices have to be curtailed. you can not use real estate as a td bank. real-estate is shelter. -- as a piggy bank. real estate is a shelter. for community stability, you have to have rules of the world. -- rules of the road.

that speculative nature has created an expensive black eye. host: nancy sherman has a different proposal altogether. guest: that is out of my area. i have seen, in effect, even in the occupied movement, one of the desires. stephen debt is a serious problem. debt in general is a serious problem. it is a big challenge this nation faces s and economy. it is expressed in that? -- has and the economy. it is expressed in that

question. this is a nation as been a nation of borrowers and spenders for far too long, and we need to get to a protocol where we are savers and investors. that is a transition as think we will learn. host: robert, an independent in nashville. caller: i wanted to address this to c-span, and not necessarily david stevens, who essentially it is a shill for the mortgage banking industry, ok? the entire crux of this is the biggest crock i have ever heard in my entire life. my wife and i played by the rules, paid our mortgage on time, did everything we could possibly do to keep our home without any problems.

we paid on time every time. we realize the mortgage was under water, and we refinanced in 2006. we are not broken. we have one home. we do not have a home in florida. we have a home in tennessee. this mortgage bankers' association guys sitting there is nothing but a shill for barack obama. we voted for barack obama. he did not do a thing for us. dodd-frank did not do a thing for us. they said tests of thing about forbearance, and they said -- sent us off thing about forbearance, and said if you pay $6,000, will extend your payment out. if we had 6000 extra dollars, we would not have been in this position to begin with.

this guy is nothing but a liar. host: robert, we will leave it at that point. guest: it expresses the anger. it is a challenge. when i left the administration i was deciding whether to stay in washington or go back to private industry. this outcry is not uncommon. the reality is we need certainty and we need to get markets that are functioning going forward so families can have access to credit, something chairman bernanke talked about in his white paper a few weeks back. this a bear is a reflection of the overall concern of those seven -- a deere is a reflection of the overall concerns. host: the fed plans to keep the same is a strict policy through 2014. -- the same interest rate policy through 2014. i'm wondering what that might do for people looking for holders of in the next five

years? looking -- looking for homes in the next five years? guest: this is not a push for one way or the other, but low interest rates and the cost of real estate in this country, in my 30 years in this housing system, i've never seen both at such an opportune time for families that are qualified and can afford to buy a home. i think the fed chairman directing a long term message about interest rates sends column and certainty to markets about what they can expect. will it be that long? it depends on the trajectory of this economy, but as long as the economy remains soft, the ability to keep rates low