orientation and gender. the people in this lawsuit, are they looking at the insurance rolls of their own companies and churches, to make sure that single men do not get prescribed by agra and other erectile dysfunction drugs? guest: a very good point. there were a number of suits where drug companies were providing of by agra and not contraception. -- viagra and not contraception. women should make the decision about what is best for their own health. host: george, republican, mississippi. caller: i am a catholic and a former monk. guest: no kidding. host: what kind? caller: [unintelligible] i know that the kennedys contributed quite a bit.

guest: i am actually on the board of the monastery. caller: i was there. guest: no kidding. did you know my god father, danny walsh? caller: yes. i did not know him well, but of course you know everybody. guest: he taught theology at the abbey. caller: right. i guess my comment is, the church is not really a democracy. the pope is the only one that matters. my point is, the episcopal church and catholic church were very similar until the 1960's. the episcopal church became very liberal, with women priests and a homosexual priests, and their membership has thrived drastically. whereas the capital church has

remained the same. i think that that stability is important. i hate that they are involved in the government. i would like to say -- like to see them say that they do not need money from the government. i think it is contaminating the church. host: i think we got your point. guest: well, i love the you were a [unintelligible] monk. my family has a close connection to them. as you know, even they had disagreements at times with the pope. father thomas merton had to have his letters looked at by the monks themselves and by the local bishops. there are many parts to the catholic church, which is why i love about it.

we do not all agree, but that is what church is about. host: md., democratic caller. caller: i cannot believe that this is insurance that we are talking about today. i do not believe that it is between or has anything to do with religion. i think that it has to do with the person, the woman between her and her doctor, as well as contraceptives. something that a woman needs to have good health. i think that rick santorum goes overboard. his wife lived with a man that was a senior and started an abortion clinic. so, he has to overdo it. he has to our right everything on this, overcompensating like

travis. when they become -- like drug addicts. when they become clean, they overdo it. when they talk about it. host: what about that separation between church and state? guest: it is a very good question. how do you get any money from federal or state governments? when i was lieutenant governor, we had faith based programming. what we would do -- there were terrific organizations involved in baltimore city. we would give them money, but they could not use the money to proselytize. they could help of hospitals and homeless shelters. they did a terrific job. they could not use it to proselytize. they set up a separate organization in which they could receive money to do good works.

host: what sort of things with a banned from doing? guest: you could not use the money to preach. you could not use the money to become a catholic. you would use the money to help someone with sickness, finding a job, or whenever it was needed. i think that is a very important distinction that helps to keep the line between church and state. over the years, as you know, catholic charities have helped so many people. different hospitals in the united states are run by nuns. you want to make sure that they are kept up and running, because they do such a good job. host: you have mentioned this important voice before. guest: number one, she was a person who said that the obama health care plan did not support

abortion, contrasting what the bishops had said. as a nun, she was able to have the credibility, as a great catholic, tutu nafta -- national health care. she spoke on that and was critical of the original plan that the obama administration had put out. but when she changed the position, she changed as well. she had credibility in the health-care field, as well as as a catholic. when she speaks, she speaks with knowledge and graves a toss. host: did you agree with the original ruling? guest: i did. as some people point out, this is the case in 28 states already. i figure that this has been going on in 28 states. that we were able to do with them, why not continue? clearly, there was a push back

and the obama administration responded very quickly. host of republican line, hawaii. they are up -- host: republican line, hawaii. they are of very early. [laughter] caller: you look so much like your father. i think that your uncle and father would be revolted by this. unfortunately you and many other catholics are toxic. as far as the jesuits are concerned, how can you call jesuits catholics? some jesuits, at least the ones in hawaii, are saying that law is not president -- is not present in the holy eucharist.

caller: i call them guest: there was a time when the jesuits did not like what the church was doing. the point is that the church has many parts. you do not have 1 billion people all thinking the same way on every single issue. that is not why the church is so rich. the churches rich because people have different views on particular issues. you say that is cafeteria catholicism. at least it is catholicism. i think it is important. i welcome what you have to say. i like to listen to you and hear your views. i am sure you feel the same way about me. host: you serve as a board member of the catholic democrats. iguest: it is an effort to rejet

catholics and make sure that the catholic voices heard -- to reach out to catholics. too often it seems that the bishops have gone to the republican side and we want to make it sure that there are many catholics who are democrats and believe very strongly the role of the church that we grew up with taught us to care for the poor, the sick, the homeless, the helpless. matthew, chapter 5, why are you here? you are here to help someone, to help your neighbor, love your god. that means we give something up. my parents often quoted to me when we read the bible every night and said our prayers together, we often heard from st. luke, from those who have given much but much will be expected. we were very fortunate and had a

responsibility to others. host: vermont, richard. caller: hello. how are you doing? i was raised catholic. i am also a pharmacist. you did not respond to the planned parenthood comment where these ladies can go to get oral contraceptives. you accuse the caller saying that he wanted to cast you out of the catholic religion or something, in so many words. guest: it actually it said that. "what are you a catholic?" caller: i do not remember exactly what you said, but the point of trying to make is that i do not believe that it is wrong to use oral contraception. i was raised catholic, but i

respect catholics to do have the religious conviction and a respect the church for their conviction and doctrine. what the president is trying to do is use another giveaway. he is ordering insurance companies to give these medications away for free. let me give you a quick scenario how this can go. host: let me jump in because we are running out of time. guest: yes, it is part of the health-care plan. there are certain services that everyone should get. one of those services is contraception for women. the reason is because it helps women be healthier. we are interested in making sure that we have a healthy country and healthy women. they should get contraceptive

devices. it costs $600 per year and it is expensive for a lot of women who cannot afford it. if it is free, they are more apt to use it and be healthy. as a pharmacist, you want people to be healthy. host: democrat from mobile, alabama. caller: my comment is this. most of the people that are jumping up and down abotu this -- about this rule is men. they do not want contraception coverage for women but they want viagra covered on men. most of them are politicians. 99 percent sent -- 99% of the people rallying against this are men. host: the think command should be in the debate about this

issue? -- do you think men should be able to debate? guest: i think everyone should be able to discuss this. the bishops are all men at making decisions about women. it is a little ironic. when you actually talk to people, they believe women should get contraceptive devices. this is a great debate. i hope the bishops will be able to listen to women. i wrote a book about a policy they were supposed to do about women. one of the reason is because bishops sometimes have a problem listening. when you get to be a bishop, you talk to people. one of the issues that i think

the bishops and the church need to do is listen to women. we have a lot to say. we are people of conscience. we are people of moral views. we are catholic. host: republican from miami. good morning. caller: good morning. this has nothing to do with contraception. it is all about tearing down the constitution. i am catholic. i have used birth control methods in the past. however, i do not expect my church to pay for them. what it boils down to is tearing down everything in the constitution. host: let's take a constitutionalist you. -- constitutional issue.

guest: people whose main purpose is to proselytize are exempted. over 370,000 churches are not covered by this role model. i do not know if that was clear to you. other churches who have the main purpose of teaching or health care, they do not have to pay for it. the church -- the insurance company pays for it. it is much less expensive to cover contraception than to cover what happens if you get pregnant. a pregnancy is much more expensive. this saves money. host: louisville, kentucky, and dependent caller. -- independent caller. caller: you are a wonderful speaker. nuns kept at the mercy of the missionaries for sex were given

the pills and the vatican themselves reported many cases of the nuns forcing to have sex with priests. some of them became pregnant and were encouraged to have abortions. host: where are you going with this? caller: when nuns have access to the pill and even abortions, in the case of rape, and then turn around and deny the same access, even in the case of rape, for medical reasons, too, it's a slap in the face to all women considering the church's own sexual past. guest: many nuns have supported the new ruling by the obama administration because, i think, many of them work in hospitals

and they know how important is to get the services although they, themselves, do not want it provided to themselves. it is difficult. the question between the power of the church and the power of the state is sometimes difficult. what the obama administration is doing a good job is to provide health care for women and also respect the faith of churchgoers. host: 5 minutes left. let me talk 2000 call politics. what will be your role -- 2012 politics? guest: i'm excited in supporting the president. i think he has done a really good job in trying to get health care passed. this was a policy that my uncle, ted kennedy, worked very hard on. we had one of the biggest economic crises since the

great depression. a person on earlier talking about what we can did make sure we have enough jobs in this country and to grow the economy. there is a lot to be discussed in the coming months and will be very important to make sure that we have a great debate as to what is best for our country. host: when you have an official role with the obama campaign? guest: i help them out. host: what is your political future? guest: you hear an announcement from my nephew in the next few weeks in massachusetts. host: running for? guest: congress. he is terrific. his name is joe kennedy. host: you, personally, will you run again? guest: i'm not planning to.

host: next caller, lisa. there you go. caller: how are you today? one of the other callers that called in, and do not see this as a women's right to contraception issue. i see this as a constitutional issue about the bill of rights. we have a first amendment protection of the church to uphold their beliefs. here lately, but i see a lot of our rights being stripped away and people need to be aware. this is not a women's issue. i have been able to get contraception my entire life without any problem whatsoever. it was less expensive when i was younger because the cost of everything has gone up. i have never had a problem getting contraception. i did not believe that most women have a problem. host: let's take that point,

lisa. guest: you every two good points. first, in fact, three are people and people not as well-off as you commit it is expensive. $600 per year is very expensive. the poverty level for a family of four was $12,000. studies will show that people do not use the money to take contraception or use the pill every day to make it effective. when it is free, people are more apt to use it. that is the first point. the second thing about what this is a constitutional question, over 370,000 churches will be exempt from this. they do not have to provide any contraception. the government does not imposing their view on you. i think the people feel about

what is best for women. they are exempt. host: have a of a problem is this for those who work at catholic institution to universities? guest: those who work for places where their primary goal is a vacation or health will be able to get contraception through the insurance, not the university or the hospital. this will not cover them. it will not cover people who work in the parishes. some people think that is very unfortunate, but that is the constitutional line that makes sense. host: that president obama drew on friday. guest: earlier. there are eight states that do not even make this exception. host: 1 lost on call, sylvia, a democrat in miami. caller: kathleen, it is good to

hear a rational catholic voice being brought forward. i was born and raised catholic. i am outraged at the bishops over this issue. i was wondering where the outrage was when the crisis in the catholic church was brought to the port from -- the forefront. guest: it's interesting that the bishops have taken on an issue that does not affect them. what they are upset about is women. it affects not of them personally. that is one of the dialogues that will go forward. it will be a good thing for them to hear about this from so

>> earlier today, president obama unveiled his budget or 2013, and there are a number of meetings about it in various departments. coming up at 12:30 p.m., the office of budget management followed by the speight department. we also expect to hear from members of congress and get their reaction. you will be able to watch the democrats live at 2:30 p.m. eastern on c-span-3. a briefing with the office of management and budget coming up at 1230, just a couple of minutes from now. until then, a look at what is in the federal budget proposal from this morning's washington

journal. property impacts your vote. we have a correspondent for the wall street journal joini us. let's talk about the president's goal and what does it mean for his agenda for 2012 and is this also campaign tactic? >> this is mostly a political document. i think everybody would knowledge that the chances of any of this becoming law are very slim except for perhaps on the margins. he's doing a statement of values, what is going to run on for reelection and what he would do if he won a second term. host: laura, you said it's probably not going to pass. why do you say that? republicans in the senate after bin after democrats for not putting a budget on the floor. i mean, where does the request though it's not going to pass?

guest: what you have on one hand its annual spending congress has to improve that call discretionary spending. every year the president makes proposals and congress then enacts goes into law or puts their own version of those in turlock. that is across the agencies, military spending and domestic spending, to figure out how much each program will get. the reason why this budget is a little less consequential than most is usually looking for what the total spending proposed is. but of total spending numbers were agreed to as part of the debt ceiling deal last summer. so we already know what the caps are going to be. president obama's budget adhere to those caps. of course congress is expected to adhere to those apps as well. there are questions about undernth that, how do you divide it up. it's a tight budget because the overall discretionary spending is not rising very much. just barely more than it was the previous year. they will have to decide within each program, does heating

assistance get less or does the program that helps to bring get more? it's those kinds of decisions back to be made. the president's proposal was certainly got the process, but congress will make its own decisions. on the bigger budget questions, things like should taxes go up and should you change the rules around medicare and medicaid and social security's, the really big programs that are automatically funding each year? that's the kind of stuff that really is not expected to go anywhere this year. st: on social security and medicare, you expect him to try to reform those? guest: he does not make any changes on social security. last year during the budget talks that he had with speaker john boehner, he did make some concessions on social security spending, but those were ner -- never went for because there were not able to seal a deal. medicare and medicaid, he proposes a more modest reductions in the range of

about $320 billion between those two programs. those are cuts to providers and other cnges on some co- payments or participants, but they don't make the big structural changes in the program that would save a lot of money. for instance, raising the eligibilit age for medicare. he does not propose that. taxes, he has a total of $1.50 trillion over 10 years and tax increases. comes from a variety of pces, ending the bush-era tax cuts for those eaing over 250 cows and dollars a year is a big chunk of the money. he also proposes increases on -- bigger increases on families earning over $1 million a year. in addition, there are some corporate loopholes, corporate tax and bandages that they would -- host: what about jobs? guest: he also has some spending proposals.

you should spend more upfront in order to stimulate the economy and then deal with the deficit in long-term. he proposes infrastructure spending and proposes aid to states, opposes a variety of things, renewing the payroll tax, which will expire at the end of this month -- i'm sorry, the payroll tax deduction. he has a short-term spending increase that he's been talking about several months. host: and what can we expect in the pentagon budget? guest: the pentagon budget has been reduced compared with where it was projected to go. the defense department laid out a lot of the detls already. it is definitely a tighter budget. they are no longer saying that they will have the ability of fighting two wars at once. they are -- it is definitely a

much tighter pentagon budget than we're used to seeing. of course, the bigger question around the pentagon is there are some looming much bigger cs of about a half trillion dollars in defense cuts that would kick in for 2013nd of this year port unless congress finds a way to replace those with other deposit reductions. >> laura, thank you very much for your time. first, will you download the free app that allows you to read all ur volumes of the budget? gut: yes, luckily i don't have to do it. my news room has a system for getting all the information to our compers for us. the process is amazing. the news media has a process as well. there's an enormous amount of time spent looking at these budget documents. they are distributed to reporters across our newsroom. everybody looks on their own individual beats at how the

decisions wou affect programs they cover. there's an enormous amount of expense covering the budget rollout. it's a little ironic, given the fact this is a large >> we are live now at the eisenhower executive office building here in washington where shortly we are expecting remarks from the director of the office of management and budget. he will be talking about the president's 2013 budget proposal that was unveiled earlier today. we had the president's remarks live here on c-span. if you missed any of the comments, you can watch them on our website, c-span.org. you can also find budget details there.

we got a five minute warning about two minutes ago, so we are expecting the speaker in just a moment.

>> along with this briefing, with the acting director of the office of management and budget, we are also going to be bringing you other briefings related to the budget. coming up at 1:30 p.m. eastern, we will have a state department briefing with the deputy secretary of state. c-span-3 will carry that at 1:30 p.m. eastern. this afternoon at two o'clock, defense department briefings. the heads of the army, navy, and air force will be speaking to reporters. also, members of congress will give their reaction to the budget. senate republicans are expected at 1:30 p.m. this afternoon. senate democrats will be live on c-span-3 starting at 2:30 p.m. eastern.

>> as we wait for white house acting budget director to appear to talk about the president's

budget proposal, very quickly, and probably at the conclusion of this briefing, the house will gallon for a brief pro forma session. the house will be -- gavel in for a brief pro forma session. the house will be back in session tomorrow. the house bill has changes to current federal transit programs and expand offshore oil and gas drilling. members might also consider extensions to the payroll tax cut and long-term jobless benefits and medicare rates for doctors. house negotiators are working on a compromise on that. >> hi, everybody. thank you for coming for our

overview of the budget. we have a four part agenda as you can see on the screen. we are going to start with the chairman of the council of economic advisers. he is going to discuss our economic assumptions. then i will return to discuss the president's 2013 budget. gene sperling, the director of the national economic council, will lay out the main investment tillers in the budget, with a special emphasis on job creation, and the director of domestic policy is going to talk about education and the importance of education in our budget. let's start with allen. >> thank you. i want to comment on four of the economic assumptions that underlie in the budget. the economic assumptions are

developed jointly by the council of economic advisers, the office of management and budget, and the treasury department. this process takes place over several months, and the assumptions are lockdown in mid-november. at that time, the latest report on the unemployment rate was 9.0% for october, 2011. that number was subsequently revised down to 8.9%. when we made the projections, the unemployment rate had been at 9% or 9.1% for several months. in the budget, we assumed that the unemployment rate would average 8.9% for 2012 and then come down to 8.6% for 2013. these forecasts were very close to the consensus private sector forecasts at the time.

the 2012 forecast was about 0.1% below the private sector forecast at that time. since we made our forecast, we have learned that the unemployment rate has come down 0.8% in the last six months. we have also seen an improvement in other economic indicators, particularly for the labor market, such as initial unemployment insurance claims. as a result of this welcome news, the budget forecast for the unemployment rate should be considered stale and out of date. the private sector forecasters have shaved over 0.5% from their 2012 forecast of the unemployment rate as a result of the improved situation in the job market. and that is just over the months since we made our forecast in mid-november. if we were to do another forecast today, we would certainly lower our forecast of

the unemployment rate from what appears in the budget. to be helpful, together with the budget tables, we included the january blue chip forecast by private sector forecasters of the unemployment rate, as well as other recent forecasts. these forecasts, in fact, are all so out of date, as the new blue-chip private sector forecasters was released last friday and that is more current than the one from january that is included in the budget tables. i will quickly walk through the assumptions for three other key parameters in the budget, economic growth, inflation, and the interest rate. on a year-over-year basis, real gdp growth is assumed to be 2.7% in 2012.

this is up from a pace of 1.7% in 2011. and it reflects the quickening pace of gdp growth at the end of 2011 and the presumption that we will continue to get a boost from the extension of the 2% payroll tax cut for the remainder of this year. for 2013, real gdp growth is assumed to be 3.0%. for inflation, we have a stand that the consumer price index will rise boy -- rise by two 0.2% this year and 1.9% in 2013. the interest rate on 10 year treasury notes is a sin to be 2.8% this year -- assumed to be 2.8% this year and will rise gradually to 3.5% next year. the current 10-year treasury interest rate is around 2%.

as the economy strengthens, interest rates are expected to rise. there are another -- a number of other economic parameters that influence the budget, but these are the key assumptions, and that is why i highlighted those. i will not bore you with the dozens of other parameters. instead, i will hand it back to jeff. >> thank you. before i joined the office of management and budget three years ago, i had spent my entire time in the private sector. one thing i found that was often helpful to boil things down to a few slides. given that the budget is multiple volumes of hundreds of pages, i thought that approach might work well today. minor over four topics, first, the current policy based fines.

next come a key deficit reductions. an overview of areas essential to our growth. and finally, a bottom-line of the budget and how to put this on a sustainable path. first, the baseline. we believe we have a base line accurately reflects our current policy. in essence, this baseline is business as usual. this baseline includes the extension of the 2001-2003 tax cuts in the estate and gift taxes. it has the permanent extension of the amt and the sdr -- sgr. permanent extension makes more sense than patching these year after year. it has the enforcement of gdp capps, an accounting for future

disaster costs rather to in ignoring them. this accounts for four 0.7% of gdp at the end of the budget window in 2002. last april, the president offered a blueprint for achieving more than $4 trillion deficit reduction. he maintained that the men and in his proposal last september. this budget is very similar -- that commitment in his proposal last september. this budget is very similar to the september proposal. the budget actually includes over $5 trillion of total deficit reduction. let me walk you through the critical elements. i'm going to work from left to right. if you start on the far left, you will see 6 android $76

billion in savings from the appropriation bills enacted last year. -- $676 billion in savings from the appropriation bills enacted last year. moving right, over $1 trillion in reductions in discretionary spending, consistent with the discretionary caps in the budget control act. third are $252 reductions from savings in medicare and medicaid that will make these programs more effective and more efficient. then you will see $262 billion in savings from programs including agricultural subsidies, direct payments, federal civilian worker retirement and the pbgc changes

and reforms that we are suggesting. these costs are net of the costs of new mandatory initiatives. the next category, the $1.5 billion bar, is revenue. revenue for deficit reduction, including the expiration of the high-income 2001 and 2003 tax cuts and the elimination of inefficient and unfair breaks for the highest earners. the 1.5 trillion dollar number #as we furthernet cut taxes for the middle class and small businesses. there are $13 billion in net savings from investing in a six- year surface transportation reauthorization. capping occo closes the back

door on security spending. their other savings of $483 billion. these include disaster adjustments, program integrity, and averting the general fund transfer that happens every year. as a result of all of these initiatives coming of $800 billion less in debt service. that is the bar right next to the pink are. let me go to the pink are. that cuts the other direction. these are investments in short- term job initiatives. this is the remainder of fiscal year 2013 of the three entered $54 billion of jobs initiatives that is not spent -- $354 billion of jobs initiatives that is not spent in 2012. we do not can attribute this to the total debt of the said -- we

do not attribute this sequester to the total deficit reduction. the bottom line is that these efforts represent more than five trillion dollars in net deficit reduction. even as we achieve this deficit- reduction, we continue to make key investments in presidential priorities. gene is going to provide a little more color and these priories. these include short-term measures for job growth, tax breaks for the middle-class and small businesses, and continued investment in our long-term priorities including education and job training for american workers, innovation and research and development, clean energy and infrastructure.

we make these investments while abiding by the very tight spending caps, and we make hard trade-offs. and in ample this all together for you. on the left -- let me now pull this all together for you. as you can see, in 2012, deficits from the president's policies are below 3% of gdp compared to over 4.7% for the baseline. furthermore, the debt as a percentage of gdp is stabilized from 2018 on. this is important for maintaining a strong investment environment. replacesdent's budget the sequester with a balanced approach deficit reduction, with $2.50 in spending cuts for every $1 of revenue increases.

in closing, as a business person and now acting director at omb, i believe the president's budget makes the right investments to make us even more competitive in the global marketplace. achieving declining deficit and stabilizing our debt are critical for business confidence and investment. this is good for business. it is good for the middle class, and it is good for america. let me now turn it over to jean. -- gene. >> thank you. the ultimate end of any budget is not any particular number or ratio. if this -- it is an economic strategy that is designed to

make the middle class stronger, more secure, and more inclusive. to meet at end, to meet that goal, you need a plan that returns us to medium to long- term fiscal sustainability to give companies the confidence to make the united states still the place to do long-term investment and job creation. secondly, you need to have more momentum to the recovery and job creation at this moment. we are still digging out of the largest hole and worst recession since the great depression. third, we need to have the investments that lay a foundation for the private sector to grow and become more competitive. these three goals are not contradictory. they are as complementary as

good hitting, good pitching and good fielding is for a baseball team, or to seasonally adjust, a good shooting, a good rebound in in good playmaking. if you contract too quickly, as we have seen in other parts of the world, it not only hurts your growth and job creation, it can be counterproductive to your fiscal goals. there is widespread agreement, widespread, ranging from the federal reserve chairman to the congressional budget office to top economists, that this type of balanced approach of ensuring strong demand and more momentum for recovery at the same time that you're laying out a framework for medium-long term fiscal discipline is exactly the right recipe to give confidence and growth in this recovery and expansion. there is equally that outside independence -- independent

validation for the fundamental fiscal approach the jeff discussed and the president has called for since he has come here, which is that you ultimately need a grand compromise that includes a combination of entitlement reform savings and revenues. that is what you have seen called for from goals-samson -- bowles-simpson and other commissions. whether or not you agree with every measure in this budget, there is no question it achieves this type of balance between revenue and spending cuts. the only question is whether the house republican budget that will come forward soon will, for the first time, include any semblance of that balance in their budget. now this plan, as jeff said, does include immediate efforts to strengthen the pace of

recovery and job creation. there is little question that the payroll tax cut, the unemployment extension and the 100% expensing were critical for the resilience of our economy in 2011 when it faced several hits, both external and unfortunately from the debt crisis and downgrade internally. one economist said that deal probably saves us from another recession. the extension that we just did this december for another two months gave the possibility, the opportunity for us to have the type of strong january that we saw. imagine that instead of the payroll tax cut being extended and unemployment insurance being extended, we had story after story about a hundred and 60

million americans taxes going up, a million people losing unemployment insurance. it is unlikely we would have seen the momentum and job creation that we did this january. so, the payroll tax cut and the unemployment insurance are seen as having some of the strongest bang for the buck by independent forecasters in the congressional budget office. these outside economists have said the full extension would mean a half percentage of growth this year and well over 500,000 jobs. if we fail to extend unemployment insurance right now, two 0.5 million americans would lose their unemployment benefits in the next two months alone, and the payroll tax cut, as we have said, would go up. payroll taxes would go up for 160 million people with the typical family losing $40 per paycheck. this is obviously a critical part of our short-term,

immediate job creation strategy. but we also include more aspects that we think are critical. as alan krueger would tell you, about the only thing that was negative in the january jobs numbers was that 9600 teaching jobs were lost. 105,000 teaching jobs were lost to read the last 12 months, and to under 54,000 teaching jobs have been lost since -- 254,000 teaching jobs a been lost since the recession. this is a self-inflicted wound. this did not have to happen. had the congress passed the president's initiatives regarding teachers and first responders, we could be gaining in these areas instead of losing in them. so the president includes $30 billion for teacher layoff prevention and to help first responders in this budget as well.

on school modernization, we know that the unemployment rate among construction workers is up 13%. we know there will never be a better time to, with lower interest rates and more available workers, to rebuild our schools and our infrastructure than there is today. the president include, as he has before, $30 billion for school modernization, $50 billion for infrastructure investments, and $10 billion for an infrastructure bank. again, there is nothing fiscally responsible about infrastructure delay. you get no points for that. what better time than right now when it would strengthen our recovery and help unemployed workers who are better -- who

are desperate to get back to work? beyond the immediate efforts that we need to do to get job creation going, stabilize our economy, the president laid out both iner's -- pillars the kansas speech and the framework in the state of the union. as you'll see in the details as well as the state of the union, we put a strong focus on manufacturing jobs. we believe manufacturing punches above its way economically. beyond employing 11 million people, it has significant effects on multiples of additional jobs the support and are part of manufacturing. because a 70% of all private sector research and development, 90% of all patents, 60% of all

exports. we put in detail some of the things we talked about in the state of the union on incentives for bringing jobs back, removing deductions for shipping jobs overseas. you can see in here today that there is a $6 billion tax incentives over three years to prevent the downward spiral that happens too often in our communities where when there is a massive plant closings, layoffs, or perhaps layoffs that could be related to the military drawdowns, that we are -- have a strategy for those communities to attract new employers, not after they've gone to the downward spiral, the before. this budget will include a $5 billion clean energy manufacturing tax credit, often called 48 see, it is more than doubled. the demand is so high and this brings together the presidents pillars of both energy and

manufacturing. the same is true with the extension of the 16 a three provisions -- 1603 provisions that seem to have been very effective. an expanded and permanent r&d tax credit of 17% to give companies the confidence and security to make those investments. we will talk more about manufacturing innovations in weeks to come. another element that brings together the president's energy and manufacturing pillars are our advanced vehicle strategy. you will see in your new consumer tax incentive for buying advanced vehicles. these are technology neutral. there at the point of sale. they're worth $10,000. we do not pick between natural

gas or electric vehicles. we let the market determine that and give consumers the incentive to buy these cars. this will come together with the community challenge for infrastructure deployment, and the first-ever tax credit for heavy truck natural gas tax credits, the first credit of its kind. you have seen the we also, as part of our jobs manufacturing strategy, put forth an energy trade enforcement center, 50 dass 60 new people, greater coordination kick -- 50-60 new people, greater coordination in the government, and this is designed to bring additional trade cases that will level the playing field against countries around the world including china. the pillar of education and skills i am going to leave largely to cecilia, but make one point.

overall, you see a very significant commitment to training at this time of very high unemployment where we are still coming back from the worst of this recession, still gaining traction, still trying to make sure that more people are able to get the jobs. in this, you are a -- you will see a few principles in terms >> we will leave this briefing for what we believe will be a brief pro forma session on the house floor. washington, d.c.,, february 3, 2012, i hereby apoint honorable steve latourette to act as speaker pro tempore on this day, signed john a. boehner, speaker of the house of representatives.

the speaker pro tempore: the prayer will be offered by father conroy. chaplain conroy: loving and gracious god, we give you thanks for giving us another day. help us this day to draw closer to you so that with your spirit and aware of your presence among us, we may all face the task of this day with grace and confidence. bless the members of the peoples' house as they spend their final day in their home districts. may these decisive days through which we are living, make them genuine enough to maintain their integrity, good enough to keep their faith always guarding public office as a sacred trust. give them the wisdom and the courage to fail not their fellow citizens, nor you. may all that is done this day be for your greater honor and

glory. amen. the speaker pro tempore: the chair has examined the journal the previous day proceeding announces its approval thereof. the chair will lead the house in the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible with liberty and justice for all. the speaker pro tempore: without objection, the house stands adjourned until noon >> the house will return tomorrow at noon. on the agenda, work on highway and transportation programs for the next several years as a possible debate on the extension of the payroll tax cut and job

-- jobless benefits. now we will return to the briefing on the office of management and budget and the president proposal this morning. >> on a tax rate that is clearly harder to reason why so many people who made well over a million dollars are paying a lot rates than so many middle-income families. with that, i will turn it over to my partner in crime, our new domestic policy adviser, but not new to most of you, cecilia nunez. >> to round out the picture presented by my colleagues, you heard the president talked about the urgent need to make sure our students and workers are getting the education and trading -- education and training they need.

the budget reflects two important principles that you have heard the president articulate. the first is his very strong view that a quality education should not be a luxury in this country. it is an economic imperative that should be available to every family. the second view is a vital need to make sure we're providing training programs to fill good jobs coming on line now and are likely to come on line based on the evidence. to start with the education peace, there are three or four budget items. the first big piece has to do with higher education. you heard the president talked about the reforms he is proposing in his trip to michigan. student loan that is outpacing credit card and other forms of debt and everyone has a role to play in making sure we're making college more affordable.

the federal government can continue its commitment to expand its pell grant program by making permanent the american opportunity tax credit and investing in making sure that students loan interest rates do not double as they are expected to this summer. this budget includes a proposal to make sure that does not happen. there is a series of incentives the budget reflects to make sure that colleges and states are doing their part. there's a series of incentives to keep tuition affordable. to provide incentives to colleges to move in the direction of colleges keeping tuition affordable and investing in students from needy students in particular. there is a race to the top program focused on affordability and there is a first in the

world competition to help states and colleges model innovation for the rest of the sector. it's a reflection of the notion that states have a role to play, government has a role to play, colleges and universities several to play, and this reflects the incentives to make sure we are making a higher education affordable in this country. the second big bucket of issues is the race to the top program. the budget provides about $850 million for race to the top, which has been successful in driving reforms and has been expanded to include an early learning challenge. it is being applied to make sure students enter kindergarten were ready to learn. the race to the top program includes a district global competition so we're not just driving reforms at the state level.

you heard the president described elevating the teaching profession. there is a teacher and innovation fund up reflected in the budget and a $5 billion program to challenge states and districts to work with teachers to have transformative changed on the teaching profession to create career ladders and focus on reforming colleges and trading programs for education, to establish to for leadership roles and this is a whole package the department of education is working on to make sure we're working with teachers, school districts, and states to transform the teaching profession as a driver for change in our education system. today, the president traveled to northern virginia community college to announce his proposal to provide more americans with the skills they need for this 21st century economy. this is a college to career fund designed at forging new

partners to train 2 million workers for a good paying jobs for high growth and high demand industries. in particular, we need to fill mid-level and high level skill positions in industries like health care, advanced manufacturing, clean energy, information technology, and this fund is designed to create partnerships that would be implemented by the department of labor and education. the private sector, to make sure they're building partnerships to provide that training coming on line in their communities. the idea is to help community colleges become community career centers across the country. there is a piece aimed at colleges themselves and a piece that is available for state and regional factors to compete for

funding, to build the skills of workers in their area, state and local governments can apply for these funds. there's a piece dedicated to entrepreneurship a particular to make sure we are providing training to folks starting small businesses, and is built on an arena or this administration has made investments already in making sure community colleges have the resources available to meet the needs of the economy and students in this economy. this built on a record by making sure community colleges are linked with businesses and states to make sure they are providing the training for the jobs even as americans are looking for work, jobs in industries where they are looking for workers and training will make the difference in making jobs that are available. with that, i guess we are ready for questions.

>> thank you, everybody. who has questions. -- who has questions? >> [inaudible] >> why don't i go first. in terms of the first question, the eight deficit and the reduction in that deficit -- we knew things were not in good shape, but we did not realize how bad they actually were. the fourth quarter in 2008 at the time we thought was - 3% or so. we now realize it was closer to - 8%.

the president inherited a much worse situation, hundreds of thousands of jobs being lost per month. we had unpaid for medicare prescription drugs from the bush tax cuts and i think the situation was far worse than we had anticipated, particularly given the economic news we started with. the president's budget does cut the deficit in half in 2014, one year later than be a original projection, and i think that is explained by the situation we inherited on the economic front. on the sequester, let's be clear -- it is bad policy. just look on the defense side -- it would require $500 billion of further cuts.

across-the-board cuts. that is bad policy. we believe the sequester should be replaced with the balanced deficit reduction i described earlier. there's plenty of balanced deficit reduction to replace sequester and to get rid it is bad policy and -- to get rid of the bad policy and call for the sequester. the sequester is an important and forcing function to make sure we do the balance deficit reduction. the president is not calling for the sequester to be taken away. the president is calling for the money to be replaced by a balanced deficit reduction. >> just to add one artur -- the president's budget in late november, when you look at the fourth quarter and the first quarter -- this is straight factional, so do the math

yourself -- the average was projected to be one way 5% for the first quarter. in the end, it ended at being a 8.9%. that time, we were averaging 7.9%, almost 9%. the projections would have been a bit darker and there's no question we face a external shocks. i do want to say that this budget, when you look at the ultimate goal, it is superior to the 2010 budget. the debt was sustained and comes under 3% and secondly, just to add on to the point -- it's not just that we think -- the opinion on the sequester is not

ours. the entire design of the whole rationale was to create and unfortunate mechanism that was designed to be mutually assured destruction to both sides, to force people to come to the table and, with an appropriate balance to debt reduction. that is what was forced in 1990 when it went to entries airforce base to get a broader deal. the whole design was an action- forcing event to make us come forward with a grand compromise. it is totally appropriate to look at the amount was locked away in the budget control act. there was an enforcement mechanism that would force us to come together and agree on an amount of production due to the

sequester and we have come up with something that is significantly more than that. that is the right way to look at it and that is where our focus should be. >> the difference between the deficit objections in this document and the september document -- the policy seems to be largely the same but the debt in 2021 is a trillion dollars higher. >> the difference is primarily what allen talked about, the economic assumptions that drive the ball covet. we have proposed making it the aotc permanent. >> what about [unintelligible] ?

>> it is kept in this budget at $450 million. that saves a piece of that for surface transportation. >> that another policy change. >> i think in the super committee meeting, we wanted to put forward the provisions that word deficit savings that we supported and the president put out. the president felt it would be helpful, and the deficit savings there, people could agree to in the super committee, knowing they had the blessing of the president. we did it -- we tried to put in all deficit savings and we did not put in all of our aspirations for -- such as making the tax credit permanent. there's a different purpose to that. >> you mentioned the grand

compromise. is there say it -- is this eight -- is this a situation where you could come above that or get a megadeal with the speaker and go beyond the numbers in this budget or would they just change? >> despite my deep affection for you, probably will not negotiate the grand compromise. i think that's called negotiating against yourself. i think we all realize when you engage in a good faith, a bipartisan effort, when you have divided government but a common goal which is reducing the deficit and strengthening the economy, everybody will probably have to make some compromises. i think what is significant is

when we put out a budget, it has $600 billion of the entitlement savings, and we have already agreed to the most significant discretionary cuts for decades. the discretionary number for non security savings in this budget is 2.5% of gdp. that's the lowest it has been since 1964. in other words, we have put forward significant entitlement savings. the president has taken on a sacred cows on our side and put forward entitlement savings that you have not seen detailed and the budget before. then he puts out an amount of revenue that is the equivalent to the overall package that has been done here -- that puts

forward a type of balance that offers the opportunity for compromise. let's see if we ever see a budget coming from the republican leadership, or even a framework that has that type of balance where revenues are explicitly put on the table in a significant amount. that would be a step forward. we will see. >> [inaudible] >> on corporate tax reform, we're going to speak on that

before the end of the month. he supports corporate tax reform that would reduce expenditures and loopholes. as we have the buffett rule, we need a global minimum tax so that people -- as having bit tax code subsidize and facilitate people moving their funds to tax havens. we will save more, perhaps not in gory detail, but in more detail before the end of the month. in terms of the revenues, the

president is looking for shared sacrifice. this is a democratic budget and it has savings in medicaid, savings from new beneficiaries, it has agriculture civilian retirement savings and a lot of tough choices. helping the president or anyone else go to a town hall, looking americans might be affected, being asked -- how could they be asked to do that at the same time the most fortunate americans don't have to contribute at all? i think when you look at what it takes to get the public and general support for a balanced budget agreement, you have to

have that type of shared sacrifice for this to be acceptable to the public at large? >> [inaudible] >> the only exception the president had previously was he had not led dividends go all the way back for those over to under 52 the clinton era. he decided that was something he could not afford.

that's the type of thing you would have to work out. what the president has made clear is that it needs to be reform that leaves the tax code as progressive. it's not more progressive than it would be if you simply let the bitch tax cut -- let the bush tax cuts expire. this is a fair point -- we do reforms to the current system as we know it. things like the dividend rate is a proposal under our current tax system. we have other things where the president has made clear he would like to see a simpler, more fair tax code. we have put out some principals, so the buffett rule for example,

has been one of our principles for tax reform as opposed to a -- an explicit provision, the same for the global minimum tax. when that we do tax reform, we ought to get rid of the alternative minimum tax which no longer serves the purpose it originally had we had to keep it from hitting a millions of middle-class families it never intended to hit. we should replace it with what the alternative minimum tax was always meant to be. to make sure the very well off were able to insure the arranging of accountants or lawyers to pay less than typical middle-class families. >> the return to clinton, the

39.6 number. then you have the capping of the reduction for 250 k @ 28%. then you have corporate reform based on corporate jets, carried interest, oil and tax expenditures will no longer need. those are offset by tax cuts -- you get a net number of $1.5 trillion. we are very specific in the budget and at the same time, the president is in favor of corporate and individual tax reform. >> [inaudible] >> the president wants to be very specific about how we're going to raise the $1.5 trillion to have a balanced approach.

we want tax reform, but the president's proposal is very specific about where the money comes from. >> we do believe in the individual tax reform that that would contribute this amount to deficit reduction as part of an overall plan. we are saying -- if we just wanted a $1.5 trillion as part of an overall deficit reduction plan in reform, you might say you are just putting out a number. we're showing you how we would get it under the current system. the same value in terms of

simplicity and making sure we have a tax code that is as progressive as if the bush high and come tax -- income tax. that is obviously more than the republicans would prefer. it is a reasonable, bipartisan measure to put out as part of an overall deficit reduction. >> of want to make sure that you know there are no tax increases for families making $250,000 or less. in fact, there are tax cuts. >> in the budget, he did capital gains are a 20%.

i think you have rolled back a little bit to maintain the 20% rate on capital gains. does that give you most of the way toward the revenue you want for the upper income taxpayers? the point that the unemployment rate is lower than projected, do you still have a relatively optimistic 3% gdp, that is higher than the fed? >> when that we make our projections, we do it under the presumption the president's proposals will become law. most importantly, the extension of the payroll tax cut. the continued extension for unemployment benefits, the congressional budget office has concluded they have very high bank for the buck. i don't know private forecasters

as soon as far as policy going forward, our forecasts are based on the presumption the president's proposals will help strengthen the economy in the coming year will be in place. >> i am worried if i answer, and going to confuse everybody. there is a little bit of apples and oranges in light of what we're talking about. because of the buffett rule is part of tax reform, and there are a number of things you could do because of dividend capital rates. in the end, there should be a basic rule that people over a billion should be a -- should be paying an effective rate of 30%. we are not proposing the buffett role in the current law. if you were, halving the dividend rate go up higher would mean less people would get hit by having the buffett role as an alternative minimum tax.

if you consider that is how some people call most famously, warren buffett, do end up getting such low tax cuts was, as he said, arranging for himself to get income that could have been waging come as dividend income and being at the 15% rate. but there is a little bit of apples and oranges. it you were putting the buffett rule in the current system and the dividend rate was back to ordinary income and the tax rates were going back toward the clinton era, you would have a smaller percentage hitting. the idea of the buffet will was not to be the main force of raising revenue. it was to be a minimum tax. we have said from the beginning we never expected the most well- off people what it that. many well-off people get their money in wage income and pay over 30% rates.

this is designed for those who somehow either park their money somewhere or arrange for their money to all be in preferential rates so that combination allows tens of thousands of very well-off people to pay less taxes than ordinary middle income families. >> very quickly, the last question. >> [inaudible] >> i don't think we take a pass. we have to go back and think about the affordable care act which saves $100 billion in its first decade and more than a trillion in its second decade. we have specific savings on medicare, medicaid, and other

programs that $360 billion and $270 billion of net other mandatory savings, including the federal retiree program, the pension benefit guaranty, i think we are taking a serious path that deficit reduction. overall, we have a balanced package. it has $2.50 of spending for every dollar of revenue. most importantly, we have deficits declining year over year and we reach a point where our total debt is stable as a percentage of gdp, which is important to make america the place to invest. >> can i point out that if you look at the ninth or 10th year of our budget, it's the same in

2021, the same as the bulls samson plan. we do start beneficiary changes for 2017 and beyond. the real issue is i should have to point out, everything in terms of the dramatic expansion of the people on a -- between 2000 and 2020, there be a large people of -- on the social security and medicaid. we were able to project balanced budgets, even the surpluses, a lot of which has changed since then. besides the cost and the

economic crisis this president inherited is the ongoing cost from the fact there were two major tax cuts and a prescription drug initiative, much of which we support, but all of which was not paid for and the legacy of that is well over $500 billion a year. that legacy and that being the difference between us struggling with deficits and having a very low deficit as a percentage of gdp. that just makes the case that you need to deal with revenues on those who are most fortunate and entitlement at the same time. we never said it was one or the other. we have always said we need a grand compromise of spending, savings, and revenue savings, particularly on those who are the most well-off and that is what we have been trying to achieve. that is what the president has

been trying to cheat and tried to do over the summer. that is what he put in the september submission and what he put in this budget. >> [inaudible] >> what matters economically is what the external data is as a percentage of the economy and whether it's rising are coming down. what you have now is actually, when you do what matters most, external debt that doesn't include financial assets and things like student loans, you have thus hitting 67% and have it coming down after 2014 or 2015. anytime you look at a country's economic stability, that is what you look at most of all. the president worked very hard to get a grand compromise over the summer. he is putting out entitlement changes i've never seen in the president's budget before.

agriculture subsidies, civilian retirement, even on the military side, medicaid, medicare -- i think this president has very much stepped up to the plate both in the negotiations over the summer and in this budget. all that has been holding us back from progress has been, quite honestly, a resistance from too many on the republican side, particularly in the house of representatives, to do a balanced package with revenues. there are clearly some republicans who would like to engage in that kind of grand compromise, but unfortunately, not enough. >> unfortunately, we are out of time. our office at omb and the white house is happy to answer any questions. get in touch with us and we will be happy to answer your questions. [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2012] >> you can read the president's budget on our web site, go to c- span.org. with this being budget day and budget week on capitol hill, we have setup a facebook questionnaire for your reaction to the budget released earlier this morning. we want to know what your priorities are for next year's federal budget. go to our facebook page 2 of for your thoughts. budget briefings from federal agencies are continuing through the day today on how the spending plan will affect their departments. coming up a couple of moments, the state department's reaction to the budget with the deputy secretary of state and the usaid administrator. it just got under way on c-span. span3. sorry on that c-

here at 2:00, will of the defense department briefings from the army, navy cmdr force. also, senate republicans will be on-line at c-span.org and senate democrats will offer their take at 2:30 eastern on c-span3. as president obama unveiled his budget this morning, in metropolitan washington d.c.. this is about half an hour. >> ladies and gentlemen, to introduce the president of the united states, please welcome mike phillips. [applause] >> good morning and welcome to northern virginia community college. my name is mike phillips and i'm a student in information

technology. after working various jobs in the real-estate industry for years, i found myself having to start over. i read about the demand for skilled personnel and cyber security and news media. cyber security is a constantly changing field that includes many different disciplines. our data, devices, and finances are constantly under attack. as technology advances, so does the risk. but today, there's practically zero unemployment in this field. new jobs have been created, such as security analyst comments in responder, and digital forensics. there will be others in the future. i enrolled in nova in may of 2009 and completed a career studies certificate in network security. as of a security + certification. my experience has been very enjoyable. one of the greatest assets here are the instructors. whether taking a course online or in the classroom, the instructors are dedicated professionals and nothing short

of outstanding. the connection to cyber watch also provides student an opportunity for cyber security competition, internships and scholarships. i recommend to others who may be starting over to consider opportunities that their community college. vocation no longer matters. today, we're pleased to welcome the president to our campus, who is committed to community colleges and recognizes the importance of the education today for tomorrow's jobs. please welcome the president of the united states, barack obama. [applause] >> thank you, everybody. thank you.

thank you very much. thank you, virginia. thank you, nova. thank you very much. everybody who has a chair, please have a seat. i know not everybody has a seat. >> i love you. >> i love you back. thank you for being here. i want to thank mike for the wonderful introduction. please give him a big round of applause. [applause] it is great to be back here at nova. i've been here some eight times that i'm about three credits short of graduation. [laughter] there are a couple of reasons i keep coming back. first of all, i think dr. temple

in and the administration here is doing a great job. i want to give them a big round of applause. [applause] the other reason is because jill biden keeps talking about how great you are. just as i do what michelle tells me to do, i also do it jill biden tells me to do. we also have our secretary of labor here, who is doing an outstanding job. [applause] but the main reason i keep on coming back is i think this institution is an example of what is best about america. some of you may have your eye on a four-year college.

some of you may be trying to learn new skills that could lead to a new job, or a job that pays more and give you more opportunity. but all of you are here because you believe in yourselves, you believe in your ability, you believe in the future of this country. that is something that inspires me and you guys should take great pride in that. the truth is the skills and training you get here will be the best tools you have to achieve the american promise. the promise that if you work hard, you can do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement. the defining issue of our time is how to keep this promise alive today. for everybody. because we have a choice. we can settle for a country where a few people do really,

really well and everybody else struggles to get by or we can restore an economy where everybody gets a fair shot, everybody does their fair share, and replaced by the same set of rules from washington to wall street to main street. that is the america we believe in. [applause] we are still recovering from one of the worst economic crises in three generations. we have got a long way to go before everybody who wants a good job can find one. before middle-class americans regain the sense of security that has been slipping away for too long, long for the recession hit. but over the last 23 months, we have added 3.7 million new jobs. [applause]

american manufacturers are creating jobs for the first time since the 1990's. the economy is growing stronger. the recovery is speeding up. the last thing we can afford to do right now is to go back to the very policies that got us into this mess in the first place. we cannot afford it. [applause] the last thing we need is for washington to stand in the way of america's comeback. [applause] what does that mean concretely? for starters, congress needs to stop taxes from going up on 160 million americans by the end of this month. if they do not act, that exactly what will happen. [applause]

congress needs to pass an extension of the payroll tax cut and unemployment inkster rents without trauma and without delay and without linking it to some other ideological side issues. we have been through this before. we have seen this movie. we don't need to see it again. the time for self-inflicted wounds to our economy has to be over. now's the time for action. now's the time for all of us to move forward. but preventing a tax hike on the middle class is only the beginning. that is just starters. in the state of the union, i outlined a blueprint for an economy that is built to last. an economy built on the manufacturing, new sources of energy, and new skills in education for the american people. today, we are releasing the details of the blueprint in the form of next year's budget.

read itrry, i will not to you. [laughter] its long and there's a lot of numbers. but the main idea in the budget is this -- at a time when our economy is growing and creating jobs at a faster clip, we have got to do everything in our power to keep this recovery on track. part of our job is to bring down our deficit. if congress adopts this budget, along with the cuts we have already made, we will be able to reduce our deficit by $4 trillion by 2022. i'm proposing some difficult cuts that might normally would not make if they weren't absolutely necessary, but they are. the truth is we're going to have to make some tough choices in order to put this country back on a more sustainable fiscal path. by reducing our deficit in the

long term, that allows us to invest in the things that will help grow our economy right now. we cannot cut back on those things that are important for us to grow. we cannot just cut our way into growth. we can cut back on the things we don't need, but we also have to make sure everyone is paying their fair share for the things we do need. we need to restore american manufacturing by ending tax breaks for companies that ship jobs overseas and giving them to companies that create jobs right here in the united states of america. that's something everybody should agree on. [applause] we need to reduce our dependence on foreign oil by ending the subsidies for oil companies and doubling down on clean energy that generates jobs and strengthen our security. [applause]

and to make sure our businesses don't have to move overseas to find skilled workers, we've got to invest in places like nova and make sure higher education is affordable for every hardworking american. [applause] that's what i want to focus on today. what we need to do in terms of higher education. community colleges in particular. employers today are looking for the most skilled, educated workers. i don't want them to find them in india or china. i want businesses to find those workers right here in the united states. the skills and training employers are looking for begins with the men and women who educate our children.

all of us can point to a teacher who has made a difference in our lives. i know that i can. i want congress to give resources to keep good teachers on the job and reward the best teachers and in return, they need to give schools the flexibility to stop just teaching to the test and replace teachers who are not helping kids learn. that is something we can do. [applause] making sure we've got the most skilled workers starts early. it starts with k through 12. it starts before k through 12, making sure every child is prepared. when an american of any age wants to pursue any kind of higher education, whether it is the high school grad just trying to get the first couple of years

of college education or somebody like mike who is in the process of retraining, whether it is a two years or four years or more, we have got to make sure education is affordable and available to everyone who wants to go. this congress needs to stop the interest rates on student loans from doubling this july. that is pretty important. [applause] that is in our budget. we are saying to congress now is not the time to make schools more expensive for young people. they can act right now to make that change. they also need to take the tuition tax credit my administration put in the budget over these last few years, a tax credit that saves families thousands of dollars on tuition

and make it permanent. it should not be temporary, it should be permanent. [applause] between the increases we have provided in pell grants, the tax credits, keeping interest rates low, all that is going to help. millions of students across the country have benefited from that. but students and taxpayers cannot just keep on subsidizing skyrocketing tuition. we are going to run out of money. that is why i have asked states and colleges to do their part to keep costs down. we are putting colleges and universities on notice. you can't just keep raising tuition and expect us to keep on coming up with more and more money. tuition inflation has gone up even faster than health care. that's hard to do. what we are saying to states,

colleges and universities, if you cannot stop tuition from going up, the funding you get from taxpayers will go down because higher education cannot be a luxury. it's an economic imperative that every family in america should be able to afford. that is part of the american promise in the 21st century. [applause] that is what we need to do to get more americans ready for the jobs of the future. but what about jobs that are open today? i talked about this in the state of the union. there are millions of jobs open right now and millions of people who are unemployed. the question is how do we match up those workers to those jobs? what about the companies looking to hire right now? i hear from business leaders all the time who want to hire in the united states, but at the

moment, they cannot always find workers with the right skills. growing industries in science and technology have twice as many openings as we have workers who can do those jobs. think about that. at a time millions of americans are looking for work, we shouldn't have any job openings out there. they shall be getting filled up. here in america, with that the best workers and fastest-growing companies in the world. there's no reason we can't connect the two and places like nova are proving we know how to do it. [applause] this institution proves we know how to do it. [applause] are a single parent or returning veteran or somebody who just wants a shot at a better paying job. your hard worker, fast learner and motivated and know there are companies looking to hire.

you just need to figure out how to acquire some of the specific skills, the specialized skills the company's need and figure it out as quickly as possible. hopefully without taking on tons of debt. everybody in america should be able to get those skills that a community college like nova. companies looking to hire should be able to count on the schools to provide them with a steady stream of workers qualified to fill those specific jobs. that is why mike was sharing his story. he worked in the mortgage and real estate industry for 10 years. but when business declined after 9/11, he decided to start over and began selling building materials. then the bottom fell out of the housing market and he had to start over again. he's got a knack for computers, so he figures he would try a career in cyber security where there is a lot of hiring.

that is going to be a growth industry. luckily for mike, nova is home to a program called cyber watch. so he signed up. even though he is driving a limousine on the side and has to pay the bills, he is working while going to school. but in december, mike earned two certificates and by the way, finished with a 4.0. [applause] we are proud of that. now he is working toward his associate's degree and when he graduates, he will have access to a network of over 40 companies and government agencies to help him find a job. we need more stories like mike's. that is why my administration is helping community colleges redesign training programs so students can learn the skills that are most in demand in

industries like health care, sciences, advanced manufacturing. that is why we're making a national commitment to train 2 million americans with skills they need to get a job right now or start their own businesses. we have lined up more companies who want to help. [applause] we have already got model partnerships between companies like siemens and places in the louisville -- they're already up and running. that is why i asked dr. biden and secretary solis to take a bus tour to highlight committee colleges working together to train workers for careers in demand right now.

we have to make these examples a model for the entire nation. we need to give more committee colleges the resources they need to become community career centers where folks can learn the skills businesses are looking for now from data management to high-tech manufacturing. this should be an engine of job growth all across the country. these community colleges. that's why we have to support them and that's why it's a big priority. [applause] an economy built to last, that demands be have students learn the skills businesses are looking for. it means we have to keep strengthening american manufacturing, keep on investing in american energy, double down

on a clean energy that is creating jobs, but it also means we have to renew the american values of fair play and shared responsibility. the budget we are releasing today is a reflection of a shared responsibility. it says that if we are serious about investing in our future and investing in community colleges and investing in new energy technologies and investing in basic research, we've got to pay for it. that means we've got to make some choices. right now, we are scheduled to spend nearly $1 trillion more on what was intended to be a temporary tax cut for the wealthiest 2% of americans. very expensive. now we are scheduled to spend another trillion.

keep in mind a quarter of all millionaires pay lower tax rates and millions of middle-class households. you have heard me say it. warren buffett paid a lower tax rate than his secretary. that is not fair. it doesn't make sense at a time when we have to pull together to get the country moving. i don't need a tax break. we don't need to be providing additional tax cuts for folks who are doing really, really, really well. it to you want to keep these tax cuts for the wealthiest americans, or do we want to keep investing in everything else -- education, clean energy, a strong military, care for our veterans? we cannot do both, we cannot afford it. some people go around and said that the president is engaging in class warfare.

that is not class warfare, that is common sense. [applause] asking of billionaire to pay at least as much as a secretary when it comes to a tax rate is just common sense. warren buffett is doing fine, i am doing fine. we don't need the tax breaks. you need them. you are the ones who have seen your wages stalled. [applause] you are the ones whose costs for everything from college to groceries has gone up. you are the ones who deserve a break. we don't begrudge success in america. i want everybody here to go out there and do great. i want you to make loads of money if you can. that is wonderful. we expect people to earn it.

study hard, work hard for it. we don't envy the wealthy. but we do expect everybody to do their fair share, so that everybody has opportunity, not just some. given where active as it is, it is is just a matter of math that folks like me are going to have to do a little bit more. americans understand that if i get a tax break that i don't need and the country cannot afford, one of two things is going to happen. that means either have to add to our deficit, or you have to pay for it. seniors have got to pay for it. in terms of suddenly their medicare benefits are costing more. it means a student suddenly seize their interest rates go up higher at a time when they can not afford it. a family that is struggling to get by as having to do more because i am doing less.

that is not right. that is not who we are. each of us is here only because somebody somewhere felt a responsibility to each other and to our country's future, and that is why they made investments in places like nova. here in america, the story is never been about what we can do just by ourselves, it is about what we can do together. it is about believing in our future and the future of our country. you believe in that future but that is why you are working hard, why you are putting in the long hours, why mike is doing what he is doing. some of you are balancing a job at the same time you are going to school. you are scrimping and scratching to make sure you can pay tuition here. you know that doing big things isn't easy, but you haven't given up. that is the spirit we have got to have right now. we don't give up in this country. without for each other, we pull

together, we work hard, we look for new opportunities, we pull each other up. that is who we are, and if we work together in common purpose, we will build an economy that lasts and remind people not by the world why america is the greatest country on earth. thank you very much, everybody. god bless you, and god bless the united states of america. [applause] host: [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> president obama earlier today we are going to the defense department now. >> first, a few words on the budget numbers themselves, starting with our total defense budget, not just our base budget, but everything we spend on wartime spending. what you see is fighting back to 1950 -- funding back to 1950, in

constant dollars, so we have factored out inflation. the cure, 2010, compared to 2016. using the budget placeholder, it could be in the mid-20's. only two general points. they're not that different from past wartime and drawdowns, and the total budget is coming down. we will have resources for other priorities. most of the focus is on our base budget. that is what is primarily controlled by the budget control act. what you see at the top line is what we had anticipated as the base budget last year. we were going to request a special budget authority. it is down $43.5 billion, $50 billion to $55 billion beyond 2015. that is a number i will keep coming back to, the target we were shooting at to accommodate

title one of the budget control act. the budget control act actually goes out 10 years. when we make these cuts we work asking congress, or we will ask them to appropriate to a private $524.2 billion for 2013, adjusted for inflation that is down 2.5%. in the years beyond 2013, the budget rose slightly, and have to keep up with inflation or perhaps a bit more. one more word before i go on, and that is that this budget does not accommodate the sequestered in title 3 of the budget control act. we are following normal fiscal guidance, which did not anticipate the sequestered. with those in mind, how we get there? the four principles we outlined before -- i will go through each of them, starting with more disciplined use of our defense dollars. next slide. we made a number of proposals for more disciplined use, adding

up to about $60 billion of the savings. five-year savings against last year's plan. these will add to the $259 billion i mentioned. we made a number of proposals reducing expenses for the sector of defense and defense agencies by terminating a lower priority programs. we rephased military construction and i will talk about structure cuts that in some cases left us on sure about where we needed to make investments. our buying practices, in number of things in our area. more use of should costs as well as the will costs. better management of service contracts, a major area where we can do better.

finally, we will try to improve financial information and readiness. the same situation we were in last year when i stood at this podium and tell you we had $150 billion in efficiencies. over that last year, we have turned to the general plans into specific plans, especially for 20 top-2013 -- 2012-2013. we will do the same thing with the fiscal '13 plants over the next year. we understand that we need to make more disciplined use of our defense dollars. it will not get us all the way to 259. we need to make reductions in our force structure and investment. those will be guided by our strategy. if we have that slide, let me ask jim spencer if he could tell the goals we will be using.

>> it is a goal that is adaptable, ready, and technologically advanced. it will be a globally in the aged. our strategy is built towards the asia-pacific and middle east and is built on innovative partnerships and strategic alliance. we have heeded the lessons of 10 years of war and prioritized areas in cyber, intelligence, surveillance, and reconnaissance assets. this will be man and led by the highest quality professionals that can be funded to defeat aggression anywhere, anytime. >> next slide. we know that we need a force that is smaller and leaner. we have taken on hundred 3000 active duty in strength out of this budget. mostly in our ground forces, the army down to 490,000, and smaller reductions in the navy and air force.

we are make reductions in reserve-bin snow strength, but smaller. in the national guard, relatively modest reductions. ground forces, especially on the active site, are produced because we are no longer sizing these forces to accommodate long for stability operations. these kinds of cuts, if i could get the next slide we need to reduce numbers of units. we did so saving roughly $50 billion. the army will eliminate a combat of eight per day teams and to a study that may lead to the reorganization and changes in the number. the six combat battalions out of roughly 41. air force will eliminate six air squadrons out of about 61. and reduced mobility aircraft -- you can see the numbers

there. but we make cuts of this size, we need to consolidate our infrastructure, and we will ask the congress to provide authority for two rounds of base realignment and closure actions, one in 2013, one in 2015. we want to force a smaller, but ready -- the only major title to go up is operation and maintenance, up 6% from fiscal '12 to '13. we will maintain special forces that can essentially self-employed. another of our goals is to be balanced with the asia-pacific and the middle east. we will maintain capabilities with those areas. there is a fleet of nine ships

building shortly after this. and we will make selected investments in the new bomber. at a staging base, a new ship available on the mobile landing platform that will provide a capability to handle people and equipment in smaller contingency operations. next slide. we know that we will not fight alone. if we have to fight, we will fight with partners. we need strong alliances and of taking a number of steps, not large in dollars but large in importance. the vehicles that we will buy and operate within nato, the national guard state partnership program, the exercise engagement program to help training and improve our allies. two of the eight brigade combat teams will come out of europe. not sure yet exactly which ones and where, but they will. the europeans will probably see more of us, not less. many of the units now stationed

in europe are deployed to afghanistan as we wind down the troops there. there will be more of those units back in europe. same with the special ops forces. as we wind down afghanistan, we will have more of those able to conduct activities. next slide. investments in high priority initiatives -- it does not mean we will spend as much as we did last year, but they are important nonetheless. special ops forces continue to go up. we will spend $10.4 billion on special ops. 31 $8 billion on unmanned aerial systems. we will reduce the predator from 48 to 24, but keep our commitments of 65 combat air patrols. the only reason we're making a reduction is that we need to give time to the personnel and training system to catch up so that we can effectively operate these systems. we spent $3.4 billion on cyber,

including activities there, in that what we know is an important area for us. we have had to reprioritize and go back to the talks again, the changes that dealt with the $259 billion. we will reduce funding in 2013 through 2017 to the joint strike fighter, compared to last year's plan rate it got 179 aircraft. it is are consistent with our strategy. but it is to and read and in our view we need to give more time for testing -- is too concurrent and in our view we need to give more time for testing to be completed. we will reduce shipbuilding by $13.1 billion over that five years, going from 57 ships in the last year's plan to 41, but try to do it in a way consistent with our strategy. many of those cuts are support vessels, half of them are joint high-speed vessels.

affordability -- if you give the system time to mature, the army ground combat vehicle -- the three items on the bottom are three of the six termination's we propose. i mention just one but we will terminate the lockbox 30 program it has grown substantially in cost. we had envisioned a replacement but it is simply not cost- effective in that wilrole. we will keep up the block 40 program and the variance being used. let me go to full support for the all-a volunteer force. we're doing a number of things for full support. i will ask it general's answer if he will brief this slide. >> the department has no greater priority than providing the highest quality to wounded and injured soldiers, sailors, airmen, marines, and their families. this budget finds our health- care system as well as support

programs such as department of defense schools, counseling, and child care. the assistance program connects transition service members and families to resources such as employment preparation and job search workshops. the yellow ribbon program assists the national guard and reserve members and families with their unique reintegration needs both during and after deployment. next slide. >> we will fully support the all-volunteer force, and we also felt we needed to review military compensation. it is up 90% since 2001. it makes up about 1/3 of our budget. the review was guided by some principles. we need our compensation system to be concerned with the stress and military life. we have got to be sure we have this and that allows us to attract and retain the people we need. kameny to ensure that no one's pay is -- and we need to ensure that no one's pay is cut.

we have had to make changes to avoid overly large cuts. i'm going to recommend and i will talk -- we will recommend i will talk in a moment about specifics. the changes that save $30 billion -- that is about 10% of total savings. we will have more out of roughly 1/3 of the budget. by design, it is disproportionately small. next slide. we will find money for pay raises for the military that is consistent with the cost index. same in '14. beyond fiscal '14, we will recommend a small paris is what giving members and their families time to plan. the fact that the overall economy is slow, all the races are lower -- raises are lower. we will propose changes in military health care.

we are committed to high quality in the try care health care program. we will propose increases, continued increases come in try kirk enrollment fees, and we will use a tiered approach, as was proposed by the 2007 task force on the future of military medical care. it will require a somewhat higher fees for more senior retirees, lower increases in fees for junior retirees. that is for tricare prime, the hmo version. for the standard fee per service, will ask congress to enact a new in enrollment fee and higher deductibles. we will ask for a new enrollment fee for the tricare light program, retirees 65 and older, again using the tear approach. and we will increase pharmacy go play -- pharmacy copays, creating more incentives for mail-order a generic brand

prescriptions. with retirement, we're not present changes but we are asking congress to set up the military retirement modernization commission that will allow staff to look at this complicated area. if congress approves and it operates under procedures similar to that brac commission, recommending that congress approve changes, date and would only apply to new recruits coming after the changes were made. let me ask general spencer if he would comment on these from a military standpoint. >> some of last how people feel about these proposals from the stench of military competition bred date and reflect the chairman, the joint chiefs, and our senior leaders. they represent a balanced approach to the overall budget reduction, and as mr. hale stated, are only two% of the total reductions. in accordance with the

principles that got us to the budget, the honor the commitments of america's military force and their families. >> the last area is deployed war fighters. we will ask for $80.5 million for fiscal year '13, down roughly commensurate with the troop reductions in afghanistan. almost all of the funding for afghanistan, $2.9 billion for iraq, supporting the it security corp. for iraq, and the rest of that is new equipment come out of iraq. i will mention one point so that we can get on and hear your questions. we assume that afghan force levels continued through '15 at a level of 68,000 pit that does not mean there will not be later changes in two levels. does not mean we want to bind the hands of the president with budget limits. we want to hear the

recommendations from the commanders based on conditions on the ground and, of course, the secretary of defense, before he makes decisions on levels of troops in fiscal year '13. i am going to spare you these slides. this one and the next one. what they do is go through five years, the $45 billion we took out in 2013, both in terms of the categories i've been discussing, the use of resources, and so forth, and then by preparation. the next slide that you will be largely spared gives you 12 enacted levels by appropriation, and also what we are requesting for appropriation in fiscal year '13. i want to end where i started, which is to say that this is a budget based on strategy and good management. it is the package of proposals that we've put together that we think work as a whole, and we very much hope that the congress will enact this package just as

that, as a package and not start making changes, because once they do, it loses some of the synergies that make it a strong package. last slide. we are trying to cut down on printing costs, which means that we did not give you as much stuff as we usually do. but it is all on our website, and you will see the web address there. you are more than milk and, if you are not sleeping at all tonight -- more than welcome, if you're not sitting at all tonight, to get into these documents and taken up with that, i will stop and i will turn it over to doug. >> you are requesting nearly half as much money for the afghan national security forces. last year it was $11.2 billion. you are requesting $5.7 billion. this is the u.s.' x's said he for afghanistan. why are you putting so much? >> we have invested heavily in equipment and a beginning to meet equipment needs.

we still have more to do with training. we think the 5.7, based on the best judgment of our commanders over there, is adequate funding to fully support roughly 350,000 in the afghan national security forces. don't take that as any sign of the reduction in our commitment. we are fully committed to them. >> did that come from this building? >> it was their recommendation. they are very comfortable with it. >> secretary panetta said recently that there was a lot of theideration to reduce - target of 250,000 it does this never take that belief into account? -- does this never take that belief into account? >> there are talks of long run structure, but that would go beyond fiscal '15. >> can i ask a question about tricare fees?

the once the most well-off retirees are a quadrupling over five years. i noticed that most of the budget cuts for this next year right?ut 6 billion, i it looks like most of that money is coming from the health care. >> no, it will be that much. i don't have the number in my head and -- now, it will be that much. -- no, it won't be that much. i don't have the never in my head. the fees go from 5 27 out of $20 a year for tricare. the number is about right, it roughly quadrupled. it would still be quite generous compared to typical private sector plans.

the aetna plan, the blue cross plan, more like $4,000 to $5,000 a year. we still think that it is generous as it should be. but we also feel we need to move in this direction to hold onto costs. those earning less than 22,000, it goes to 850. >> i wanted to follow that up. you are keeping pay raises equal to private sector raises for the next two years. the prospect of troops still being and fighting somewhere and you are tapping their paid lower than federal civilians, the private sector take it out the square that with keeping faith, unless current pay levels are too generous? >> we are looking at control personnel costs in the context of congressional requirements

that would take $259 billion out of it. had there not been that requirement, we would probably not be making this recommendation. in that context, if we choose to entirely exempt personnel, we will have to make much larger cuts in force structure and we don't want to do that. it is not consistent with the strategy. these are out-year plans. there is an old saying in the budget this is that the out years never come, which means we will keep reviewing a. if we cannot attract and retain the people we need, we will find a way to not do them in the out years. it is a reasonable proposal -- >> the big thing is that there is no pay cuts. we are just slowing the growth in the obvious. >> you mentioned in -- the defense department mention in the defense strategic guidance that there would be a reduction in the reliance on nuclear weapons and a movement to reliance on conventional weapons.

can you point to anything in the '13 budget requests that implements that are moves in that direction? >> we fully support all three legs of the triad in this budget in making investments at all of them. the one major area where there were some reductions is the listed missile submarines, two years. that is largely an affordability we would like to let the program tries will, but it is laclargely out affordability. >> there is not going to be a briefing provided for us today, so i'm curious if you could outline what was the decision between htx being shot? the sea-based x-band radar? >> you already know the answer.

[laughter] services are coming later. >> how much of the share of cuts to the agency -- >> we are spending $9.7 billion on missile defense. i will tell you the broad strategy. we will protect our investment in home and missile defense, and we will protect european phased adaptive approach. cutting back on radars, cutting back on the missile buys, in anticipation that other areas will slow growth in this area. >> if you could articulate -- >> i cannot help you. you want to say something about that? our acting undersecretary. >> it is a research development. we thought we could get adequate data for the testing we're doing

without the radar. it is largely an affordability issue. other centers can fill in the gap. >> there was one number in there that leads out. with all the cuts, the number for army end-sprint, which has been 1.9 from 2011 to 2012, jumped to 4.9 over fiscal year 2013. at a time when we had been told to expect fewer troops in afghanistan. why is the number going up? is this just a shell game to play with money? >> it is not a shell game. first, i am impressed that you are reading these tables so carefully to my staff and i appreciate. we tried to identify the non- tendering ground strike forces, all the strength in the army of the 40,000 in 2017 and all in the marine corps of the number

we are heading for. we are doing that because this year we have made a decision to eliminate those forces. they are primarily because of the afghan war and we thought it was reasonable and omb agreed to fund them. total of $6 billion for the ego strength for fiscal '13. >> when the secretary and president were in this room unveiling the strategy for the budget, they described a more agile, more flexible force. when you think of agile and flexible, you think of the navy and air force. the navy and air force budgets are going down while the u.s. army budget is going up. if you look at this, i guess going up by $3 billion more -- it is going up by $3 billion more than with the table would suggest. is that what some people would call institutional intertia? -- inertia?

>> i like all your questions except the end. no, the reason the army is going up is at the ms meant -- is a heavy investment. '12 was artificially depressed because the congress put army in. second, we need to increase army at onm to improve readiness and in some cases because they are moving forces out of iraq and back into the states, they after move the forces back into the base budget. the army can give you more details. that is the main reason you see what is happening from '12 to '13. numbers, you '17 will see a pattern that is more consistent with what you would expect. it reflects the fact that there

is heavy reductions in the ground forces. i cannot remember the exact numbers in the navy and air force. >> that was a really good question. if you look at -- we get a lot around here about service shares, who should get what. to be honest, we never looked at that when we developed this budget. if you go back to 2000 entries that to 2017 -- and a trace that to 2017, the shares among the services group for the army primarily, iraq and afghanistan, and is starting to trail down. it is ironic that pre-9/11 budget chairs are about the same as they are in 2017. >> in drawing up contingency plans the end of the case of a sequestered some area, it is not why not g. isn't that a clear due diligence

task for you and your colleagues? >> know. we are not planning to i think i would know if we were. this is not a good policy to sequester. what we need is congress as a whole to enact a balanced package of deficit reduction that the president can sign and that will replace sequester ing, and do it in a sensible way rather than this kind of meat axe approach. we are not planning. >> if you talk about it openly and publicly release some kind of contingency plans become does it make it more likely? >> i don't think so. we listed some of what would happen, and it will be pretty. -- and it won't be pretty.

we know the numbers, and what has to be done an equal percentage terms at least at the navy,t level, army onm, maybe in the world level. it would be a meat-ax approach. it won't be nice. we will a and disrupting a lot of programs, we will probably be forced into a situation with regard to our civilians. we would adversely affect readiness. the more we save, the less people will like. we are hopeful that the congress, as i say, will need to make an active package of changes to replace sequester. >> i'm sorry. >> can you address some of the criticism about efficiencies being such a big percentage of the savings? efficiencies, budgeting $60 billion in savings? some people said that is crazy, too much efficiencies, and that

they are not realistic. >> the best answer, first off, we used the word "more disciplined use our resources." i like that better, and from an economist's standpoint, these are not efficiencies. they are streamlining activities and cutting back on a lower priority programs. i think the best i can tell you is what i tried to say in my oral remarks. these are plans and commitments for this point in fiscal year 2013, 2013 through 17. we will have to flush them out, but i think we did that with regard to more than 150 that we have done last year. we have specific plans it people assigned to doing them, targets , government structure in each service. asked the service about that as you hear from them. i colead reviews with the deputy chief management officer. we will get the majority of those deficiencies and we will do the same thing.

they have to give us a little time. we cannot have it all done with this budget. >> on pay raises, if it might raise 1.7% for fiscal year 2013 and 2014, after that, given the idea of what the reduced rate will be and what metric you are used to guide that? >> we are planning right now for 0.5% pay raise in fiscal 1.5% in '17.6, we revisit that in terms of how well the economy's doing, how we do with work for men and retention. >> 05 -- 15 is 0.5.' >> can you go about specifically

how you will be reducing the ground forces, and will need to be forced to leave the army and marine corps to reach this figure is? >> i will give you the general figure and you can ask the army wifor more detail. they will accept a voluntary departures were those occurred. they will take up investment standards. some are associated with other officers can stay dry i think i will let the army -- i cannot stay here as it will not be any involuntary separation. we will have to see how the economy recovers s. the economy is still fairly weak. the change will be easier. if it doesn't, it will be harder. >> as you are putting these numbers together, had he accounted for an estimate of how much will come out of retirement and how high is voluntary reduction? >> i don't have those numbers in my head. we are looking at various incentives that we could provide people to help for them.

we will try to do this as we can. >> if you could talk a little bit about how you came to the idea of a nine-year plan and this pool of money rather than looking at it as a year by year, why that makes good budgeting cents. and in general, you talked earlier about predator bombs, slowing them down. are they going to be purchased in future years? is this slowing it down or just -- >> we do budget when you're at a time in detail, and the only detailed proposal have is the $80.5 billion in fiscal'13. the administration has proposed a cap on total oco spending

through 2021. they want to limit the ability of all of us, and if the congress, to move money from the base. under our current graaff plans for afghanistan, we think that is fine. we are ok with it. i don't know if that answers your question. >> more of a white house -- your idea of -- is there a tension between that idea and your idea of putting some of these army costs and rory costs into -- and bring costs into oco? what we most need is the ability to make a proposal each year that is consistent with the troops we expect to have there and the temple of activity that we expect. we think the form of $50 billion gives us the latitude and i'm

comfortable with it secretary panetta is comfortable with it. >> on the uabs you mentioned, the air force can answer this in more detail, but they had at their plants that were off the production line. they have a target of achieving 65 combat air patrol. when they did the review, they found it was not platform that failed, it was the under-trained crews. when they did their review, they found that by lowering the amount of reapers they bought, increasing the number of trained crew, that the bank had breached their search capability -- that they code breached their surge capability. >> how much are you expecting from the base closings, and the

sums compared with the last bracs? what are you going to do if you don't get that brac from congress? >> we need him no more detail on service is working on exactly where -- we need to know more detail on service is working on exactly where the reductions would come. in terms of the blessed plan, it was expensive, about $35 billion in upfront costs we will save $5 billion a year or so. we will get a payback, and as i like to remind people, these savings occur in perpetuity. it is still a good deal even though, frankly, the costs are significantly higher. for 90 of your third question? since we have not budgeted for ok., we are a

>> a lot of defense companies are shaking their head, looking at 40% of your savings from '13 falling into procurement accounts. 35% to 36%. what happened to the balanced approach of procurement, about 21% of the overall budget? >> first off, as general spencer said, we make the decisions on a by-weapons-system basis. we did not say we wanted a certain proportion out of or to men or any other category. it is common to see that procurement is just partially cut because it takes a while before we can make decisions about force structure cuts out and realize savings. if you look at our plan, even over the five years to come out

procurement is more proportional, and less so in fiscal '13. >> there is a lot of hemming and hawing about terminating the program. you have 80 of these things are ready. what operations budget is does it make to mothball -- get rid of what you already have? it seems like it calls a waste of money. can you justify this for the taxpayer? >> it was going to replace the u-2 and we thought we could do so at a cheaper price. this was no longer the case. it became too expensive. as you are probably aware, the global clock and u-2 have two centers. ntered on the u2

is far superior. based on the cost of the block 30 and the cost it would take us it was ain the u-2's, business case decision and an operation to his decision. >> it does not seem to make any sense. >> i will have to refer to the specifics that will happen to block 30s. >> back on the old code, this might be an expansion of -- right, just trying to match numbers. this slide shows a big drop from '13 to '14. the next page, it shows dollars going up. does that mean there is a huge drop -- >> it is a place holder in the budget. it is just that, a place holder.

we will year from now make a specific proposal for '14 and will be different from that date since it is the budget no. we were using, and it has a sharp drop from this place -- >> you have half of this for next year. is that a realistic assumption? >> i will use the word again, " place holder." it is not necessarily realistic. we will have to see troops on the ground before we make that decision. we are not constrained to $44.2 billion. we are constrained to $450 billion, but we are allowed to come up with the money we need to support our troops each year and we will. >> time for just a few more questions. >> you have lifted about $2.8 billion in investments that dod

says have to do with rebalancing towards the asia-pacific and the middle east. can you give us a figure on what that will go to over the five- year plan? what other investments fit into that category? >> i think i cannot, because it is kind of the squishy, i will be honest. we're picking investments that we think illustrate a commitment, but in contrast to some other figures in here, there is not an easy "i did this only for the pacific," as you can imagine. almost everything we're doing what also provide benefits elsewhere. i would be hesitant to be too precise. we are kind of shifting our resources and maybe our thinking more towards the pacific and the middle east while still maintaining a global involvement. we are not any means for our

best allies in -- with our best allies in nato, we will keep them in mine. >> you used the figure $9.7 billion for missile defense. what is the comparable figure for last year? who do you expect to make up for some of those reduce purchases of missiles, radar? >> i want to say last year, that is still missile defense, maybe $10.8 billion, $11 billion? 10.4? ok. >> that was from 10.4 -- >> the level of a year ago -- that was 12. 1-.4.s '12 was 10.4.

there could be other middle eastern countries that stop themselves, or we will slow our actions to improve missile defenses. it could be widespread. i don't think we have made a specific choice of where we are going to do this. >> you talked about a more disciplined use of defense dollars, but you are doing a lot of procurement in ways touching programs out, which inevitably adds to unit cost. how is that a more disciplined use of dollars? >> fair point. if we had our way, we would not have done it. congress passed the budget control act. you react to be consistent with title 1 of that act. we try to do them in a way that minimizes adverse effects. your points are well taken, and some of the stretch out will result in higher unit costs. >> to contained $400 million for the medium, extended, do you

expect to see that face through or not? >> we have asked for money in fiscal '13, the last year of the program. we have legal presentations on fiscal '12. frank, do you want to add to this? >> it is a program that the u.s. decided not to procure a year ago. we agreed to a two-year termination phase, which we would fund in '12 and '13. restrictive language allows us to only spent 25% of the money. we would terminate at the end of '12 or restructure programs at the end of '12. we did request the money in '13

but the restrictions we have will make it hard for us to execute that. >> last question. >> i believe only $26 million where it requested for the okinawa to guam plan if you reach any agreement abowith the japanese government about how to carry out the new alignment -- >> the social economic funds in know, we3 -- as you announced discussions, result s of discussions with the japanese. we needed to work with the japanese and consult with the congress. if we come up with a plan, we need to look again at financial weds of fiscal '13, and yes, may have to adjust them. >> thank you very much. [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2012]

>> this briefing, the defense department's proposed budget for 2013, will continue at 3: 15 eastern time. we expect a detailed review of the proposals for various branches of the armed forces, the army, navy, and air force. until then, we will go to the state department briefing from earlier today. >> thank you all very much. good morning. let me start by welcoming you to the rollout of the 2013 budget request for the state department and usaid. i know that tomorrow is valentine's day, and i was going to give some of you flowers, chocolate's, but because of

budget constraints, i have given you this very pretty park and you can take it home with you -- pretty book and take it home with you and enjoy it. very nice pre-valentine's day present. i thought that was fun henier earlier. [laughter] i am delighted to be joined by usaid administrator shah who will detail programs for all of you. new powers are emerging, america is strengthening relationships in the asia-pacific region while keeping commitments around the world. in iraq, we've completed the largest military to civilian transition since the marshall plan. the budget reflects the beginning of the normalizing of our system. in afghanistan, the 33,000 u.s. troops come in and work to

secure our hard-won gains. this budget reflects that. since i presented last year's budget, there has not been a day when we were not managing multiple crises at once. the demands of us have never been higher, and you will see all of that in this budget request. it is also a time of economic parcher in our country and we get that here. -- a time of economic hardship in our country and we get at here. this is to stretch dollars as far as possible without compromising our core national security interests. now, if my high-tech skills serves me correctly, i will show in graphic detail how our budget fits into the overall federal budget. 50% of the federal budget is spent on the social security,

medicare, and medicaid. second, 22% supports discretionary national security programs at the department of defense, and security, and veterans affairs. third, 13% goes to discretionary non-security programs run by transportation, education, and justice, commerce, and hud. fourth, 6% pace interest on the federal debt. if you think there isn't a lot left over, you are right. state and usaid account for 1% of the federal budget. see that thin yellow line? that's us, 1%. today we will show how this makes the outsized contribution to america's prosperity, security, and leadership. from day one, secretary clinton has made it a priority to work smarter and more effectively. this is the reform outlined in

the quadrennial review. we estimate our efforts -- but not tied up we have streamlined our efforts but not shied away from making trades in irresponsible cuts. a recent gallup poll found that americans believe that if we spend 1/4 of our budget on foreign assistance -- let me remind you again what the chart shows -- state and aid to all of what i just described with a little less than 1% rate let me go over the numbers and my colleagues will stick around after this to go into more details if you wish. fy2013 budget for international affairs programs, known asthe function 150 account, the totals $56.4 billion. this includes state and usaid. it includes the treasury's

international programs, the millennium challenge corp., the peace corps, and others. within the 150 account, you find the state department and usaid's request, totaling $51.6 billion. that is what i will focus on today we have limited our request to what is absolutely necessary to achieve our mission. even as our needs and responsibilities grow, our budget increases by less than the rate of inflation. money goes to four principal areas. 23% of the budget is spent on the frontline states -- iraq, afghanistan, and pakistan. 20% of our budget goes to preventing conflicts, support our allies and partners through direct assistance and multilateral contributions among other things.

another 28% is also spent on human and economic security. the remaining 20%, 21%, support our people, and the seas, a global presence. now the specific numbers. first, the 23%, at $1.9 billion, goes into -- $11.9 billion, goes into our national security interests in iraq, afghanistan, pakistan. operations budget funds the temporary costs associated with these missions. these are the same methodologies from last year's requests, which last for $8.2 million and $3.7 billion in air base budget for a total of $11.9 billion for the front-line states. let me break it down for you specifically. in iraq, we are requesting $4.8

billion for next year, which is about 10% less than last year. it the transition has already saved the american taxpayer a great deal of money. with the now -- with state in the lead but the troops no longer on the ground, the government is spending $40 billion less this year than last. as discussed during last week passed a press briefing, we are continuing to be thoughtful about the right size of our presence in iraq, hiring more local staff, securing more goods locally, which would further reduce our spending. in afghanistan, we are requesting $4.6 billion. civilians are vital to our efforts and are securing our gains against the todd andaliba -- the taliban, and they are laying the groundwork for what comes next -- sustainable

economic growth, national reconciliation, and the long- term civilian partnership. all of which helps us ensure that afghanistan never again becomes the safe haven for terrorists. in pakistan, the 2013 requestou4 billion. our relationship with pakistan is challenging, but make no mistake, it is critical to afghanistan's future and to america's national security. commenting extremism, joint counterterrorism efforts and -- combating extremism, a joint cardin terrorism efforts -- joint counterterrorism efforts. this year, our request includes a new $770 million released and

north africa incentive fund to support political and economic reforms in the region. our investment in supporting our allies and partners includes everything from police training in latin america to efforts toward stability in haiti, south sudan, and more than 70 military-military partnerships that are managed by the state department. it is sending missions around the world and our presence in international institutions. it matches last year's record high of $3.1 billion for the state of israel, and continuing our efforts to support our arab partners. third, we devote another 28% of our budget, $14.7 billion, for investing human and economic security, specifically global health, food security and climate change, poverty reduction and efforts to empower

women and girls in our humanitarian budget. for all of these programs, we are focused on achieving measurable outcomes that have real impact on improving people's lives. even with the financial constraints we face, this budget fully supports the president's goal of treating more than 6 million people infected with hiv aids by the end of 2013. this is a -- this is $2 million more than our goal and put us on the path to an aids-free generation. the money also funds humanitarian responses and the care for refugees. i will leave it to administrator shot to speak in more detail about the -- shaw to speak in detail about the programs funded by usaid.

usaid makes the work and have described possible. this budget pays for all of our operations and 274 missions around the world. it advances our interests and defend democracy and human rights. it funds development to spread opportunities to make the world a better place. it helps us respond to emergencies around the world. it funds economic offices that help america compete in new markets and put america back to work. and as i like to say, not a bad return on our investment. this is a moment of historic change around the world. it is also a time of tight times for our government and our people. two truths have guided us from day one. with just 1% of the federal

budget, the state department and usaid will maintain our leadership in a changing world, jump-start our economy and above all, keep america safe in 2013 and beyond. let me now turn the floor over to my friend. >> thank you. i want to start just by reiterating those opening and closing points that the entire budget and the activities described live within the 1% of the federal budget that tom highlighted. i intend to go into a little bit more detail, starting with foreign policy. the investments we make in

health, education, clean water and fighting hunger are part of our national security strategy to keep a safe, and are part of our economic security strategy to ensure that we are expanding the number of countries and communities with whom we can trade and as a result create jobs here at home. the budget accounts are familiar to you, things like development assistance, global health, child survival, international relief. in all of these areas, we're taking a more businesslike approach to delivering results. the fiscal year 2013 request demonstrates a willingness to focus and concentrate investments in those areas where they will deliver maximum results and more value for u.s. taxpayers. i will begin by describing global health. at $7.9 billion, this is a budget request that focuses on cost effectiveness and saving lives.

it allows us to meet the president's goal of putting 6 million patients on treatment for hiv/aids, building on the progress we have already seen under this administration of going from 1.7 million-3.9 million under coverage today. this is in part possible because of a more than 50% reduction in the cost of administering treatment thanks to the pep far program. this will also allow us to work in hiv prevention, including the elimination of pediatric aids by treating pregnant women. by getting together with the global community, we have made investments to help save more than four million lives over a five-year period by expanding access to new vaccines to poor children around the world. allows us to extend our investments in malaria and

maternal child health where we have seen concrete and specific results. since 2008, a child mortality has been reduced by 16%, maternal mortality has been reduced by 13%. new studies show the effectiveness of u.s. investments in global health in places like rwanda and tanzania. second, our feed the future program, the president's signature effort to advance food security around the world, is predicated on the point that it is cheaper and smarter to help countries learn to feed themselves then to address riots that results from food insecurity. this is an area where we have changed the way we were -- work to focus on results, focus our

investments on those countries that are taking on reforms to ensure they can be successful, and rework more actively in partnership with the private sector to stretch taxpayer dollars even further. we have seen import results in places like bangladesh and tanzania, where food production is up and the number of people and number of children who are chronically hungry has gone down. we've implemented new partnerships with pepsi in ethiopia, walmart in central america that are reaching tens of thousands of families and stretching u.s. tax dollars even further and achieving results. these accounts help us deal with food emergencies, address water when water is not available, address refugee flows around the world and support internally displaced populations

in conflict in other countries everywhere around the world. in these areas as well we have taken a reform approach and prioritize deficiencies, investing in early warning systems that highlight faster where disasters are likely to occur, pre positioning food and supplies to reduce the cost and improve the time of delivery, and expanding initiatives like the secretaries 1000 days initiative that targets food assistance to pregnant women and children so that it achieves better results in terms of nutrition, learning and outcomes. these types of strategy's allow us to reach more than four 0.6 million people who are at risk in the horn of africa in the past several months and the drought and famine that ensued. despite the fact that that has now been downgraded is in part due to effective humanitarian support. the u.s. will continue to make

investments and the horn and other parts of the world where it is necessary, and will continue to use our leadership and our ability to make those investments to diversify the burden and insure that the whole world is living up to its share responsibilities in times of need and crisis. finally, tom mentioned at $10.4 billion of the overall budget is 4 -- $10.4 million of the overall -- $10.4 billion of the overall budget is for our staff and initiatives that allow us to use new technology like mobile banking in haiti and afghanistan to fight corruption and expand access to banking services and financial services. they allow us to invest in scientific and technical partnerships like the grand challenges program, through

which we launched programs like saving lives at birth and efforts to improve literacy of all grade levels. every $1 from tax their leverage is $3 or $4 from donors before -- taxpayers, leverage is $3 and four dollars from donors before we go for it. to reduce waste, fraud and abuse, cut down on contractor costs and save taxpayers money. by recalling times opening point that this entire portfolio investment takes place within 1% of the federal budget and is a critical part of keeping a safe and secure and improving our economic prospects around the world. thank you.

>> and i to ask about some of the areas where -- i would like to ask about some of the areas where you are expected to cut funding, such as aid to egypt. there is $3.1 billion in there, but it looks as if things are not resolved, it may be cut. i would also like to ask about unesco funding. are these in anticipation of resolving these issues? are you reserving the money? if you could explain. >> sure, let's do unesco first. as you know, the congress has prohibited us from funding unesco this year. the president has articulated quite clearly that he would like a waiver allowing us to participate in it unesco. we have put the money in the budget, realizing that we cannot

spend the money unless we get the waiver. we will work with our friends and colleagues on capitol hill in hopes that we can work out an agreement to fund unesco. it does a lot of enormous good work and we would like to be sure we have a contribution to their work. in egypt, our goal is to provide the money which includes $1.3 billion for military financing and to under $50 million of direct assistance. $250 million of direct assistance. this budget reflects our commitment and our desire to fully fund those initiatives. >> 1 follow up on egypt and then to the broader middle east. you are saying and the egyptian

side that you hope to be able to give them the money that you have outlined here. how much push back you expecting from congress on these particular numbers? secondly, on the $7 million for the broader incentive fund, how much of that -- $70 million for the broader incentive fund, how much of that is going to be new money? >> first on egypt, i think the desire from the hill and the administration is to resolve the issues that are currently occurring in egypt. there is bipartisan support, once we can get these issues resolved, to support egypt. there seems to be no argument on that from where we sit. our hope is and desire as we proceed this year and have discussions around the budget that it will be clear to us, that the situation gets clear to

us and we will be able to provide the assistance we hope to provide -- >> the state department budget briefing from just a short time ago. we will leave it now and go back to the pentagon for remarks from the army director. >> this is going to be the first budget request that we have developed that addresses the reductions in defense spending that will occur over the next 10 years, that takes into account and supports the new defense strategy and the budget control act. the major change for the army is the active component discussion. there were questions early on about it. beginning this fiscal year, 27,000 in reductions announced in the president's budget, until we get to 50,000 by the end of fiscal year 2017. but the department of defense and army leadership have

directed army staff to put a comprehensive review together and determine what is the right course structure for the army, both in the operating force and the generating force. we are not able to provide you with any information at this time until that work is done. what we would like to do now is turn to our presentation of the fiscal year 2013 budget, and get to this as quickly as we can so that there is time for questions. >> this request really reflects the results of some very hard and difficult choices that we had, but i will tell you now that the army will remain the best lead, best trained, best equipped ground force in the world. tore preparing army forces win the current fights and maintain the readiness we have. this supports the all volunteer force, our soldiers, families

and civilian employees. we to invest wisely and modernization programs, but there are some terminations out there and there are some program restructure's. we will talk about that as we get into the investments themselves. if fully funds operations in support for our forces in afghanistan. in addition to that, it will go ahead and restart -- reset the force and the equipment coming back now from afghanistan. it also improves stewardship of our resources. we will talk about later about investing in a range of enterprise-wide initiatives. >> we look at the army's fiscal year 2013 budget request. it totals $184.6 billion. the army is people. we have heard that over and over again.

it is the largest cost driver that the army hands. it -- if i could draw your attention to the large pie on the top right. operations and maintenance costs 35%, then resources development and acquisition and 19%, than 4% in the other, including army family housing. when we look at the smaller pie that is down there, that is the overseas contingency operations request. it is primarily for military operations and sustainment in support of operation enduring freedom. the major cost driver, as it has always been, is operations and maintenance. we of the military personnel account which takes up about 20%. we of pass-throughs, afghan security forces and the afghan infrastructure fund at about

16%, and then we of research and development acquisitions. -- have resources and a bell and acquisitions. if i can draw your attention to the column on the far left, that is the army's fiscal year 2012 enacted budget. it is $135 billion in the bass program and another 68 billion in cocoa -- oco. significant funding reverse the efforts we have been working on for awhile, but it is ok, because it did help the army preserve buying power for fiscal year 2012. we look at the right hand column now. the fiscal year 2013 request is about $18 billion less than it

was for a 2012. but again, that is driven by the oco requests, of reflects our complete drawdown from iraq and the beginning of our drawdown from afghanistan. this chart reflects the army's funding level since 2001, but does not take into account a fallacious -- take into account inflation. remember, we were building the army in 2008, so we were both growing and equipping all the initial combat teams to meet demands in theater. our current total request is down about 27% from the high mark in 2008, and oco is down almost 59% from a high mark.

when you look at the height of military operations in 2008, oco represented almost half of the army budget. now that is less than 20% as we continue to drive down. on the military personnel appropriation, 1.1 million soldiers, over 500,000 on active duty and over 500,000 in reserves. four hundred 90,000 will be paid for in the base. -- 490,000 will be paid for in the base. we also have a non enduring part of 49,700 that we will pay for as we do the drawdown. we also have a new category

called the temporary army and strength medical. bell include soldiers processed through the disability system. -- that will include soldiers processed through the disability system. for the rc, the base request includes $83 million for additional training days for the national guard and reserves. this will fund the pay allowances and special pay for all soldiers deployed in theater. it will also fund of the post requirements out there. our next appropriation is the

operations and maintenance appropriation. there is a decrease of $7 billion from 2012-2013. the net effect of the growth case -- base of almost $6.3 billion. the reduction in oco is over $13 billion. half of that is due to the understated 2012 star point that included over $3 billion relied on by the congress. we have growth from inflation, fuel rates and our federal civilian pay raise. our number one objective is providing trained and ready forces to win the current fight and sustain a high level of readiness. funding for ground tempo increased by $3 billion. it also funds an additional

training and professional military education because we have so many soldiers at home now available to train. it sustains our commitment to care for our soldiers and our families. we put another $1.7 billion into those family programs to reinforce holistic fitness, mitigates stress and build resilience. that includes comprehensive soldier fitness, sexual harassment, sexual response and army substance abuse. it includes funding for recruitment and training and education. that will continue to attract, develop and retain both our high-quality soldiers and our civilian work force. we are committed to improving our business practices and resources trichet. we have -- resources stewardship.

we have the operations and maintenance oco. this does fully fund operation enduring freedom in theater. 33,000 for all services, but 23.4004 army personnel. for fiscal year 2013, we're planning on 68,000 soldiers. there will be no change in the nine dcts we are planning for and budgeting for. transportation reset and intel. also, we continue to fund supreme a training going on, the personnel readiness and post deployment integration with the soldier, his family and his

work. we would like to turn our intention now to your attention now to investments. >> i would like to first note the we all had to make a lot of tough choices about how to continue to sustain the readiness of our force and capability of our force while facing an era of declining resources. what i would like to start with is by telling you programs not in this budget. we are announcing eight program terminations with this budget. many have been addressed in the media, but i'm going to mention a few key ones that have major savings, just under $5 billion in total. the reconnaissance aircraft will save $1.2 billion. the humvee recap program will be supported in the oco request,

but the medium expanded capacity vehicle program is being terminated with this budget. that will generate about $1.4 billion over five years in savings. it is being significantly restructured this year with termination in 2014. the mounted soldier system is being terminated. the joint precision approach and landing system will generate another $400 million over five years. there are a significant number of programs that have been restructured as part of this bill. there are some accelerations that we can count as having been restructured, but by far the majority of them are programs that were changing requirements, change in the scope, would it his sixth the big the procurement out over years in order to generate -- extending the procurement out over a number of years to generate

savings. the joint air to ground missiles, a striker procurement, our joint task vehicles, one of our modernization priorities, has also been restructured. we recognize there is some risk to the industrial base with this restructuring. we believe that is manageable, but those are business decisions that will rest with the private sector and we will not be able to address any of them with certainty right now. now i will talk about is included in the budget, beginning with our overall procurement appropriations. on this summary page, which totals $19.6 billion, down about 1.9 billion, you see some of our key systems highlighted on that page. as we turn to the individual appropriations, we will show you for all the key systems, the

dollars invested by system and the quantities invested by system. i will just highlight a few as we go through in the interest of time. aircraft procurement request is $6.3 billion in total for 2013, that is only down $158 million from 2012, and that respects a tremendous demand and aviation assets which is greater now than it has been since 2001. we remain committed to aircraft modernization and i will highlight three of our key aviation platforms in which we have major investments. we of $1.4 billion -- have $1.4 billion in the chinook. we're requesting authority for a new five-year program beginning in 2013. that will provide for 25 new and 19 remanufactured air frames. we're asking for $1.2 billion hawk.e blackrock -- blackroc

sari, chinook and a new program in 2012, begins a new one in 2013. we're asking for 59 new blackrock aircraft -- black hawk aircraft. apache procurement is stretched out over a longer time, but we are committed to that heavy lift asset. we're asking for 10 new and 40 remanufactured block three apaches. combat aircraft. we are asking for $518 million for procurement of 19 additional brae eagle unmanned systems which support equipment that will enable us -- bayer ego unmanned systems which support equipment -- bare eagle

unmanned systems. we're also asking to replace aircraft that have been lost or significantly damaged in the current war effort. turning now to missile procurement, the total of those two appropriations is down about to under $30 million from the 2012 enacted -- $230 million from the 2012 and acted. we're asking for $650 million for 38 missiles and 38 launchers. we are also investing in other key missile programs. turning to amoco, one thing of like to highlight is the request for production modernization and quality work environment enhancements for our ammunition plants in tennessee, missouri,

virginia, iowa and pennsylvania. there are $400 million included in the request and that is for replenishment of ammunition missiles extended in the current war fight. for combat vehicles, the request is $1.5 billion, down $590 million from last year. our major w t c investment is almost $380 million for the initial procurement of the striker re-con vehicle with associated c4 i f r equipment. that vehicle in is intended to replace the current dysfunctional vehicle. one of our most critical modernization efforts, this budget asks for two hundred $6 million -- $206 million dollars. this addresses some capability camps and will allow us to keep

pace with the abrams tank and bradley fighting vehicle on the fighting field. the bradley request of 180 four million dollars is for continued improvement of that vehicle. this is only a small request been oco of $15 million for 51,000 improved weapons cleaning kits for the f-16. our request for 2013 for weapons procurements is 18 billion. i want to highlight the net worth, which i know you have heard from our senior army leaders. major components are outlined on the chart before you. i want to highlight the $893 million request for the war fighter information act -- information network tactical.

when combined with the fiscal year 2012 low rate initial production, that will allow us to have 13 b c ts. our mobile communication on the battlefield, $556 million requested included rifleman radios, man pack radios and airborne and maritime radius to support our ongoing network modernization. looking next at tactical wheeled vehicles, 3 android 7 $4 million -- 370 four million dollars is included -- $374 million dollars is included. the budget for humvee recap is only in oco.

that includes equipment being returned from iraq and now from afghanistan as well. looking to the future, to our research development testing evaluation appropriation, $8.9 billion in the request is a slight increase of about $200 million. in the interest of time, i'm just going to highlight a couple of key priorities. again, going to the network, the a $546 million included in our requests for the network, the funds increment to which gives the force on the move command and control capabilities. also is the distributed common ground system, $41 million, the army component of the department of defense-wide family of i s r systems.

i want to mention just briefly the network integration evaluation. i think many of you are familiar with them already. this has been a tremendous success story for the army and a good use of resources and the key to our modernization strategy. this is attributable to the way information technology makes general leaps, much more quickly than the defense acquisition process tends to move. while we're able to do in thenie -- in the nie is currently testing capability before it investing in procurement. we've had tremendous savings, acceleration, save a significant amount from net warrior, and we're very proud of the outcomes that are associated with our network integration evaluation. under vehicle development, we

have 9 sadr $54 million 954 million- $85 requested. we have a three-pronged approach outlined for the tcp that includes the analysis of alternatives, assessment of non- development of vehicles, and i think you know we of two technology development contracts that are out there now. we have another $72 million requested for a vehicle that is the centerpiece of both the army and the marine corps, tactical wheeled vehicle modernization strategy. there is only a small amount o again. turning now to facility is our

request of $3.5 billion, down significantly. of that $3.5 billion, it represents $1.9 billion, about one-third less than last year, and the reason for that is that until the army has determined the outcome of our force structure reductions and the associated stationing in packs, we are deferring those projects that might otherwise have gone to some of those brigades. we hope to reinvest those dollars in the 2014 and 2015 budgets. this does include four hundred million dollars for a barracks projects and seven installations, $173 million to include -- conclude army modular

forces. direct contribution to readiness and finally, we're asking for $165 million for a new force structure projects, seven of which are associated with our new great eagle companies. the money passes through us the the organization's are not associated with the army. we have $1.5 billion included four ongoing demolition of ammunition and munitions. the oco request of $7.8 billion is a dramatic increase over the last two fiscal years, and that reflects the final 2011

investment in the iraq security forces fund and a decrease of $6 billion to just $5.7 billion in the afghanistan security forces fund. there is also a small amount of four hundred million dollars included in the afghan infrastructure fund, and what that does is fund larger projects outside the scope of the emergency response program projects to help with economic and physical infrastructure with our presence in afghanistan. 2013 budget army's request does begin to take into account the discretionary spending caps, but it does so without any risk to continuing to support our is essential roles. as has been said, the army is the best lead, best trained,

best equipped ground force in the world and there's nothing our leaders or this department would allow to happen to preclude that. we continue to meet our commitments in afghanistan and around the world. we're developing the army for the future. we are continuing to care for soldiers and families. that is one of the most important commitments we possibly have, commensurate with their sacrifice and service. we are strengthening components in a measured way with solid commitment to how to restructure our force to be even more capable than it was before. we are supporting the transition by using base budget dollars for the first time of the reserve component, army national guard and the united states reserves. we are supporting our new modernization systems. with that, i would welcome your questions. >> question about the network.

$103 million into net warrior. with all of this money going into net warrior, which, while being smart but not a fun, replicate some of those functions, and should -- a phone [unintelligible] >> i do not believe that is the case. i believe we're going to be staying with the technology. the reduction for net of warrior reflects the inconsistencies we were able to identify. >> does the army still maintain that it is going to be cheaper to shut down the production line for three years starting in fiscal year 2014 and build it back again after that as opposed to minimally funding and during

that time? >> yes, we do. >> you said there were eight cancellations, but you only said five. what are the other three. >> i only listed the largest ones. let me flip back to -- let's see. davis. >> long-range advance surveillance systems and night targeting, and under armor. >> that was $5 billion in savings? is that over five years? >> over five years.

>> a separate question on the force structure review. you said it was going to take a while. any idea on the time frame, and will that feed into what is going on with pratt? -- brac? craigslist and not have a time frame and it could be several months. the army staff has a lot of work -- >> we still do not have the time frame and could be several months. the army staff has a lot of work to do. when you start to take the force structure down, what kind of brigades are they going to be? there are different skill sets in there, a different grade sets in there. it is going to be a very complicated and long process as we go through. >> i would just follow on to that come in the army benefited tremendously from the last round on the active component. we do not see a significant

change in the army footprint that will result from the force structure drawdown. but until we know what our brigades are going to look like, we cannot say that for sure. >> is i understand right, everything above 490,000 personnel is now in a contingency, not in the base budget. you,much is that saving ne taking it from one pocket to the other? >> we have not over the five years because we only do oco a year at a time. we are counting on continued funding of whatever subset is left.

>> is there a reserve reduction? >> very small, and not enough for 2013. >> i want to ask about the personal course structure review. if i understand, as a result of that might be additional reductions in some of the out years. have you done any calculations, any projections, ballpark, about what portion of the currently projected reduction might require in voluntary separation. >> i want to first make sure that i did not miss speak. is not additional. we're going to be ramping down. for the army leadership, what is most important is not the

number, but the ramp down, to make sure that we do not put ripples in the force and that we have the ability and reverse ability, that if something happens between now and the next five years, that we have the capability to reverse that and bring that back up. there are many things we can do for it, so we can start to put a lot of our mid great majors, lieutenants and colonels back into the generating force. if we need to pull them out, we can do so. it is the amount of risk that the army leadership is going to want to take as we do the planning for this. >> involuntary separation, ballpark, what portion might require that? >> i would not even estimate because you're going to have retirements. there are so many tools and the tool kit. you can do retirement, early- retirement, assess less, extend

promotion lists. there's so many things we can do. if you want to put minimal stress on the force as we do the ramp down, that is the reason the army leadership is so -- believes it is so important to make sure that we get the ramp correct. we will not be rushed into. >> the last gdr called for the army to build 12 to 13 brigades. is that still the plan? >> yes. the 12th is fielded. the 13th will be field the next year. >> of like to ask you to do detailed questions about the post comanche aviation plan. one is the termination. can you tell us how you plan to

accomplish that mission with out it. are you going to embark on a new program at some future point? on the other hand, for the scout helicopter, can you talk to us about what your plans are, how this budget supports supporting admission after the demo that is supposed to be done this spring. >> on the arent area scout, we're going to announce a -- aren't aerial scout, we're going o announce a -- armed arierial scout, we're going to announce some things about that. >> is there a budget to support something to come after that? >> there is not.

>> based on the analysis, they can divert money to armed aerial scout. >> we have to wait until phase two. the answer to all of the above -- is all of the above to what you said. i cannot really speak to anything further on nikon aircraft. do you have anything to add? -- re-con aircraft. you have anything to add? >> does the army believe it is better to shut down the abrams plant. why request $129 million for it in 2014? >> that is for upgrades. >> on the humvee recap, i understand there is some money left over from previous years in that account. do you have the number handy by

any chance? >> we received almost $1 billion very late in 2011, as you remember. i do not know how much of that we have expended to date but that is going to carry us for awhile. we can get back to you on that. >> there was something in here about least family housing. i take it there is a reduction in that. where is that coming from? can you talk about that a little bit more? >> we have about 7500 leases out there. we have government-owned, r c i housing, but there is also housing out there where there is no are citi and no army corps available, and we do -- no rci and no army corps available, and

we do the leasing of those. >> where are those? >> most of them are in europe. >> two of your slides mentioned things that are kind of small in your budget but very large in the amount of attention they get from the public. one is page 15, the facilities. the first thing that is mentioned is arlington national cemetery. can you give me any numbers on how much the army is going to spend on arlington national cemetery and whether that will be an increase or decrease over fiscal year 2011. on page seven, there is a brief mention of suicide prevention. do you have any numbers on how that is going to go? >> $48 million was inactive for

arlington in 2012. this is something new for us. i do want to mention that. this is the army's effort to support the improvement efforts at arlington national cemetery. we are planning $84 million for site surveys and expansion efforts, and $90 million, for a total of $103 million for future efforts. >> and then for the suicide prevention, as collier 11 was $23.4 million -- fiscal year 11 was $23.4 million, fiscal year 2012 is $25 million. if you look at the program, a

particular program, the funding is going down. if you look at it holistic week, the answer is no. for fiscal year 2012, it was 81.6. for fiscal year it 2013, it is 101.1. it has gone up dramatically, it is just where those dollars are being cut. a lot of it has to do with efficiencies and whether we can get more efficient as we go through it. we are spending almost 20 million more on those four programs than we spent last year. >> thank you. >> thank you all. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> defense department budget briefings continue in about five minutes. we will hear from the budget manager from the navy, followed by representatives from the air

force. agency budget briefings have been happening throughout the day to day on the heels of the release of president obama's 2013 budget proposal today. you can see all of the briefings, including the president's, and get a look at the budget itself if you go to our website, c-span.org/budget. >> and again, with this being

budget day, a budget week on capitol hill, we have set up a facebook questionnaire for your reaction. we would like to know what your priorities are for next year's federal budget. go to our facebook page and offer your thoughts. >> from the associated press,

senate republican leader mitch mcconnell says that the budget president obama sent to congress is really a campaign document. he is accusing the president of shirking his responsibility to lead and using the budget to divide. among other things, the president proposes to raise taxes on the wealthy and remove tax breaks for corporations. if you missed the president's remarks earlier today, we will be airing them to night -- tonight at 8:00 p.m. eastern.

>> good afternoon. the assistant secretary of the navy for budget will be briefing for the department of navy. following the briefing, if you have any questions, let me know. >> good afternoon. i am here to present i think you have already heard the secretary dick lynch rolling out his project the secretarial defense rolling out that review. the department of the navy and marine corps is well-positioned for joint force 2020 and i know our capabilities and we can of,"

-- accomplish all portions of these missions. thanks a lot. beyond the guidance from the secretary of defense and the president, we were chalices we did the review. first taking care of our people, second maintaining working were fighting readiness, our involvement with sustainable energy, promoting acquisition excellence and integrity in how we conduct our business. bus was to drive innovative enterprise solutions. around the world, right now the navy king deploying 156 ships involving four aircraft carriers. paired with them are significant number of marines including 16,000 in afghanistan and 3000

others. the emphasis on the two areas for the department of defense, 29 ships deployed in the middle east, 52 under way in the pacific. we are where we need to be and will continue to operate in these areas around world. first in terms of dollars, this gives you 16 years of data and the growth of the marine corps over time. i want to emphasize, you can see the budget is for $155.90 billion in the base, approximately $14 billion in oco. the red square is delineate adjustments in terms -- the red squares delineate adjustments. there is a quantitative reduction in 2013 and 2014 in nominal as well as real terms.

the net effect over this is that from fiscal year 2012-in fiscal year 2013, this is a reduction in nominal growth and 2% reduction in real growth. it ends up being 0.7% in real growth. there is a contraction here, but the bottom line, you will see where we position our forces, we are well served. this will be my last in terms of strategy, but i want to emphasize what started in the spring, and i have been budget of certification now for three years, 2012 was efficiencies, 2013 is what we will call an inflection point. we are out of iraq, focusing on the world going ahead, fiscal pressures on the united states. we are looking at what kind of fiscal contraction set in 2014 and what is happening with

deficits around the country. the emphasis on what the department defense can do, and what can we do with the money we have. there are two areas of economic realities out there along with the desire for strategic review. it involves the department at the levels of secretary at higher levels of discussions along with combat commanders, the national security council, as well as the lower levels, played out of every day in october. this is a very iterative process. what do these services bring to bear? the bottom line is that circle in the middle, as we look at new strategies, how we reshape what we have an controlled growth. where do we have to have the supremacy we bring to bear? but the bottom line was the

restructured forces. i will show you slide by slot what that means. -- slide by slide what that means. this is a busy slide. this is a five-year snapshot. these numbers you see here, the total is -- would have been $600 billion. walking arm around the circle here, going counterclockwise, a significant change, but not a reduction. it is a change in rate. you have savings expected, still pay raises but not at the same level. there are still increases for medical, but not as much as before. across the board you can see in each of the years what was an expectation it will grow more than we have before.

the bottom line is, no one is losing a dollar. there is not a sailor or marine losing a dollar of their current paycheck. this is merely an adjustment of the ramp up over time. it did not go down because we are seeing the price of doing operations there and not the amount of shipment for part in the navy. we are driving and bringing in a back to 51-24. we are driving more of the ship box back into base because that is the strategy. independent of where we are, focused in the middle east and the pacific, over zero billion

dollars going to the navy and the base to maintain the presence of the commanding officers base. it will be a joint force. it will still be inside the navy to actually run that camp as a base over there. grow the force for the marines and the service is accepting a little bit of risk in terms of how much they can put in there. research and development is only down slightly. procurement, where you take the cuts in the near term when you cannot reduce people that fast, and when you cut procurement, some of it is just gone and the others are items we will talk about. milpers is still robust account. onm has actually gone up at $49

billion. infrastructure is down almost a half billion dollars, and r and d is a very minor change. military personnel, two different services and two different messages here. the navy is finishing a slight decline. it has come down almost 60,000 people in the last 10 years. this adjustment you see here, the blue was last year's budget and the red is this yours. one change in 2012 was the lost .f theia's and oco we did a continuation for some officers. the adjustments reflect some of the decommissions and changes on the ships. you decommissioned summons ordering others on line. .he blue was last year's plan

from this point on, the green line is the line that determines what they are going to have in terms of oco dollars. the other lines are a place holder, but that is anticipation of the oco dollars. each year it allows the marines to draw down and maintain the force is ready and then reorganize the marines into the future support group of how many young captain's that will have. that is all part of the process as the marines it downsized, forming a unit of readiness for the future. personnel relatively flat, the slight change of 2500 people. 1400 are transfers, 1100 people are going from the navy medical to the try care management

office. -- tricare management office. our civilian work force is largely an integrated into the airplane in ship depots, naval surface warfare centers. our civilian personnel but nothing has changed in terms of the number of ships out there. for the next couple of years, all are good and coming back and our people are there. there are minor changes and some workload reduction. ship operations, you can see the big change from 2012 to 2013. the big changes the oco to base i talked about. flying hours are relatively flat, but in terms of how we maintain the squadron ready, and the decrease is just an

adjustment in how much lying is going on. marine corps ground equipment is maintained a level of equipment that have on their bases and also be equipment coming back from overseas. shipment is continues to be funded at 100%. -- ship maintenance continues to be funded at 100%. there has been some increase back from where congress put money into a oco. aircraft depot-is relatively flat, driven by the level of operations in the past. they support, the navy has about $180 million in terms of family service centers children centers and other items. shipbuilding, i am certain there will be a lot of questions on this later on. this is probably the one that has a large number of ships changed.

to put those in context, the bottom line was there was a plan for a larger force. as we look at what we have to have for war fighting, the analysis made was can, 5 that would be completed in 2013 to complete that group of ships. three were oilers that we were trying to get. we took out three but maintained one to get going on the design of ships. one submarine was moved from 14 to 18, but in terms of procurement, it is the same. one ddg was moved from 14 to 16. an lsdx was moved out.

it is a big change in number of ships. the total dollars are a modest amount of savings, but a rule was, what we have to have? we are still buying submarines and other combatants we need here. aircraft, this is an area changed also. we have been discussing joint strike earlier. the total changes 69 aircraft. the money was rolled into some into r&d and the balance in currency. the earlier planes built for the marines and a couple of navy are going back to make the fixes that had to be done, the so- called hot spots the admiral talked about. that is all rolled up in the money in this account. we maintain the f-18 and p-8's

were adjusted at the end. b22 comes out of a multi-year and there has been an adjustment down. this was adjustments for affordability for availability of the aircraft. weapons -- not as much change as you might expect. we basically have weapons that are going to msr. ram esm are the same. we brought some more torpedoes. the bottom line is, across the board and weapons, trying to maintain the pace we have to be, and we need to buy the weapons we need to have. in this case the only other big change is jag.

the small diameter, is crucial to the navy and marine corps and joint strike air force. in terms of affordability, one need to be retained and one would be terminated and a small amount in the army to maintain some r&b. corrine core procurement -- the marines goal is to modernize command and control equipment to keep up with a joint force. some highlights in here, radar systems. you can see in the middle of the slide, a jump to $128 million. as well as refurbishing an edm model so they can get going on that. some of the tactical and energy investments, need for fuel to be transported forward.

they are going into safety improvement on the ldsr. pretty much flat, a slight decrease, but 1112 or also buoyed up preconceived from the dropping almost $200 million as a transfer to production. the bottom line is, that will ramp back up again and allow us and even rampart. increases for trainers, the virginia class plug module is the beginning of the r&d. it will increase to allow that virginia plug.

you can see the transition ramping down. the other or important programs for the common on. it is part of and in -- for the common haute cuisine -- commandant. the joint like tactical vehicles will be the replacement for humvees. they will be paired with the army on that program. andr, the cycle going back up to 224 as we move from -- that will be leading to end up on the ship profile. it is a change from last year.

the robust idea was that at the end we had to get to the enhanced capability. military construction and family housing. a significant drop over time. the biggest change is the marines coming out to grow the forced and the level to take care of all the marines on the bases around the country. you see us thuringia more flight:a steady state at the end. the fiscal year 2013, some overseas, largely focused on military needs. on the right is family housing, a picture of some housing in key west. there is one project in 2013 up in the northwest in what is called jackson park. $102 million construction is not new housing and it maintains

largely overseas. energy -- a key component driven by the secretary of the navy who has made that one of the opening six items. also supportive for what i call tremendous tactical reasons. everyday -- tactical aviation improvements, fuel refilling of aircraft carriers, technical improvements require fewer -- each one extends the range for the feel you have on board. when you unrep, you have a lower state of readiness. your taking a risk. anything you can do to affect energy use is important.

we are doing this for a reason of safety for personnel and efficiency of our forces. you see some of the examples, the green hornet. a significant investment of trainers. saving time in terms of training. gliding on board, a wide variety all across the area. -- lighting on board. oco funding, a couple of big drivers here in terms of navy operations going down to $5 billion. the sheer amount of what i call carrier presence. we are still maintaining a robust presence but we are not flying as much as we were. we are still maintaining 58 days deployed for some of the ships

there. in terms of marine corps changes, you can see a big step up their, the moving of the marine corps with an extra 15,000 personnel going into a oco here. that is what drives that up. terms of marine corps operation, going to $4 billion, that would normally be going down as our level of ops are going down. in afghanistan, the army had budgeted for fuel, and in this case for fidelity as they close down the account, the marines have had to budget for the fuel they use, which previously -- it is not really an increase to dod, just a transfer in terms of display. as i try to wrap up and shift to questions, we think all our investors -- dollar investment shoreline with strategic goals as set out by the president and

in meetings with the department of leadership, and as a result we have a leaner, smaller force and we are man and led by the highest quality of individuals. i think you have all the material. i would like to go ahead and turn it over to questions. >> the changes in the ship's account, you said 15 ships are being moved. what does that mean for the long term, are you forecasting a smaller fleet for the future? >> right now we have -- we are forecasting that in 2017 we will have the same number of ships we have right now. we'd be commissioned some of the cruisers, but the production we have going on will actually drive us back up. we will be above 300 in what the secretary of the net because the second fit up. we actually see some growth up

there. the actual structure assessment that will define another number for the navy is not done. i expect to have numbers in april or may for total fleet size. i want to point out as you look at that, right now we have 37 ships under construction. shipbuilding is a program, we have some being built that was funded in 2005. we have a very large amount of backlog. all these yards or you may see lower numbers, there is an extensive amount of work. we have nine more ships to award this year. we view that backlog of work out there and those ships deliver -- we are tightening them up in the virginia class. it had been up to six years to deliver a ship and is now almost five.

>> the have a five-year figure for ssbnx? >> how do not, but i can get. largely the money removed and that program was construction. we had advance planning in 15, 16, 17, and the procurement of advanced components. we will be the number, but i do not remember exactly. it is more than $2 billion. >> my second question is, on the new strike capabilities you are looking to design with the nuclear submarine, do you have any funding for that in fiscal year 2013? >> the actual virginia plug was a transfer from that account. there is ans money,

account that osd had. you design and build a ship, come up with the plan. right now we are still looking at weapons with curlwe currentl. >> a question about your aviation program. it looked like from your slide you hold steady at 6 and then go up to nine in 2015. is there a reason why you are still holding off and holding that procurement lower? >> the production is related to what i call -- there is a very large msr. when you go down and see the two lines that have open, there is

an msr for where it is right now. the bottom line, if you do 11, 12, 13, 14, we don't want to build more until you finish the design. taking off for probation is related to, we are going to recover, do the concurrency fix on all the passenger planes. the marines have all the planes and we want to get them fixed soon. taking off probation does not affect this ram. >> the navy made a strategic decisions to trim them to program the live tree are you worried about the effect on the per unit cost? >> you are always worried about cost.

one thing we are finding, cost is one thing, but it is of abuy of 3000. in terms of what we do to the cost on boeing, the actual cost is still coming down. we are seeing pretty good caused returns on that. it is more of an adjustment from 20 going to 30. we are looking at small amounts of dollars that had to be on airplanes that are not in multi years. you still have to come up with a $58 billion reduction, which was about $32 billion procurement. as you look at the max, the multi-year v22 was coming out of 30, which is designed for 2.5 squadrons a year. now they are done. the transition is done, so the

marines are looking at affordability and what can i put back in a multi year to keep building at a reasonable number within the dollars you have. it is just trying to basically maintained and we are not putting that in a multi-year. there was talk about that last year. >> are you saying the per unit price is not going to go up? >> the price may change, but we will have a new multi-year. there will still be a savings of 10% over a single unit buy. i will have to defer from the actual budget book, but it is not an immediate cut of half. >> you are going to build f-35b inc's and six

fiscal 2012, yet both of them need major work before they are actually an aircraft that can be used in operations. >> we have already been told by comptroller hale that by stretching these programs out a little longer, the per unit cost is going to go up. one of the problems with both of these is that the per unit cost has already gone up. how can you reassure the taxpayers this is not going to become some monumentally expensive -- so monumentally expensive it is not worth the money to spend on it? >> the assurances through these whole process is more than just joseph mulloy as the budget officer. i take this job very seriously. there are some things that have to be fixed on this airplane. the estimation early on was that the model would model better. in some cases they did not.

any plane if we put on contract in 2012 will not deliver until 2014. these airplanes you see in 2013 and 2014 will not require the same concurrency fix. we are not producing more. they are trying to reduce the number and make sure these planes roll off without the concurrence the issues. there is a backlog of 50 or more of marine aircraft that will have to come back in for some level of repair that need to be done in this process. having seen the airplanes down there and having seen one that got launched, the f-35b landed there. the taxpayer does not have to worry about -- the admiral was picked to drive this program further ahead and general amos is also amazing as an aviator

and what he has done. i think very strongly, when you look at the capabilities this airplane brings and the level of stealth and electronics capabilities, whether the full spectrum environment, this airplane is the technology we have to have going ahead. this one has been pretty well driven down under a learning curve when you go to the company. >> on ships, with the retirement of the landing ship dock and the newer amphibious vessels, are you going to be below the number of amphibious ships you need to deploy, and what will be the size of the amphibious fleet? >> a long-term fleet -- amphibious lee will be 30. that is what this is all based on.

we are working through the interstitial. along the way, the long-term path will be 30 amphibious ships and we will be able to maintain the flow. there are some cases where they are in maintenance, but some bottom line is, we need 32 or 33 ships, but our goal is 30 right now. this is one area of taking risk. we maintain the largest amphib for navy and marine corps needs. it is conjoined -- over here. >> a loose end of the ohio replacement, construction was going to begin in what year?

>> 2015, and now it is 2017. taking up $58 billion is hard to not have some adjustments, but the bottom line, we maintain our bam's. as we look at what we have to provide to ground forces, support and able needs, v2av, supporting the requirements for that, it was felt that was enough to get what we need there. we keep a robust program of all the various small ones. the program was already sliding some for about a two-year delay in the u-class. it did slide out.

it was going to be 19, and now will probably be an early 20. >> there seems to be some confusion about the plans for the carrier may port. as the canceled altogether? >> effectively delays it. strategic dispersal is still a strategic need recognized by the cno and the secretary of the navy. it has been deferred outside this set up. >> any idea when it will be put back in? >> no, ma'am. >> a quick clarification on where flight 3 is on the progress. is that construction and design schedule still the same from last year? >> the first one will be in 2016 and we have two in 2017.

>> it says in here that you all are turning a third mlt -- does that mean a reduction from three to two? >> why the other adjustments in here in terms of risk-taking was in 2012 -- it is going to rrf ships. it was a calculation taken on as we look at what was the risk of having the ship's could we could break them out and still make some of the plans. there is an efficiency idea. when that happens, the question is, where you have to go with the third mlt? you could have it as a free rotator. it supports a wide range of

operations weathered mine hunting, anti-piracy. we looked at the ship building and the navy trying to wrap up, what should do we need to build, and it would be putting in r&b that the navy has 4.13, 2014, and 2015. we are able to come up with the plans and designs, and the -- there will be to a beach. --two of each. >> [unintelligible] whether any navy programs there? are the through theire navy programs, but i do not have all hours broken down that way. our focus on the pacific is interstitial to all the products

we have. we have to have the ships to be able to operate in both theaters. >> does it concern you as a controller, your most expensive vessel is only 42% through. how worried are you about additional cost road on the gerald ford? >> it goes back to where i have been and what i have done. ashley had invented the shipyard and speaking between naval reactors and the company, and looking at the construction of the ship, there are a number of items where the cost was already incurred years ago, and recognition of where the company has made changes. i can do what i can, but there are other items that have come up. as the ship got rolling, some changes are due to the navy and

some due to the company. i have seen articles saying this could be as much as a 1.1. that is not much more than i have put into the ship. admirals looked at it as, since the ship is now within this window of delivery, i looked at what was the best case of dollars that i want to recognize, that i have to pay for calls, but hold the line with the $811 million. that was a long discussion between the budget office, navy leaders, and we elected to recognize this is where we want to hold the line. as you start to assemble things, you begin to realize you'd either add on other efficiencies or cost growth that is already out there. i feel comfortable that this is a big chunk of what is in their.

>> aside from retrofitting, is there money for developing it, or is that all in r&d for 2013- 2015? >> it is about a total of $200 million. each mlt was about 500 to make up the r&b and design. the navy to the money on top. about 200 of the multiple lines to do that. >> with regarding the open now okinawa to guam.nell

is it related to the uncertainty regarding the realignment? >> you bring up a lot of different things. the actual total is 51, 26 for a project and $25 million for planning and design. we know we need to plan and ahead.ate going and we need to do an expanded eif out there, and that is going to take time. we put up more money than that, we will very likely lose it on the hill. better to put in a project on the north ramp at andersen air force base and put the plane design money into start working the plan. we still have a backlog of things to build out their independent of the size of the troops. thank you all very much. i appreciate your time.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> so far, we have heard from the army and navy, giving readings about their part of the defense department's proposed budget for 2013. the air force briefing is next. expected to start about five minutes from now. we have been covering briefings from the federal agencies today about the president's budget. also getting reaction from republican lawmakers, which can

see here on c-span tonight starting at 8 eastern can at c- span.org right now.

[no audio] >> national events and business technology magazine writes that the pentagon's de 2013 budget of unveiled today by the obama administration contains no big surprises. the proposal is president obama's first full budget since the enactment of the budget control act. also the first one where he is asking for a cut in defense spending. he 6 $525 billion for the pentagon's base budget, a decline from fiscal 2012.

the briefing about the air force's part of the proposed a defense budget is coming up next. with this being but a week on capitol hill, we set up a facebook question for your reaction to the budget released earlier today. we wanted to know what your priorities are for next year's federal budget. you can go to

facebook.com/cspan to give us your thoughts. waiting to hear more from the pentagon about the air force but the budget. the washington post writes that president obama's proposal that the national debt is projected to grow significantly faster than previously forecast. the 10-year blueprint shows annual deficits exceeding $600

million every year except 2018. >> this portion of the fiscal year 2013 budget role at. we have major general edward l. boldin, jr.. he is the assistant secretary for budget and he will actually give the budget briefing. at the end of the budget briefing, he will be joined by miss marilyn thomas, the deputy for budget. without any further ado. >> good afternoon. good afternoon, ladies and

gentlemen, and welcome to the fiscal year 22 -- 2013 budget briefing. next slide, please. today's air force, as is our tradition, is globally engaged in missions across a wide range of difficult and complex challenges. in 2011, we helped end the war in iraq and reduce sectarian violence in afghanistan. we help curtail violence in libya, supported earthquake relief in japan, and engage in a myriad of smaller operations around the globe. in addition, we provided deterrence to help underwrite global security. as our global security environment evolves, our physical environment has changed. it is clear that we need to renew our economic strength at home. the budget control act, the defense department's share as a result of the reduction is $487

billion over the next tenures with nearly $260 million of our over the next five years. we understand that the air force must do its part to reduce spending and have made the difficult choices necessary to achieve those savings. we firmly believe this is not a choice between national security and fiscal responsibility. this budget starts the transformation of the air force in support of new defense strategy, constrained by limited resources. the evolving threats we face require a new strategy of changing how we engage across the globe. this will require us to be able to respond quickly to deny and deter opportunistic aggressors. the strategy emphasizes the asia-pacific and middle east region. we will also continue to meet our commitments in europe and those other partnerships where we will look for innovative ways to sustain our interest.

we are required to balance risk by making difficult choices. we protect readiness, accepting a smaller, high-quality force, and focus on investments on key modernization programs while making more disciplinary use our dollars. finally, as always, will continue to take care our most important resource, our people. next slide, please. although the environment and our strategy have changed, the enduring contributions the air force has provided will remain. contributions are as you see on the slide. our fiscal year 2013 budget decisions reflect the difficult choices we have made to align with the new strategy. these decisions reflect a balanced approach in five brought things. we have every balanced our force structure to maximize

capabilities and response. we preserve readiness by protecting flying hours and weapon systems sustainment. this will support our aging fleet of over 52 -- 5200 aircraft while reducing the cost of operations wherever possible. in the area of modernization, and have continued our investments in the most promising, technologically superior systems and maintain the quality of life for our air men and their families by increasing pay and allowances, providing first-class housing and family programs. the result is a flexible and personal force to support our new national security strategy. the next line provides of view of our 2013 budget. this chart shows the total air force budget by appropriations to include intelligence and defense programs and overseas contingency operations, or oco. the base line comprises funding for air man, weapons, training,

and all the other programs that the air force directed manages. the first thing we want to highlight is a reduction from a total budget of $162.50 billion in fiscal year 2012, a reduction of 5%. we also want to highlight the air force base line has declined 12%, adjusted for inflation from fiscal year 2009 to fiscal year 2013. i would next like to draw your attention to our air force base line which will be the focus of today's presentation. from fiscal year 2012 to fiscal year 2013, the budget decreased 4.4% in nominal terms and 6.3% adjusted for inflation. approximately $73 billion, or

66%, is required for running day-to-day operations at our bases around the world. this includes military personnel, flying hours, operations, and so forth. includes facilities sustained, restoration, and modernization support. our approach is to preserve readiness by not eroding our accounts while maintaining efficiency efforts at focusing on structural adjustment. the air force is committed to preserving the quality of our all volunteer force and taking care of our air men and their families. next we have military and family housing, decreasing from fiscal year 2012 due to a delivered paul's in major construction projects. pause ino a deliberate paul' construction projects.

we made the requisite tough choices that will maximize our military effectiveness in a constrained environment. next we will discuss overseas contingency operations. first, overseas contingency operations funding decreased significantly from fiscal year 2012 for the simple reason that military operations ended in iraq and we have begun to draw down in afghanistan. within this appropriation will provide $1.30 billion in special allowances for the approximately 26,000 airmen who are engaged in disrupting, this mailing, and defeating al qaeda and its networks. the $9.40 million operates to deliver critical command-and- control and firepower to u.s. and coalition forces. it will also support the theater movement.

it provides course detection for operations in afghanistan and they support him to secured operations in iraq. the $602 million considers -- it procures and replenishes of munitions and also replenishes missiles. our request includes $240 million of in a working capital fund which includes funding for dignified returns and transportation of our fallen heroes. next we will look at our budget by appropriation, beginning with military personnel. we continue to take care of our air men with increased pay and allowances, which includes a 1.7% base pay increase, 4.2% increase in housing and a 3.4%

increase in subsistence to match corresponding inflation indices. the reduction for the medicare eligible retiree health plan contribution account is due to updated economic assumptions that are calculated by the dot board of actuaries. our total force decreases by 9900 authorizations from the fiscal year 2012 to fiscal year 2013 and maintains a balance active to reserve component mix. these reductions a line of force structure with the new defense strategy and within funding constraints. kelso provide a balanced and trained force that is ready and able to execute the air force's core capabilities. next slide, please. operations and main appropriation supports ongoing operations and new missions in our 79 major installations as well as minor installations. this budget divest portions of the combat forces are retiring

227 aircraft, which is about 4% of the fleet. where possible, we attempted to retire all aircraft of a specific type that allows us to divest the training and logistic support of that aircraft. where that was not possible, we work to retire the oldest aircraft first. this budget takes readiness in flying hours despite an increase in fuel costs and find weapons sustainment at 79%. our plan supports readiness along with operations to support 16 launches for dod, national, and commercial agencies in fiscal year 2013. just as we are focused on preserving the readiness of the force, the air force is committed to maintaining the quality of life for our air min. bunning is provided for .5%

raise for personnel after a two- year freeze in -- funding is provided. in addition, we are pursuing opportunities with local communities to support our airmen and their families. our work to better use our resources continues in fiscal year 2012 and we are already seeing returns on our investment. the executive order for promoting efficient spending mandated reductions in administrative travel and printing costs, among others, and we complied with that guidance. the air force is committed to achieving audibled financial statements. auditable financial statements. our military construction budget decreased from last year's budget request. this will give us time to ensure proper investment of limited resources in light of the ongoing budget reduction pressures and potential for structure changes. this budget continues to

support the highest priority by focusing on high priority, dormitories and basic efficiency projects. our base realignment can and closure appropriation focuses on environmental cleanup and 34 closures between 1988 and 2005. our military family housing program and approved 400 units and infrastructure in japan and continues to maintain an overseas 76000 privatized units. the military family housing increase is for the requirement due to the delay in privatization. our research and development evaluation appropriation decreased by approximately $500 million.

we have taken a balanced approach to ensure our fighters have the capability they need to combat threats today and tomorrow. we also remain committed to modernizing our fleet. our fiscal year 2013 budget brunt like test, continues development of software upgrades and allocate resources to extend the life of our f-16 lead. our focus on long-range strike efforts continue as we develop a new long-range, nuclear capable of penetrating bomber and we advance -- the number one obsolescence issue in the fleet. we also provide funding corp. upgrades and dense technology upgrades for infrared system vehicles. in fiscal year 2 w