guest: the following week we had tea parties across the country. host: were-- where were you living at this time? guest: my husband and i were just coming out of bankruptcy, cleaning houses to make ends meet. host: where were you located? guest: i still live in a small town in southern california, not affiliated with either party. i was frustrated. when i heard santelli, it resonated with me. i held 80 party. i was in sacramento, california. 127 people showed up. that ignited a fire. people were just tired of the government. host: are you the leaders of the

tea party movement? guest: definitely not. people describe the movement as leaderless. i do not think that is accurate. there are millions of readers across the country. there are 3000 local chapters, local people on the ground in their communities. host: in your book, you talk about the five pathways to liberty. what are they? guest: our goal is we are working to save our core values of fiscal responsibility, constitutionally-limited government, and a free market. over 50% of americans have this in their hearts and minds. if that happens, they are not going to be voting for a person. they are going to be voting for a constitution and the ideas that made america great. there are five pathways to get there. there is the economic, the

political, the judicial, education, and culture. guest: really, these are things where we felt our key to returning the nation to principles -- these ideas come from all across the country over the last four years. for example, there are reforms necessary to get our economy going to free entrepreneurs to produce the wealth and prosperity that banks and government cannot. there is a wide consensus across the country that our education system is broken. we want to free parents to have more choice, so they are invested, and they have a choice. the education system is better. host: we want to encourage members of the tea party to call in this morning. you see the lines on the screen. mark meckler and jenny beth

martin are our guests. how did you get together to write this book? guest: we have communicated on conference calls facebook, and twitter. we started tea party patriots. there were five people. as we had gone through, we wanted to make sure there was a way to convey to americans what the tea party is about other than 32nd sound bites. -- 30 second sound bites. host: do you think the tea party has been fairly portrayed? guest: it is about making sure we let our fellow americans know what it truly is about. sometimes they are favorable reports. sometimes they are not. it is not about the media. it is getting our message out there. host: is tea party influence waxing, winning? guest: it is less about

legislation or elections. it is about the dialogue. you look at the dialogue in the country. it is all tea party dialogue. republican candidates are forced to speak about tea party values, and conversations resolve around fiscal responsibility, the constitution, free-market enterprise. these are things the tea party brought to the fore. host: there was an article saying they have reached agreement on the payroll tax and it will not be paid for necessarily. there are also reports that the transportation bill is being called. two pieces of legislation you probably have an opinion on. what does that say about the republicans in congress right now? guest: two different things. on the extension of the payroll tax, i think they still do not get that the american people want to know how they are going to pay for things.

people understand the primary issue is debt and deficit. people are concerned with that issue, along with the economy. republicans think they can maybe spend more slowly than democrats are spending. it is the same thing. we are spending our children and grandchildren into the dustbin of history, if they do not change. on the transportation bill, there is hope. republicans in congress are objecting because it has a lot of spending in it. they do not have a way to pay for that spending. host: jenny beth martin, do you believe he party and occupy have any shared interests? guest: i think we are all concerned about big business, big government, and big labor working together to benefit each other and not consider what benefits america and the everyday americans. i think that after that we go

separate ways. we believe in independence and self-reliance. we believe competition is good for america. we do not believe the government solves our problems. i think occupy wall street prefers government solutions. host: the constitutional government mean that entitlement programs must be dismantled? guest: i do not think it is that simple. you apply the constitution to individual programs and make that decision on a program by program basis. when you are talking about the tea party movement, i have talked to thousands of people. i do not hear anybody saying we want people on the streets and there should be no social safety net. it is not about a lack of compassion. it is about a proper its size and scope of government. host: when does the book come out? guest: it is out. it came out on valentine's day. host: can you expand on your for

your plan? -- 40 year plan? guest: we want to make short americans understand that we vote and that is a first step in the right direction. it is not the only responsibility we have as citizens. we have to make sure we are holding our elected officials accountable. the payroll tax extension -- they are going to extend it to the end of the year. after the election, they will have to go in and figure out what they do going forward. it is during that time when it is a lame duck congress that people go back to their lives and do not pay attention to what is going on. that is when things are happening. it is our job to hold people accountable who we elect. host: in our rock, colorado, on our independent line. you are first up. "the second american revolution" is the name of the book.

caller: i worked for a major financial institution in the mortgage division, and saw firsthand what the industry did in the manner of a few months. their irresponsibility cost millions of jobs to be lost. just decimating the tax bases of our cities of communities states, etc. i am just appalled at the seeming ignorance of the tea party of what actually happened. -- what actually happened with the private sector. this is one illustration we can even see currently in europe. the broad spectrum of belief that banks have to be propped up and bailed out in order to protect their bond investments in countries that they deliberately invested in that they knew were hugely bad investments. guest: you say the ignorance of

the tea party but what you are saying we 100% agree with. the idea that banks should be propped up by the government is simply wrong. what they have done and what government has done is government has allowed private industries to maintain its profit motive, but it has socialized the risk. it made all of us, through these guarantees and bailouts -- it has made all of us pay for the failures of these institutional investors. we do not believe in too big to fail. we believe government created this. it is the intersection of big public companies with big government. that influence trading has allowed this to happen. you and i and everybody else higher pay price -- are paying the price. host: you write many tea party years are interested in abolishing zero cabinet-level departments other than state, treasury defense, and justice.

that would dramatically reduce the federal government. do you agree with that? do you agree with abolishing all departments? guest: i think abolishing departments and sending them back down to the state level allows for citizens to hold elected officials accountable. there are people in the west coast to cannot get to washington d.c. and make sure their congressmen understand how they want them to vote on a particular bill. it is much easier to drive to your state capital. often, you see your legislators from state government at the gross restore and gas station. host: next call from atlanta republican line. guest: if you -- caller: a few comments. i will try to be brief. what we need to do is really arm ourselves to the teeth with a deep knowledge of history.

when it comes to spending, i do not think the general public knows -- i am nearly 50 years old. every 10 to 12 years, the size of the federal government has doubled. barney frank says it has gone too far to the right, politics in this nation today. but federal, state, and local spending is more than half of the nation's individuals' income. when it comes to tax reform and the history of significant tax reform i do not know if the american people know that every time going back to coolidge in the 20's, after kennedy cut taxes across the board top to bottom on the wealthy and everyone else in the middle of the recession, we have significant growth and job creation. in 1983 and 1984, nearly 7 million jobs were created.

you had an average of 8% quarterly growth. the revenues increased even after bush tax cuts. guest: i think what you are talking about is the size and scope of the government at the federal level and the state level. the way we define that is a simple question. who decides? it is less what is decided then who decides. we believe there is an evolution of power from centralized power to the federal government down to as close to the local level as possible. you will end up with different solutions. san francisco will operate differently from dallas. that is as it should be. those will be more creative solutions. it is impossible to have one size fits all with 3 million people. it is an impossibility. we believe the government should be smaller. most americans believe the same thing. host: what is your background? guest: my background is in the

law, and please don't hold that against me. 20 years in law. originally in real-estate and later as an internet attorney. host: from northern california? guest: a small town, a country guy. i hang out with my kids, "soccer, ride horses. host: grover norquist, americans for prosperity actually run the tea party. true? guest: definitely do not run tea party patriots. they certainly do not. host: do you get funding from any of those groups? guest: no. going back to our summit, we may have had a sponsorship or to come up paying for a summit in phoenix, arizona. our donations come in from hundreds of thousands of americans around the country. the average donation is about $60. host: is this a full-time job

for you now? guest: it is a full-time job. i am around the country visiting local groups, promoting our message at every chance i have. host: keep your government hands off my social security. guest: so, the social security trust fund -- we are having issues with it. we have to face the fact that we have got to cut government spending. if we do not cut government spending, there is not going to be social security money. there is not going to be money left. every dollar we spend in the federal government right now 40 cents is borrowed money. you cannot continue to borrow like that. host: president obama has proposed a 1% cut in defense spending. do you agree with cutting defense as well as everything else? guest: i think everything should be on the table.

the idea that any program is sacrosanct does not work. right now the federal government is out of control. i think we need a strong defense. i think most people in the tea party movement are very strong on defense. i think everything has to be on the table. host: you wanted to add something? guest: i think we need to pay attention if it is a real cut or a spending cut. -- or a cut in the increase of government spending. the budget that the president has suggested and quite frankly, what congress has done as well, has continued to increase spending. they have not cut real $1 yet. we cannot continue to increase and increase and call it a cut in spending. it is not a real cut. host: democrats line, you are on the air. caller: thank you so much for c- span. it is an excellent program. i hope to see it on forever. my question to your panelists

had the civil rights activists been called the tea party knowing the in justice in an equity. -- be in justice, the inequity -- the injustice the inequity. but jim crow-ism. what you think the nation's reaction would have been in simple terms, the tea party, as the nation's reaction is today. talking about the tea party. host: could do very quickly explain what you mean by that question? we are all a little confused. caller: all right. the tea party today -- i am a liberal.

from louisville, kentucky, if you can believe that. host: what do you mean by your question? caller: it is a right policy -- a right party that is inhibiting the banner to negotiate. -- mr. boehner to negotiate. as in before, if the civil rights movement had been called the tea party movement. host: i am not sure any of us understand your question. i apologize if this is not what you're asking, but bill tweets in -- guest: you can talk to the rev. peter cynne in south-central los angeles who runs the tea party there which is not 99% white, clearly, this and the

demographics of the area. you can talk about the dinner i had. talk to the national director. he worked on the million man march. this idea that it has anything to do with race is just ridiculous. frankly, the tea party movement is not interested in race. they really do not think about the issue of race. it is about every american in every state. it is a post-racial movement. host: florida, gordon, tweets in -- guest: i was active in the republican party prior to the to party movement. we were very upset and frustrated. on a personal level, i can tell you that when the tarp bill passed, my husband and i had huge problems with it.

he had had a business that failed. we did not feel like the government needed to bail us out. we were very concerned by this too big to fail nonsense. really that is what we thought of it. we complained about it. after we filed a currency, we -- we filed bankruptcy, we lost our house in january 2009. we're offered fannie mae and freddie mac money to stay current in our house. we decline did because we thought that the tarp bailout where was i? i was opposing it and i probably did something that i never thought would be known on c-span and national tv. we stood by our personals. -- our principles. that is why we stand now. we're holding our parties accountable today. just as frustrated with the republicans and the overspending and the the last real spending cuts. host: the name of the book "tea party patriots -- the

second american revolution." mark meckler and jenny beth martin are the authors. angelica is on our line. caller: when i look at the situation, i see two problems. we have the welfare state that is promoted by both parties. the only reason they continue paying for things they cannot pay for is by printing money. we do not have sound money anymore. that would be my first point. my second point has to do with the constitution. great document. you know, but do we really do have a government by the people, for the people? i do not think so. i think that whole phrase we the people should be replaced with we the global banking interests. those people, those institutions control, on, and tell our politicians what to do, how to do it, and when to do it.

i take my comments off the air. guest: your comment about printing money is correct. >> this is the great hidden tax in america. the government does not talk about this. everytime the print money the money in our pockets is worth less. it is a tax, essentially. it takes the value of money out of people's pockets. we have been printing money at a record pace. that is something i think everyone in the country needs to understand. we need to get a handle on as a country that we are going down the muddy hole. -- the money whole. you described it correctly. in regards to the constitution, you talk about we the people, and do we have the constitution. again, unfortunately, i think you are correct. we have allowed our constitutional liberties to be chipped away, one by one. we, as americans, have to defend that document. the founders said we are the last line of defense against incursion on the constitution. if we continue to fail it becomes a meaningless document.

host: democrat, arlington virginia, go ahead. caller: this is a question to jenny. she talks about fiscal responsibility for the government but she was against the tarp bailout, but she did not mind so filing bankruptcy witchy overspent on her personal -- when she overspent on her personal finances for or on her head -- when she overspent on her personal finances or for her house. i what her reaction to that. guest: it certainly was not easy to lose everything we had worked for. it was my husband's business that failed. we did not take the easy way out. the only government help that we had was from unemployment. it was only for a short while. after that, beyond that, we realized we had to except that personal responsibility.

we cannot wait for the government to take care of us. we rolled up our sleeves look at what we could do, and started cleaning houses and repairing computers to make ends meet. it was not easy, but we did accept responsibility. the great thing about america is you can risk it all. sometimes you are successful and succeed. we had that for a while. and then sometimes you risk it all, and you lose it. when you do lose it, you cannot look to other people to take care of you. you have to accept responsibility. that is what we did. host: jenny beth martin is your personal story written in the book? guest: it is in the introduction. host: is yours as well? guest: yes, but it is not very important. what is important is what all these tea party years across the country think about how we got here, and what they think about how we are getting out of this mess. host: do you support ron paul?

guest: i think he is very good on the constitution. we appreciate everything he is doing fighting on capitol hill for our core values. as far as the presidential race goes, the tea party does not endorse. host: who are you supporting? guest: nobody. i have not chosen a candidate yet. i am actually enjoying the process. i am enjoying watching these guys. this is an incredible vetting process. i think they're all getting better. it is interesting to watch them go to the debates and public scrutiny. nobody, yet. guest: we do not endorse a we cannot support a candidate on here. it would appear as an endorsement. what i appreciate about each of the candidates is that the process we are going through is getting these candidates and the specific about how it will solve the problem. it will be our job as americans, to hold them to their promises.

host: new york independent line. caller: first, i would like to think c-span for opening up this discussion. it is quite interesting. one thing i would like to bring up, i believe this is in response to the tough bailout by the bush should ministration. -- bush administration. it was a money bomb, a tea party money bomb it that created backers of ron paul in 2008. he has been declared by many people as the godfather of the tea party. i noticed lately that the tea party, a lot of the tea party organizations have disassociated themselves with ron paul and his policies. in reality, the tea party was established as a response to -- the name tea party was in response to the tarp bailout to the bush administration.

they're totally against any kind of government spending. that is where it began. again, ron paul was the godfather. i hope the tea party people are waking up to this and to the founder really was. guest: again, we appreciate everything ron paul is doing. he has been fighting for fiscal responsibility for years. he has gotten teenagers and college students excited about monetary policy. we appreciate that. with knowledge that ron paul is a large part of this movement. host: new york, republican line. you are on with the authors of "tea party patriots -- the second american revolution." caller: i want to thank c-span. the last caller said of my question because i want to talk about ron paul and how he started the t party.

-- t party. -- tea party. my question, directly, is about foreign policy. it seems like the tea party started by ron paul, but now that it has become mainstream, it has really turned into more of a militaristic type organization. i wonder your comments. guest: i want to set the record straight. ron paul has talked about many of the issues that are tea party issues for decades. that foundation that he laid is invaluable. as far as starting the modern- day tea party movement, i take issue with that. i understand there are ron paul supporters a couple of years before the tea party became official. they did not take off until that rents. -- intel -- until rick santelli did his rant on cnbc. every movement has a moment. that was the moment for that modern american t party.

-- tea party. i would not say he actually started the modern day tea party movement. as far as becoming militaristic, i would say they do have a difference of opinion -- of opinion with ron paul. on foreign policy. there are a lot of distinctions. there are a segment of ron paul supporters, but the majority of tea partyers do not. host: were you approached about writing this book? guest: we had an agent approaches. -- approach us. they said, you have something to say everything publishes would -- and we think publishers would be interested in it. host: what was the process like? guest: lots of phone calls and the mouse. -- e-mails. and a lot of collaboration across the country. host: a democrat. caller: i am interested in that

city bank memo that described america as not a democracy but a plutocracy. that is how i see this -- i do not see this as a government that is too big. i see a government that is not big enough to overstep large private and corporations that have really taken over everything in america. since when does somebody have to pay the mortgagor to make a -- the mortgagorer to make a payment to them? when did that come about in america? guest: well, the government is spending more money than it takes in. we have to stop doing this. if we continue down this road, we will go the way of greece. as for what citibank is doing and other businesses, i think we can find agreement that we do

not think the government should be giving special bailouts, special tax breaks to certain businesses and not to all businesses. it is not fair. we cannot continue to do that. guest: i am not familiar with the citibank memo, but the idea that government is too small is not economic reality. we can talk philosophically about the appropriate size of government, but the bottom line is that $0.40 on every $1 is being borrowed. we're putting that debt on our children and grandchildren. do you consider that moral? can you look in your grandchildren and say i am spending money on things that i want right now because i like having them and later on i am not going to worry about paying for them, you are. i think that is fundamentally immoral. host: this week has come in.

-- tweet has come in. guest: of course we support a balanced federal budget. the question is, how you get there? i do not think there's -- a lot of folks support a balanced budget amendment. i do not think there is necessarily anything wrong with that. number 2, more portly, congress -- more importantly congress is not following the constitution right now. they manipulate all the numbers. i'm not sure what the magic pixie pixie dust is that would make them follow it. we definitely support a balanced budget. host: bill, a republican in new york, you are the last call for these tests. -- these guests. caller: good morning. i have been listening. you filed bankruptcy, which you had to do. that clown that called and probably would've took money from freddie and fannie and owed the taxpayers more money. i support you. i send money to you. i would never vote for ron paul. people tell me, you are a ron

paul guy. i am not. i am a vietnam vet who fought against communism. i hate communism. maxine waters, just listen to her. you know where our president is coming from. you have a great day. guest: thank you. thank you for your support. we are going to continue to fight the government expansion and the overspending. together, we're going to restore our constitution. host: what point in the book -- have we not discussed that you heavily not discuss the you would like to get out? guest: i think the most important thing is who the key party is. 40% of tea partiers are democrats or independents. it is not a republican movement. it is not a right or left wing movement. it is not democrat versus republican paradigm. the reality is this is a movement for all americans. if you believe that we cannot continually spend more money than you take in, you are a key part -- a tea partier.

if you believe the constitution is the founding document of this country and you should follow it, you are a tea party year -- partier. if you believe that capitalism has listed more people out of poverty than any system, then you are a tea partier. host: jenny beth martin guest: this is a book we wrote and it is our ideas. the tea party movement, what makes it so great is it is the ideas for everyone across the country to get everyone thinking. maybe these of the best ideas maybe not. we encourage people to go to teapartypatriots.org to tell us what you think a good plan for achievement is. host: do they take positions on social issues? guest: absolutely not. there was a wide range of debate about this when we founded. if you look to our mission statement, you will see that we specifically say we did not take positions on social issues. we encourage people who are passionate about those issues to

be engaged on them and to be engaged and organizations involved. but as an organization and generally as a movement, spokesman's do not take issues. host: "tea party patriots -- the second american revolution" is the name of the book. jenny beth martin and mark meckler are the authors. thank you. >> members of congress have reached an agreement to extend the payroll tax cut. it also addresses unemployment insurance and payments to doctors. it will be voted on in the house tomorrow morning, with live coverage at 9:00 a.m. eastern. the senate is also expected to act on a plan. live coverage of the senate begins at 10:00 a.m. eastern on c-span to. -- c-span 2. >> i am mark arcas.

i head up the local content vehicle. we have three of them. the purpose is to collect programing from outside of washington, d.c. how do we do it? we staff each of these with one person with a small video camera and a laptop editor, so they are able to roll, record, produce and edit things from the road. what we want to do this is to get outside of washington, d.c. and collect programing for all of our networks. we are doing a city's tour. we will descend on each city with all three vehicles. one will do historic sites. the other will do programming and bookstores with authors. the third does community relations events. community relations events are important because we work with cable partners in the city. the last thing to know is all of this gets archived on our website, the video library. what we are also doing is extensive social media. you will see us and our cable

partners on facebook. you will see foursquare, telling people where we're going. you will see us on twitter as well. the chance to get out our message not only on air but online and through social media as well. that is why it is important. we want to get to places we do not normally do programming and really make a commitment to getting outside the beltway to produce programming for all the networks. >> the next stop is shreveport louisiana, the first weekend in march. >> in a few moments, a preview of next month's arguments in the supreme court on the constitutionality of the health care law. in a little more than an hour and half the vice president of china on relations between the u.s. and china. after that, the senate armed services committee hears from

intelligence officials about the threats to the u.s. around the world. >> several live events tomorrow to tell you about. the house armed services committee holds a hearing on the army budget request. that is at 10:00 a.m. eastern on c-span 3. all after 2:30 p.m., president obama will speak about the economy and jobs at the boeing plant in everett, washington. >> book tv is live saturday from the savannah book festival. coverage starts at 9:30 eastern. at 1:30, the changing israeli- palestinian conflict. there is a connection between all, liberty, and love at 2:45.

we look at post-blackness at 4:00. and the rise and fall of the comanches. part of a three-day presidents day weekend. >> the supreme court next month will hear oral arguments on the constitutionality of the new health care law. up next, a preview of the case, focusing on the mandate for citizens to buy health insurance. panels include attorneys who argued on opposite sides of the case in lower courts. this discussion hosted by scotus blog and bloomberg lot is a little more than an hour and half. >> good morning. i am with bloomberg law. i welcome you to a supreme court argument briefing," sponsored by scotus blog. we are approaching the two-year anniversary of the patient

protection and a portable care act. since the president signed that act into law it has been challenged numerous times culminating in a case now before the supreme court. this morning, we hope to explore some of the arguments underpinning that case. i now have the distinct honor of introducing lyle dennison of scotus blog. he has been covering the supreme court for 54 of his 64 years of journalism. he has covered a quarter of all the justices ever to sit on the court and has reported on the entire careers on the bench of 10 of those justices. it is also to be noted that he is not an attorney. but he is the author of "the reporter and the law, techniques of covering the court's." it is published by community -- by columbia university press and it is still available. i would like to welcome lyle.

[applause] >> good morning, everyone. on behalf of scotus blog in bloomberg law we are glad you are here. contrary to the perceptions of some of my colleagues in the press room, i was not around when the steamboat case was decided beginning the exploration of the commerce clause. that was one case in which he did not appear. i was not very far behind when peter roosevelt began exploring the possibility of a national health care lot in the early 1900's. i can a long after that. my task is not to discuss the case but to give you some outlines of the logistics of what is going to be happening.

the first thing that i would tell you for sure is settled is that justice kagan and thomas will participate in the case. there have been repeated discussions about whether one or both of them should disqualify themselves. there is one case urging justice kagan to refuse. there have been opportunities for them to refuse and they have not done so. it is perfectly acceptable that they will continue to participate. there will not be in a live television coverage of the oral arguments in late march. there is a request. i do not believe there is any possibility that there will be live coverage.

one other thing that is settled is the court has completed the briefing schedule but not all are in yet. i did a count last night in the press during -- pressroom. there are 93 briefs. there are still more briefs to come including tomorrow i think it is due tomorrow on the server ability question. some issues that are almost settled are how much time there will be for the oral argument. they are committed to pipeline five hours but the parties have asked for another half hour.

we presume we will see an order from the court asking for the competing allocation of time request. there probably will not be a safe date release of the audiotapes made. the current chief justice has a policy that he prefers not to release any idea taste on the same day of the hearing. now the common practice is to release all of the audio tapes on the front of the argument. when only historians and weekly magazine editors and maybe council have an interest. the daily press has lost interest by that time. there could be a change in policy for that case.

it treats this case differently. the court has some of the filings in the case of the website. the court also has set aside 5.5 hours of argument for this case. normally, there is only one hour of argument. i would urge you to not overlook the anti induction issue. this is one of the issues for the main street press. it tends to fall over division. there is a mandate.

i would like to take up a few issues. most importantly, the birth control mandate is not an issue before the court now. if you wish to see where that kurdistan's as the legal matter, and they published the regulation region where that stands as a legal matter, at the published-- if you wish to see where they stand on the legal matter, they publish the regulation where it stands as a legal matter. it will require insurance companies to provide care. i would also like to address one major issue. one other major issue that is not before the court is the employer mandate. this is the equivalent.

-- the equivalent of the individual mandate. it was raised that the court ought to do that. it has been suggested that perhaps i should offer a prediction as to how it should come out. i am not going to do that. i am not in the business of making predictions. except that the following panel could be very informative. thank you very much. >> thank you so much. in the publisher of a blog. we are grateful for those who are watching streaming or three c-span. -- or through c-span, taking the time to be with us. everybody understands the case -- the significance of the case the judges are about to hear on the patient protection act both

with respect to health care reform and the structure of the government. that are about to hear on the act. there are incredibly well meaning people on both sides of the case. one small point of privilege is that i have a dog in this fight as a lawyer. i have an amicus brief. i want to make clear that my job here has nothing to do with that. it is simply to facilitate the folks who will do the talking. we have produced a media guide for the folks who are here. you can find links to the bias -- their bios in the back. we can give you a little bit of backgrounds about each compliment. -- about each of them. hall clement --he is a former solicitor general. he is representing the state plaintiffs in the case. half the states have sued the constitutionality of the statute. he's arguing every case.

or nearly so. depending on how many cases you count this as, you could count this as at least 10 oral arguments this term, widely regarded as the most distinguished and best lawyer of his generation. eking compass at least 10 of the oral arguments. michael carbon is a partner at the bankrupt. he is a partner at jones day. he is the former deputy head of the office of legal counsel. of the civil rights division. and of the department of justice. is the principal lawyer for the private plaintiffs. has been involved from the beginning in formulating the legal theory and strategy in the case. they have a principal lawyer for the plaintiffs. legal strategy. -- has been involved in a lot of the strategy. is perhaps the best legal thinker in the they have been

involved in the matter involving the business -- is perhaps the best legal thinker in matters involving the business community and a lot of conservative issues. my last is the former acting general. he argued a most of the cases in the court of appeals as this was being litigated. he is now co-head of the super practice which is an international law firm. he is regarded at the very least among the same generation as the leading democratic lawyer. keela is a professor at yale university. he teaches both in law school and in the undergraduate college, with a specialty in constitutional law and constitutional criminal procedure. he regarded fairly as one of of the five ones in america today. -- five most distinguished legal

thinkers in america today. in particular, in my own view at the very least a legal fixture in academia who, rather than gravitating toward the esoteric and in comprehensible, is actively gravitating toward the important and the clear, and has written and spoken at great length about the health care litigation. so we are here, obviously, with the purpose of talking about the case as a whole. in the time available our goal is to focus on part of the case, which is the challenge to the individual mandate. we will have questions at the end of an inch -- at the end. it has been suggested by the justices of the supreme court that you could talk about this for five and a half hours. we have less than that. we are going to focus on the core of it. i have encouraged the panelists to engage each other, to not hold back.

none of them are known as shrinking violets. i do not think it will be a problem. but to really cut to the heart of the matter and what the essential arguments are about the constitutionality and individual mandate. i will start, if i could -- a lot of folks in this room know a ton about the case. what folks will not know much about, and a lot of people walked -- watching it elsewhere -- if i could just have a chance to set the table with a brief description of what the individual mandate is and what the heart of the constitutional challenge is. >> i will give it a try. i think maybea particular, my own view. -- i think maybe neil would have a different way to describe it. the most controversy in the central constitutional issue is the individual mandate which essentially requires, with one or two minor qualifications,

every individual in the country to obtain qualifying health care insurance. this is something that, certainly the framers of the act, when the were putting it together what was critical. they looked at some states that had tried to do the other insurance reforms including trying to make sure insurance was available generally, to everybody, and that you would not be denied insurance because you had a high-risk condition. states that have done that without an individual mandate had run into problems. massachusetts tried it with an individual mandate. that was perceived as being more successful. it was perceived the individual mandate was critical. i do not think it was perceived by everybody as the only way to accomplish adequate health care reform. there were earlier versions of the act that more affirmatively embraced the taxing power and the taxing authority.

but in the and it was settled that the health care act would include this individual mandate. what gives rise to the central constitutional issue is the starting observation that this is a fairly unique, or completely unique, provision of law. there have been a lot of crises in this country over the years economic and other where congress might have thought that forcing individuals to purchase a particular good or service might be a useful means of government action. but the government never did it. just take an example that resonated with me, because it is so recent and seems to me so obvious -- a compelling purchase would have been a more effective regulation. there was the famous cash for clunkers program involving a series of incentives to get people to help the car industry by giving them incentives to purchase cars. it seems to me it would have been more efficient and

effective for the government, in accomplishing its objective of boosting the automobile industry, to simply say that everybody over a certain income level had to buy a car. a much more direct way to accomplish that objective. the government has never really seen fit, at the federal level to do that kind of direct requirement that individuals engaged in commerce. and so that is what really gives rise to the basic issue here, i think. the federal government, on its behalf suggests this is -- although i think they concede it is largely unprecedented i think they suggest it is a fairly straightforward regulation of commerce, supported by the commerce clause. the challengers on the other hand will point to the unprecedented nature of the imposition and the government's seemingly -- seeming inability to articulate a limit in

principle, such that if you could engage in this regulation, what regulation couldn't the government in cajun what commerce couldn't they force you into in the name of better regulating commerce. in a nutshell, i hope that is setting the table. i am sure i have said at least one thing that makes neil want to clarify. >> legs for this wonderful event. a delight to be here. i did represent the government. i am now speaking for myself. i agree with a large part of what paul said, in terms of description. let me flesh out what congress is doing. i did not understand why this individual mandate existed until i started getting really into the weeds of arguing the case. congress was reacting to a problem in which there are approximately 50 million uninsured people in this country. they are priced out of the insurance market. a large part of that has to do with discrimination against

those with pre-existing conditions. if you are in one job and try to switch your job you cannot really do so because the other employer looks at you and says, "this person has all sorts of high risk, and so on, and the insurance costs for them are too high." 50 million people are uninsured. congress says we are going to eliminate the discrimination against those with pre-existing conditions, and insists that everyone be rated at a certain level in the community so that you cannot stick the bill too high to particular individuals. the problem with that is once insurance companies are told you have to insure folks at a fair cross-section of the rates then everyone could just wait to buy insurance until they got sick. you would wait until you got to the hospital before you had to sign up for insurance. that way you would economize on your costs until you got sick.

that obviously would create massive adverse selection problems, and did in the states that tried to inform the insurance market through pre- existing discrimination bands. congress said with an individual mandate everyone has to have a certain amount of insurance precisely to avoid the adverse selection problem. right now, congress found every american family spends about a thousand dollars extra a month to pay for those who are uninsured. those costs spread across state lines. that is what congress said when saying this is part of their commerce power. health care is approximately 8% of gdp. this is a regulation of that market. the example that resonates with paul is why does the government not do this with respect to the

automobile industry. the automobile industry is really different. that is not a situation in which you can show up at a car lot drive off with the car, and stick your bill to your neighbor. that is what is going on in the health insurance market. the uninsured are going into emergency rooms. you and i, who are paying for health insurance are paying for them. that is an economic effect that is real and present right now. >> assuming you were not persuaded by that, is health insurance foundational a different, in a way that explains why congress could impose a mandate here, but not in some other context? >> neil, as always, is wrong with his independent reasons. he did not describe congress's purpose in enacting this plan. this comes straight from the text of the statute. neil and the government tried to

pretend it what they are trying to do is prevent the insurers -- the insured from subsidizing the uninsured. it is the opposite. you are trying to construct a lot of healthy individuals to buy insurance before it makes actuarial sense. the reason you are doing that is because you have required insurance companies to give insurance to all of these sick people. you counterbalance that by bringing in a lot of help the people whose insurance companies magellan of money off them. this is the congressional budget office. it scored how much subsidy to insurance companies is coming in from the individual mandate. $28 billion to $39 billion a year. it is because you are taking a bunch of healthy third year-old with no need for insurance except perhaps catastrophic insurance, which the act prevents them from buying -- the

only kind of insurance you would want as a single 30-year-old is catastrophic insurance and case i get hit by a bus or something like that. they say have to buy the contraceptive and wellness programs and things that'll do you a whole lot of good. why do we do that tax what your insurance money. as for the adverse selection problem, there is an 11 month time period you have a certain opportunity to buy insurance. what kind of person will sit there and say i really need insurance but i'm going to become a casino gamblers. i will be able to buy insurance on the way to the emergency room. cbo did not score it appeared there was not a line of testimony trying to document what causes this election.

we can disagree about the policies and economics. what difference does it make. the court is not want to second guess what is beneficial for congress. congress is the one that makes the power. heat bacon come up with ever policy differences they think are important are what unique aspects. once congress has the ability compelling duty by the one is there. congress has the power. but congress has the power that is the proper role. of the government tries to build these economic reasons while allowing this case, it is not unique.

they can require you to buy a car. we impose all kinds of restrictions on the car company that drive up the cost of cars. just like the nondiscrimination provisions strive of the cost of provision. if congress is allowed to force tankers to the provision there is no reason in the world that they cannot do it just like they can do it and the health care context. as the justice department has been unable to show, congress has the power to serve the public welfare to improve congress, a game over. they can do it for banks and anyone else they want. >> among your reactions, both paul and michael have said that there is no limiting principle.

is there no limit in principle or does it matter? >> the most important decision that the supreme court ever issued is mccullough versus maryland. the take them seriously everything that they said is clearly wrong. clearly. here is what john marshall says. the argument is that this creates a corporation and it is special. marshall says wrong. he says of for reasons such a applicable. the corporation has already been created under other causes. why not here? george washington signed his

name to individual mandates. i will read the language before the end of today. here is what he says about the limiting principle. q government tax me? yes. can they take money and buy stuff with it? yes. the only security and the abuse is against it itself. the act upon the constituents. this is sufficient security. if you do not like this, vote the bums out. i personally did not much like any aspect of law as a matter of policy. i would prefer to see a lot of torts reform. my wife is a physician and we have been sued in malpractice. my brother has been sued. i do not like this as a matter of policy. if you do not, roll them out. we voted for president obama and

his party and they said they were going to do this. that is what they did. if he did not like it, we will have another presidential election contest. the limiting principle is that they are taxing us. they are making us pay.

if they do a cash for clunkers, i do not think they will because there is no room for it. we do not need constitutional lawyers and judges pulling principles out of thin air to limit the ability of congress to pass a loss on cash for clunkers requiring you to buy a car. congress will not do it. there's not a need for its. if they do do it, i want to see why they do it. there maybe a reason for it. mike talked about construction.

-- conscription. let me read you the language of a law that george washington find his name to. it is this sufficient bayonet and bill. they had a knapsack and bill. does not less than 24 cartridges. if you're 30 years old, you do not need a health insurance policies unless you're going to get hit by a truck. they're subsidizing older folks. welcome to social security. in denver people may be going in. there's nothing unconstitutional about that. to be will roll back 70 years of progressive legislation. on conscription, the next attack could very well be biological. the germ warfare. everyone will need vaccines. viruses do not respect state lines.

today is social security means everyone needs to have vaccines. they are more likely to have it if they are required to have insurance. >> i wanted to make sure there are too arguable constitutional basis for the statutes that have been discussed. the three be taught about the commerce clause. he has put on the table that there is another power that can be used to justify the statutes. it has blown a little bit hot and cold. can you address the question of whether this is a tax so that even if it worked not within the power, it is within the taxing power?

>> mike will probably supplement them. there is this arguments that even if this is not on the individual mandate under the power that congress expressed, he said it was exercised. and nonetheless might be supported by the exercise of congressional power that at least the president said was not being used here. that is the taxing power. in some respects, i think the simplest answer to that argument and to his point about mccullough, which i embrace. here is the thing. the simple reason why the mandate is not a tax is because it was not labeled as a tax. it does not operate the way a normal tax does. it is clearly something different. we have not described how the

tax does that. >> there is no tax. >> what this does, the mandate is a requirement that every individual, say people that are incarcerated in people that are native americans have a separate plan. everybody else has to get health insurance. there is a separate provision which is penalty that operates as a penalty against those who do not buy insurance. that penalty, which is a little bit closer than the mandate does not apply to everybody to him the mandate applies. there are a lot of people, virtually all the low income people that are subject to the mandate. they're not subject to penalty if they don't.

it is not the principal focus. it is not the mandate that really has everybody else says. this is to the point from the call-up. what the chief justice said is that the taxing power is brought power and that once you have the government exercising the taxing power there will not be a lot in court to limit the power and get the taxes too high for that it is some doubt impermissible. all that is fair. the limit on the taxing power has to be structural and has to be people who are the taxpayers. that is as likely what the people said. that is why in earlier versions congress contemplated something. the people did speak. the people who passed this law and congress knew full well there not the votes to do this. they use the mandate. it is a sneaky tax. it is not on any group of people you'd otherwise rationally say

to be subject to a tax, like people who are high income people are people who engage in certain transactions such are risky. all of that might make sense from a logical taxing policy. it taxes what your people you and not logically want to tax, reasonable help the, recently unpeople who do not have a lot of spare income.

they are inclined to save their money. it has a lot of assets of the tax. it does not have the one thing that chief justice marshall said is critical, the kind of up front accountability that allows the structural process to work. he said we could start a serious conversation if we had an answer for why this is different from taxing people and taking things from some people in giving them to others. i think the short answer is that this is completely different.

there's a lot of accountability in being very clear about to is getting the benefits of the tax. a group of insurance companies who otherwise would protest long and hard against a new impositions that are implicit in the insurance reforms were basically quiet it. an effective subsidy was devised for they got all this money on the backs of relatively healthy individuals. it would not have passed. >> i absolutely agree with every word he said. anything that congress can tax and take and give to an individual, congress can require one individual to pay for another. since congress can pay for

somebody's insurance premiums and can require you to pay for this person's insurance premium. we all agree there is no constitutional limits in principle want to give congress the ability to take it for me and give it to you. this is the honesty of the political process. somebody ran for president and said hillary clinton, i am opposed to an individual mandates. bill not raise it on anyone with the west into a $50,000 a year.

he could not endorse the individual mandate and impose taxes. the big difference is the tax system does apply to all americans or should. everyone to accomplish this, we need to do for the greater societal good. if you are forcing people to engage in a public good, at the public as a whole should pay for its. that is how we have done it if we require hospitals for people with their normal charitable instincts. this is all we're asking for. if congress wants to force one private citizen to help other people for obvious charitable reasons, is terrific. what you do not do is then not pay for it. what you do not do is make that take the entire tax. if we think it is so important to get protections against insurance discriminations for pre-existing conditions,

terrific. that is a policy choice. we have to pay for it. the cannot ask someone to pay for the other insurance premiums. >> i think you can read this until you are blue in your face. you'll never find the principle. that is that congress has to somehow face it. but she is saying is that the great check is the political process generally. i do not think anyone was fooled that this was a tax and therefore constitutional. the way that you sign up for health insurance, you have to report it on your 1040 tax form and pay a penalty.

you are reminded that this is a tax. the way that it is calculated is that it looks to a percentage of your gross incomes. it looks and smells like a tax. congress founded functions like a tax that will raise money. the cbo found it will raise $19 billion and putting it in the federal coffers. it is in the heartland of the power. i do not think it is as much about the tax power as what is the real check against these worries that my friends have pointed to. isogloss school in the early 1990's. i thought -- i went to law school in the early '90s. i thought it was a great idea do we get this stuff done. i am struck by the change.

it is now striking legislation down. they cannot get their victories through the political process. >> the challenge has been laid down by paul and michael. i want to make sure whether we agreed on it. they say that under the view of the defenders of the statute there is no nonpolitical limiting principle. there is nothing that you could go to a judge and say this mandate is unconstitutional.

is that right that's correct that is absolutely wrong. -- is that right? >> that is absolutely wrong. >> it is important to appreciate lawyers. the governor would not come in and say here are limiting principles and close the future congress from something they might decide is necessary on all sorts of situations that we cannot anticipate right now. the government job is often to say here is what the heartland of our claim is. those cases are for down the road. if they wanted to, the principles are fairly easy to articulate. the bill of rights cuts and a structural power -- in any structural power. it will reduce health-care costs.

the privacy will preclude the government from acting in that way. the second principle is that they limit this. these are the courses and 1995 that would strange the government. the government takes them seriously. the most important limiting principle is this. when congress is asking to solve a truly national problem that is one in which the states are separately confident to fall that is one is at its effigy. congress found that when any individual state like massachusetts ties to reform the health insurance market, and tries to reform the health insurance market, other states will come in and swat the markets. states often will not enact legislation to deal with the problem. they do not want to come back for the uninsured. the only way to solve this crisis is a truly national

solution. >> i read you a passage from apollo where he was talking about a tax power. --; mccullough or he was talking about a tax power. there are two different bases for what is constitutional, taxation and interstate commerce. they have to be right about both. we just have to be right about one or the other. there are at least three different clubs that argued the tax. the constitution does not use the magic word of tax. sometimes it is excises or revenue. the word "revenue" is in. it is titled 26. it is the internal revenue code enforced by the internal revenue service. cbo says it will raise 100 billion overall. it will lower the cost by $100 billion. it will be revenue positive. it is passed by the house and

senate under specific internal rules but only apply to revenue measures. if you do not pay income taxes at all, the mandate does not apply for the tax form. if you want to look at the word tax, if you think that is important, they understand it is a tax -- the word taxable, taxation, a tax payer appeared 34 times in section 26 which is the relevant section. what are the limits that it really has to be a revenue measure. it is. they understand this. on commerce, it passed to actually regulates to act as a whole.

it has to really be trying to solve a problem of interstate commerce. it has to be an interstate spillover problem. one problem is the welfare magnet program -- problem that neal pointed out. you have a job now. you are worth more to the economy. they're willing to pay you more. we have to be paid by the system. they are not their highest. if they do not pay for you you're not going to want to travel. i do not know the answer. every monday, i am in new york. if i fall sick, and they will take me to a new york emergency room. i hope they will take care of me there. new york is paying for a connecticut person. that will not be fair and must actually have insurance. you need to provide for emergency room care so people

will be guilt free to travel interstate. the need to make sure that people have insurance so some states are not taking advantage of others. this individual mandate itself need not actually regulate interstate commerce. it needs to be a part of a comprehensive thing as a whole. this is what's they explicitly said in the case.

you look at if the law as a whole tries to solve the interstate problems. >> that really puts handcuffs on congress. we have been listening to 20 minutes of this. do you know what congress has to do? the regulation does not have to do anything with congress. as long as to attach it to a bill, that is ok. >> did it its due. did it its due. it is not just attached to something. it is part of an integrated scheme. that does not make it constitutional. explain why it is right to say there is a spill that has five pieces that worked together. one of them is an individual

mandate. what we do is assess the constitutionality weather them getting away with the statute as a whole. -- rather than getting away with the statute as a whole. >> i am not sure i really heard one. i think akhil give a great defense on why this might be in interstate commerce. in doing so, he laid out an argument that would apply to almost every commodity. >> but those are the limiting principles. >> when i asked for my limiting principle, i pointed to [inaudible] that has nothing to do with this particular power. this power is unique, the power to compel people into commerce. that power is what does not have a limiting bridge.

there is really no commerce that i cannot foresee to engage in on the theory that could then be easier for the federal government to regulate for the broader commerce. >> the basis for the regulation is not the individual mandate. there is an individual mandate. this is one way. >> maybe we should transition into the question tom asked mike. your point is that you do not have to show really anything about the interstate commerce or individual mandate as long as it is a broader regulatory structure that regulates congress. we take issue with that. >> your initial statement of the fax, twice he said - -facts you said "a critical part" of a comprehensive plan to deal with a genuine interstate problem that no individual state can handle. john marshall had no problem

with that. >> every word you emphasized in that sentence are the kind of words that the supreme court will prefer to. it is genuine. in the next context, it is all caps, exclamation point "genuine." >> i'm sitting at home in my living room. i am not buying insurance. how can they force me to enter into the stream of commerce? this is not like them growing wheat where he is producing a product that is an distinguishable from they predict which is indistinguishable from the interstate product. -- a product that is indistinguishable from the interstate product.

how am i a problem when i make a choice not to buy insurance? they can still require insurance companies not to discriminate against people with pre-existing conditions. i am a solution to the problem congress has created. every time congress rises up with a regulated company they can say it is sobbing and interstate commerce problem. -- it is solving an interstate commerce problem. maybe i have a right not to eat broccoli. i can sure make you buy it. i am making two points. one is the limiting principle. this is unique in our prudence.

every other person has been regulating an impediment to the congressional scheme at the interstate level. they have abandoned the distinguishing characteristics between interstate and intrastate. they can get local bootleggers his liquor never crosses state lines. the question is can they get people who decided i do not want any part of the liquor business tax you will help it if you start making the buy wine -- and to not want any part of the liquor business? you will help it if the start making them by wine. >> he is doing something that affects the national economy. that is what the government is saying. that is what congress is saying.

the failure to buy it is different. everyone could get this. >> what does that give rise to a limiting printable? the problem is that people were sitting in their living room and they were not buying cars. that was a problem. >> what congress is saying is that health care is different than the buying of cars. everyone needs health care and those costs are externalize of people right now. maybe you can make that argument. i do not quite think so. you cannot predict when you will get struck by cancer or heart attack or get appendicitis. let me finish.

this is something that is a product that everyone is going to buy. congress reaction is not the failure to buy but the failure to pay for it. health care is going to be consumed by everyone inevitably including mike as he sits on the couch in his living room. congress found those costs aggregated mean that each american family spends $1,000 per year extra. that is across state lines. maybe he can tell the story with other markets. i do not quite think so. >> even if you are right and we can debate the tax that the health care -- the facts why does that limit any principal? if the the supreme court says you can regulate this into the power and is a decision not to purchase health care and has a profound market, why does it mean the next time congress

tries to do this with the sec same theory that it is making it a pain to regulate that particular market so we will make you buy its? the next time it'll be cars. some people do not buy cars. they walk. why will that make one bit of difference under the structure of the argument that the government is making? >> you are truly the best lawyer of a generation. it cannot win this case no one can. i do not think you can because the power congress is seeking -- congress is forcing someone to buy something they would not otherwise by. what congress is saying is that everyone is glad to buy health care. they're going to use health care in consume it.

what they're doing is regulating the financing of its. they can easily right in opinion that say that health care is a market that is different than any other markets because of that and because of the demonstrate a cost that occur across state lines. >> healthcare is very distinct because everyone needs to have it and will have it at some point. that is not a direct the states. it has to solve an interstate spillover problem. there are cases which the supreme court said congress went too far and established a limit. we are on the correct side of those cases. lopez and morrison are cases where there reynaud interstate problems. -- where there were more interstate problems. people in one state were opposing cost of people in another.

>> of me ask you to respond to this. what congress is doing is saying that you cannot pay for health care with your own money. you are going to have to pay for with insurance. what michael says you make a rational economic decision not to buy health care, he is talking about an economic choice that is being made by individuals. fundamentally, the decision not to use insurance is being regulated by congress. is that a limiting principal? >> no. every time you decide not to buy a product, whether it is books or school curriculum or any kind of traditional thing -- i making a purely economic.

if you want me to i will. cars are economic. you are going to buy health insurance is the premise of is that it. you are going to buy its. we will tell you how you are going to buy it. you're going to pay their this with their insurance. it is different telling you how it is that you have to buy health care. it is a when you get health care, you'll pay for with insurance rather than -- how is that different? >> i have decided to self move or a scooter or a cap or an airplane. we are just telling you which way you decide to engage in transportation.

it is not a limiting principle. this is the only market most americans will go into. the labor market, however, fell into the labor market. it is predictable than 95 simmel gone to the labor market. >> this was about as interested in market as you can get. this is not the theory. it is thought have anything to do with economic activity. growing wheat for your on props on your own land and having marijuana in your own basement for your own use affects the interstate market.

do you know what facts they were probably right. i do not know how you distinguish between homegrown wheat and homegrown marijuana. we lost that battle in the 1930's. >> this is why i think your example backfire. our point is that it demonstrates the precise limits that they were separately confidence to deal with guns. there is no spillover about one individual states deals with the gun problem. by contrast, health care is one in which one state does. if you can tell your story by which neighbors do not get stuck the same way with bills maybe congress can tell the story and it may be something that is constitutional down the road.

>> we've it to a genius to come up with an interstate food market theory. -- leave it to a genius to come up with an interstate food market theory. you came up with this by saying you're modeling after massachusetts. it is a thing that were perfectly. -- worked perfectly. >> the massachusetts miracle the thing that worked perfectly. by your own definition, it is not a problem at the state level and you are opening of a cathedral about the -- >> massachusetts supports the solution that did not work effectively because it was -- >> because you can't have your cake and eat it, too. [talking over each other]

let's see if anyone agrees with this rationale. if insurance companies have to insure people after their houses are burned down, it raises rates. i am not saying it is a wrong charitable decision to make, but to say it won't drive premiums through the roof is crazy. the patient protection was protecting six people against discrimination by insurance companies. what made it affordable was having healthy individuals offset the premiums that the companies suffered a. -- suffered. >> vote against it. >> it has to do with your false assertion that this is a unique factual scenario where congress

is never going to be able to cobble together a nexus. every time somebody doesn't pay someone, costs are shifted. other customers and absorbed the costs. it is not a limit in principle. -- limiting principle. >> they want you to think that there is something distinctively dangerous and problematic about a mandate to buy a private supplier. how do we test that idea? we don't see any particular concern about that. they have come up with that, but you won't find it in any supreme court case. it is not in the constitution that it is a special concern. it is exactly like -- the corporation is somehow very bad. john marshall says there is nothing particularly problematic about a corporation. like there is nothing particularly problematic about a mandate to buy -- hold on.

>> they would say there is not a big concern about this because there has never been a statute that requires somebody to purchase something. >> every state requires you to get insurance before you go on the road, because otherwise, you are exporting costs, it is a mandate to support costs. this is proof of the following point, that there is nothing particularly problematic about this. states do it all the time. they do it for cars. massachusetts doesn't, connecticut does it. you are imposing risk of cost of other drivers. car insurance, there is other insurance, too.

>> their point as i take it is that this is something that the state should be doing. i don't think they will be persuaded by saying that states do things like this. is there a federal statute to give them their due? is there a federal statute that requires you to purchase a product? >> is the act of 1792. >> you could have been given the guns. >> you can be given a health insurance policy. it is exactly the same all the way down. one, there is nothing wrong in principle with the government. government requires you to buy something. the government's view that all the time. now, the federal government can't do everything that state

governments can do. it is limited in certain ways, and that is where the word that begins with enter and ends with state comes in. there is nothing wrong with a mandate. for insurance and cars, the only question is whether that very traditional governmental tool that has been in operation for a hundred years is a sensible tool to deal with the distinctly federal problem where people in 1 states are imposing costs on people in other states. that is the interest a problem to be solved with this traditional regulatory tool. i am well, how are you?

>> and you want me to respond to the militia act? >> on the question on whether there is a limit in principle, you agree that congress could have done this if they were right about us being attacked. i also guess that you agree that congress could require that before you actually consume health services, you require health insurance at the point of sale, you're going into the hospital, that sort of thing. does that cut into the concern of limited principle and if they can accomplish this through other means? >> it suggests that there is a limit in principle that you can't do this through an individual mandate. it suggests that there are other

ways that would be more politically accountable for congress to accomplish these objectives, which i think is important. there is a health care policy debate that i am happy to wade into to the extent necessary to argue this case. there are people talking about the health care market and have dedicated their lives to studying health care. and to the extent that they honestly believe that this series of requirements is necessary. they should take great comfort in the fact that there is a way for congress to accomplish this. you can't have the shortcut of the individual mandate. that is a really important principle, and to make two points, it really is important to distinguish between the mandate and the penalty. because if you decide you're not going to buy health insurance, he will pay a penalty if you are not exempt from the penalty, and a lot of people are.

that is something that you will have to do on april 15. you don't see the premium, which is really what congress wants. they want you to get compliant health care. and you're not going to write a check to the irs on april 15. he will write a check to an insurance company, and to the extent that it is really a tax it is really pernicious. when we try to figure out this huge budget mess, we will start by looking at what the tax revenues are and government expenditures. to have something that is really a tax that will be completely off of that budget, people are taxed to whatever level they are at forced to buy a product that they don't want, but if they are forced to buy it, they might as well have its. you'll have this whole thing kind of off-budget. i don't think that is what the framers had in mind. >> called a tax?

it is unconstitutional because you end up buying the insurance? >> as michael suggests, it will be distributed in a different way more broadway. -- broad way. >> at least it would be on- budget and i think it would be better. i can't resist saying something about the militia act of 1792, because i do think it is different. congress was given the power to raise a standing army and can certainly be argued that the militia act was pursuant to that power. it is important for two reasons. congress is given the power to raise armies and regulate. it was recognized that those were separate things. the power to raise an army was very controversial. the power to regulate and army wanted was raised was not controversial at all.

by contrast, if you look at the commerce clause, which gives congress the power to regulate commerce. it assumes that there was actual commerce ongoing that congress had the authority to regulate. that was the power, because it assumed congress to be regulated that was not controversial of all. if you go back to the minds of the framers and causing the idea that they really thought the congress hall clause was brought and if empowered compelling people and congress in order to regulate, the whole constitutional history would be different. we would have had he amendments at the framing in order to control this really brought potentially dangerous powered to compel people to engage --

>> i want to make sure that we have time for questions. >> all the arguments against the act, there is a lack of political accountability, it is somehow stolen to the unsuspecting night and seems to be the weakest. i think paul's concession i understand if they did it using the word tax a few more times it would be constitutional and really cuts the legs out from under them and comes to a point about unlimited government. they say as long as they do it with the word tax more than 32 times, somehow it makes it constitutional. and we are haggling over how many times they have to say it. >> i am saying you can accomplish the same objective by raising everyone's taxes and providing a direct subsidy to the health insurance industry and end up with the same public policy result, guaranteed issue, community rating, and everybody paying for it.

>> i misunderstood you. >> there is no difference between requiring people to do something directly and creating financial incentives to do so. their entire argument on medicaid as we are not forcing states, we're just giving them a strong financial incentives to do it. >> we have 20 minutes left let me make sure that we have the opportunity to ask questions. i think we have microphones available. here we go. if you could just introduce yourself. >> i have two questions that have not been addressed by this

rather lively debate. the first is, if this is a tax collected by the irs and can be characterized as a tax, why is it not covered? a therefore putting the case of until 2015 or something like that? my second question, i would like you each, at least one of you to address the question of supper ability and why if you lose any part of this case, the rest of the statute should stand or should not stand.

>> let me ask neal first. is that ok? >> i don't remember all the details, it could be close to those two. the first problem of the question is you refer to its as yet. but it is important to distinguish between the mandate and the penalty that enforces the mandate. it looks a little like a tax and is what is collected by the irs. the challenge focuses on the mandates. most people, if they were rational, they are not going to stubbornly said that i am not going to buy health insurance anyways because the tax penalty is key to the amount of the premium you would otherwise pay. most people will make the rational choice that if i have to buy insurance for mss -- asses a penalty, people will pay. >> assume that the statute is of

the -- upheld. does it run into the anti- injunction act. >> it is not a problem because the principal challenges the mandate. it creates an important difference for understanding the anti-injunction act. it basically says if you are a taxpayer and you are upset about a tax that you think is unconstitutional, you have an option that most people don't. most of the time, you face an obligation from the government. you can comply or brain a pre- enforcement challenge. i can pay the taxes and get a refund and to litigate that way. once i pay my premiums to the insurance company, i can't get a refund from them. the anti and judgment act -- anti injunction act is still a non sequitur.

one of them, i will give you too. how long line of supreme court cases that don't interpret it in a way that making it seem jurisdictional. they make it seem like it is a defense that the government can raise and also waive the defense. i have created exceptions. the government and to the private parties and the states all agree that the anti- injunction act should not apply. they don't have to reach it if the court agrees it is not jurisdictional. we have arguments as to why the anti injunction act would apply to the states no matter what. >> if the individual mandate goes down, does the rest of the statute have to fall apart?

got to the government has taken the position that if the individual mandate falls, only a few provisions would be apt to fall, the insurance market reforms and community ratings. the theory is what i outlined at the beginning of the hour together, that the reason why the individual mandate was put in was to deal with the adverse selection problems from the community rating and guaranteed issue provisions in the act. some folks have said, there are 24 pages of the act have to fall including things like funding for abstinence education. i think people think is a tough argument to have the entire act fall to make sure that there is no clause in the legislation that is what gives that argument some teeth. alone, it is not this positive.

>> is there a question of what falls apart if the mandate goes down? >> i don't think reasonable people can disagree that the individual mandate is tied inextricably to the guaranteed issue and community ratings provisions. the two provisions that gave the patients the most protection or the guarantee issue and no ban on pre-existing conditions. the thing that made it affordable again was massive subsidy. once you have taken away both pillars of the act, once you have ripped the heart and lungs out of the body, it can't matter if the figures continue to move. it matters if they move in the way that congress intended. it is no way that you can

possibly say that the rest of the act is ok. i suppose you can take the anti- competitive provisions out and still have an anti-trust division that can function. but it can function in a manner that congress intended. this is particularly true of this act because we know it was a series of compromises and if pulling out any one part was going to do them, pulling out the biggest car will doom the whole thing. >> rather than killing the whole tamoxifen, it would be to say, if it is all about the fact that they use the word revenue rather than tax, it would be obviously ok. we write a the statute so that wherever it's as revenue, it says tax and people have political accountability. that is what other cases have done. marshall, and the fact rewrites one clause of section 13 of the original judiciary act.

if the whole point is that people need to understand that the supreme court can make that clear, one other very important fang, we talked about an individual mandate. strictly speaking, you can simply pay instead.

margaret are growing stronger, more independent, more diffuse

and more willing to attack american interests. this evidence by their part to washington restaurant the rulers in iran clearly pose a more direct threat to us than many would've assumed just a year ago. that is on top of the hostile actions in which iran has been engaging for years including killing americans in iraq and afghanistan and supporting terrorist groups across the middle east. destabilizing your countries and probably not in the assad regime in syria and continuing on the shared pursuit of a nuclear weapons capability. the threat posed the iranian regime could soon bring the middle east to the brink of war if it's not there already. north korea is in the midst of a potentially dangerous and destabilizing transition and inexperienced 29-year-old is now in charge of a government that

continues to produce nuclear weapons to develop ever more sophisticated ballistic missiles with the republic of korea and administer the most brutal apparatus of state oppression of any country on earth. the chances of conflict are israel is ever before. the people's republic of china continues with a nontransparent ellipse of its military forces while engaging in provocative acts against its neighbors in international waters. indeed i'm intentions in the south china sea have rarely been higher. at the same time the number and sophistication on american targets by chinese at various likely with chinese government involvement in many cases is growing increasingly severe and damaging. indeed, last year's report from the office of the national counterintelligence executive makes clear quote, chinese

actors are the world's most days and persistent perpetuators -- perpetrators of economic espionage. and afghanistan, the taliban and insurgencies damage but not broken and regrettably there will to stay in the fight against the international coalition and afghan partners has only been increased by the administration's repeated public commitments to certain date for withdrawing our military forces regardless of conditions on the ground you meanwhile pakistan remains as fragile and combustible as other ms eyewitnesses statements are clear, pakistan's intelligence service continues to support terrorist elements inside afghanistan that are attacking and killing americans. direct the fragile stability of democratic gains that iraqis have been able to forge thanks to the search now seemed to be

unraveling. prime minister malloch he appears to be consolidating his power at the expense of the other political blocs. france is up significantly since the departure of u.s. troops. al qaeda and iraq invalid shia extremist groups are still very much active and threatening to iraq's stability. it is increasingly difficult to argue that iraq to use the president's words this quote stable and self reliant. one in to gear up spring and the situation remains fluid uncertain and in places very troubling. tunisia and libya yemen and bahrain, countries undergo monumental changes and now comes of those changes are still far from clear and then there is the area for the conflict appears to be entering a new phase more than 6000 lancet have lost and there appears to be no end date.

the bloodshed must be stopped and we should rule out no option that could help save lives. we could consider among other actions preventing opposition groups inside. the political and military with better means to organize activities and care for the wounded and find safe haven to communicate securely to defend themselves and fight back against the forces. the time has come when all options must be on the table to add the killing and forced aside to leave power. we should continue for some time listening to marry the other threats facing our nation and i've come to brutal cover most of them in today's hearing. what should be clear is that by no object of assessment at restaurant on national security decrease to the contrary they are increasing as they prepared testimonies of eyewitnesses make

vividly clear. so the question members of congress and the members of this committee in particular need to think long and hard about is this. why in an international environment of growing uncertainty, risk and credit would we choose to add to those risks by making large and misguided pastor and national defense budget? cuts that by themselves will not significantly reduce our national debt, the real driver which is our domestic entitlement programs. i do not see a compelling answer to this question at this time and i imagine today's hearing will underscore that point. thank you, mr. chairman. >> thank you so much. senator mccain. mr. clapper. >> thank you. distinguished members of the committee for inviting us to present the 2012th worldwide threat assessment.

i observe you probably are the given up for us. i'm joined today by the defense intelligence agency, friend and colleague lieutenant general ron burgess. these are marks in her statement for the record reflect to collect event sides of extraordinary men and women of the united states intelligence community would be recognized and we must appreciate that and have it is our privilege and honor to the. we are most appreciative of your knowledge of the work, sometimes under various conditions around the world. with all its attempt to cover the full scope of worldwide threats in these brief or remarks, said like to highlight some of the issues we identified for the coming year some of which you party done for us a sense that. earlier this month, there was the 51st anniversary of my enlistment in the marine corps.

entering my entire career i don't recall a more complex and interdependent arete challenges that we face today. the capabilities, technology, know-how, communications and environment of forces are combined by borders and transnational disruptions astonishing feat. never before has the intelligence community been a call to so many issues in such a resource constrained in my area. continue to integrate the intelligence community and implementing new efficiencies and is always simply working hard. but candidly maintained the world's premier intelligence enterprise in the face of a shrinking budget will be a challenge. we will be as accepting and managing risk more so than we have had to do in the last decade. when i say we, i mean both legislative and executives.

we begin our threat assessment as he did last year with the global issues of terrorism and proliferation. the intelligence community sees the next two to three years as a critical transition phase for the terrorist threat particularly al qaeda and like-minded groups. with osama bin laden's death the global jihad movement lost its most iconic and inspirational leader. the new al qaeda commander is less charismatic and to capture a prominent al qaeda figures has shrunk the group's top leadership there. even with this capability some focus on smaller simpler plots i'll qaeda remains a threat. as long as we sustained pressure we just al qaeda will be largely symbolic importance to the global jihad is movement. regional fillets to a lesser extent small cells and individuals will drive the global jihad agenda. proliferation that his efforts to develop acquire or spread weapons of mass destruction is

also a major global strategic threat. among nationstates as you've alluded, iran's technical advances particularly in uranium arrangements to an assessment there has more capable of producing if it's political leaders specific way a supremely there himself chooses to do so. north korea's export of ballistic missiles and associated materials including iran and syria illustrate the reach of the norse proliferation activities. we don't expect that it kim jong un to change the policy of attempting to export most weapons systems. i would note that in this your statement that the record as you have noted as yourselves of the elevated our discussion of cyberthreats to follow terrorism and proliferation. and perhaps in something of the newcastle just to affirm the

cyberthreat is one of the most challenging ones we face. we first see a safer environment in which emerging technologies are developed and implemented before security responses can be put in place. among state actors, particularly concerned about entities within china and russia conducting intrusions into u.s. computer networks and stealing u.s. data. the rule that nonstate at her side playing in cyberspace is a great example of the easy access that could potentially disrupt legal technology and know-how by such groups. two of our greatest strategic cyberchallenges their first native real-time attribution of cyberattacks come in knowing who carried out such attacks and were perpetrators are located. second is managing older abilities within the i.t. supply chain for u.s. networks. in this regard, cybersecurity bill was recently introduced by senators lieberman colin, rockefeller and feinstein and

addresses the core homeland security requirement that approves cybersecurity for the american people, nation's critical infrastructure and the federal government's own networks and computers. intelligence committee considers such legislative steps essential to addressing our nation's critical infrastructural vulnerabilities which pose serious national and economic security risk. briefly looking geographically around the world and in afghanistan and general burgess will have more to say about this coming during the past or the taliban and lots of god because mainly mainly a place to the international security forces or isaf were concentrated. the leaders begin to enjoy safe haven in pakistan. the efforts to partner with afghan national security forces are encouraging the corruption and governance continued the afghan forces effectiveness. most provinces have established basic governance structures but

struggled to provide services. the international security force in support of afghanistan's neighbors notably in particular pakistan will remain essential to sustain the gains achieved. although there is broad international political support for the afghan government particularly in europe about how to find afghanistan initiatives after 2014. in iraq, then it's been sporadic high-profile attacks continue. prime minister maliki's recent aggressiveness against sunni political leaders have heightened political tensions. but for now we believe the sunnis continue to be the political process as the best venue to pursue change. elsewhere across the middle east and north africa, those pushing for change are confronting ruling elite, such caring ethnic and tribal divisions lack of experience with democracies, stalled economic development military and security forces and regional power initiatives.

these are fluid political environments that offer evidence for extremists to produce a more assertive in political life. states were authoritarian leaders have been toppled such as tunisia, egypt and libya have to construct to reconstruct the political systems are complex negotiations among competing factions. and nowhere is this transition i believe more men egypt which i think will be a bellwether and of course and so strategically important because of its size, location and of course the peace treaty that now has with israel. in syria regime and transit social divisions are prolonging internal struggles and could potentially turn domestic upheavals and two regional crises. in yemen although the political transition is underway can the security situation continues to be marred by violence and fragmentation is a real proper though the. as the ancient roman historian

task this once observed the best day after he batted for is the first. after that, i would have been scared very problematic. the intelligence community is also paying close attention to african continent throughout the western hemisphere, europe and across asia. and here are two issues are self-contained. virtually every region has a bearing on our key concern to terrorism, proliferation cybersecurity and stability. throughout the globe, whether their environmental stresses on water, food and natural resources as well as whole thread, economic crises and organize fancy ripple effects around the world and impacts on u.s. interests. amidst these extraordinary challenges, it is important to remind this distinguished body in american people in all of our work the u.s. intelligence community's choice to exemplify values. the chariot or omissions with

respect to look on protection of civil liberties and privacy. that pledge leads me to mention our highest legislative priority this year and require support of both houses of congress. our first specifically to foreign intelligence surveillance act amendments act for saa which is set to expire at the end of 2012. title vii allows the intelligence community to collect battle information about international terrorists and other important targets overseas. the law authorizes surveillance of non-us persons located overseas who are foreign intelligence importance for information about threats such as proliferation. it also provides comprehensive oversight by all three branches to protect privacy and civil liberties of u.s. persons. department of justice in my office conduct extensive oversight use of activities and report to congress and compliance twice a year.

intelligence collection under fisa produces crucial intelligence that is vital to protect the nation as international terrorism and other threats. .. by thank you and the members of the committee for your dedication to the security of our nation and your support for our men and women of the intelligence community and your attention here today. with that i will stop and turn it over to general burgess.

>> thank you director clapper. >> i want to thank you for the opportunity to join my longtime friend and professional colleague, director clapper in representing the men and women of the united states intelligence community. i would like to begin with current military operations in afghanistan, where we assessed that endemic corruption and persistent deficiencies in the army and police forces under mod -- undermine efforts to extend governance and security. the afghan army remains reliant on isaf for key combat support such as logistics, intelligence and transport. while afghan army performance and grouped in some operations when partnered with isaf units, additional gains were required sustained mentoring and support. despite successful coalition

targeting, taliban remains resilient and able to replace leadership losses while also competing to provide governance at the local level. from the pakistani safe havens that the taliban leadership remains confident of eventual victory. to the west, iran remains committed to threatening u.s. interests in the region through its support to terrorist and militant groups including in iraq and afghanistan while it remains committed to strengthening its naval, nuclear and missile capabilities. iran can close the straits of hormuz at least temporarily. and they may launch missiles against united states forces and their allies in the region if it is attacked. iran could also attempt to employ terrorist circuits worldwide however the agency assesses iran is unlikely to initiate or intentionally provoke a conflict.

iranian ballistic missiles and development could range across the region in central europe. iran's new lacks -- space launch launch -- iran today has technical, scientific and industrial capability to eventually produce nuclear weapons. while international pressure against iran have increased including through sanctions, we assessed that tehran is not close to agreeing to abandoning its nuclear program. in iraq, dia assesses the baghdad security forces probably can maintain current security levels this year despite manning shortages and overly centralized command and control. despite perceptions of sectarian violence and a need for logistics, intelligence and tactical communications training, iraq security forces are putting forces on the straight. they are securing high-profile

sites and they are conducting intelligence driven targeting. however, sunni insurgent and shia militant groups likely will remain serious challenges for iraq and remaining u.s. personnel until more comprehensive political reconciliation reduces lingering tensions among religious and tribal constituencies. more broadly across the region, popular forces weekend the middle east and north africa are demonstrating the potential to reorder long-standing assumptions relationship and alliances in a way that invites risk and opportunity for the united states and our allies. arms domestic opponents pose an unprecedented challenge to the al-assad regime in syria and its collapse would have serious implications for iran hezbollah, hamas and lebanon. turning to asia, north korea's third generation

third-generation leadership transition is underway. improving the economy and regime's survival remain enduring leadership rarities. pyongyang's missile programs provide strategic deterrence international prestige and leverage to extract economic and political concessions. while north north korea may abandon portions of its nuclear program for better relations with the united states it is unlikely to surrender its nuclear weapons. pyongyang's position military can attack south korea with little or no strategic warning but it's a verse from logistic shortages, aging equipment and poor training. pyongyang likely knows he cannot reunite the peninsula by force and is unlikely to attack on a scale that would risk its own survival. we see no sign that the leadership transition has changed the regime's calculus regarding nuclear weapons and the defense intelligence agency

retains continued focus on the peninsula to provide warning against additional attacks from the north. china continues to build a more modern military to defend its core interests which are territorial sovereignty, national unity and sustained access to economic resources. u.s. forces in a taiwan or south china sea contingency remains a top chinese military priority. investments in naval anti-air and anti-ship capabilities are designed to achieve periodic and local sea and air superiority to include the islands closest to the mainland. once focused on territorial defense, china's air force has developed an offshore strike missile defense, strategic mobility and early warning and recognizance capability. try china may incorporate that these capabilities in novel ways that present challenges for u.s.

forces. last year's first flight of the fifth generation fighter in launch of china's first aircraft carrier underscored the breath and equality of china's military probe i'm however a lack of modern combat experience is but one example that steps remain before china achieves the full potential of its new technologies, platforms and military personnel. regarding cyberthreats, we continue to see daily attempts to gain access to our nation's government and business computer networks including our own secure systems. this thread is large and growing in scale and sophistication. finally, al qaeda losses in 2011 have focused a core group and its affiliates in yemen, somalia and north africa on self-preservation and reconstitution. though damaged the group remained committed to transnational attacks in europe

and against the united states. al qaeda in the lands of the maghreb for iq i am acquired weapons from libya this year kidnapped westerners and continue to get support from nigeria-based -- what we have made gains outside and its affiliates we remain in a race against their ability to evolve, regenerate leadership and launch attacks. self-radicalization or lone wolf individuals including within the united states and even within our own ranks remain an enduring concern. i would like to close by noting how honored i am to represent the men and women of the defense intelligence agency. remain acutely aware that while much of a plea to his secret our work is always in the public trust. on their behalf i would like to thank the members of this committee for their continued support and confidence in our work. thank you. >> thank you very much general burgess.

let's try seven minutes for a first round and i hope there will be time for a second round. director clapper prepared statement said the following in terms of the intelligence community's assessment about iran's nuclear program. quote, we assessed iran is keeping open the option of developing nuclear weapons should it choose to do so. we do not know however if iran will eventually decide to build nuclear weapons and his statement also said that we judge iran's nuclear decision-making is guided by a cost-benefit approach which offers the international community opportunities to influence tehran. general burgess do you agree with that statement of director clapper and his current statement?

>> yes, sir and i think it would be very consistent with what the vice-chairman of the joints chiefs and myself along with a couple of other witnesses stated before this committee almost a year and a half ago. >> and director clapper, i understand them that what you have said and without general burgess agrees with, is that iran has not yet decided to develop nuclear weapons. is that correct? is that still your assessment? >> yes sir, that is the intelligence communities assessment and that is an option that is still held out i iran and we believe the decision would be made by the supreme leader himself and he would base that on a cost-benefit analysis in terms of don't think you want a nuclear weapon at any price so that i think plays to the value of sanctions particularly the recent

ratcheting up of more sanctions and in anticipation that will induce a change in their policy and behavior. >> is at the intelligence community's assessment that sanctions and other international pressure actually could, not will necessarily, but could influence iran in its decision as to whether to proceed? >> absolutely, sir, and of course the impacts that the sanctions are already having on the iranian economy, the devaluation of the currency, the difficulty they are having and engaging in banking transactions which will of course increase with the recent provisions of the national defense authorization act. and so to the extent that the iranian population and the regime then feels threatened in

terms of this stability and tenure, you know the thought is that that could change the policy and i think it's interesting that they have apparently asked the e.u. for resumption of the five plus one dialogue, and of course there's their nother meeting coming up with the international atomic energy administration, so we will see whether the iranians may be changing their minds. >> i have to tell you i am skeptical about putting any significance in that but nonetheless it's not my testimony that we are here to hear. is your testimony and it's obviously important testimony. director clapper in a recent interview defense secretary panetta said if iran decides to pursue a nuclear weapon capability quote, it would

probably take them about a year to be able to produce a bomb and then possibly another one or two years in order to put it on a deliverable vehicle of some sort in order to deliver that weapon. do you disagree with the defense secretary panetta's assessment? >> no, sir i don't disagree and with respect to the year, that is i think technically feasible but practically not likely. and there are all kinds of combinations of implications that could affect how long it might take should the iranians make a decision to pursue a nuclear weapon and how long that might take. i think the details of that are best complex and arcane and sensitive codas of how we know this are best left to closed discussion sessions. >> do you think that the year is

perhaps ripe and more likely that it would take longer or is that the implication? >> yes, sir. >> now, "the washington post" columnist recently wrote that a the senior administration official believes that an israeli strike against iran was likely this spring. general burgess, in view of the intelligence community has israel decided to attack iran? >> sir, to the best of our knowledge israel has not decided to attack iran. >> i was concerned as i indicated in my own statement director clapper by recent reports of the latest national intelligence reflects a difference in views between the intelligence community and our military commanders. over the security situation in afghanistan and i made reference to who signed up to that

difference of views including general allen and ambassador crocker,. general allen ambassador crocker, general mattis can you tell us whether these reports are accurate and if there is a difference of views on that matter? >> without going into the specifics of classified national intelligence estimate, i can't confirm that they took issue with the nie on three counts having to do with the assumptions that were made about the force structure deal that we gave sufficient weight to pakistan and its impact as a safe haven and generally felt

that the nie was pessimistic. i have to say -- >> about other matters as well? speeches generally pessimism in afghan and the prospects for posts 2014 and that by the way was the timeframe. is after 2014. if you'll forgive a little histories are i served as an analyst breather for general westmoreland in vietnam in 1966. i kind of lost my professional innocence a little but then when i found out by operational commander sometimes don't agree with their views and the success of their campaign as compared to that perspective displayed by intelligence. fast-forward about 25 years or so when i served as the chief of air force intelligence during desert storm. general schwarzkopf protested

long and loud all during the war and after the war about the accuracy of intelligence and the fact that it didn't comport with his view. classically, intelligence is supposedly in the portion of the glass is half-empty and operational commanders and policymakers for that matter is the glass is half-full and probably the truth is somewhere somewhere in the water line. so i don't find it a bad thing and in fact i think it's healthy that there is contrast between operational commanders believe and what the intelligence community assesses. >> thank you very much. senator mccain. >> i want to follow up on the chairman's question so do you believe that post-2014 afghanistan faces extremely difficult challenges? >> yes sir i do. and think in terms of governance and the ability of the ansf

which is striving hard to train up. there there are some indications that is having success, but i think the afghan government will continue to require assistance from the west and another issue is the extent to which we and other coalition members will be able to sustain that support. importantly as well and is the achievement of a strategic partnership agreement with the afghan government, which would premise, be a preface for our continued presence in some form to advise-and-assist in perhaps to assist particularly with counterterrorism. >> and there has been no change in the isi relationship with the haqqani network who are killing americans in afghanistan? >> yes sir.

with respect to the pakistani government and isi is kind of a microcosm of the larger government, their existential threat is india and they view everything, they focus on that and their concern is of course sustaining influence and presence in afghanistan and they will probably continue to do that through malicious. >> so our relationship with pakistan must be based on the real assessment that isi's relationship with the haqqani network and other organizations will probably not change? >> yes sir. i mean there are cases where interests converge. government to government and that relationship and that factoid is reflected in a relationship with isi. >> the secretary panetta publicly stated that israel will

decide in april, may or june whether to attack iran's nuclear facilities are not. do you agree with that? >> well, i think he was, that was quoted by a columnist. i think general burgess answered that question. we don't believe that this point that they have made a decision to do that. we could have given rise to this simply the fact that the weather becomes better. obviously in the spring and that could be conducive to an attack, but to reemphasize what general burgess said we do not believe they have made such a decision. >> we have seen a very intriguing kind of situation involved here. there have been what is believed to be iranian attacks or attempts to attack worldwide the

united states in the case of the saudi ambassador and in georgia india the explosions there now today we read about thailand. does this tell us a number of things including the extent of the iranian worldwide terrorist network and that -- this is also tell us there is a covert conflict or war going on between israel and iran? >> well, i think iran is well two dimensions to this. i think on one count they feel somewhat under siege and on the other hand they are feeling their oats. the iranian lands, they probably view arab spring is a good dating and an opportunity for them to exploit which thus far have not worked to their favor. so today, through their proxies, particularly decided

and made a conscious judgment to reach out against primarily israeli and u.s. interests. >> they are displaying some capabilities. >> well, yes sir, to a certain extent even though the attacks that you reference were not successful in case they blew one of their own up but they regard those as successful because of a psychological impact they have in each one of the countries. >> quickly, in the situation in mexico, do you believe that, as you know 50,000 mexicans have lost their lives as a result of drug-related violence. is your assessment that these violent criminal organizations pose a threat to the united states including states along

the border? >> yes, sir, they do. there is always the prospect of a spillover and that is one reason why we are working closely with the mexican government and that is particularly true with respect to intelligence initiatives and we are working with them which i have to discuss in closed session but it is a profound threat to both countries. >> have you seen any indication that the top candidates vying to succeed resident calderon will alter the way the mexican government addresses the threat of cartels? >> i believe serve that, i can't do a one by one assessment, but i believe that no matter who succeeds president calderon, they will be committed to continue this campaign. >> well i suggest you look a little more carefully because that may not be the case at

least with one of the candidates. the status quo remains syria with increasing iranian, russian arms and equipment iranian presence and the assistance to assad. what is the outlook as far as the situation in syria is concerned and what is your view? do we and the arab league and other like-minded countries need to do to alter that equation if it is an apparent stalemate with the massacre continuing? >> well, there are four, we characterize them for pillars of the assad regime. the continued effectiveness of military support, its own military which is quite large.

there have been desertions but for the most part, they have engaged about 80% of their maneuver units and assaults on the syrian population. the economy is another pillar that has really taken some hits in place of gas in september. food has gone sky high. they have periodic electrical interruptions, so the economy is going south. the state of the opposition which is quite fragmented, is very localized. the syrian national council really doesn't only control command and control of these oppositions groups. the free syrian army is a separate organization not connected to the syrian national council, and of course the other is the cohesion of the elites.

in all we have seen signs of some of the seniors and the assad regime making contingency plans to evacuate and move families and financial resources. to this point they have held together. assad himself could probably cause his psychological need to emulate his father sees no other option but to continue to try to crush the opposition. >> i guess my question sir was, and less something changes as far as assistance from the outside, do you see a continued stalemate in syria? >> i think it would just continue. we don't see any, short of a coup or something like that that assad will hang in there and continue to do as he has done. >> and the massacre continues. thank you mr. chairman. i thank the witnesses who would have been very helpful.

>> thank you senator mccain. senator lieberman. >> director clapper and general burgess thank you for your extraordinary leadership of the intelligence community and protecting your security. director clapper i want to go back to iran for couple a couple of minutes quickly. you said this morning that is your assessment that iran has not made a decision to build a nuclear weapon, but i assume you also believe based on international atomic energy agency reports and in information that the intelligence community has that iran has taken steps to put them in a position to make a decision to break out and build a nuclear weapon. >> yes sir that is a good characterization. >> there are also certain things they have not yet done which i would be happy to discuss in closed session that would be key

indicators that they have made such a decision. >> and that they have done things, is it fair to say, that are inconsistent with just wanting to have peaceful nuclear energy capacity? >> well, obviously the issue here is the extent to which they produce highly-enriched uranium. you know, they have produced small amounts of higher than 20% highly-enriched uranium which sensibly could be used for legitimate peaceful purposes so if they go beyond that obviously, that would be you know, a negative indicator, put it that way. >> general burgess do you want to answer that at all? >> sir i would agree with what director clapper said and i would agree with your character a saint -- characterization. that is already a leaf and it's

not that much of a bigger leap to the bigger 90% that they would need to go to. >> thank you and do you both agree that or is it your assessment that if iran makes a decision to nuclear weapons and in fact achieves it, that it is likely to set off a nuclear arms race within the region? in other words saudi arabia will want to also have the nuclear weapon capacity? >> is certainly a possibility sir, absolutely. >> is also fair to say and we talked about the iranian sponsorship of terrorism, that if they did have nuclear weapons capability in their use of terrorism -- in terrorism against regional opponents and the united states? >> yes, sir. it would serve as a deterrent

even a thing to a certain extent the ambiguity that exist now serves as a deterrent. >> okay, thanks. let me go to cybersecurity and they thank you very much director clapper for your statement and support for the legislation that senators collins and rockefeller and i introduce. the main intention of the legislation, does a lot of things, but is to create a system where the federal government through the department of homeland security advised and supported if you will by the nsa can work with the private sector to make sure that the private sector is defending itself and our country against cyberattacks? we have spent a lot of time on this and right now, because of the remarkable capacities of the

cyberattackers and the extent to which they can attack privately owned and operated cyberinfrastructure for either economic gains or to literally attack our country, that we need to ask the private sector to make investments and to defend themselves and i'm afraid a lot of them are not yet making it. is that gin your general impression? in other words bottom line, do we have a vulnerability? does the privately owned and operated cyberinfrastructure of america have a vulnerability to both economic and perhaps strategic attack? >> sir the chairman and the ranking member cited the national intelligence at consecutive report that we issued in october which called out both china and russia as our

primary concerns and particularly with respect to the chinese and the theft of intellectual property. of course which occurs, much of which occurs in private-sector. i know that the bill is quite lengthy, some 270 pages. i have not read it all. the important thing for me was precepts that it addresses including it delineates rules of the various components of government to include the department of homeland security which i believe has an important role to play here. it defines what i feel is a good talents in a relationship with the private sector and how intrusive the government is going to be which is an issue and most importantly to protect civil liberties and privacy. i am sure there are other provisions in the bill that some may take issue with but the precepts i think are important in terms of the balance between

protection and our freedom. >> i appreciate very much what you have just said. part of the problem here is as we go forward, i think so much of the vulnerability we haven't even the attacks that are occurring and the exploitations occurring are largely invisible to the public, so am i right in this regard? the report you just cited said it. there is extensive ongoing theft of intellectual property of american businesses, which in fact enables competition from abroad that actually costs us jobs here at home and diminishes our economic prosperity at home. >> absolutely, sir. one of the downsides to this for the united states of course is particularly when people are

robbing us of our technology which of course saves them the investment in r&d so that's almost a double whammy if you will. i think there is difficulty for some and something you cannot see, feel or touch, since it is a passive theft and you don't directly see immediately the negative impacts of that. unlike an attack which obviously is by its nature active, in which he would feel the effect of the seizure of the banking system or the stopping of our electrical grid or some other egregious effect like that. >> and would you agree finally that general burgess that right now are privately-owned and operated cyberinfrastructure, electric grid banking system and transportation water supply

are not adequately defended against such an attack? >> that is probably to ruby and it's uneven. some parts of the infrastructure are reasonably well protected, but it's not complete and of course you are kind of at the whole weakest link proposition is the vulnerability. >> i wish is was just going to say and i am like director clapper, if not read the whole thing but from my days when i was in the director of national intelligence and took on the issue with mike mccollum of cybersecurity i think what you have put on the table, sir, is a great first step and as an american citizen, thank you for doing that. it is a good first step. it is progress. changes generally evolutionary as opposed to revolutionary and i would say this is evolutionary

in my humble opinion. if i have one thing that i would hope as i think i understand there is not a requirement to share some information. it's encouraged. i always tell people when i speak publicly we are a nation separated by a common language. we all define words a little differently, so in terms of economic attack and so forth some entities may not want folks to know about what has been taken and they are not required to divulge it, so just to comment from the peanut gallery. >> a i take that seriously. it's a good comment. it's a thoughtful poke and thank you for your words. thank you is to chairman. >> thank you senator lieberman. senator inhofe. >> thank you mr. chairman. i really think this is a better

hearing than we would have with the straightforward responses and i appreciate that very much and your comment about language i'm going to get that from the record and use it later on. >> i just wrote wrote adelle. >> that was a good one, general. i think we pretty much have decided on this 20% getting back to iran now that's it's something that is being achieved as we talk. general burgess said we have the scientific, technical and industrial capabilities for producing a weapon that we didn't really talk about when. when is the big issue? i remember what secretary panetta said just the other day about and we repeated that several times some of the questioners have and i think that is consistent. back in the debate where we have difference of opinion as to whether not we should continue with the ground-based interceptor in poland. at that time the unclassified

date was actually 2015 so this is pretty consistent. one thing i don't understand, and i think there a lot of people who don't and i would like to get clarification. we do know in terms of the percentage necessary for the production of power we are talking from 3.525% enrichment. is that something that has been used? >> i think so, sir. i don't know what the percentage is. >> alright, but it is certainly less than the 20% which is apparently where they are right now. >> yes, sir, i would guess. >> this morning in today's earlybird they talk about iran has been met -- reactor to justify uranium to 20% the higher level of refinement that the nuclear power systems require. the higher enriched material also enables iran to potentially

move more quickly so it talks about something that i have heard and i assume is correct that the difficulty is getting up to the 20 percentage. the time between reaching that level and reaching the 90% that we have been concerned about goes much more rapidly than it would eat to get up

i believe the first person who made that statement was winston churchhill and he said that the united states and britain were two countries separated by a common language. i don't want to out you, general burgess but someone was going to do it sooner or later. >> i appreciate that. >> it actually goes to one of the points that i need to make this morning and to ask both of you for your advice on it. that is words do count. i also sit on the foreign relations committee and the last few days, we have been trying to put together a resolution with respect to syria.

and first i would say director, that your comments, testimony and comments were very helpful today and you can hear the frustration from people like senator mccain on the fact that people think they need to do something but we have to be careful what we do and we have to be careful about the statements that we make as a senate and i have had a number of occasions since i've been here to attempt to look at some of these statements that are well meaning but hastily drawn and sometimes overly conclusive in their tone.

i asked him a question about the nature of the opposition in syria. not going to what the a sad regime would be capable of doing. i thought you laid out very -- in very understandable specifics, but really what is on the other side of the picket line? who are they? how much of this is domestic? how much of it is foreign? what is the regional dynamic. and he made a -- one comment. he said syria is a much different situation than we collectively saw in libya. it presents a very different challenge in which we also know that other regional actors are providing support as a part of a sunni majority rebelling against an on pressive regime.

we all know this. you made some comments about this as well. i asked him about the reports in the media last week that al qaeda was involved in some of the assassination atemperatures in syria. he would not reject it out of hand. he said he didn't know. one of the things that general dempsey was very clear about is they are attempting to analyze the intelligence information to come to some sort of conclusion. this is an opportune time for me to be able to ask both of you, what are your thoughts on the nature of the opposition that is active on the ground in syria right now? >> let me take a stab at that and then i'll ask general burgetose amplify or correct as the case may be.

trying defend itself against attacks from the syrian regime controlled military. the syrian army which is a blabet generic name that is sort of applied to the collection of oppositionists, is itself not unified. there is an internal feud about who is going to lead it. complicating this, as you implied, of course rrks sort of the neighborhood dynamics. the iranians very, very concerned about propping up

assad, so they have sent help in terms of trainers, advisors and equipment. mostly oppression equipment. that sort of thing. a.q. another disturbing phenomenon that we have seen recently is the presence of extremists who have infiltrated the opposition groups. they in many cases may not be aware they are there. we've had the two attacks that you alluded to. the two bombings in damascus in december i think it was, and then the two additional bombings in -- both of which were targetted against security and intelligence buildings. and had all the earmarks of an al qaeda-like attack. and so we believe that al qaeda and iraq is extending its reach into syria.

complicating all of this is -- this is another contrast with libya where we had one or two or three sites that had chemical warfare components. it is a much more complex issue in syria, which has an extensive network of such installations. although to this point, and we're watching these very carefully, they appear to be secure. so many complexities here involving the opposition, which i am sure will affect any discussion about coming to some assistance. >> sir, there is a whole lot i can add to what director clapper laid out. the only other comment i would make is in regards to what we have seen in reference to the

al qaeda-like events. as we try and look at some of that, it appears to be those almosts that may already be in country, be but what we haven't seen so far and what we have not assessed yet is whether they would be what i would call a claireon call to outsiders coming in to augment. we haven't seen much of that up to this time. basically the team that is on the ground is playing with what it has. >> thank you. i just -- my time is up but i would like to read very briefly from a piece that was just published by we seely gale who needs no introduction as a foreign policy expert in our country saying when interventionists -- they blind themselves in the nation and run dangerously amok.

demands to supply arms to rebels they know nothing about with ideas or no-fly zones and bombing. their good intentions could preserve lives today but sacrifice many more later. again, i hope members of this body will keep this in mind as we develop policies. thank you, mr. chairman . >> thank you, senator. >> thank you, mr. chairman . director clapper, general burgess. thank you so much for being here today and for your service. director clapper, i believe you previously testified that the reengagement rate from those who have been released from goib was 27%. -- goib was 27%. what is the current reengagement rate of terrorists who have been released from guantanamo bay and has it gone up?

>> i think the next assessment will reflect a very small, less than a percentage point increase. >> so the next assessment will reflect perhaps a percentage increase from 27% to 28%? >> somewhere in that neighborhood. >> certainly any one being released from there and getting back into fights, our soldiers is one too many, isn't it? >> yes. >> i want to ask you about there have been reports from the administration about the potential of exchanging and i asked secretary panetta about this the other day, five detainee tosca tar in exchange for detainees from qatar in exchange for -- that have been reported by the "washington pothse and the "wall street journal." they presented a high risk of

returning to the fight. has the designation for these five detainees changed by the administration? >> no, ma'am. they have not. and i -- i hasten to add that of course, negotiations have always been a part of any wining down of combat hostilities and that is the case here. this is a case of exploring the option to see what sort of reaction we might get from the taliban. but a couple of points i make here is that i don't think anyone harbors any illusions about these five taliban members and what they might do if they were transferred. part and parcel, this discussion would be their transfer to a third country such as qatar. and then the conditions on which they would be surveiled

and monitored. i also want to add turned provision s of the national defense act fy-12. the secretary of defense has to certify his view on whether or not anyone can be transferred with respect to their recidivism. i can tell you from personal encounters with secretary panetta, he treats that authority with the gravity that it deserves. this is something i think the administration will do very deliberately. >> well, and appreciate that and appreciate what the secretary had to say about his responsibility the other day. i know that he takes these very seriously, but i want people to understand very clearly. these individuals were designated by the administration in 2010 to be high risk. nothing has changed about that assessment and the notion that we can monitor them or surveil them, we have tried that in the past with releasing people that

have come from guantanamo bay terrorists to third party countries and we think it may go up to a 20% reengagement rate for what i understand the administration has described as good will from the taliban. i think this is an unacceptable risk. i think that unless we're going to get them to lay down their arms, i don't know why we would do this to our military men and women and our allies so i appreciate what you're saying. i just see this as a huge risk in terms of safety for our troops and our allies. i wanted to ask you briefly about iran. i know that you have gotten many, many questions. both of you about iran. i just want to clarify a couple of issues. does the iranian regime continue to support hezbollah? what kind of threat does hezbollah pose to our ally israel? is iran supporting hamas and the gaza strip and is iran supporting insurgency in afghanistan and what role is iran playing in iraq? >> i didn't quite write down

ule those questions? >> so basically do they continue to support hezbollah? >> yes, they do. >> hamas? >> there is a very close relationship between particularly the irgc force, which is the organization responsible for external operations around the world and hezbollah. it is kind of a partnership arrangement with the iranians as a senior partner. >> is iran supporting the insurgency in iraq? excuse me, afghanistan? >> yes, ma'am. >> what type of role are they playing in afghanistan?

>> well, they have provided arms. they have been -- we have found iranian arms in afghanistan, so you know, they are -- they were working what we would call a dual track strategy as they work not only the work against u.s. and coalition desires in there. but while at the same time they want to put forward the government of afghanistan, so they are walking a very fine line. >> but they are clearly supporting our enemies and trying to kill our soldiers? >> yes, ma'am. >> and in iraq, what role are they playing now that we have withdrawn and how would you describe that role there? >> i would describe their role in much the same way as i did in afghanistan as a very dual track -- iran does not want strong iraq on their border, but at the same time, they also

want to, you know, encourage us out of there totally, so again, they are walking both sides of the fence. >> so again, they are working contrary to a stable iraq and they are also working contrary to our national security interests? >> i would not disagree with that the same. >> they would like to have a cooperative shia-dominated government in iraq which they have but that is not to say that the iraqi government is necessarily a complete satellite of iran. he has his issues with the iranians as well. >> clearly their efforts are continuing to fuel sectarian violence? >> absolutely. the three principle shia militant groups that iran has supported in the past, some of which were directly responsible

for attacks on u.s. forces. of course, the issue is whether , you know they will turn their ire against iraqi government or simply become part of the political process remains to be seen. >> when you throw on top of it, of course, their efforts to acquire a nuclear weapon, no question, they are a grave threat to our national security and to that of our allies? >> that's true. iran is a big problem. >> thank you. >> thank you. >> i join with other members of the committee in thanking you for your service and excellent testimony this morning focusing on afghanistan and the roadside bombs or i.e.d.'s. as you know, members of this committee and the united states senate consider the role of pakistan in providing greents

used to make those road -- ingredients used to make those roadside bombs as a grave threat. in the 2012 defense authorization act the $700 million in aid is frozen until they come up with significant efforts with a strategy to counter improvised explosive devices. i've heard nothing. i've seen nothing that indicates they are making that kind of significant effort. am i misinformed? could you shed some light on that issue? >> i would tell you that yes, that i.e.d. use najaf after is up by 15%. and most of the precursors and components for those i.e.d.'s while they are assembled in afghanistan come through pakistan. >> that could not be happening

if pakistan were making significant efforts to stem the flow of ammonium calcium nitrate. am i correct in that? >> yes, sir, that is correct. they have two of the major companies that produce this material are located in pakistan. there is an extensive network from pakistan into afghanistan to move these materials. >> we know where those plants are, do we not? >> yes, sir, we do. >> and in fact, the congressional delegation that i joined as recently as august met with at least one of the owners of those plants who indicated that their production is ongoing and the pakistanis have the wherewithal to stop the flow of those ingredients into afghanistan do they not, sir? >> well, that's a good question, sir, how much the pakistani government controls anything in the fattah.

in the fattah regions which border afghanistan. so -- but it is clear they could probably do more than they have to this point. >> so they are really, again, to come to the bottom line here, they really made no significant efforts so far? >> not that i'm aware of, no, sir. >> turning to another area of inquiry. could you send some light on the talks that are in progress, if there are such talks as mr. karzai has acknowledged in the past few days there are apparently, involving the three parties, the taliban, the united states and afghanistan? >> yes, sir, there have been. i don't think either general burgess and i are are kind of

the authorities on negotiations with the taliban. i'm sure a special representative for afghanistan, pakistan, mark grossman is far better informed than that. i'm sure there has been dialogue. i'm sure president karzai is through either directly or intermediaries has been discussing reconciliation issues with the taliban. >> you're aware that such talks are ongoing? >> oh, yes, sir. i believe they are. >> what would be the need, then, for releasing these currently incarcerated taliban insurgents if those talks are ongoing at the moment? >> this, sir this is part of confidence-building. i think that started as a kind of a separate track and there are some reciprocity

considerations which i prefer to talk about in closed session. >> well, i appreciate that. i would just say, i would see no need for that kind of release, if in fact, the talks are ongoing and if in fact our adversaries have an interest, a self-interest in talking. i personally would question the need for any such release. apart from the security issues that have been raised by my colleague in new hampshire and others previously. let me ask you, if i may, a general question. i understand you may be reluctant to go into details in this setting, but if you could characterize whether there are differences in the threat assessments from our intelligence about the iranian

nuclear capability and the potential response to israeli intervention there and the israelis' intelligence assess yms, if you understand my question, which calls for a sort of a general answer. i'm not asking for the details. >> if your question is just to make sure i understand it, do we and the israelis largely agree and the owns a is yes. -- answer is yes. >> you agree, general burgess? >> yes, sir, i do. we have been in these discussions for many years. i personally have been involved in them in both my previous life and in this life. sir, generally speaking, our assessments track with each other. they comport. >> thank you. and let me ask a final question and you may not think it is directly relevant to all of the questions that you have had so far, but we have been in

discussions with as recently as a couple of days ago with secretary panetta and general dempsey about the overall budget of the department of defense and the platforms that exist. in terms of platforms for intelligence gathering are there particular areas where you think the expenditure of resources poses a threat? in other words to, put it more simply, where diminished funding impedes or imperils intelligence gathering by the united states? >> well, sir, we're going through our own cuts in the intelligence community since a large portion of the national intelligence program is embedded in the d.o.d. budget.

so we were kind of given the same reduction targets on a proportionate basis. so we are in the mode for the first time in 10 years of cutting intelligence resources. we have been on a steady upward slope for the whole decade. and that's going to come to a halt and so we will have less capability than we have had in the last 10 years. that said, i've been through this before when i served as director in the early 1990's and we had to read the peace dividend after the fall of the wall and we did some profound cutting, in the intelligence committee and didn't do it very well. we're trying to profit from that experience and place stock in those capabilities that make us resilient and agile so we can respond as we need to wherever hot spots or crisis

occur in the world. as the department of defense for example, pivots to the far east, the pacific we will do that as well and obviously major equity for us in the intelligence community is to sfor military. -- support the military. where we're effective i think, to get to your question, as we draw down in iraq, we're going to have a much reduced footprint across the board to include intelligence, that will affect the fidelity of the intelligence we previously had on iraq. i anticipate when we draw down in afghanistan and intelligence resources are drawn down proportionately, that we will also not have the fidelity that we have today. so in that context yes, we'll

lose some capability, but the premise of the intelligence community and one of the organizing principles i've tried to push as a result of my experience 20 years ago, is those capabilities that enable global coverage to include for denied areas such as russia and china and that enable us to adapt and be resilient depending on what the crisis of the day is. >> thank you very much. again, thank you both for answering my questions and for being so forthcoming to our committee. thank you. >> thank you very much. senator brown? >> thank you mr. chairman . the points that my colleagues have made in reference to iran i agree with much of what was said. i want to emphasize how important it is that israel has anything it needs for us to close any intelligence capability acts with respect to

iran. do both of you agree with that recommendation or suggestion? >> yes, sir. i think both of us have been proponents for sharing intelligence with the israelis. i'll be going there next week to engage with israeli intelligence officials to discuss that very point. >> great thank you. director, also to add on a little bit more, my colleagues have already mentioned syria and how the people are enduring serious attacks from assad. earlier this week, the head of al qaeda released a video calling on all muslims in the country surrounding syria to join the fight against the assad regime. given that the president and administration officials say it is not a matter of if but when it will fail and fall, are we prepared for the situation of a possible failed state where al qaeda enjoys safe harbor and

refuge in which to coordinate attacks? what is the plan? >> that's a great question, sir. because what would -- who would succeed or what would succeed. assad is a plist. -- mystery. we certainly don't know -- i don't know what would ensue and as i quote that i read in my -- my oral remarks at the outset of the testimony quoting the roman historian who said the best day after a bad emperor is the first day and after that, i would add that it kind of goes downhill. there is no identifiable group that could succeed him. so there would be a vacuum i think, that would lend itself to extremists operating in syria, which is particularly

troublesome in light of the large network of chemical warfare, c.b.w., storage facilities and other facilities there are in syria. >> i agree. i have a concern that al qaeda and iraq is moving towards syria and consolidating themselves there now. do you have any evidence of that? >> yes, sir, we do. we have seen evidence of extremists, sunni extremists. i can't label them specifically as al qaeda, but they are infiltrating the opposition groups, in many cases unbeknownst to those groups. >> the fort hood shooting, i know there were some recommendations made regarding information sharing. what is the status of that and can you tell me a little bit about the counterintelligence community and what they are doing to help the leaders on the ground identify potential breakdowns like to one we saw at fort hood? >> i'm not sure what you're --

>> well, in the wake, key reforms have yet to be completed in the area of information sharing, which continues, i think to, put our nation at risk for home grown terrorism an inside threats. are you getting all of the information you need to adequately address our domestic threats, do you think? >> i'll put it this way. i know we have come a long way in the last 10 years in information sharing. it is a big focus for me and for the office of the director of national intelligence sharing vertically across the agency as well as or horizontally and vertically as well as the local and private sector. there has been a lot of work done towards that. it is an emphasis area for me and i do think we have made great improvements. at the same time of course, we have had episodes like

wikileaks, which reminds us of the need to balance the sharing and security. so we always have that fine line the draw between those two, but i think we have improved, but there is always more to do. >> great, thank you both. >> thank you very much senator brown. >> chairman, i would like to lead to mr. mansion. i would like to keep my place in the q. >> always appreciate those court sis. >> i am reading a book finishing up. it is by jip jim clifton. it says basically the coming jobs war is going to be the biggest war that we have facing this world. who is fighting for what jobs. it breaks it down.

7 billion citizens on this earth. 5 billion over the age of 15. 3 billion seeking a job of some sort of working. only 1.2 billion formal jobs in the world today. so we can see that the mammoth problem that we're facing. with that, i think what i'm asking is when you conduct intelligence estimates do you consider the impact of unemployment and what it will have on the stability of the population and how that increases the likelihood of unrest and terrorism? >> absolutely, sir. i haven't read the book but i'll get it. but i think the point, even more basic than jobs is if you project out in the future what the world supply of food and water is going to be in the face of the growing population. if you project the population of the earth, what it is going to be in the face of declining resources. and yes, absolutely, we do

account for that in doing any kind of intelligence assessments and an illustration of that was arab spring because of the conditions which actually still exist the population bulge of high numbers of people, the economic difficulties and deprivation and lack of political freedom and expression. of course one of our major insights into that is in social media, which has become a major bellwether for the attitudes of people. so to answer your question, sir, absolutely, we do consider that in assessing the potential for disruption. >> thank you. general, following up on that when i read this book and i was thinking, our involvement and the a amount of money that we have spent in afghanistan, knowing that when we leave, they have no economy. the only economy they have is us. knowing that the unrest,

unstability, terrorism or the ability to foster terrorism will be the same. and i have a hard, very, very hard time, understanding why we are still there and i know i've talked to everybody and i feel very strong about that. what i will say is this sir. north korea -- there are reports that north korea and iran ha have possession of u.s. drones. why in -- on earth did we not design or request a design of destruction when those -- when we lost those drones under any circumstance that we could have destroyed them so they could not have been copied and reproduced back to use against us? >> i would be happy to discuss that with you in closed session, sir. >> gotcha. >> general burgess, what is the assessment of kim jong un mean

for the north korean nuclear program and the six-party talks that are going on? >> sir, so far as we have watched this succession, it is unfolding as we had thought it would. it is actually moving as has been designated and at this time we see no change to any of their policies and we actually see no impact on the way they are going about conducting business at the present time. >> concerning al qaeda, the terrorist insurgent group in somalia, they joined al qaeda this past week. some have traveled from the u.s. to join. i would like to know from you, sir, what are we going to be doing to respond to this threat? >> well, both, first of all, i would play down a bit the significance of this union between them and al qaeda. i think these are two

organizations, al qaeda is an organization under siege sand in decline. the other is under pressure by virtue of the ethiopian and kenyan insurgency into somalia. they have lost territory and are under -- they are under the gun. so i don't -- i think we'll continue to do what we have always done with these two organizations. they have been largely focused on regional issues, that is within -- within the horn of africa as proposed to projecting the homeland threat. what is bothersome are the number of foreign recruits that they bring in and train and then fight. >> finally, in general to both of you, on tuesday general dempsey testified that the military government in egypt is aware they stand to lose $1.3

billion in aid from the united states. we have been a partner. according to press reports, the same government general, general dempsey spoke of is losing power to anti-american factions. some of these are campaigning to end the u.s. aid to egypt. based on your assessments, will we be able to rely on a future egyptian government to uphold the 1979 peace treaty with israel? >> that is an excellent question sir. i think that will depend very much on the continuation over the transitional process in egypt, particularly when they write their discussion and what the constitution may or may not say about the treaty with israel. i think under any circumstance, i can't foresee a circumstance with any government that emerges, civilian government, that emerges after the staff

transitions are hand -- hands off in june there won't be a review of the treaty. how that will come out, we don't know. >> let me just say thank you to both of you for your outstanding service to this country of ours. with that, i want to thank my gracious colleague most generous colleague from colorado. >> thank you, senator mansion. senator graham? >> thank you, mr. chairman . thank you both for service to our country. i think it was mentioned that the intelligence budget budget was wraupped in the defense budget. secretary panetta said if we did sequesta sp ation, would it have the same effect on the intelligence side? >> absolutely, sir. >> would you