>> where there are some good news, particularly in the united states. but still a lot of soft spots. still europe is a big worry. and in some of the emerging markets we see markets slow down also. i think we're not all of the woods in terms of the world economy, and it will be, i hope, fascinating to listen to the exchange between david and secretary geithner. then you'll all be invited to come in. mr. geithner is the 76th secretary of the treasury of the united states. before serving as treasury, he served as president and the chief executive of the federal

bank much new new york. the group response for monetary policy. secretary geithner has a long career at treasury, but also worked at the world bank -- sorry at the imf directing the policy development and review department. he has strong international and national experience bringing it together. secretary geithner studied international economics in east asia at dartmouth. the event will take place in the form of a conversation with david ignatius from "the washington post" whom many of you you know writes twice a week and contributes to columns and blogs. david has also written eight spy novels, the most famous "body of lies" made into a hollywood film. i told him -- [laughter] >> i told him before the meeting i was really very jealous of

that. ignatius joined "the post" in 1986, and in 1990, he became editor. he began writing his column in '98 and continued through his three years as director of the "international herald tribune." early in his career, he worked at "the wall street journal." he studied at harvard and cambridge. >> thank you. i'm always happy to be linked to leonardo dicaprio in any public setting. we have the imf and the world bank convening here. there's great curiosity about the world economy. i want to start with the u.s. economy and ask you about the growth picture. the imf forecasts 2.1 growth

this year. all of the estimates seem to be under 2.5%. we had signs of faster growth in last year's third quarter. but then slowing. and i'd like to ask you the basic question that everybody has, which is what's going on. what's your mental snapshot of the u.s. economy right now. >> well, the u.s. economy is gradually healing and getting stronger. growth is averaged about 2.5% since the recovery began. slower than the average of the recoveries in the postwar period. why has it been so moderate? really the following reasons. one is the basic reality that when you are digging out of a financial crisis caused by too much borrowing, too much leverage, and that makes growth slower. people are bringing down debt, saving more, spending less, and

naturally more cautious in that context. that's very important to understand. because in the paradox in that is that the weakness that induces temporarily should be a source of strength going forward. as you know and many people have written, we are much further along in the adjustment process than many countries. we brought down the risk in the financial sector. we are four years into the adjustment in housing, and even individuals are bringing down the debt levels quite a bit. so that's good. we also got hit by a series of pretty substantial external shocks in 2010 and 2011. europe's crisis, japan in oil, those are large enough to bring down the rate of growth quite significantly in the united states. and then we had, of course, the debt limit drama of last summer which was very damaging to consumer confidence at a time when the world was very fragile. those are the main reasons why the recovery has been more moderate than you might that

thought. just thinking about an economy coming out of the crisis. but we're making quite a bit of process. we're in a much stronger position than we were six months, a year, 18 months, two years ago. if you look at the basic indicators of economic strength of the united states what's encouraging about it is the strength is pretty broad based. you see it in manufacturing, high-tech, agriculture, energy, private investment growth has been pretty strong actually. even the job creation and the private sector has been relatively strong since the restart and export growth is good, productivity measures is encouraging. where there's weakness, it's understandable and necessary as we work through the balances. i think we should find that encouraging. just to finish this, still some risks and uncertainty ahead. obviously europe is going through a very long, protracted, difficult set of challenges. although oil prices to date

haven't -- didn't look like they've had the materially significant negative effect on overall growth so far. there's still a lot of uncertainty around the oil markets. as everybody is sort of becoming aware. if you look forward to the end of the year in the united states, you face the substantial number of tax cuts, the potential impact of the large automatic spending, another debt limit. it'll be a big test to washington, big test to the capacity's country to govern itself in how washington dealing with those challenges. and, you know, hopefully we used as an opportunity to make another significant step towards long-term fiscal reform at that time. the engine and the american economy and the private sector is humming along. and obviously more we can do to reinforce that and, you know,

we're just going to keep looking for opportunities with congress to try to get congress to approve additional measures that would strengthen the pace which we're growing and bring the unemployment rate down more rapidly. >> you and i were talking the other night informally about the famous cains definition of an economy that's growing robustly, animal spirits of an investor that see a chance to make money next quarter and so invest. then you get the virtuous cycle. we see a restraint in investor behavior, yes, investment numbers are up. i'm wondering if you can speak a little bit to the concern that many people have that we're in a new normal. the animal spirits are going to be less animalistic for a while. people are going to cut themselves to lower risk, lower rates of return, it's just a different kind of economy. do you think that's a correct picture? >> i think there's something to that. i think it's probably over done

in the context of the united states. remember the forces that produce the growth of the previous -- of the decade coming up to the crisis were really unsustainable. and that created a set of expectations about future performance in the financial sector and other sectors of the economy that was not plausibly sustainable over time. so there's been a bit of gravity in expectations as people think about what it's going to take for us to grow in a more balanced and sustainable way going forward. you know, we can't have an economy where we expect growth to come from sustained borrowing by individuals to finance over investment housing. not a plausible long-term strategy. so again i think the broad adjustment you are seeing in the u.s. is we should find encouraging. it's more investment and export led. it's coming with a improvement in private savings rates, even

the beginnings of the improvement in public savings, public debt, fiscal debt is coming down, that's encouraging. people are bringing down the debt burdens, financial sector is much more stable. we have a very resilient and dynamic american economy. you can see that across the broad strength that you are seeing. i think if you look ahead, the world as i think is still at the early stage of what's going to be a very long period of pretty substantial rates of growth in the emerging world and the most populous parts of the world. we are better positioned than most developed economies to take advantage of that. that's probably why you are seeing the strength that you see today again in agriculture and manufacturing and high-tech in the united states. >> let me ask you about year end set of interlocking crises that you mentioned in the newspapers that we've been refers to that as taxmaggedon.

there are a lot of uncertainties out there. you could argue that the president by introducing the idea of the buffett tax, 30% minimum tax for millionaires, is adding to that sense of uncertainty as we head toward year around. i want to ask you to address question. is it just unlikely that we'll see sort of the firming of business confidence until the issues are resolved, which probably will be after our presidential election. and on the question of the buffett tax, a lot of people have wondering why the president hadn't locked instead towards more comprehensive tax reform. a lot wrong with the u.s. tax system. you could argue that equity is part of what's wrong. why is it limited approach to a big problem? >> good question. thanks for raising them. among the challenges that we face as a country, they are not the only challenge that we face

is trying to find a way to build a hock and census around a balanced mix of tax reforms and spending to restore a fiscal position. it's not the only challenge we face, it's not the most urgent challenge, but it'll be critical going forward. at the end of the year, we had the huge incentive and huge opportunity to try to get people to come together and make some progress in that direction. for that to happen, you are going to need some additional revenues through tax reform, alongside some significant savings across all parts of the government. health care, all of the other things, you know, that dominate the spending picture of the government. and but they have to happen together. i think it's untentable to ask people to bear the burden of the significant savings they are going to have to come across the government.

which is going to affect all parts of the american economy and middle-class families, unless that's accompanied by some shift towards modest taxation on the most americans. i don't know how you see it economically or politically unless you have the combined process. as part of the process, we've been trying to lay the foundation for the debate that's going to come on tax reform. now the president has proposed a very detailed, very comprehensive tax changes. higher and letting the bush tax cuts expire for the top 2% of the americans and a significant limitation in the 2% of americans that take advantage of the deductions and exclusions in the tax code. we think that's the necessary and essential element of tax reform. alongside changes on the business side that would lower the rate and clean up the corporate wealth on the tax code

and create stronger incentives. the two basic center pieces are ways to restore a greater degree of tax code with the modest increase in effective tax rates of the most fortunate americans. that's what the buffett rule tries to do by making it clear as many republicans have said, you need to limit the deductions and exclusions which disproportionally benefit the rich americans. i want to have that alongside the business tax which would lower rates, broaden the base, and improve incentives in the united states. what we're trying to do is lay the broader foundation for those reforms so that when a better position at end of this year to set a process would move in that direction. that should be alongside of, not a substitute for a broader set of savings on the spending side. just one last point of this. all of the bipartisan proposals

for the fiscal reform share with the presidents a basic judgment. they need to have spending savings alongside some modest increases in revenue. so everybody has looked at this, whether it's since then the senate six or the whole range of other nonpartisan or bipartisan efforts have come to the same judgment. there's no plausible way politically, and no really sensible way economically to try to restore fiscal sensibility without that. tax reform should be part of that. but it requires some spending savings too. >> so just to clarify for our audience, am i right in understanding you to be saying that the president would be interested at year end in a broad discussion about tax reform as you address the series

of questions that you mentioned? >> absolutely. again you need a -- i think tax reform is coming. it's inevitable. it's necessary. it's just all about the shape of it. and, you know, we're going to have to make another substantial contribution to the spending side too. those things should be -- they should proceed in parallel. and we're going to have to find some way to put in place a framework for doing those things at the end of the year. >> so let me shift now to -- can i say there is important. i think the important thing about the uncertainty that people see ahead at the end of the year, i would say there's no plausible argument that today in the behavior business and the broad behavior of the economy in financial markets, you can see much evidence, really any evidence about the uncertainty about the resolution of the fiscal problems affecting the economic growth or behavior. it just doesn't exist not. no evidence.

it might come in the future, but not today. the big source of uncertainty around this, and what people can do to provide more reassurance is around the debt limit and the potential scope of changes on the tax side. the things that would be reassuring and helpful are the following. one is that congress will pass the debt limit without all of the drama in politics and damage that republicans and congress imposed on the country last summer. two, it's important to recognize that the tax proposals we're debating would affect 2% of american individuals taxpayers, 2%. they would involve a modest increase in the effective tax rate on those americans. about 3% of small business is affected, very small fraction of the american economy affected by those changes. and the third thing is -- this

is very important to to recognize that when you restore fiscal sustainability like this, you got to do it in a way which is calibrated to the strength of growth and recovery. if you cut too quickly, you try to bring about too precipitous withdrawal of the fiscal stimulus, then the risk is you do damage to recovery, and you undermine the objectives. those three things are important for you to recognize. if people can watch and emphasize a commitment to those basic three tenants, that will help reduce some uncertainly of what might happen at the end of the year. >> i want to turn now to europe which is a source of great interest and some concern as the imf and world bank gather. olivia, the imf economist, in his latest announcement just out in the last few days notes the

problem of investors demanding fiscal consolidation, fiscal cuts, and then getting upset at the slower growth that results from those cuts. it's kind of a trap. if you do what you are required to do, people are upset with you. i want to ask you more broadly, looking at the situation in europe and the risk of very low or declining growth, what do you think -- what does the united states thing is an appropriate response beyond what's being down now? >> excellent question. i think it's the center piece of the policy choice as the europeans are going forward. they have put together a stronger set of financial tours and stronger fire wall if you look at the combined force and what the government has put together in terms of the funds.

they have the reform side. i think the government have more confidence, for example, spain and italy, for what they are trying to do. which is good. it's more important to get the balance right between growth and austerity. you want to avoid a situation where since there's a risk of the strong period and weakness, you want to avoid getting in a situation since economic weakness produces in the short term larger definites than you would hope for, you don't want to have to offset with immediate difficult cuts in spending or taxes right away. the best way to do it to respond to those with some gradually phased in, medium-term plans for reform. if you try to do it all up front, then the risk is again you are under mining the prospects for some stability and

growth, some recovery and growth, and you may end up undermining and setting back the cause of reform. in addition to that, as you heard from all of the debates, it's very important there be a clean commitment by the central bank, and the broader fiscal stories of europe that they are going to provide the financial commitments necessary for those governmenting to be able to borrow at sustainable interest rates and for those banking systems to be able to fund and function. those two things are critically important. just emphasize what the governments of italy and spain are doing is very difficult. they are very tough. i think they are quite promising in many ways. because you are seeing them not confront, not just the sustainability problems on the fiscal side, and not just the problems in the financial sectors, but they are trying to put in place a set of reforms in the labor markets, and over the

broader business community that will make it easier for them to grow in the future and start a business, for example, and to hire people. those things are important. but very difficult, tough long road, very fragile, very tough politically. and important that they get reinforcement along the way. >> we still seem to go week by week in our monitoring of the european crisis. in that context, i'm interested in what you are hearing as you talk over these last days with european finance ministers and with ecb chief, mario, what's happening in these economies. >> i would say the most important change thatoff seen in the last six months is, i would say the governments of germany and french and ecb have a lot of

confidence in what the new governments of italy and spain are doing. just to do that. that's very important. without that, it's very hard to get anything to come together. and that's very important. the other thing they've disown they've put in place a better set of tools. they are not, you know, the early process still of building the architecture of a let of things that will make the union work over the long run. but they are in a much better position in terms of the mix of the financial tools than they were six months ago or so. those are very important things. and the combined affects of those actions has been to calm significantly attentions and markets that you saw periodically in 2010 and length. -- 2011. we can see every day this is going to be a long process, politically difficult, and it's going to require some reinforcement and sustained effort over time. >> so to sum up, am i right in taking from what you said a

sense that europe has turned the corner in terms of the severe liquidity problems thatter evident several months ago? >> i think what they've done is they've done a better job of reassuring the world that they are going to take the risk of catastrophic failure out of the plausible range, out of the market. catastrophic failure, you know, cascading default by government or the dismembering. they've worked hard to take those risks out of the market. that's absolutely essential. nothing is possible without that reassure. they are going to have to keep working hard to do that. even when they achieve that, they are still left with, you know, formidable and difficult challenges. they have a set of reforms in

place. >> this is the financial question from me. then we're going to turn to the audience for your questions. i want to ask you about the final big piece about the global economy: china. two things of particular interest now. first the chinese announced last weekend they were widening the band within which the rmb can move. and i'm wondering whether and to what extent that addresses long standing u.s. concerns about the value of the yan and the way it will be traded. and looking at the latest figures, if it's slowing, if it's heading for a soft landing, soft decline, and whether there are concerns that your analyst have that could be somewhere

more trouble for the chinese economy? >> good question. i think what they've done on the exchange and external side is significant and promises. let's review what they've done. they've allowed the dollar to appreciate about 14% since june 2010. if you look back to 2005, it's more like 45%. pretty significant adjustment in real terms. they have begun to significantly losen the comprehensive set of controls they have in place on capital movements and the ability to use and borrow. they have widened the band to allow the market forces to play a greater role in setting the exchange rate. they have been -- at least over the last six months or so in intervening less. it has come down dramatically,

and the expected surplus has come down quite significantly too. those are important and promising. i think they signal a continued commitment by the chinese authorities, even though they are going through the political transition, to the broad change in growth strategy towards the growth strategy less dependent on external demand, more relying on the market, and that's encouraging. obviously they have a long way to go on that process, including on the exchange rate. not at the end of that process. on the growth run, it's a good question. and i don't claim to have any particular feel for it right now. i think that it's absolutely true that growth has slowed, particularly in the early parts of the first quarter. but i think, you know, most people look at china and most people in china with a feel for this are really quite confident that you are going to see the economy growing, you know, in

the range of seven to 8.5 or 9% over the medium term. i think that's realistic as long as europe is still making some progress and working through it's crisis. >> and again to clarify, you used some positive language in describing chinese moves on the currency fund. very significant, very promising, you said, which leads me to ask if the chinese continue to do these series of incremental steps that are having a significant broad effect, is that sufficient to meet the long standing u.s. demand that the chinese allow the currency to trade more freely? >> it just means they are on the right path. none of us know. >> if they keep on the path, are they going to get to where they want them to be? >> are they going to stay on the path? you don't know with certainly how far the process should go? that's an assessment.

people have to make a ruling over time. what you can tell about the reality today is they've moved some distance. they are planning to still move further. i think they recognize they have to go further. i think with the available evidence suggests they have to go further on the exchange rate. i think again the key thing, you know, we like to remind people that nation's act in their own interest. i think china has made the basic judgment that it is in the in the -- it is essential to the long-term interest, economic interest of china that they create an exchange rate that gives it the independence to run economic policy in china to suit chinese conditions. that requires the gradual losening of the link to the dollar. that's why they are embarking in the path. as i said again, significant and promises. they are not at the end of the process or reform. >> i want to go to the audience for questions. this is the treasury press

corps' best chance to pound their secretary with questions before the meetings take place. if there's anybody from press corps, i want to make sure to recognize them. hands in general, i see a hand back there. yes please. >> ian jones, i'm not sure about the hounding, but given the e.u.'s recent efforts to temporarily raise it's firewall, there seems to be a dam breaking on raises imf funds, at least in a limited way. what specifically besides pacing fiscal consolidation and more ltros are you going to press europe for to encourage their prospects? >> well, again, i would say looking forward, but these are choices that europeans have to

make. looking for what are the challenges ahead? the challenges are obvious. they are to put in place the set of policies, reinforced by financial assistance. they will provide a better foundation for growth over time. they have to put in place the institutional framework that will allow the monetary union to work, that means a better developed mechanism for fiscal discipline and transferred. those are very important. they are starting to build the architecture. but that's still ahead of them. h are of the challenges. i think again they've made it a very credible commitment to do what it takes to make this process work, and they obviously -- they absolutely have the will and the ability, financial ability, economic ability to make it work. and, of course, no one can feel more strongly about it than the europeans themselves, because they have such a huge and

strategic interest in making it work. >> other questions? yes. please. >> my name is michael feinberg, i'm a student at george washington university. i had a question about mortgage writedowns. if the administration is considering any additional proms? and if you believe they would have a significant effect on the broader economy? thank you. >> housing markets you know are still very tough in the united states. still a long way to go to work through the, you know, the big over hang that you see in housing. and we think the most promising ways to help facilitate the process are one, to help americans who have income that can afford to stay in their home to stay in their home. get a modification on their mortgage to allow them to do that and help more americans refinance even if they are deeply under water, and to move the large stock of unoccupied

homes, the legacy to move it into the rental market where there's a lot of demand and shortages. that seems to be the core of what's happening. first, to give people a chance to face a more sustainable set of mortgage obligations. we think there's a chase in some circumstances for making principal reduction a part of that. we've done that in the programs that we run at the treasury. you are seeing quite a lot of that in the markets as banks and investors make the same judgments yourself in their interest over time to do that. we are working, as you know, fannie and freddie to make the oversight financial case to them. this would be a useful part of what they are trying to do and would probably improve the overall returns to the tax payer in those companies. the number of families who would benefit from that are significant. not overwhelmingly large, but

significant. our basic approach on housing is that we're going to keep at it until we see a much more durable set of improvements coming. and any time -- any place that we think there's a way to help facilitate the process, help more people stay in their homes, better forms of housing, help repair and feel the damage, we're going to keep doing that as long as we get the authority to do that. i should say that there's a bill being considered in the house today that would end the government's authority in the housing market. which would be very damaging. to right now at this time with the economy where it is and the unemployment where it is, and housing where it is, the scars and damage and legacy of the crisis still so damaging and so apparent to many americans to stop the government from having the ability to help ease the transition that it's causing would be very damaging to recovery. there's no plausible, economic,

or financial case for doing it. >> since you mentioned the u word, unemployment, i really ought to ask you. given the growth forecast that we're looking at for the rest of this year, and as i mentioned earlier, the imf is projecting 2.1% for the year for the u.s. in consensus forecast ranged between that and 2.5. what does that imply for the likely rate of unemployment through the year? or to put a different way, that doesn't imply much improvement in the likely rate of unemployment through this year, does it? >> i don't ever talk about forecast. if you look at what the imf and the broader community of private forecasters say about the u.s. economy, they see an economy that's growing between 2 and 3%. and where it comes out in that range will determine the pace at which you see more people get back to work, and at the pace of which unemployment comes down. for unemployment to come down at

a significant pace, you need to be growing, you know, significantly above 2.25, 2.5%. if the world conspires against that, and some mix of oil or iran or europe slow the momentum here again as it did before, then you'll be at the weaker end of that range. but still again just to try to emphasize what's promising. again we're in a much stronger position to deal with even those challenges and uncertainties than we were six months or a year ago. most things you can look at and measure in the u.s. economy today suggest more resilience. even though we get a lot of challenges still ahead of us. >> there was a gentleman behind you, and then you, sir. yes, fred. >> fred from the peter institute for international economics. tim, i think it's fair to say

the major operational question at the imf meetings this weekend will be possible augmentation of imf resources to build additional firewall to help cushion possible effects from europe. two aspects of that, you have taken, i think, strong position that the u.s. itself will not contribute to that augmentation of imf resources. i happen to think you are exactly right. this is a liquidity issue, the funding should be provided by surplus, the u.s. is a debtor company, it's appropriate to not contribute. i think you are right on that. but the second issue is the creation of firewall itself, the increased imf facility, and how big it ought to be. then i've been puzzled because i think it's fair to say that you have not been very enthusiastic about that. some senses, you even discourage creation of a very large, very rapidly available set of additional resources. and i'm puzzled about that.

i would have thought you would go after the surplus creditor countries, china, japan, oil exporters to put up as much money as possible to avoid the spillover into our economy. would you explain why you are not leading the charge to put together a big firewall to support what the europeans are doing themselves? >> good questions. let me try to explain our basic strategies. two thing the world is doing for europe now which is very important. one is we are very supportive of the imf playing a significant role in reinforcing the reform process in europe. it's a supplement role to the european financial role. it's not the dominant financial role. but it's a significant financial role in that context. we've been very supportive of that, and we will continue to be. the second thing that's been happening which is, i think, as significant in this case and something only the united states

can do is the federal reserve as it did in '08 and '09 has given the europeans unlimited access to dollar swept lines at a critical moment where funding concerns in european banks which has large external assets funded in dollars were under a lot of pressure. that's something only we could do. we did it early. very, very powerful financial scale, and they indicated they will leave the framework in place as long as it makes sense to do that. now the imf is a good position. i think you can see based on commitments that you are going to see this week to demonstrate although it has $400 billion in available resources, very substantial tool. it has the money to raise from other countries very, very quickly if it needs to do that. i think that's good. because that'll prove to the world there's a substantial capacity that can reinforce what

europeans are going and help cushion, if necessary, the affects of any european trauma in the rest of the world. we're very supportive of that process, and we'll be very supportive of it this week. what we have been -- just to be honest and direct about it. what we did not want to see is people look at imf as a way to substitute for a more forceful european response. we didn't think that would be tentable, not fair, not really realistic and plausible. so where you've seen the united states and this is true for china and japan and the other major emerging economies. a little reluctant to move ahead of europe. it's because the basic recognition that europe is a relatively rich continent. it absolutely has the financial resources to manage this problem. it's got to play the dominant financial role. and we wanted to see them put a

more forceful commitment behind that basic financial reality before the imf came in and said, okay, you'll do what's necessary to help reinforce the role and the affects on the rest of the world. that's the rational for that strategy. one last point. the economics of a swap line that the fed provides the european central bank and the national central banks, and the economics of a country that lends money bilaterally to the imf are not very different. you know, when you lend money to the imf, you have a liquid interest claim on the fund which you can draw on if necessary. it has the characteristics of a swap in some ways. we're the only ones providing assistance directly to europe. other countries are not willing to do it directly, they are only doing it through the imf. what the imf is backed up by the united states in significant affects. it's a mistake to look at this

and say the united states is holding back and standing apart from the broader effort. we have been central to the broader effort by the world to help reinforce what europe is doing. and we're doing it in ways that are most effective for what europe needs right now, available early in a very substantial force. and those swap lines have made a very important role in dampening and cautioning the effects of europe's crisis on the rest of the world. because it diminishes the need for the european banks to reduce quickly which would put a lot more downward pressure on the global economy. >> ambassador? >> just a quick question. just to comment on fred's point. as you know very well, we have just announced $60 billion to the contribution of the imf as we have done in 2008 after wall street crash, we were the first one to come to the assistance too of the imf.

thank you. >> thank you, ambassador. yes, sir, in the third row. >> jim moody. well aware of how the discussion and deficit has been a force of its own on capitol hill and a lot of very shallow things have been announced about the deficit that shows little understanding. i don't think the public is given good education either. what is the right size is not going to clear public discussion at all. on the one hand, we don't want the deficit to get too big. but using the analogy of the home credit card bill is wrong. we're a reserved currency country. we're lucky to have that. and the deficit in some sense is a matter of foreign trade. we're providing liquidity, i'm sorry, we're providing parking of value. and that's valuable per se to park safely something for someone while they don't need it right now. and in turn for that, we're getting liquidity that we

wouldn't otherwise have. it's an international trade issue in some sense. both sides benefit. so the proper size of the deficit is not zero, but how big should it be and whatever is the span within it? it's extremely productive. and yet it's being demonized. and the most radical terms never seem to explain the fact it's a public and international trade concept. the question is what are the limits? and the public debate is -- doesn't take place on capitol hill or take place in the press. we need this as a country to have a rational discussion about what is the limits up and down of the deficit? >> you are lamenting the quality of the united states economic policy, which it's your right to do. [laughter] >> in terms of the fiscal deficit, the minimal, acceptable anchor for physical policy should be the following. you need to reduce the deficit to a level where the debt stops

growing as a share of the economy and starts to come down. for a country like the united states, we have to have a deficit that's slightly below 3% of gdp. we are above 8, we have to bring it below 3, we have to do it in a time frame where the debt stabilizes and stops coming down. ifoff look at path that we've laid out for the country on the cbo metric scoring, the president's policy would reduce the deficit to below 3% of gdp in 2016, hold it there over the rest of the decade. what that means is the debt held by the public would stabilize in the 70s, 70% range and a high 70 and gradually start to come down. if you were to do that and achieve that, that would be a very consequential step. it would still leave us with

unsustainable rates of growth and spending for retirees where we've made some significant steps in the affordable care act to bring down the rate of growth and cross. we'll have to do more over time. that's the right way to think about the challenges. first put that in perspective. don't put it in the head of everything else that we face. recognize that you have to deal with them to do that sensibly. you have to deal with them in a way that's balanced which has a mix of spending/savings/tax reform, and reserved room for us to invest in the things that are important for us to grow. make sure we are not eroding what's thin in the united states, poverty in the united states is worth reminding americans that even before the crisis, 20% of american kids were born under the poverty line. and 40% of american children born before the crisis born to families that qualify for medicaid. so the case for balance and

fiscal reform is not just an economic case or a political reality, but there's a very important, moral question. and pragmatic economic question in how to reserve and make room for investments to grow like infrastructure, and make sure you are protecting the critical assetses of the safety net, not just for low income americans but retirees going forward. that's why we think there needs to be a balanced approach over time. [inaudible] >> i'd like to ask you your thoughts about the tpp. the u.s. now has played a key role in the negotiations. when it was formed, how do you think it will impact the u.s. economy? >> well, i think the two promising things that happened on the trade front over the last couple of years which are really important is: one, we were able

to negotiate trade agreements with korea and panama which had been pending. the u.s. had essentially frozen in it's capacity to negotiation export and trading for the american economy. and getting those agreements done is very important. without that, why would any country be willing to take seriously an american commitment to negotiate? that helps. second, we've seen a lot of support in asia for this transpacific partnership. it's going to be a long period of time, we have huge economic interests in being part of that expansion, and we think we can use that agreement to set higher standards for a number of economy that is will provide an incentive and anchor for economic reforms in the region. you know, it's overwhelmingly

good economic policy, and it's good strategic policy too for the united states. we're hopeful by the end of this year we'll be able to put in place the basic foundation of that agreement. >> in the fourth row. yes please. >> hi. i'm nancy donaldson. i want to go back to david's point about unemployment, but from a global perspective. president obama at summit of the americas over the weekend talked about the importance of coming together and really tackling the issue of global unemployment issues. and i know that this administration has brought those issues to the congress as well. we know that in addition to the imf and world bank meetings that the g-20 finance ministers are meeting in the next couple of days. i just wanted to ask you if you anticipate on the agenda having some discussion about global recovery that promotes job creation and that kind of growth

has an emphasis. >> very good point. and, of course, let me just say from the u.s. perspective, the dominant, overwhelming imperative for the global economy now as it has been for the last three years or so is to lay a foundation for the growth across the world. there are other challenges too. it has to be central to the agenda, of course. for that to happen, and for that to translate into broad based games and income and better opportunity for americans and better employment outcomes, you need to see growth complimented by things that like better education outcomes, better education opportunities. the world has gone through dramatic increase in operation and technology, and where those translated in the long periods

of growths and income, average incomes, and, you know, broader economic opportunity it was because those big changes in the economic growth were accompanied by things like universal access to primary education and thing like the basic elements of the safety net to provide the retirement security and health net security. one reason why the debate about fiscal and the balance between growth and austerity and the debate about the shape of the fiscal united states is to recognize that you got to make sure you are creating better conditions for economic growth for better outcomes in terms of opportunity. and better prospects for broad based income gains. and that'll have -- that should dominate the economic and the united states and countries around the world for a long period to come. that's why the debate that we're going to have in the united states is so important. that's why the shape and context of the fiscal reforms is going to be so important.

>> i want to ask the last question. this gentleman here has had his hand up. i asked the audience when secretary geithner finishes his answer if you could remain seated while he leaves the auditorium. thanks. >> thank you for your comment, sir. i wanted to follow up on your opens comment that you said that debt levels in the u.s. were down. i would also like to follow up on mr. feinberg's question about mortgages. when you were talking about the treasury and mortgage debt, you talked about what you hoped would transpire going forward in the short term. but you also said there were other things that your research department was looking at. the imf research department has looked at the issue of debt restructuring, and your treasury department has looked at it. do you feel, beside mortgage debt, that credit card debt, personal debt, student loan debt, needs to be addressed

perhaps after the buffett rule is taken care of, after tax reform, but is there any more precise that you could say about beefing up agriculture demand both in the u.s. with spillover effects in the global economy? thank you. >> on demand. let's start with demand. good way to end your question. what we think the most useful thing that the congress could do right now for the american economy is pass a long-term infrastructure bill with substantial levels that's over time. that would be good for aggregate demand in the short run, good for long-term growth potential. that's one example. if they authorize the bank for a series of times, you'd have continued assurance of pretty carefully designed support for american exports in a world where lots of countries subsidize exports. those are two good examples. helping americans refinance and take advantage of lowest interest rates acts as a tax cut.

just under our programs, for example, on the mortgage side the typical modification is $500 a month in lower monthly payment. a million americans had current modifications that meet that test. that's a pretty substantial boost to income. if you can provide broader base refinancing opportunities for americans, including those that are under water, you can have similarly powerful effects like that. those are thing that is are good for demand. on the mortgage side, as i said, there's a pretty good financial case, pretty good economic case for adding to the tool kit of what the gses are doing for the forms of production alongside the modification programs. we're very much in favor of that and trying to work towards that. if you look at the other aspects of the broader consumer debt market, i think the right emphasis and reform in the united states is on things that

improve the ability of individuals to borrow responsibly. for example, in the private student loan market, we'd like to see, and the cfpb is working on this, we like to see better disclosure and better protection so that americans that are trying to pay for their education can borrow to do that and are not more vulnerable to making bad decisions in that context. it's a huge opportunity for sensible reforms like that with improved disclosure across the broader individual kind of markets. we'll be working towards those things. nice to see you all. thanks for coming. >> thank you very much, mr. secretary. [applause]

[inaudible] >> this comes sunday is the 100th anniversary of the u.s. chamber of commerce. on "news makers" sunday we talk with the president and ceo tom donahue about the economy, taxes, trade, and the business legislative agenda. that's sunday 10 a.m. and 6 p.m. eastern. on our facebook page today we're asking are you optimistic about u.s. manufacturing? join the conversation on facebook.com/ cspan. >> when i was in afghanistan, the soldiers started telling me that the u.s. government was tasting tens of billions of dollars on totally mismanaged development and logistics

contract. >> he follows the money right into the hands of the taliban. >> i was in the brigade and colonel howard and right after president obama took over and said we're going to give you a whole bunch of development money. win their hearts and minds. nation build. and colonel howard said don't send me any more money, send me contract officers that can oversee this stuff. i need people. i don't need more money. >> douglas on bankrolling the enemy. sunday night on c-span's q & a. look for the q & a with robert

caro. >> from the colonial era to today, prohibition. drinking has always been a part of the american landscape. watch our back store with the american history guys, ed, party, and brian with tales of beer and spirits in america. part of american history tv this weekend on c-span3. >> the u.s. house of representatives gaveled out yesterday, they will reconvene tuesday. next week a build to improve information sharing between the government and business when it comes to cybersecurity. also a motion to go to conference with the senate on highway and mass transit programs. live coverage as always here on c-span. and the senate is back monday on noon eastern for more work on the violence against women act

and the overhauling of the postal service. you can see it live on c-span2. >> this year's studentcam competition asked students to create a video telling us which part of the constitution is most important to them and why. today we'll take you to colorado springs, colorado where second prize winner brendon boyle. what is the 10th amendment? >> the 10th amendment says that all powers not delegated to the united states by the constitution nor probibbed are the states or the people. basically what that means is any rights or powers that aren't instilled to the federal government at a national level instilled to the states and the people. so basically it's creating a system of more individuality. for example, the education system isn't currently standardized at a national level, it's standardized at a state level. so basically it's just giving

the individual states and people a chance to make their own decisions. >> why do you call this the amendment for individuality? >> it's creating a system of individuality into the student, in the student's eyes. because the students are able to pursue subjects that they want to pursue maybe more than just the subjects that the schools require them to pursue. so sometimes it's just kind of nice for students to be able to have a little bit more personalization, if you will, in their education system. >> why did you choose to use state education standards as an example to explain federal versus state powers? >> we used the education system as an example for this because, honestly, it's one of the only things that really applies to us as high school students. some of the political debates out there, they don't really have an affect on me because i'm still a teenager. i'm still in high school. the education system is the one big thing that reflects on me as a high school student. >> how did curriculum

standardization begin? >> the most recent movement towards standardization was back in 1983 when the u.s. department of education released a report entitled a nation at risk.

>> i mostly approve of the education i have been receiving. we created this documentary not to say an issue that we are already having, that we feel like it is already controlling us too much, but we think that -- the bigger issue is at the national level -- the debate is that the education system should be stepped up and controlled at the national level. we think that would be a little bit too far in taking away our individuality. >> thank you very much and congratulations again. here is a brief portion from brendan's documentary, titled "the tenth amendment."

>> one part of the day, it is academics, basic academics. they get hands-on, vocational learning. they can do computer tech. they can get excited and see how the basic math and english applied to that particular job field. i think that is the answer to get kids motivated. >> again, the debate is that the government should have more control over the content in schools, but this is contradicting the 10th amendment. it holds what individuality of our education that we still have left. to educators, officials, and the lever else might be watching, i have a question -- and whoever else might be watching, i have a question. wouldn't you rather have american students be as successful as they can be? the 10th amendment recommends that the rights be and still to the state or to the people. i speak for the students of america when i say, do not standardized curriculum any

further. let's keep what right do we have. variety is what makes us individuals. it is our individuality that motivates us. >> believe me, you'd be surprised what students can do when we are motivated. >> you can watch all of the winning documentaries at studentcam.org. continue the conversation on c- span's facebook and twitter pages. >> coming about 3:45 eastern, the republican national committee state chairmen's meeting. we will hear from mitt romney, arizona senator john mccain, and rnc chair reince priebus. it starts at 3:45 eastern here on c-span. >> this weekend on "booktv," live coverage from the los angeles times festival of books. cover start at 2:00 p.m. eastern on saturday and sunday. saturday at 3:30, barbara first john farrell, jim newton, and

richard reeves -- and call in your questions or steven ross, the author of "-- questions for steven ross, the opera "hollywood left or right." at 5:00, a panel on surveillance and secrets of the entire schedule for the weekend is online at "booktv board -- -- at booktv.org. >> the u.s. house of representatives gaveled out yesterday. they will return on tuesday at 2:00 p.m. eastern. next week, a motion to go to conference with the senate on highway and mass-transit programs. live coverage is always here on c-span. the senate is back on monday at noon eastern for more work on the violence against women act and overhauling the postal service. you can see the senate live on c-span2.

>> two things, one is, this is such a complicated conflict that we have never ever -- never, ever fought a war like this before. it is really complicated. the second thing is, what is referred to back in washington as a nation-building really is very targeted war fighting. >> david wood has spent decades covering u.s. military operations or various news organizations. this week, he won a new -- he won a pulitzer prize. he is many -- one of many pulitzer prize winners named this week. you can watch them on line -- online at c-span.org. find over a quarter-century of american politics and public affairs on your computer. the international monetary fund and world bank held their annual spring meeting this week in washington. imf managing director christine

lagarde spoke to reporters, saying the global economy is in the "a light recovery." this is 40 minutes. >> good morning and welcome to this conference on behalf of the imf for the spring meeting of 2012. it is my pleasure to introduce to you this morning the managing director of the imf, mad and christine lagarde -- madame christine lagarde. directed to the right is the managing director of the fund, david lipton. david will have to leave a little bit early this morning to participate in important g-20 meetings taking place. do not be surprised if you see him leave suddenly.

we are on the record. i would ask you to identify yourself by name and affiliation. we will try to take as many questions as possible. id'd now we have simultaneous translation in a number of languages -- i think you know we have simultaneous translation in a number of languages. you have all of those. with that, let me turn to the managing director for a few opening remarks. >> thank you very much, gerry. welcome to all of you. it is very nice to see you back. it is very nice to welcome you to the 2012 spring meeting. david and i are really pleased to see many familiar and friendly faces. first of all, let me pay tribute to somebody who -- it is going to be the last spring meeting in his capacity, robert zoellick,

from the world bank. during his tenure, they had very good cooperation. i would like to recognize that. i would also like to congratulate all the contenders who are vying to be president of the world bank. indeed, special congratulations to dr. jim yong kim, who has allowed me to actually call him jim when we last spoke on the phone a couple of days ago. together with david, we look forward to working with him as we worked with bob. it has been six months since we all saw each other. in that six months, we have had a new member. as you know, south sudan is our 188 number. -- 188th number. it is a sizable membership, as you can imagine. before you go into your questions and your interests, i

would like to make a few points and, first of all, touched on where the imf sees the world economy, for those of you who have not attended either the fiscal monitor or gsfr press conferences. it will be very summarize. then i will touch on what policies we see as appropriate and what the key challenges are, and finally end up with what we at the imf expect from this meeting in terms of outcome. now, looking at the world economic situation, it is obviously very diverse. i would like to use a weather analogy. we are all very fond of weather reports. we're seeing a lead recovery -- light recovery blowing in the spring wind, but we're also seeing some very dark clouds on

the horizon, which is another way to tell you that there is a bit of recovery, timid. and a fragile situation with still high risk. what are the dark clouds on the horizon? clearly, first of all, high, sustainable unemployment in many corners of the world, not just in the advanced economies. second, a slow, protected growth -- protracted growth. third, potential deleveraging. fourth, renewed financial major stress in the euro area. fourth -- fifth, potential oil price hikes. there are lots of clouds out there in a situation where, as i said, timid recovery is blowing in the spring wind. now, what can be done about it?

what should be done is actually collective action. in my recent speech at the brookings institution, i called for the washington moment, as there had been a london moment in due course. collective action is needed because all members have actually addressed their respective issues. if we turn to europe and the eurozone in particular, first and foremost, because it is, today, the epicenter a potential risk, we clearly acknowledge that come in the last six months from a significant actions have been taken -- that, in the last six months, said dividend actions have been taken. -- significant actions have been taken. stronger sanctions, more disciplined. significant involvement of european institutions, in particular the european central bank.

to top it off, i have promised by chancellor merkel to me, on march 31, the significant improvement of the european fire wall. many of you would like to argue that there is a little bit missing here and there. if you look at it all together, it is a comprehensive package that shows significant dissemination -- determination to find the their currency zone. this 800 billion euros overall commitment, some already committed, and 500 fresh, is a clear improved fire wall. if we had a message to europe and the eurozone in particular, it would be, "keep up" -- "keep up for better and more europe." keep up with reforms that have

taken place. keep up in the deepening the integration of the zone -- in deepening the integration of the zone. europe is not the only place where action needs to be taken. if we look at, for instance, the emerging markets, they, too, have to address some of the issues and attempt to work in the volatile market situations. for some of these emerging markets, that means refocusing on their domestic growth and not only based on investment, but also drawing on consumption, which means significant, in debt reforms at home -- in depth reforms at home. for other markets, it means very attentive to capital flows and managing them properly. it means adjusting currencies as appropriate.

or accepting the evolution of currencies. what does it mean for other corners of the world? the arab spring countries -- where we will be really paying a lot of attention both during this meeting and in further discussions with partners and, obviously, with these countries. it means more resources, more attention, a better market access being given to them. by their partners in the region, by their partners across the globe, and, clearly, the imf will continue to play capitalist as well as a coalescing role for those countries. low-and some countries as well -- low-income countries as well have to make sure that they temper what is inevitably going to happen and what has been signaled in terms of lord aid resources -- lowered aid

resources, lower remittances, which will put them in a more fragile position. as far as we are concerned, the imf needs to participate in that effort as well by building additional firepower to contribute to this global firewall that we have been advocating very strongly in the last few months. that is the reason why, as part of the outcome of this meeting, we expect our firepower to be significantly increased. i know this is the sort of topic of the day. is she going to get there? is the imf going to reach the threshold? i would like to call your attention to another fund that you do not write much about, the prgt. poverty reduction and growth trust. it is our pooled resources, from

which we draw concessional loans for low-income countries. that, too, needs to be beefed up. we will be calling the membership actually do that. the numbers are not as big and the needs are not as voluminous, but it is equally important that we have adequate resources to help the low-income countries if they need it. the second outcome that we expect -- we expect, out of this meeting, from our own perspective, and for the benefit of our members, better multilateral surveillance, better imf surveillance, in general. the multilateral aspect, the interconnectedness' that has been clearly identified in the post-crisis analogous -- analysis really needs to focus on the spillover effects. what happens in other countries

when another country decides on its particular policy? we will push the membership and ask them to validate that approach. improved, bilateral surveillance, but significantly beef up the multilateral surveillance. for the outcome that we will expect -- further outcome that we will expect, david and i and the other managing directors come in all the meetings we will have, we will ask the membership -- directors, in all the meetings we will have, we will ask the membership to finish the job in terms of resources and in terms of governance. there are changes that needed a place to better reflect the members of the institution in terms of the economic role. we are not there yet. we still have 16% to go on the quota resources and nearly 1/2 of the jobs still undone on the

governance reform. we will be pushing that as well. we will not complete the job this time. our targets and our deadline is the next annual meeting. as you all know, that will take place in tokyo. i think i will -- our final expectation out of this meeting is to make sure that all ministers and governors who are coming to the meeting go home with more energy and a clear understanding that everybody has a task, everybody has work to do so that, in a more cooperated fashion, we address the challenges and pushed away those dark clouds that i was referring to -- and push away those dark cloud that i was referring to earlier. you have my introduction. you'll probably not pay much attention to it.

it is time for your questions. >> thank you very much. again, name and affiliation, please. i will start over here and we will work our way across the room. yes. beginning with the lady. yes. >> as you mentioned, since the global economy is still in a fragile stage, you have continuously called upon the country's to seize the -- countries to seize the moment. do you see them responding? how much needs to be achieved at this meeting to call it a success? since the plenary is coming up in tokyo, what are the discussions that are leading to the tokyo meeting? >> i very much hope that the entire membership will respond

and will seize the moment, but i can say that, if there is one country that has seized the moment, it is japan. japan, after the euro members committed much early on in december, the contribution to increased resources of the imf, japan was the first country to come up with a pledge of additional resources for the fund. it is in line with the tradition of japan to actually participate in multilateral efforts. i can only say that we are gratified to have members of that commitment and engagement for the multilateral approach. i have to say that it is true also in technical assistance. the fund provides advice, macroeconomics advice, and more pointed the price in -- pointed advice in financial and fiscal

matters. the fund provides assistance in many corners of the world, particularly in low-income countries, particularly arab spring countries at the moment. japan is a great finance year of this endeavor -- financier of this endeavor. we have other commitments. the nordic countries came in force. singapore came along. we have others in the pipe. i do not want to preserve it take any announcement, because it is for them to announce, not for me or davide. -- david. what we expect for our annual meeting in tokyo -- first of all, it is coming in and of itself, good to talk to tokyo, good to pay tribute to the japanese people who have been so brave in working on the reconstruction after the horrible disaster that hit the coast of japan.

if only for that, as a tribute to japan. to bring out all of you, i hope, an emmy -- and many visitors d academics. there are thousands of people who polate our meetings. reporting back from japan, spending money in japan. all of that is good. i would hope that we can deliver on efforts to support the arab spring countries, a better and stronger commitment and actual demonstration that collective action has been taken between now and the annual meeting. and we will continue to support actively all these initiatives. >> let's go down the front. sorry. it is xin hua, ight here. -- right here. >> madame lagarde, you have

fine taste and what you are wearing. when you visited china on march 18, you were wearing a chinese- style garment. what message are you delivering to countries including china and other brac countries -- bric countries? how can they help to seize the washington moment when there are dark clouds still in the economy? what can be done to help increase the fund's lending resources? thank you. >> my beautiful peacock feather chinese jacket is at the cleaner at the moment, so i could not wear it today. if it is a message, it is one that demonstrates that there are talents, including in the design and fashion industry,

across the globe. it demonstrates that this global partnership that we represent with 188 new members can display unity, diversity, and can respect the individuals used and policy -- individual views and policy paths. if there is one thing i have learned in the first nine months i have been here, it is probably the principal of interconnectedness that i had not seen as strongly as i have. and it is also the fact that we cannot sort of propose one- sized-fits-all solutions. everything we do, whether it is policy advice in terms of fiscal consolidation, whether it is growth initiatives, whether it is labor market reform, it has to be country-specific.

you ask me about the bric's. i think it is a nice the nomination invented by goldman sachs, if i can recall. they have different issues. they have different currency issues. they have different capital flow issues to reckon with. they have different growth to work with. what they have in common is their dedication to multilateralism. i hope this will be demonstrated by the various members, including each of the ones you are thinking of. before -- loudly and clearly and i hope before the end of the spring meeting. >> over here from "the washington post." >> hi, i am with "the washington post." i hope your knee is better.

>> it is well looked after by the george washington hospital. thank you. >> there is a staff recommendation of the european firewall mechanism being expended so they could intervene directly into the financial sector -- expanded so they could intervene directly into the financial sector. i am wondering if you are tempted to take the next step, given what is converging around spain. it is -- is it time to consider a more quick, dramatic, direct intervention in the bank's there to -- the banks there? >> well, thnak you -- thank you, howard, for inquiring about my health. i will make it through the meeting, no question. i would like to observe that the spanish authorities are taking the matter very seriously. they have announced actual

measures and policies in relation to their banking sector, which is good and very welcome. second, including in its present form and under its current status, but the csf best and the cfm -- both the esfs and the efm can actually help in the recapitalization -- cannot actually help in the recapitalization. it has to be structured through loans to sovereigns. what we are advocating and have been advocating and will continue to advocate is that this be done without the channeling through the sovereign. we would see that as a move toward stronger and better integration, stronger and better europe. it could be accompanied with more global, european

supervision, with appropriate european backstops, with appropriate, european resolution systems, the same as baling in, particularly if it applies both at home and in the host country, where quite a few of those banks have subsidiaries or branches. >> let's take a lady here at the front. >> thank you very much. >> adding your microphone needs to be switched on. -- i think your microphone needs to be switched on. >> as a journalist, we do care about your health, as important as our questions are. you still look great, even with your suit. >> it is a question for equilibrium. >> my question is on china.

last week, he welcomed china's move to allow more flexibility -- you welcomed china's move to allow more flexibility on the r&b. do you think this is a baby step? -- on the rmb. do you think this is a baby step? >> i did welcome the move by the chinese authorities to widen the band to 1% in the fluctuation relative to the dollar. we think that is a good move. it is not a baby step. it is a very good step in the right direction. i certainly hope that it is not the last step, but it is one stuck in a longer journey -- one step in a longer journey, which is in sync and in line with the chinese tradition of doing one step at a time, making sure it works, then moving to the next step. that is for them to decide.

at the end of the day, it is the nationalization of the currency that would be highly desirable. >> i will go with the gentlemen at the front. >> thank you very much. >> microphone, please. it is working. >> [inaudible] >> the microphone is still not working, unfortunately. >> -- has been a skeptic about the u.s. contribution to the international monetary fund in the past. [inaudible] to rescind the $100 -- [unintelligible] >> much better. >> congressman mcmorris rodgers, who you had a productive meeting with, has never taken back her

legislation to rescind the $100 billion donation this country made to the imf in 2009. in fact, it now has 100 cosponsors in the u.s. house of representatives. at a time when you're calling for more people, more nations and member states to make donations, are you concerned at all about this attitude of holding back donations from the imf's largest shareholder? >> first of all, the imf -- i do not think this is working. can you hear me? ok. the imf does not receive donations. ok? we receive loans from members of the imf who become our creditors. in only draw on those loans -- and we only draw on those loans if need be.

we do not receive donations. i wish we could, but we do not. it is not in the articles. in 2009, all members -- many members committed to increase their participation in the lending pot of the imf. and the united states of america, which is my leading member in terms of quotas and voices and governance, did participate, like many others. this took the form of what we call the new arrangement to borrow, which had to be rolled into, for those numbers that have actually participated coming into the quota reform that was voted, agreed, and approved -- participated, into the " reform that was voted, agreed -- into the quota reform, that was voted, agreed, and approved in 2010.

it will shift a little bit of quota, about 6%, to the underrepresented countries, essentially. it is a little bit more complicated than that. that is the simplest way to describe it. it depends on the parliamentary rules and principles in many countries. it has to be ratified by the u.s. congress, as i understand it. i certainly hope that it can happen. -- it can happen in due course. i do not think that the excellent and productive meeting that i have had with cathy mcmorris rodgers, who understand the issues very well -- who understands the issues very well, is sufficient to propose a withdrawn -- to propose a withdrawal of the deal. we need to concentrate on the

efficiency of the imf. we cannot give money or grants. we give loans. we are paid back. the loans generate interest for the creditors. it is money that is well managed. no country has ever lost money on the imf. and the second thing that i hope is clear is that the leading economic power in the world clearly has to have a leadership role. i think it is in the tradition of the united states, very much so. i think that is one way to demonstrate it. but it is not the only way. the united states of america is also providing tremendous support. secretary geithner yesterday referred to the swap lines, which is a technical but very

efficient way to support another part of the world that is facing difficulties. >> the lady all the way in the back. >> their are two ladies in the back. ladies in thewo back. >> what you are waiting for is the elections and [unintelligible] knowing you have to know the egyptian government is just telling people that the imf is not fulfilling aegis promises -- fulfilling its promises to egypt. >> i will rely on you competent, female journalists to report back what i tell you. egypt is a very important country from many points of view.

it is one of the -- what we regard as the five countries that we call the arab spring countries. the imf stands ready, will help each of those countries and any of the members, for that matter, each of those five countries that still requires and needs help. we're going to do so in accordance with our rules. the answer i gave to the gentleman before you applies here, too. we have rules. the reason why the imf is a reliable and respected institution is that we go by the rules. and for us to extend loans, it requires, number one, that we have negotiated with the country and with the authorities in the country an economic program that is actually going to help that country --

>> you can see the rest of this conversation on our web site. we're going live to scott still, arizona, where the republican national committee is holding their stay chairman's meeting -- scottsdale, arizona, where the republican national committee is holding their chairmen's meeting. >> i am the proud owner of the 2008 super tuesday mccain jacket. i think i am probably the only chairman in the country that has one. these travels together with senator mccain have made it clear to me that what people in this country are starting for in america are real, authentic people that want to serve with a pure heart and make a difference. the country always comes first.

in the navy, as a prisoner of war, as a member of congress and a senator, and a presidential candidate, personal ambition has never come before the needs of the nation. for that, he is respected throughout the country, especially here in his home state where he has been serving the people of arizona proudly for many years. it is a privilege for me to introduce a man and an american hero who has never stopped fighting for the greatest country on the face of the earth. please join me in welcoming senator john mccain. [applause] >> very nice. thank you. thank you very much. thank you for that. thank you. thank you. thank you very much. [applause] please.

thank you for that warm welcome. thank you for kind introduction. hasn't this young man done a fantastic job at the helm of our party? [applause] i am grateful that you are here and i am proud that you have to was in the state of arizona to spend time with us. i want to say that, reince, you have done a fantastic job. you are making it easier for us to let our friend here -- to let our friend here as an ex- president of the united states -- to elect our friend here as the next president of the united states. we need to regain the majority. we need to keep the majority that we have. i am confident that your

leadership will make that possible. [applause] can i also said that i am most proud to be here with the next president of the united states? [applause] can i tell you that i am proud of his campaign? i have watched him go across this country, his wife, his sons, his grandchildren, crisscrossing this nation, working hard, selling them self -- themselves, his principles, his vision to the future of america, to the republican party. i am so gratified to see our party coming together in a solid team that is going to be let him as president of the united states -- to let him elect him e

next president of the united states. i was looking at a magazine which said how nasty the campaign has become as far as the president's campaigning. the class warfare, the character attacks, the desperation. the desperation that is obama campaign is already showing. obviously, they will do anything. anything to divide this nation in class warfare, the likes of which i have seldom seen in any political campaign in our history. i wouldn't tell you -- i want to tell you that -- i am an old boxing fan. i was a lousy boxer at the naval academy. i still remember one of our great heavyweight champions was a guy named joe louis. he was a great fighter. he was writing a guy whose name was billy. he was not -- fighting a guy who was named billy. he was a very agile fighter.

joe louis was a puncher, not a boxer. he said -- they said to him, how are you going to catch him? he said, he can run, but he cannot hide. my friends, this president, barack obama, can run, but he cannot hide from a record -- [applause] he cannot hide from the record that has given our children and grandchildren of $5 trillion debt, the largest in the history of this nation. my friends, what would a path that this president has us on -- it is unsustainable. it is not sustainable. this country cannot end up like greece. this country cannot do that to future generations of americans what we are doing today. every time there is a problem, what does barack obama think the answer is? throw more money at it, more

government jobs. this race is about the fundamental difference between mitt romney and barack obama. barack obama believes that government creates jobs. mitt romney knows that business creates jobs in america today. [applause] and mitt romney has a record to prove it. my friends, there are a lot of people who like to attack people who get wealthy. the fact is that bain capital, under the stewardship of mitt romney, they saved companies. they turned places like staples into a place called -- into a place that employs thousands of americans. that is the kind of success story that is there. [applause] word their failures? were there companies they could

ret save -- were thei failures? were there companies they could not save? yes, there were. when you look at success after success after success and then you look at the olympics in salt lake city -- there was corruption. there was bribery. that olympics was going to fail to the eternal embarrassment of the united states of america. a guy went out there and, yes, he had to fire people. but it was the most successful olympics in the history of this nation thanks to the leadership of mitt romney. [applause] now, my friend, the economy is broken. the economy is broken. unfortunately, tragically, we are seeing signs that the improvement that we have seen in the last few months may be tailing off. those of you who have come from out of town, you have come to a state that was one of the

hardest-hit states in america. nearly half of the homes in this state are under water. we had the furthest to fall. the state of arizona, don't worry, will be for mitt romney this november. so will a lot of other surrounding states. i want to talk about a couple of other points. the first thing that we're going to do with a majority in the senate and the majority in the house under the leadership of mitt romney is repealed and replaced obama care. we will repealed and replaced obama care -- is repeal and replace obama care. we will repeal and replace obama care. let me remind you of something else. i was there for almost a year. it was the sleaziest process i have never seen in my years as

the united states senator. the cornhuskers kickbacks, the louisiana purchase, taking lobbyists' into the blair house and bludgeoning them into supporting obama care -- no wonder the american people were sick and tired of that. that was not the kind of government that president obama promised people. that was an exercise in sleaze. we have to do away with that and give the american people real health care that is available and affordable to all americans. mitt romney will do that. [applause] i understand and there is a lot more i could tell you -- there is a lot more i would like to say. the person that you want to hear from is waiting. that is the importance speaker. i do want to point out to you that i understand that this election will be about jobs and the economy. that is completely logical. but i also want to tell you about the great and grave concern i have about the lack of

american leadership in the world today. and i think that, when i traveled around the world, i can tell you that leaders all over the world believe that the united states of america is in decline. this is not the country that ronald reagan had the stewardship of. this is not a shining city on a hill to the rest of the world. it is a country that has articulated a policy of "leading from behind." that, my friends, is not the role of the united states of america since the 20th-century and must have been the 21st century. i want to mention one aspect of it. i will give you some straight talk. relations between the united states and the state of israel have never been worse since israel became a state. we have a country now that, instead of facing up to the iranian threat of the acquisition of nuclear weapons, which they are on the path to,

the president of the united states sends his people to israel to tell them to be sure not to attack iran, thereby weakening very badly that is really position. put yourself in the position of the steve israel. you have a country in your neighborhood that is dedicated to open a wiping you off the map." they are on the past -- to "why did you off the map." they are on the path to doing so. they are a sovereign nation. we should be with the israelis, drawing red lines for the iranians, and telling them those are not lines they can cross. we should be telling israeli government and people we are with them. that is what america is supposed to be about. [applause]

so, could i say that not only am i most proud to have mitt as our standard bearer, but i also want to recognize what you all recognize, what a great partner in his wife. what a wonderful person. what a great example. [applause] so, every day that we are not out there campaigning in rounding up votes for mitt romney is a day lost. when we leave today, we are in the campaign. do not let an hour goes by that we are not getting votes. this is going to be a very close to election, my friends. i believe we're going to be up late on election night. i really do. i believe it is going to depend -- the going to depend on how we get out our vote. i cannot be more proud to have a man of principle and vision, a

man who can inspire all young americans as well as older ones, a man who i am convinced and get our country back on the path to prosperity, to freedom, and the kind of nation that we would want to hand off to our children. the greatness of america is that every generation has handed off to the next generation of better nation than the one that they inherited -- a better nation than the one that they inherited. i promise you, with mitt romney as the president of the united states, we will be able to hand off a better generation to march to -- the generation to our children and our grandchildren. thank you very much. [applause]

>> thank you, senator, for your vision and your kind words. we had a groundbreaking day yesterday. we passed our version of the stimulus plan at the republican national committee. that is to fire barack obama and help save this country. [applause] the stakes of this election are incredibly high. you know it. i know it. it is our job to make sure that every american citizen, everyone going to the polls knows that as well. we cannot afford four more miserable years of this president. our children cannot afford to spend a lifetime paying off his debts. we know that a country that has to surrender its sovereignty to its bondholders cannot guarantee prosperity or freedom to anybody. and a country that buries its

kids and grandkids in an avalanche of debt cannot rest in any vestige of the moral high ground. that is what this election is all about, the big things -- liberty, freedom, opportunity, the bill of rights. we have to end barack obama's presidency before his presidency ends our way of life. [applause] and we cannot trade the american dream for a european nightmare. europe does not work in europe. i would we want to talk to more years of barack obama -- why would we want four more years of barack obama? he has no record to run on, so instead he is running on a parade of shiny objects. out on the campaign trail,

barack obama is resorting to a strategy of divide and conquer, resources pour, republican versus democrat -- rich versus poor, republican versus democrat. he is running on fear and division. the president who so often said this is not about the state of america, the state -- the red state of america, the blue state of america, but the united states of america. where has that barack obama gone? he once promised to hold themselves accountable, but now he spends time making excuses -- hold himself accountable, but now he spends time the excuses for his failures. he blamed the arab spring. he blamed atm machines and earthquakes in japan and even bad luck. excuses will not pay the mortgage. his class warfare will not create a single job. like all of our candidates, our

next speaker understands that. we're grateful, honored, and blessed to have governor romney with us today. the governor is running a remarkable campaign, unlike president obama. governor romney is not afraid on running on issues, solutions, and an incredible record. and what our record he has, as senator mccain just laid out, turning around companies, turning around the olympics, and turning around a state. if there was ever an entity that needed a turnaround, a new direction, it is the united states under barack obama. throughout his career, governor romney has been a fiscal, responsible, conservative leader. he understands what this country needs -- lower taxes, less spending, an efficient, effective government.

governor romney wants to restore the idea that, if you work hard in this country and your played by the rules, you can -- and you played by the rules, you can give the american dream. that is what this election is coming down to, the fundamental question. under barack obama , if you work hard and play by the rules, can you live the american dream? unfortunately, under this president, answering that question has become much, much more difficult. i applaud the governor for the campaign he has run, the experience that he brings to the table and his dedication to making barack obama a one-term president. it is an honor for me to welcome and introduce a businessman, a governor, a job creator, public servant of father, grandfather -- public servant, father, grandfather.

we want to welcome you in a formal way to a great family here that is willing and looks forward to working beyond anyone's imagination to making sure that we put a republican back in the white house. doing our part and not worrying about saving our party, but doing our part and working together to help save this great country. so, with that, would you all please welcome governor mitt romney. [applause] >> thank you. thank you. thank you. [applause] thank you. thank you. thank you. [applause] thank you.

thank you. please. thank you, guys. ok. thank you. thank you! [applause] thank you. thank you. well, it is good to see so many old friends. thank you. [applause] we haven't won yet. it is great to be here with you. i appreciate that generous response. thank you, mr. chairman, for your introduction. thank you for the work that you are doing. looking from afar, this organization was troubled a couple of years ago. i look and see what you have

accomplished over the past year. it is just extraordinary. i want to say how much i appreciate your germans' work and how much i appreciate all of your work -- chairman's work and all of your work to help get us ready to take back the white house. [applause] and let me also commend the people who had the courage to run for president on our side of the aisle this year. some still running, some have gotten out of the race, but each contributed to the process. each of them campaigned in an aggressive and dynamic way to spread our message of conservatism. each is going to play a vital role in making sure that we win in november. and you know their names. it is a long enough list that i wrote it down. michele bachmann, tim pawlenty, jon huntsman, herman cain, rick perry, ron paul, rick santorum,

and newt gingrich. thank you to this extraordinary team. we have all fought hard and well. we're going to fight for the things that we believe in. [applause] and i express my appreciation to senator mccain for his battle for the presidency, for standing true to the principles of our party, for the fact that he has been a fighter for america for decades. this is not someone who came late to the game. he has been a stalwart champion of the things that make america america from his earliest days. and he has sacrificed enormously and continues to battle to this day. i hope we can always count on seeing john mccain in the u.s. senate fighting for the things that we believe in the. thank you, senator. [applause] >> i am surprised that senator mccain did not regale you with some of his favorite jokes. i have heard a couple.

he says this is the only state in america where mothers do not tell their children that someday they can grow up to be president. i think i can join the millions of americans that wish you had proved them wrong, john. you would have been president right now. [applause] four years ago, the then- candidate obama was speaking in denver, not far from here, standing in front of greek columns. remember that? do not think he will be standing in front of greek columns this time. will not want to remind people of greece. [applause] he laid out in his speech there, at their convention, how he would measure progress. he literally used these words. he said, "we measure progress differently."

it was the fact that he said, " we measure progress." he described how he and his party measured progress. it is interesting that he gave us a report card to go back and score him on the very report card he laid out. he said, for instance, the democrats' measure progress by whether people have good jobs that can pay for mortgages. we are 3.5 years later, and he has not created a single net new jobs in america. there have been job losses. 93% of the people who have lost jobs have been women. on the measure he put in place, creating jobs where people can pay mortgages, he fails. there was another measure he laid out. he said in a setting where you are having progress you can measure it by whether people saw wages and income going up or go in belem.

ok. for the last -- or going down. for the last four years, the median income has dropped by $3,000. health care costs have gone up. gas prices have doubled. food costs have gone up. the second measure he has failed. the third measure he spoke about -- he said to see progress, you would want to see people with a dream or idea of being able to take the risk to start a new business. what has happened in the world of business start-ups? they have dropped by about 150,000 a year under this president. again, on the measure he himself set out, he has failed. there are a lot of other measures as well. we have record levels of people on food stamps, record levels of poverty. the number of people who dropped from the middle class into

poverty has reached historic proportions. you have at the same time home values that have dropped by 30% or more in some places, and in some cases still going the wrong. on almost every measure, this president has failed. he has also failed overseas. senator mccain described israel and our relationship to that country, the need to show solidarity with our allies. we are not closer to peace in the middle east by virtue of his policies in israel. the arab spring has turned into an era of winter. he failed to execute the status of forces agreement to make sure the gains achieved at great cost in iraq would be sustained and secured. he entered an agreement with russia with regards to the new start treaty, which i think was exceptionally one-step -- one- sided. iran is rushing toward

denuclearization -- doward nuclearization. he made errors in afghanistan. he is clearly out of ideas and excuses. it is our job to make sure we put him out of office. [applause] i happen to have met him four or five years ago at a dinner in washington, d.c., where we were both invited to tell some jokes about our respective parties. i found him to be a nice guy. i think he is a nice person. i just do not think we can afford him any longer. i do not think the american people can afford to have barack obama as their president. [applause] he points out he did not cause the recession. but he did make it worse. he says things are getting

better. and i sure hope they are getting better. i hope that are getting better, but that is not because of them. that is despite of him. he has made this recession harder to come out of. for people who said, "why do you say that" -- go to his signature achievements. i ask yourself which of those are causing employment to rise right now. i hope it is rising. why would encourage employment? what about the stimulus? that was 3.5 years ago. he borrowed all that money, said he would hold unemployment below 8%. it has not been below 8% 6, 38 -- 8% since, 38 straight months. if unemployment is coming down, it is in spite of that stimulus, and thanks to the

entrepreneurship of the american individual. look at the other legislation. does obama encourage businesses to hire people? the opposite. i get the chance to talk to small business people. the thing they mentioned time and time again is their fear of obamacare. it is one reason businesses have held back on hiring. the labor policies -- does anybody think stacking the labor relations board with labor stooges encourages businesses to hire people? just the opposite. dodd-frank, remember that piece of legislation, 848 pages of legislation designed to deal with these two big to fail banks? how did that work out? they are bigger. the big banks have gotten bigger since the legislation was passed. the banks that have been hurt are the community banks. guess which banks provide loans

to start up businesses and small businesses. the community banks. it is one reason your seeing your start-ups. dodd-frank did not help create jobs. the so-called stimulus is not creating jobs. how about his tax policies? think about that. there are a bunch of taxes this president has been encouraging. one is to take the marginal tax rate from 35% to 40%. i know he thinks that will get a lot of support among people who want to tax folks they think are particularly prosperous. but do not forget who pays taxes at the marginal rate -- small business. do you know how many private- sector workers in america work for businesses that are taxed not as corporations, but as individuals, and pay those marginal rates? 54% of america's workers work in businesses taxed at the

individual level. if you raise marginal taxes, you will ultimately kill jobs. the putin obamacare, he has this tax on revenue -- deep within obamacare, he has this tax on revenue. there is a device maker for next surgery's. they employ 1300 people. they say the tax will cause them to lay off between 102 hundred people to meet their earnings targets. -- between 100 and 200 people to meet their earnings targets. even businesses that are not profitable will be taxed. vice president said he is in favor of a new growth tax. he is the gift that keeps on giving, this guy. [applause] i do not know how he intends exactly to apply that. but i do know that if he is

planning on putting it on certain types of enterprises, groups of individuals we call companies or businesses, some of them will go elsewhere. that is the problem with democrats. they do not understand that some of their policies cause people to do different things. they create incentives to change behavior. when you apply taxes that other countries do not have, or make the tax is higher than other countries have them, inevitably, enterprises will start up in other places other than here. what we have here is an extraordinary economic engine that leads the world, in part because the founders recognized that in america we would be free to pursue happiness as we choose, and established a government that was limited and encourage individuals to build businesses. as they do, that does not make us poorer. that makes us better off. america leads the world economically because we have always led the world in economic

freedom. freedom drives the american economy. that is why we will win. [applause] i do not know whether you heard david axelrod the other day, on sunday. i do not have the exact quote, but he said something to the effect of we have to get off the economic road we are on and take a new direction. i could not agree more. [applause] we have to make sure that we get off this road, where more and more people are sunk into poverty, where it is tougher to be in the middle class, where gasoline prices go higher and higher, where the unions are driving what is happening in our schools. this is a difficult road we are armed. it is time to get off it.

i am also convinced the president was right when he said we are going to have two competing visions in the election in november. there is the vision which represents the road we are on, in david axelrod's words, and there is the vision we represent. i have just described some of the differences. the obama vision means trillion dollar deficits every year. it means a president who in four years has amassed almost as much public debt as all the former president's combined. -- presidents combined. under me, we will cut spending, reorganize agencies and departments, cap federal spending, and get on track to a balanced budget. [applause] if we stay on the road we are on, you are going to see government getting larger and

larger, and metastasizing into every aspect of american life. do you know how big government is as a percentage of our economy today? federal, state, and local government represents 38% of our government. obamacare would take that up to almost half of the total economy. are we still a free economy in a setting like that? if you take the things that government is trying to control indirectly -- natural services, automotive, energy, health care -- they will directly or indirectly control over half of the u.s. economy. that is where they are taking us. i do not believe in an economic system run by government and controlled by government. i will return to america the principles of free enterprise and american freedom that drove us to be the most powerful economy in the world. [applause]

one of the most dangerous aspects of the road we are on is represented by a president and a party who unfortunately take their direction, far too often, from union chief executive officers, union ceo's. that is where they get their money, hundreds of millions of dollars, and that is where they pay obedience. look at the president's agenda when he came in. all federal projects go to union labor. not fair rules, were the best compactor gets a chance to compete. we will give it to our friends. that stack the national labor relations board with people who decide to tell boeing the cannot build a factory in south carolina. in washington, d.c., where a lot of our schools are just awful, people are standing in line to be able to go to a charter school.

what does this administration do? shuts down that option. who do think was crying for that, but the teachers' union? we have opportunities to open in new markets. the productive nation like ours grows and is more successful if we can sell goods to other nations. everyone else has figured that out. china and european nations, over the last 3.5 years, have opened 44 trade agreements. guess how many this president has negotiated in the last 3.5 years? none. the three that were finally approved by the senate were negotiated by his predecessor. these are the demands of the union bosses. let me tell you -- if anything were to kill america's economy, if it were not our deficit and the massive debts, it is obedience to union ceo's. it is dangerous. i believe in the right of people to join unions if they want to.

i also believe we have to have a president who will stand up for the american people with large, -- writ large, not just a narrow segment. if elected, i will rein in the excesses by linking the pay of government workers with the pay and benefits in the private sector. [applause] you know the road we are on with regards to health care. it is a road that says that fed will bureaucrats can do a better job than you can deciding what kind of health insurance you ought to have. ultimately, i am convinced those bureaucrats will tell you what kind of treatment you can receive. that is where we are headed. if i become president, we will repeal obamacare and return to the individuals of america the responsibility for their own health care. [applause]

you know the road we are on with regard to energy. this is a president who says he likes all of the above. did you hear that? he keeps saying that. i scratch my head. his epa and other regulators have been trying to insinuate themselves into regulating natural gas and frakking. hopefully they are backing away from that. they made it harder to use coal. they put a moratorium on drilling for oil in the gulf, and more, and the intercontinental shelf -- anwar, and the international show. the president does like all of the above. he likes all of the energy that comes from above the ground. he does not like the stuff that comes from below the ground -- oil, coal, and gas. we also like wind and solar, but

we like the stuff below the ground. we will have an energy policy focused on keeping the hundreds of billions of dollars we spend a year buying energy from other people, keeping it here. we will buy oil from canada, because i will build that pipeline if i have to do it myself. [applause] the road we are on is one where every four years the president or his party talk about entitlements, the fact that medicare and social security are nearing insolvency. the also talk about immigration, and the challenges for the immigration program, our immigration policies. yet when they have a super majority in the house and senate and the white house, what did they do about social security,

medicare, and immigration? nothing. for them, these are campaign issues. these are not issues to deal with and improved. when i am president of the united states, we will work together to preserve and protect social security, medicare, and legal immigration. [applause] i just want to mention the military for a moment. there does seem to be one place where the president is willing to cut back, and that is our military. i do not see the world as a safer place. when i look at pakistan and a nuclear weapons, and the state of their government, when i consider iran and their rush to go nuclear, when i consider china and their claim to the south china sea, when i look at what is happening in the middle east, i do not think america should dramatically cut back on military capabilities.

we have fewer ships in our navy today than any time since 1917. our air force fleet is older and smaller than any time since 1947, when it was formed. our troops are, as you know, stretched to the breaking point in the conflicts we have, yet the president wants to cut our number of troops. my own view is very much consistent with that of ronald reagan. that is the best i like peace has ever known is a strong america -- the best ally peace has ever known is a strong america. and i will defend our military. [applause] the road we are on is one of planning and dividing -- blaming and dividing. the president is looking for someone to blame for his failures, someone to scapegoat. chairman reince priebus just described some of the groups he

has tried to blame. the list is getting longer and more intense as he feels himself more unsuccessful, whether it is congress or speculators. he always has someone to blame for how he has failed so obviously on all the measures he described for himself. i will not apologize for success at home. and i will never apologize for american greatness abroad. [applause] and i will endeavor, in every way possible, to bring americans together. i subscribe fully, as our party does, to the principle of america being one nation under god. this is a great land and a great people, with a great purpose. the president said we have alternative visions. true. we see where his vision lins.

-- leads. job losses. losses of homes. losses of savings. we have seen the vision of obama. open your eyes to see where his vision leads. the vision i have, the vision we share, is one where again the middle class is growing, and people are earning more money, where kids can afford college. when they come out of college, they can find a job. soldiers coming out of the military know there is a good job waiting for them that respects their talents and skills the received in the military. the americans in our vision is one where we are known and respected around the world, knowing our military is the strongest in the world, so strong that no one would ever think of attacking us. that is the great thing about a strong military. you do not have to use it. just having it keeps bad people

from doing bad things. [applause] this is america that i see, that we see, with bright prospects for our kids. when you ask parents, "do you think the future will be brighter than the past," they say the debt is getting smaller, we are balancing budgets, the number of start-ups is going up, income is going up. that is the vision i see. i also see a vision that is united. for me, the image of america comes to mind in a different mental pictures i have had over the years. let me mention one to you. i was serving as the governor of my state, and i got a call from the airport. they said that the remains of one of our servicemen killed in iraq was coming in on a u.s.

airways flight to logan airport. the have asked the parents if they could come to the airport to receive their son's body, but the parents could not get there in time. they asked if i could go instead to receive the body. i said of course. our state capitol is close to the airport. we drove over and went out on the tarmac. the u.s. airways jet stopped in front of the terminal. people disembarked. the conveyor came down and all the luggage came off. finally, when everything was clear, the casket appeared. it was brought down the conveyor. the soldiers that were there picked it up. i put my hand on my heart. the state troopers who were there with me saluted. as i was standing there and looking at that casket as it was in the hearse, i happened to glance up at the terminal. up to my right is a big glass

wall at the u.s. airways terminal in the boston airport. it seems the people who had come off the aircraft had seen the police cars out there, so they had stopped against the glass wall to see what was happening. people walking down the halls all those people lined up against the glass, -- hall saw those people lined up against the glass and crowded behind them. every person i could see had their hand on the heart. that is the image that comes to mind when i think about america. i do not think about an america divided. i think about an america that is patriotic, the respect the sacrifice of heroes proved in liberating strife, and mercy more than life. that kind of pride in america -- we bring it back again and again, by virtue of restoring the principles that made america the hope of the earth -- our

commitment to freedom, unity, respect, free enterprise, people being able to pursue happiness in the way they choose. these commitments are profound, defining, exceptional. this is the greatest nation in the history of the earth because of our people, our place, and the principles that made us this great nation. we will restore them together with a great win in november. thank you so much. great to be with you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

>> thank you, governor, and thank you, senator mccain. we can assure you we are not going to trade division of the founding fathers for the dreams of obama. we have a lot of work to do. this is not going to happen automatically. it is going to happen by being unified as a party. because if this is not just a bunch of talk, and it really is a fight for the very idea of america, then we are committed to building this party to the concepts of addition and multiplication, and not division and subtraction.

with that, our commitment is to make this election about the big things -- liberty, freedom, the constitution, jobs, and america. we are going to have a great afternoon for everybody as well. we have got breakout sessions. governor samdpv -- sandoval tonight. we have a lot of work to do. with that, i wish to god -- you god's blessings, and we will see you soon. >> on our facebook page today, we are asking "are you optimistic about american manufacturing." join the conversation. the u.s. house of representatives gaveled out for the week yesterday. they will reconvene tuesday.

next week, a bill to improve information sharing between the government and business when it comes to cyber security. also, a motion to go to conference with the senate on transit programs. the senate is back monday for more work on the violence against women act and an overhaul of the postal service. you can see the senate live on c-span 2. >> two things. this is such a complicated conflict that we have never, ever fought a war like this before. it is really complicated. the second thing is that what is referred to back here in washington as "nation-building" is really very targeted war fighting. >> david wood this week won a pulitzer prize for a series for "the huffington post." you can watch him on line at the

c-span video library, along with other women journalists. find over a quarter-century of politics and public affairs on your computer. next week, president obama goes on the road to speak at universities in north carolina, colorado, and iowa, calling on congress to prevent an increase in student loans. today, jay carney and arnie duncan spoke about the issue. >> good afternoon, ladies and gentlemen. it is great to have you here today. as you can tell, i have with me the secretary of education, arnie duncan. this week, as you know, president obama is launching a concerted effort to get congress

to stop the interest rate on student loans from dublin in july. secretary duncan -- from doubling in july. secretary duncan is here to take questions on that issue from you. he can also answer questions on other education issues. it is worth noting the secretary oversees the implementation of the president's education agenda, his vision for investment and education reform. the education reform is something that, in a way that is often unmentioned by folks in washington -- has enjoyed broad bipartisan support. this should enjoy broad bipartisan support. you really have to have a brick in your head not to understand that education is the cornerstone of our economic future. without it, we cannot compete and win in the 21st century.

with that, i give you secretary duncan. >> thank you, and good afternoon. next week, president obama is traveling to three states to talk about the fact that interest rates for new student loans are set to increase on july 1 unless congress acts. the rates were set in 2007. the current interest rate is 3.4%. it will double without congressional action to 6.8%. this will add more than $1,000 in costs over the life of that loan. for students to borrow heavily, it would obviously cost them even more. we estimate the increase will affect more than 7 million families expected to take out new loans this fall. at a time when going to college has never been more important, it has unfortunately never been more expensive. families and students are struggling to meet these costs. i have travelled throughout the country.

i was out there the past two days. it is not just disadvantaged communities. middle-class folks are starting to think colleges might be just for rich folks. next week, president obama will outline the end ministration proposal to work with congress to keep interest rates -- the administration proposal to work with congress to keep interest rates down. all of us share the responsibility for the cost of college. because this issue is so important to our economy and our future, our administration is doing more than ever to address it. we have a number of proposals in our 2013 budget. with the support of congress, we have doubled pell grant funding for low-income students and nearly triple tax credits for middle-income families. we are going to lower the cap to

10%, starting in 2013. so many of us have held town halls across the country to talk about the cost of college. we have met with university presidents, governors, state legislators, and members of congress. next week, the president will meet with students at the university of north carolina, the university of colorado, and iowa city. these are among the nation's educational jewels. we should do everything possible to make sure they remain affordable. 2012 marks the 150th anniversary of the more act, signed into law by abraham lincoln, which created the first public universities. we have a responsibility to honor this vision by working together to ensure that college remains affordable for all americans. i will stop there, if there are questions. >> the white house is going to be screening a movie on a piece

of legislation called the student discrimination act, to prevent discrimination against lgbt students. >> we have to do everything we can to ensure there is no tolerance for this. i met with a woman in the movie. it was personal for me and the president. we all have children going firms -- going to school now. when children are scared, it is hard to concentrate on biology and culture. we have seen the support for an anti-bullying summit here in the white house. the president talked about his own experience. we see many states trying to stop bullying in schools. we want to make sure our children are safe and secure. not just physical bullying, cyber bullion. some of my toughest meetings have been with parents who lost their children to suicide due to the impact. i think this movie is hard- hitting.

it tells the truth. i hope it will create awareness around the country. this cannot be a normal right of passage. -- rite of package. >> are you talking about a one- year freese in the interest rate? >> we need to fix it now. think about the long term as well. this has always enjoyed bipartisan support. we have to educate our way to a greater economy. to not do this together does not make sense. >> is it a short-term freeze? >> let us work together as a country to work on the long-term issues. >> what do you say to the republicans that say this is a deadline that comes out of democratic legislation, right before an election, while the president is out on the campaign trail. >> this passed in 2007 with broad bipartisan support, signed

by a republican president. we understand that if we want to keep jobs in this country, we are competing against india, china, singapore, south korea. to keep those good jobs, we have to have an educated workforce. i have lots of data. if you have less than a high- school diploma, there is a decrease of 200,000 jobs. if you have a college degree, it is about 1.4 million new jobs. those trends are only going to continue. i could care less about ideology. we need an educated workforce. it is fascinating to me that in a tough economic time like this we have 2 million high wage high-skilled jobs that are unfilled because we are not producing employees with the skills employers are looking for. i cannot tell you how many ceo's who are trying to hire. they are not trying to export

jobs, but we are not producing the workers. we have a skills gap. we have to close it. we have to have a lot more young people graduate from college. >> you are saying republicans are wrong to suggest this is a wedge issue. >> this past five years ago in a bipartisan way. no reason it should not pass again. we have to educate our way to a better economy. that is not a republican or democrat issue. that is reality. >> you said it would increase the average loan by $1,000. what is the size of an average loan? >> it varies. for each year this does not happen, it is an additional $1,000. we know debt from college exceeds credit card debt in this country. something is wrong with that picture. we do not need to increase that

debt. we have done so much to try to make college more affordable, with programs, work study opportunities, pell grants. unfortunately, many american families in all types of neighborhoods and backgrounds are trying -- are starting to think college is not for them. that is a real problem. >> i will use a term that is familiar to you. are you going to put some skin on the hill -- some skin in the game, going to the hill? >> i will do what it takes. i have done a number of town halls with the vice president. he is going to three different universities next week. i know you guys love politics and all that stuff. that is not my interest. i am not good at it, do not care about it. we need a lot more young people to go to college and to graduate. if families start to think they cannot afford college, that is

not good for our communities and our country. absolutely. whatever it takes. >> i want to ask you a question. this is the anniversary of columbine, the fifth anniversary of virginia tech. lessons have been learned. from your perspective, what more needs to be done? >> it is a great question. i think we as a nation have learned a tremendous amount about the warning signs, about acting quickly when there is an issue. i take it back to the bullying issue. when we have young adults and high-school students who do not feel safe, who are not secure, you cannot be as effective as you need to and concentrate academically. creating a climate that is free of violence and fear, where people can concentrate in class, is important. there has been progress, a reduction in violence. but obviously one incident is too many. i come at this as a parent.

i have a 10-year-old daughter and an a-year-old sound. -- an 8-yerar-old son. i do not want them to worry about this. >> the shootings may have meant more than bullying or an atmosphere of violence. >> that is correct. universities, fellow students, when we are seeing something that does not feel right and look right, raise the alarm early and let folks know that this is a student or young adult with some issues. we have to have some conversations. not always, but so often, there are indications this person is not stable. i think we have to take this -- unfortunately, we have to take this very seriously. office,essman klein's

as you were coming to the podium, said no one has offered a serious proposal to pay for this $6 billion stopgap. what do you see as a way to pay for this, so we are not adding to the deficit? "president's budget has a number of proposals to pay for it, which we want to work with congress to do. we are committed to paying for it. we will work with congress. i have tremendous respect for the chairman klein. this is important for his family's in minnesota. -- families in minnesota. >> how would you balance this with the concerns allowing more credit would create a student loan bubble and increase college tuition? >> the most important thing we can do is to have young people graduate.

that is the best investment we can make. if you have no debt, that is the best situation. but this is not bad debt to have. there is data on jobs and how much your earning potential through your life time goes up. this is the best long-term investment you can make. but we are worried about debt going higher and higher. when we have an opportunity to work together to prevent that escalation of debt, this is the right thing to do. i expect folks to step up and do that. >> is there no link between access to loans and rising cost of tuition? >> people say with these programs tuition goes up. look over 30 years. 19 of the year's programs went up. -- of the years, pell grants went up. 10 of the years, they went down.

every year, tuition went up. we are trying to increase grants, the biggest since the gi bill. but states have to invest. we cannot do this ourselves. and universities have to reduce tuition and build cultures around completion. we want to build a scorecard so families can make good choices about good education at a reasonable cost. that transparency and shared responsibility is important. >> [unintelligible] a delegation from india is in town. they are talking about opening 100 or more colleges in india. a high-level delegation is coming from that country in june to washington, d.c. >> i have met repeatedly with my

counterpart, the education minister in india. he is an amazing man. whatever we can do to be helpful, we want to do that. the first time anyone of that stature in and the administration has had that community college background -- whatever we can do to partner with india, we want to do that. some very ambitious goals, but we want to see them achieve it. >> once, india was a house of knowledge. today, india has hundreds of colleges, universities, and schools. how can india hope america? >> we are all in this together. i believe a rising tide lifts all boats. the more we have an educated work force in america and india, both employees and consumers, that is great for the world. we want to partner together.

i think we have the best system of higher education in the world. we have amazing community colleges. 3 over the last few decades in wisconsin and iowa. whatever we can do to help india with its ambitious growth pattern, we want to do that. >> what is so special about these three universities the president is going to visit? do they have a higher rate of students using loans? >> these are public for year universities that folks have -- four-year universities that folks have concern about paying for, flagship universities with large student populations. these are the middle class families having a hard time paying for this. we want more young people going to these types of universities. yesterday in iowa, i talked to a high-school senior who happens to be a twin. her brother was not there.

her family is thinking they have to choose which one can go to college this year. a really deep conversation. no family should have to choose this job or that child. another is one of four in their family. does the older one not go, or the younger one not go? these are hard conversations in madison, wisconsin. these are the real conversations families are having. you should not have to sacrifice one student for the other. he should not have to sacrifice your eldest for your fourth going. -- fourth born. we need to make sure these opportunities stay there. >> if you have an option for paying for it? >> there are in number of ideas the president proposed in his budget. we are working with congress. we are not set on one idea. but the cost of inaction is, i

think, unacceptably high. we have to get our act together. congress is struggling, no question. if there is one issue folks can unite behind, i cannot think of a better one than educating your way to economy. for all the past fighting, why not do the right thing for the country? this is a great opportunity for folks on both sides. >> have you already started going to the hill, talking with lawmakers? >> i have testified to or three times over the last couple of weeks. i will testify again next week. people see the opportunity to do the right thing and the huge cost of inaction. >> what are you doing to rein in the rising tuition cost? >> one big thing is we are proposing a billion dollar raced to the top for higher education. we put money in the states that continue to invest and in those

colleges that keep their costs down and create a culture around completion. it has to be around completion, not just access. there has been a lack of transparency. families are making complicated decisions. it is hard to figure out what the financial aid package is in one university versus another. young people what a great education. they want value for their money as well. we want to move resources more toward universities doing things right, away from those that are not. we have 6000 options for higher education. we want young people to make the right choice for them. >> thank you, secretary duncan. thank you all for your questions.

separate from the presentation secretary duncan just gave, i do not have anything else to begin with, so i will go straight to questions. >> i just want to follow up on secretary clinton's remarks yesterday. she essentially called for tougher u.n. security actions, but also acknowledged that anything put forward to the security council would be vetoed. i wonder if there is concern in the administration the continuing to focus on security council action, which is likely to be vetoed, is wasting time, and what can be done for the rebels in syria. >> a couple of things. we remain horrified by the reports of significant violations of the cease-fire by the bashar al-assad regime. yet again, the regime has failed to keep its word. it has failed to live up to the

obligations it made, to honor the kofi annan plan. second, we are in consultation with security council members about next steps. it is absolutely true, and we bemoan the fact that an earlier security council resolution was vetoed by the russians and chinese. we make clear our displeasure, and our feeling, which is broadly shared around the world, that it was an historic mistake to side with the assigned -- the assad regime, which was at the time and is today, brutally killing its own people. in the interim, the regime's behavior has become all the worse. i do not want to get ahead of anything the security council might do, the deliberations that

will take place there. but it is worth noting that we did have unified support around the kofi annan plan. we do have that support on the security council. i think there is greater acknowledgement around the globe, as well as within the united nations and the security council, of the appalling behavior by the regime. >> does that increase the likelihood that a tougher -- >> i would not want to speculate on what next steps might look like. we remain supportive of the kofi annan plan. we support the steps that are being taken with monitors. but we are also clear ride about the failure of the regime -- clear eyed about the failure of the regime to live up to its obligations so far. we will engage broadly with the security council and the friends of syria on next steps. >> do you feel action against

bashar al-assad is inevitable? or are you considering about actions that would keep him in power? >> we feel bashar al-assad's tenure will come to an end. it is obviously difficult to put a time frame on that, and end date. he has obviously lost credibility with his own people, credibility with the nations and people of the region, credibility with the nations of the world, credibility with international organizations and regional organizations. his capacity to unflinchingly unleash brutality against his own people in order to sustain his own rule has certainly prolonged his stay in power. but it will not last forever.

>> is any consideration being given to naming a special outside counsel for the secret service? is that being ruled out? >> that is the first i have heard that raised. i know of no consideration of that nature. >> now that a couple of names of supervisory agencies have come to light, can you say whether the president personally knows either of the agents? >> i am not aware that he does. i am not even familiar with the names, although i understand some names have been published. the president has spoken about this, as you know, when he was asked in colombia on sunday. he wants the investigation that the secret service is leading to come to completion.

once the completion is reached, if the result is that the allegations that have been broadly reported turn out to be true, he will be angry about it. he made that clear in colombia. the reason for that is that, as he said then, every member of the united states government who travels to a foreign country, on a presidential trip for a trip by a cabinet member, is representing his or her country, and every american in this country, and therefore should conduct themselves appropriately. at all times. as i said yesterday and i said previously, the president does not want to, and i do not want to, get ahead of the conclusions of the investigation, make broader judgments while the

investigation is still under way. >> the director of the secret service, in a meeting with congressional investigators, voiced concern that these prostitutes were in a room or rooms that had confidential security information in them. have steps been taken to make sure that if there were travel plans on those computers or papers, there were no longer relevant? >> i am certainly not privy to conversations the director of the secret service may have had with members of congress, or those members may have had with you about conversations with the director. i would say that the investigation is ongoing. specifics like that are not things that i am in a position to answer questions on at this time. and matters of security in general, presidential security, are handled by the secret

service, and are generally not things we discussed for reasons of security. but i understand at least hypothetically what a concern like that would be, and why it might exist. but i would ask you to patiently wait for the conclusions of the investigation before either the secret service or the white house addresses those kinds of questions. >> as i am sure you know has been reported, i think by "the washington post," one of the agents in question, one of the individuals, had on his public facebook page a picture of him with governor palin, with an inappropriate remark about checking her out. this was before the incident. does that cause the president or anybody in the white house to question whether or not sullivan's oversight was sufficient?

it would seem that might cause somebody to question whether sullivan was in beijing in enough oversight and setting the -- was getting in enough oversight and setting the boundaries correctly. >> i have not spoken with the president about that specific report, which i assume happened prior to president obama taking office. stepping back, the broader question of behavior, culture of the institution, i think it is something i am not prepared to address during the investigation, which is ongoing. once the investigation is concluded, i am sure the secret service will have more to say

about it, and we may as well. >> would information like that cause the president to question whether his confidence in director sullivan might be misplaced? >> i have not had a conversation with the president about this specific facebook entry, or even this agent that you reference. two things i would say is that the secret service has stated clearly, and the president believes, that his security, and the overall security of the trip, was never compromised in colombia. he has great faith in, broadly speaking, the secret service men and women who protect him and his family, protect the vice president and members of the traveling staff, protect the grounds here. right now, we want to wait for

the conclusion of the investigation into this specific incident before we look more broadly, if that is necessary, into some of the issues of culture or security. the president does have faith in the secret service and high regard for the agency and the job they do protecting him and his family, protecting his predecessors. it is an enormously difficult job, as you can imagine. it involves putting your life on regularly, being willing to -- putting your life on the line regularly, being willing to sacrifice yourself not just for an that is a huge responsibility. the allegations are concerned. it is important not to forget the job the men and women of the secret service do on a regular

basis for presidents of both parties. >> yesterday i asked if the white house was confident nobody employed by the white house was engaged in similar activities, you said something along the lines of you were not aware of it. has anyone in the white house looked into whether anyone had anything to do with any of this? >> when i got the question yesterday, it was the first time i had heard that. i have no reason to believe -- i do not know otherwise that this did not involve anything but the agents and the military personnel. we are in regular conversation with senior members of the white house staff and secret service, getting briefed on the progress of their investigation. i really do not have anything more for you on that. >> i am wondering if anybody in the white house has made sure none of this was done by anybody employed by the white house. >> not that i am aware of.

my answer is the same as yesterday. >> some republicans have begun to suggest this incident, coming on the heels of the report about the gsa party in las vegas and the breakdown of command in afghanistan where soldiers were displaying severed limbs, suggests a breakdown -- >> in whose words? >> senator sessions and governor palin, a breakdown in federal oversight. >> we have been at war in afghanistan for 10 years. we were at war in iraq for nearly nine. incidents that have been a a great concern have been in those war zones over the years our

forces have been at war there. the incident you referred to is terrible. it does not represent the standards of the u.s. military or the conduct with which the overwhelming majority of american men and women in afghanistan, and before that, in iraq, conduct themselves. any assertion by those politicians you mentioned of the nature you mentioned should be valued at the cost that you paid for it. it is preposterous to politicize the secret service, the behavior of the terrible conduct of some soldiers in afghanistan in a war that has been going on for 10 years. >> they are trying to criticize the president's leadership.

>> they are trying to turn these incidents into political advantage. obviously you recognize that. everyone here recognizes that. i think on the face of it is a ridiculous assertion that trivializes both the very serious nature of that endeavor our military has engaged in in afghanistan and the serious nature of the work that the secret service does, the apolitical nature of the institution, and the seriousness of the investigation with regard to the secret service and military. charles? >> just to follow quickly on his question about the white house advance staff. is there no process?

>> i am not going to answer questions about random rumors. >> it is not just about rumors. has there been any double checking to make sure white house to dance staff were involved in this business? from the beginning, we have been in regular touch with the secret service and with the pentagon about this incident. i am sure the discussion and briefing covers a variety of subjects, a variety both facts and rumors. what i am not going to do is give a play-by-play or speculate about every rumor you may have heard from either anonymous sources or just the internet i.d. not have anything more for you on the investigation itself. >> but could be some sort of an internal investigation?

>> i have no reason to believe there is a need for that. i am not going to talk speculatively about where this investigation is going. >> we know mark sullivan has been briefing any member of congress that has asked for one. who has he been briefing at the white house? >> he has had conversations with the chief of staff, the deputy chief of staff, and maybe others. there have been communications with other members of the secret service. it is a regular conversation so that the white house can be kept abreast of the investigation and steps that being taken. the president has not had a conversation with director sullivan. i would not rule out that he will. i am sure he will be briefed at some point by the director about the investigation and where it

stands and what we know about what happened. >> the three universities that were picked next week, can you explain the criteria? >> i would point you to what the secretary said. i guess we can go back to the conversation. you would probably know. and anybody else in the room, what was the margin in iowa in 2008? any state that we won by that margin, should we not travel there? great universities, great parts of the country. let me finish. there are a lot of things that go into decisions about travel. it is easier to travel half the country than the entire length of the country. i would point out, as i did

yesterday, that the president was recently delivering remarks in oklahoma. while hope springs eternal, i am not prepared to call that a battleground state. he gave a major speech last year. i misspoke, i said nebraska yesterday. it was kansas, as you know. there was the omaha bifurcation in 2008, generally not viewed as up for grabs. are you giving us kansas? is it in your battleground list? [laughter] >> in all seriousness, all of his travel next week is to three battleground states. they're all official visits. it sees the cynicism that this is all one entity here. >> the issue that this concerns next week, education is, the

president does not believe this to be a political or partisan issue. it has not by and large been a partisan issue in this and administration. that is what the president is going to be talking about, and the unbelievably important reality that on july 1, rates for student loans are going to double if we do not take action. that is a policy issue that will matter greatly to the students of the large universities the president will be visiting. it is not something we accept that the president should not be able to travel all around the country, it should not be able to travel to talk about his agenda with the american people that he represents. if you took seriously all the maps that show states that are

battleground states, and therefore would be somehow inappropriate for incumbent president to visit in a reelection year, he would be severely restricting his ability to go to big parts of the country. i am just going to give you this answer because it is a fact. when this story first came out, the wall street journal ran this graphic about how president obama had traveled to more battleground states at this stage in the reelection cycle than his predecessor. but what they left out was that they did not consider in 2004 virginia to be a battleground state. it was solid republican. but they did consider it for president obama because he won it against all expectations. as you know, every president

goes to virginia because it is an easy way to get out of washington and get beyond the beltway and get out into the country. there are a lot of ways to make a lot more out of this than there is. i do not have the full schedule. these are official events where he is going to talk about the student loan issues. yes? the election in france this weekend. i was wondering if the white house was monitoring this election. are you confident on the stability of the working relationship with paris, whoever ends up winning? >> we are certainly monitoring it in the sense that we follow the news. france is a great ally of the united states and will continue to be so. >> what does the president hope will be achieved?

>> the relationship between the u.s. and france? [laughter] >> we have 90 million subscribers worldwide that a very interested in what goes on in the white house. one of the questions i have from skynews is what the president hopes will be achieved in solving eurozone crisis? >> they are looking at the eurozone crisis at the imf. the measures that european governments are taking obviously extend beyond the imf. the imf has an important role to play. it is an adjunct role. it is not a principal role. european governments and banks are taking the lead in that. u.s. contributions to the imf will not be raised and will remain where they are. but the imf does have an important role to play. europeans have taken important steps in terms of building a

firewall, actions the ecb has taken, reforms undertaken in greece and italy but there is more to be done. we're always available and extremely engaged with our european allies on this issue. secretary geithner, in particular. engaged with our european allies in providing whatever counsel we can to help them deal with this significant challenge. wendell. >> what does the gsa spending abuses say about the vice president's effort to crack down on waste in government spending?

i appreciate the question. with regards to conference spending in particular, in september 2011, the president's office of budget and management directed all agency heads to conduct a review of how they're spending money on conferences. covers-related activities were not permitted to go the conference-related activities were not permitted to go forward without controls. federal agencies have identified and are currently executing on plans to achieve traveling conference cost savings that total nearly $1.2 billion as a result of the president's executive order. they have achieved over $280 million in reduced costs in the first quarter of 2012, compared to the same period of time in fiscal year 2010. roughly, the administration's efforts to streamline federal

spending on conferences is a part of the president's broader campaign to cut waste initiative, which is led, as you noted, by the vice president, and which has already reduced costs by tens of billions of dollars by eliminating inefficient or unnecessary spending. we've cut excess real estate costs, realized over $1.10 0.4 billion in cost reductions by slashing spending in administrative areas such as travel and printing, avoided $4 billion in costs by turning around, downsizing, or eliminating projects that were over budget or behind schedule. we saved millions in production costs by halting the minting of dollar coins not needed. prevented $20 billion in improper payments, and put an end to skyrocketing contracting costs, exceeding the president's goal to reduce contract spending by $40 billion. i am so glad you asked, because the record is quite impressive. >> on another matter, there's

another bit of legislation tied to the keystone pipeline. >> you mean the keystone pipeline is yet again tied in a non germane way to another piece of legislation? there is no other way to look at it. i do not know if we have a sap out. we do. let's be clear. what congress is asking in this highly politicized way, attaching a provision on the keystone pipeline to a piece of legislation that has nothing to do with it, is basically asking -- is saying we will come in a dance, blind, approve a pipeline, a proposal for which does not exist -- but we will approve it anyway -- a foreign pipeline built by a foreign

company emanating from foreign territory to cross u.s. borders. we love the canadians. they are close allies. but there is a process in place for a reason, that is run through the state department that requires this kind of project, because it crosses u.s. border with a foreign country, to be reviewed and approved by the state department in a deliberate way. if and when this company submits a new route, a new proposal for the route of the pipeline, it will be given unbiased and appropriate consideration in the proper way, in the way that has been done for decades under administrations of both parties, and decided in the manner that it has always been meant to be decided. partisan efforts to attach it to something and say to the american people it does matter,

even though it is coming from a foreign country crossing our borders, let's approve it in advance -- that is not acceptable to this president. we are only in this situation because congress did this once before already. we only had concerns originally and delayed the process in part because of concerns raised about the original pipeline route by the governor of nebraska, who is a member of the very same party as those who support this noxious amendment. bernama? -- brianna? on keystone, obviously keeping his options open -- >> he cannot ok -- >> i understand. in terms of -- he has not indicated any willingness aside would you cannot talk about

the permit. he has upset a number of groups from big oil to environmentalists, democrats on both sides of the issue, canada. >> are you making my case about why he is doing the right thing? >> but it seems like the only folks were happy with it are the republicans because they can keep pounding him on the issue. has it been a detriment to president obama? >> i will leave it to commentators, reporters, and historians to decide that. what i know is that at the time delay was announced because of the need to find an alternate route, it was done because there were great concerns about the proposed route and the aquifer .n nebraska >> w >> which have been assuaged. >> not at the time.

it has to be reviewed by the state department. maybe that will be submitted soon. once it is, a process will begin in accordance with existing precedent and it will be reviewed appropriately. but the route was changed in large part because the republican governor of nebraska asked it to be changed or not go through the aquifer and threaten the water supply of the state. does it hurt us politically? i just do not know. i am not a keen enough analyst to assess that. what i do know is that this is the kind of thing that has to be judged on its merits. as the president said in oklahoma, the company is welcome to submit a new pipeline

proposal and the process will begin again. >> on syria, it seems the annan plan is not working in terms of a ceasefire or pulling back troops. there are reports that you are working on a plan b. there are some reports there is no plan b. which is it? >> as i said earlier when i was asked about syria and the secretary of state's remarks, we're very concerned about the blatant failure of the saudi regime -- assad regime to fulfill its obligations under the annan plan. if it does not succeed, if there is not a change in behavior by the assad regime, we will continue to consult with our

allies and partners as well as other members of the u.n. security council about next steps. >> there is no plan b? >> we are continuing to consult. >> it sounds like there will be a plan b, which means there is not a plan b right at this moment. >> in les there is no need to announce -- it means there is no need to announce an additional step to be taken by the united states, friends of syria, or the united nations security council at this time. you can be sure we are discussing next steps and options with our allies and partners. last one. >> have you got a chance to see the latest from the congressional budget office -- >> i usually wait patiently for the latest, but i have not seen it. >> i want to ask you about it,

but i have not had a chance to read the whole thing for myself. >> this question is going nowhere. [laughter] >> it is saying the president's proposed budget would reduce economic output by some percentage and the speaker's office is reacting to it. >> i have not seen it. i have not heard this. let me see what it is you are referring to. i will check my in box. thanks, guys. >> the schedule for the week of april 23, 2012. on monday, at a time when americans are engaging in holocaust days of remembrance, president obama will deliver remarks at the holocaust memorial museum in washington. the president will tour the museum with and be introduced by nobel peace prize laureate and hold cost -- holocaust survivor elie wiesel.

on tuesday morning, the president will honor the 2012 national teacher of the year and finalists at the white house. on tuesday afternoon and wednesday, the president will travel to north carolina, colorado, and iowa, to launch an effort to get congress to prevent interest rates on student loans from doubling in july. he will visit the university of north colorado at chapel hill and the university of colorado at boulder. on tuesday, he will host an on the record conference call with college and university student journalists. on wednesday, the president will visit the university of iowa. he will speak with students about the need for congress to act. on thursday, the president will attend meetings at the white house. on friday, the president and first lady will meet with troops, veterans, and military families at fort stewart in hinesville, georgia. thank you all very much. i hope you have a great weekend.

[captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] >> space shuttle discovery was transferred to the smithsonian yesterday and placed on permanent display. it has 39 missions to space. tomorrow night, you can hear remarks from the nasa administrator. he took part in the welcome ceremony when the order was moved from dulles to the smithsonian. you can see the ceremony saturday at 8:00 p.m. eastern here on c-span. >> the house of representatives will reconvene on tuesday at 2:00 p.m. for legislative business. next week, a bill to improve information sharing between the government and business when it comes to server security. also, a motion to go to

conference with the senate on mass transit programs. live coverage on c-span. the senate is back on monday at noon for more work on the violence against women act and overhauling the postal service. you can see the senate live on c-span2. >> two things. one is, this is such a complicated conflict. we have never fought a war like this before. the second thing is what is referred to in washington as a nation-building is really targeted were fighting. >> david would have spent decades covering operations for various news operations. he won a pulitzer prize for his series of of " beyond the battlefield." he is one of many pulitzer prize winners you can watch online at the c-span video library. find over 25 years of american

politics and public affairs on your computer. >> when i was imbedded in eastern afghanistan, soldiers started telling me the u.s. government was wasting tens of billions of dollars on mismanaged development and logistics contract. >> he follows the money afghanistan and fines corruption from top to bottom -- and finds corruption from top to bottom. >> an incredibly effective guy, this is not long after president obama took office, the state department was saying we will give you a bunch of development money. we will win their hearts and by minds, nation building. colonel howard said, do not send me any more money. send me contract officers to oversee this place. 20 people. i do not need more money.

>> that is on sunday night at 8:00 eastern. on may 6, look for our interview to coincide with the ur, his of volume fo biography on the president. >> the panel on renewable and sustainable energy. we will hear why it some think it is crucial to future success. there is still no word on whether president obama plans to attend. it is held by the center for global development. this is close to two hours. >> good morning, ladies and gentlemen. let me encourage everyone to come in and sit down.

i am nancy birdsall. a warm welcome to all of you. i am the president for the center of global development. we're pleased to have all of you here. i know many of you are here because of what can be done. this is a huge opportunity for the global community to put together some serious recommendations to deal with the poverty, energy nexus. this is crucial for our center for global development. we are concerned with the risk greenhouse gas emissions pose for the development of communities in the development project, for the success in reducing poverty over many years, and at the same time we

are concerned with the obvious need for energy access for millions of poor people if they're going to have better livelihood's, dignified jobs, and so on. we are particularly concerned with what the united states can do. what should be its role? that is one focus of today's discussion. it is a tough year for the u.s.. it is an election year. there are fiscal problems. you will be hearing soon from nigel about a report he did that emphasizes the tremendous contribution the u.s. can make without attacking its budget problems. nigel is a co-conspirator on putting together the event. he is the ceo of climate

advisors. he is a senior visiting associate at the center for global development. his former assistant deputy secretary of state. we'll also hear a from our decent -- danish co-conspirators and climate advisors. we will have to give sessions this morning. the first is about the global context. i will be moderating that session. the sec is about the role of the u.s.. nigel will be moderating -- the second one is about the role of the u.s. nigel will be moderating. we have an incredible program ahead of us. we want to apologize now to you and our speakers. we're going to keep very strict time because of the secretary general 's schedule.

we need to be on time and finish at 11:45. this is a partnership between the groups. i am pleased to introduce from the government of brazil, the host of rio +20, ernesto. >> >> good morning. i would like to begin by thanking nancy and the embassy of denmark and the climate advisors for the opportunity to say a few words in this event on such a crucial topic on the international agenda today. we look forward to the addresses by the secretary general among other distinguished panelists.

this even touches on two very important items and also brazil's agenda, namely energy and sustainable development. next june, rio+plus will be the opportunity to take stock of the last 20 years on sustainable development and it shaped the debate on the top -- and to shape the debate on the topic for decades to come. we hope to offer new guidance for our work. among those subject is energy. brazil has been on the forefront of promoting sustainable development, sustainable energy and development initiatives.

biofuels is not the end of the story. we have implemented many other initiatives, all of them leading to the concept we need to address the energy issue from the point of view of social inclusion and economic growth. hasil's recent history proven we can address that without a conflict between growth and sustainability. we have proved you can have both at the same time. growth can lead to sustainability and vice versa. we're glad such important event is taking place today. thise sure the panel's morning will have important input. thank you.

[applause] >> now we plunge into our first session. tim wirth and vijay iyer, please come up here and sit down. tim is well known to all of you. he is a former senator from colorado, a former undersecretary of state for global affairs and climate negotiator. he is currently the founding president, it has been 10 or 11 years, of the united nations foundation and a better world for all. vijay iyer is the director of

energy issues at the world bank. we're pleased to have both of them. let me say another word about the substance on this session. it is about a global set up and the global challenge. as i said in my opening remarks , at the center we are concerned about the challenge of development. the work my colleagues have done over the last decade has driven home for me the crisis out there because of climate change. it does put at risk much of the progress made insuring people can escape poverty over the last decade. part of the problem is that for the rich in the world, there is resources to adjust to the extreme weather shocks and other

problems climate change can bring. for the poor, that is not the same case. the welfare implications of climate change our tremendous for them. at the same time, there is no question from other work, without access to energy, is not possible for people to work themselves out of poverty. it is all about energy. the ability to irrigate your fields, the ability to work in a factory with a good job because power is accessible, the ability to have your children studying at night and on rainy days at school, energy is fundamental to the process of development itself. the problem is if it is dirty energy, they are fighting against each other in terms of

reducing poverty. that is the challenge we face and the one we are about to hear more of. it is all about the efforts to end energy poverty, how can that be made compatible with reduced emissions and the climate for in the world? -- and a climate friendly world? tim, tell us what you can about this parliament. -- tell us what you can about this dilemma. >> thank you. the center does a wonderful job of providing a framework and of the mostny important issues, many of which get lost in the political environment. it is difficult to talk about anything outside of the 48 or 50

states. thank you for doing this. nigel, thank you for helping to put this together. it is always surprising to me in talking about energy and the national system, energy and the u.n. comes as a surprise to a lot of people. as nancy suggested, it has not been done before. how can someone think about development around the world without having a sharp focus on energy? energy enables just about everything we want to have done in the development process. that is particularly confusing when you look at the u.n. system. you and those two things. -- the u.n. does two think. one is peacekeeping and the second is a commitment to development. that commitment has included education activity, health activities, and human rights

activities. but energy until recently had been left off the agenda. why is that? it was for two reasons. the united states has blocked any activity by the u.n. saying it is our sandbox. do not get involved. we will control those issues. they were aided by the saudis and others. it has been difficult politically for the human to try to get any traction at all on the question of energy. kofi annan began to try to open a window on energy and did so at rio +10 a long time ago. he came out of that with an agreement to set up an energy office. not much happened with that

until ban ki moon came in. people thought he would do traditional diplomatic activities. he arrived at the u.n. with two deep and surprising commitments , working on climate change and energy and working on women's issues and how to engage women more are actively in the international system. those priorities have driven his administration. he has been reelected for a second term and has used his first five years as a sharp edge for his second five years. this brings us to rio+plus. --rio +20.

it will be an important station between now and 2015. those get us to the second stage of the development of. it is a system of thinking about poverty and development around world. it will become the guiding principles and frameworks for countries all over the world. seven basic millennium development goals focus on poverty, women, hunter, aids, and so on. there are seven basic goals. those were started by kofi annan. the first phase is over in 2015. the second phase will kick in in 2015. what should be in the second phase? many people have said energy is missing. it was not included as a specific focus with a target in the original money in development goals.

i think many people looking at the work the secretary-general has done are hoping the second include the mdg's will a framework for energy. what should that reward be? -- what should that framework be? analysis has been extraordinarily helpful. a high-level task force and the commitment of hundreds of companies has developed a program for sustainable energy for all for sefa. it has three basic goals that have been accepted broadly across the u.n. system. the u.n. declared last year to be the year of sustainable development as part of the building process across the international system. sustainable energy for all includes three basic goals.

one, access to sustainable energy for everybody in the world who wants it by 2013. there are currently 1.7 billion people who do not have any access to electricity. 2.5 billion have access to basic tools and non-modern energy sources. the second goal is to double the rate of efficiency and the third is to double the rate of the penetration of renewable energy around the world. those three basic goals will become part of the program of action and one of the major outcomes of rio. that will be translated into discussions through the development of the mdg's. it is an important time in terms of the history of the u.n., ban administration, and

the world's development agenda. this is not by itself a climate issue. rio is not specifically about climate change. we cannot deal with climate change unless we deal with the building blocks along the way. dealing with energy and renewables is a major building block toward an eventual climate agreement. maybe that is a useful outline for getting us going. as to how this fits together and where it came from, a beginning cents a road map for where we go from here. thank you very much. [applause] >> good morning.

it is a great delight to be here at the center for global development and climate advisers. you are doing a great job of pulling all this together as a force for good. i am pleased we are discussing sustainable energy for all .nitiative to me, this gathering represents the philosophy we're trying to bring together with sustainable energy for all. this is the kind of partnership with government, civil society institutions, and the leaders in this room. this is exactly what is needed to look at the challenge and see what solutions we can come up with. the world bank has been associated with the sustainable energy for all from the days when kofi annan started the u.n. energy initiative. we were one of the founding

members of this initiative with the u.n. we embraced this very strongly. we are finding ways in which we can be contributing to the achievement of the goals. i want to make four points in my opening remarks. what does it mean in terms of achieving access to electricity for 1.3 billion people? if you look around the world, where are these 1.3 billion people located? most of them are in sub-saharan africa, about five and a 80 million. south asia, 350 million. east asia and other parts of the world, about 350 million. the challenge of delivering universal access to electricity and clean cooking fuels are simple goals but it has several challenges built within it. if you take the case of the united states, in the 1930's

most rural households did not have electricity. it was during the fdr administration in 1936. the rural electrification act was brought in. by 1953, 90% of u.s. farms had electricity. in 20 years, the electrification drive, with a lot of federal funding and political commitment. it is exactly this kind of effort needed to pick up in terms of funding and the drive for the process. if you look across the world, even though you of access in many countries, the consumption patterns are very different. in the u.s., on average represent consumes 12,900

kilowatt hours a year. in the u.k. with 100% access, 5,700 kilowatts per year. in china, 2600. in mexico, 940. there is a wide variation in consumption. here lies the point the senator made about the way we consume electricity and the level of efficiency that can be obtained. in the u.s., if every person were to consume 10 units of energy less per month, not a lot, that could save 4,000 megawatts of capacity. that is the combined amount today of three countries. there's huge potential for energy savings and contribution that can fuel a lot of the power we need in cleaner ways.

let me address briefly the productive potential power. in addition to the daily task of lighting, it is very important. in developing countries, in the role areas, they use electricity for lighting, cell phone charging, and other basic purposes. there is a lot of productive potential that can drive economic development. this is why providing electricity for other productive purposes is very important. it will unleash a lot of human potential in these countries. the issue of raising carbon emissions with electricity and also has to be put in the right context. let me take the case of vietnam. when vietnam in the early

1980's, it had about 14% electrification. 14% of people were living in rule vietnam. in the 19 years between 1993 and today, the key factor in delivering the transformation has been vietnam itself with strong leadership, community. dissipation, inclusive development, and good government at the national and local levels, and a lot of capacity building technical assistance by institutions like the world bank. brazil has also achieved universal access. between 1980 and now from 50% to full access. what has been the impact in vietnam of going from 14% to almost 100%? carbon emissions have not increased much. it has increased by 30% per

capita in all of vietnam. this is where we need to find ways we can balance the provisions of electricity with the goal we have been discussing about mitigating climate change that comes from electrification. a word about finances. i just mentioned the electrification programs in many countries have required a lot of public funding. speaking of the public funding and leveraging the public funding with more private financing is what is meetin. it is what is needed. we have about $9 billion a year in energy. it needs to go up to $28 billion over the next few years if the sustainable energy goals will be met.

leveraging different financing sources like climate investment funds, climate technology funds, investments are making a huge difference across the world in how we're able to bring the public and private sector together. we also have to scale up some of the proven programs that have delivered good results. many brand-funded programs, technical assistance programs, like in africa -- lighting africa, and cookstove programs have delivered substantial results. these need to be scaled up. there's also a big role for knowledge and technical assistance in capacity building in countries to achieve these goals. the acknowledge function is another area where the world bank is working closely with partners, the international

energy agency, to see how this can be built up. in closing, i wanted to say this is a challenging agenda. i have only touched on a few aspects of it. hopefully we will discuss more. i welcome the leadership of institutions and individuals and a partnership this will bring and the collective knowledge, financing, and technical capacity it will bring with the private sector to achieve these goals. thank you. [applause] >> thank you. i think you got us off to a great start. keep it short and then we will have time to collect some questions and comments from

participants. let me invite you to come up and take some seats in the front. tim, you have been carrying water for the secretary general on these issues. the u.s. for many years was not endorsing the united nations taking leadership on the issue. you are not hearing me? who is not hearing me? are you hearing me? >> [unintelligible] >> it is ok. we can hear tim so far. can you say more now about what countries have endorsed, pushed,

joined in? >> it is a more interesting question many may think. it is more complicated than you can imagine. if you go to the u.n. and talk to all the ambassadors, almost uniformly with a few exceptions, everybody is for this. they all say this is a great idea. but when various negotiations begin, you begin to have a lot of backsliding. people say i do not want to get that done, let's put it off. we're giving you a lot of financial assistance and you ought to slow down the activity. are we really sure we want to get involved in this if there is

a goal of doubling energy efficiency and renewable energy between now and 23? is that going to apply to us? are we signing up to something that will apply to us? it's much more complicated in the negotiation. that is why in anything like this, you have to have the secretary general that will drive it. he has done so with chad holliday. these are serious efforts along with lots of companies. you have to bulldoze your way through it. if you are meek about it, it gets pecked to death. it is true on capitol hill. if you do not drive it, it does not get done.

is the u.s. a leader in this? we will hear from the special representative focusing on this for hillary. the u.s. is always a little nervous about any international agreement. we would hope they would endorse this and drive it and help to make it become a reality. i think that is now going to happen. let's hope it does. >> vijay, maybe you could say more about vietnam. people talk about partnerships. the question is about the policy environment in many countries. will it attract private capital? what were the keys in vietnam? you have to put everything together, the technical assistance, the financing, the right policy environment. give us some insight into how it worked recently in vietnam and

why. what were the key issues that got addressed? >> thank you, nancy. vietnam is a very interesting case because he was a country that came out of war and conflict. the leadership was very committed to finding ways in which economic development could be driven in an intensive way. in 1993 when they started embarking on finding ways to get electrification, a lot of good factors were present that allowed them to get off to a good start. you had a good program from the donor agencies, the asian development bank, the world bank, who provided the initial level of technical assistance and capacity building to prepare the groundwork for looking at

solutions that would enable them to achieve electrification. then there was the whole issue about how to fund it. successful cases of electrification around the world of two major ingredients that cut across everything. one is a large level of political commitment to keep driving the campaign. it takes years. it takes 15 or 20 years. in the u.s., it took 20 years. it is something that needs to be consistent across the political spectrum. if not achieved that with the political commitment behind a campaign. -- vietnam achieved that with the political commitment behind the campaign. the need to finance the networks needed to put in place the investments needed for the basic

framework. in the case of vietnam, it was driven largely by dimensional lenders and funding from grants and other sources over a sustained time. together, we have to look at diverting the base as well. they started moving into power, into gas. they had a more balanced resource system for generating power than they had in the 1990's. it has grown substantially in the clean and green field, as opposed to some countries that are totally in -- dependent on coal. india is totally dependent on coal. the political commitment was at the national level and the local governments were very much behind this push. there was inclusive development

that brought in a lot of the organizations and community ownership. five or 10 years ago it was very messy. there were different types of models in play and all of these coexist today in vietnam. you have power grids to local systems and they are connected to the national grid. there are many islands that have stand-alone systems. it is a very mixed kind of approach. but it has worked. it was messy for five or 10 years until it got more systematic and started to produce results. and what's very interesting, and no problems with pricing? -- >> very interesting, and no problems with pricing? >> there are always problems with pricing. >> that is our problem in the

u.s., too. and 12,000 megawatts, or whatever it was. there must be some underpricing of the global level. let's turn to those of you who would like to raise questions. and yes, please. please, introduce yourself. a microphone will come to you. >> i work for to go. i would like to know of a bit more about what you mean by sustainable, what you mean by access, and what you mean by all. particularly for practitioners. and furthermore, this idea of sustainable access for all, is this aspirational, or can we really achieve this by 23? -- 2030? >> you each have time to do what you like. go ahead.

>> i meant -- a student from american university. my question is very simple. what will happen to oil dependent countries if the economy relies on the oil and they do not always have an alternative source of income, such as bio country mexico -- of their economy heavily relies on oil. is it possible to break this energy monopoly from fuel burning energy? >> i am michelle from the center for global development. when i look at the u.n. goal for double in renewable energy, which is currently from -- about 3%, so we will go from 3% to 6% -- is that enough?

>> question. -- a good question. >> i was also interested in vietnam and the numbers you cited, the 30% per capita. it sounds like, perhaps, you are saying the concern about emissions rising in developing countries is a little misplaced. can you talk about -- you know, with an energy strategy stuck at the world bank for more than a year now, what is the bank's planne for balancing the need to develop sustainably and not cause irreversible damage from the pressure from developing countries to produce with cold? >> let's start with the good question on renewables. it is the rate of renewable energy, and not the absolute percentage of what it is today

by 2030. no, the rate of penetration annually we hope is going to double. and that is happening in many places across the world, even in our own backyard. we have a set of them that have been achieved and we have gone beyond them, causing problems for other industries. but it is a rate, not an absolute percentage. >> for those of us who cannot do all of the campus -- compound in in our head, can we suggest a rate? >> it ends up about beveling, about 50% of all energy. -- about double in, about 50% of all energy. 50% of all renewable energy by 2030. that is what you end up with, in that ballpark. does that make sense? >> yes, that is much more ambitious.

>> and no, it is not. compound interest is a wonderful thing. [laughter] >> is a better way of saying it. that is what i mean. maybe we could pull the u.s. into agreeing. >> we will hear from carlos. it will be ok, probably. >> to pick up on that point, and the question that came -- at one level, these are definitely aspirational. this is to drive action, commitment to my campaign among countries to build something that has been long in the development challenges and has not been addressed. these goals, the way they are defined, they have to be unpacked and understood in the context of each country and each region.

it is not the case that every country will have to increase its renewable energy share by 50%. there are countries that are better places to do it than others. a lot of the action on energy efficiency and renewable energy will have to come in the developed world. i give you the example of the u.s., where the energy-saving potential is very high. in europe, the potential savings is very high. the e.u. already have goals for 2020 that they are looking at for a share of renewable energy, and energy efficiency by 2020 that is driving all of the eu member countries toward that direction. a lot of the action toward these aspirations and goals is already taking place around the world. if you look at last year, about $250 billion in renewable energy are on the world. almost half of it came from the private sector. allot of this investment to a place in the middle income

countries in china and india, and in brazil. there is an action element to this. the hope is that the leadership of the u.n. secretary general and other institutions and partnerships and the convening around these goals will start to drive more action around this campaign. to pick up the question that michelle asked, some analytical work needs to be done to see what these goals mean in real numbers in real time. the national energy agency and the world bank have already started doing some work. in terms of finding what this could mean and what would be the target between now and 2030. what is the rate for the renewable energy? what will it look like in 2030?

and we would like to track what is happening around these goals are around the world at the same time. we are trying to put in some monitoring system that would enable them to track renewable energy five years from now or 10 years from now. picking up this question about the balance between the missions and energy access, in some countries the solution is pretty clear. that is, a lot of potential to scare up renewable energy and resources and in some countries it is more challenging. having access with making it clean and green and reducing emissions as we do it, let's look at east africa. kenya, tanzania, uganda -- 10%

access. ethiopia. and if you look ahead, let's say, to 2025, it will be mixed between one-third geothermal power, which is very clean, one- third hydropower, and one-third from gas and other sources. you could get a 33% mixed in east africa over a certain time frame, but that action has to start today. today, it is heavily in favor of fossil fuels and hydropower. but to balance that with investment in geothermal and actions that can be taken with minimum impact to the environment, finding ways in

which you can set the goals today so that 10 years from now you end up with that kind of makes. >> let me go back to that question. i think i miss answered. the aspiration is about a 30% penetration of renewables by 2030. a 50% overall penetration. another thing about the financing of this, the u.n. is at its best when it is setting awards. you know, not in the operational sense, but in setting norms. which is why the process of engaging countries, getting agreements, providing those norms, and therefore provide a base against which non- governmental organizations, states, political parties can hold governments accountable to that set of norms. that is why generally, what the

u.n. does overall is very important. the financing side of it falls more to the world bank, but the world bank in cooperation with the global compact in terms of making this a reality. we will not reach the goals of sustainable energy for all with concessionary financing only. it is certainly not going to be done with government funding or aid funding. we will have to be very creative. there are teams now working on very different financial models so that government funding, foreign assistance funding can be used as, let's say, risk insurance, can be used to cover the differential, or the costs that are perceived by the private world. but what they do in a normal market? is there a delta that would have to be covered? and we would cover that with some kind of public financing.

there are lots of different new models on that coming up. that is going to be one of the most interesting features of a very close relationship between the world bank and the u.n. system in trying to figure out how to finance this very ambitious set of goals. >> that is going to be a very good segue. keep that in mind when we come to the next session. let me just say, the question on oil from our colleague in mexico, oil and natural gas -- i was just reminded that tanzania i just had a huge discovery of natural gas. and brazil is about to come on board very soon with a lot of oil for the global market. for development people, the challenge is how to manage these natural resources, and to ensure that they are managed in a way that is closer to norway than to

angola or nigeria. these things at the policy level can be as much of a curse as they are a blessing. i do think there is something hanging out there, but hopefully it will be answered in the next session, or in the future about how all of these new sources of old and somewhat dirty your energy -- natural gas cleaner than oil, but still somewhat dirty -- will they crowd out on the pricing side the willingness of the private capital to go into renewables? that is just kind of hanging out there. >> that is a very good question. we find out in the united states, and it is everywhere in the world with these significant discoveries of oil and natural gas and shale oil. the u.s. is battering the renewables industry.

it will happen in a lot of places. but the world energy balance is clearly changing in a very interesting way in a short time frame. my guess is that a lot of the policy has not caught up with that. people are not aware of how significantly different we are today that we were three years ago. >> right, with the natural gas. ok, let's have another round, quickly. yes, there. and yes, i remember you in the back. >> food security is important. energy security for all, you know. ending poverty. building infrastructure for health. education. good governance. those are all good things and things we want, but they all take natural resources. i just came from the planet under pressure conference in london where 3000 scientists very clearly have said we are

already over utilizing the earth's resources and that we are exceeding planetary boundaries. how do you deal with this conundrum between the desire by us all to develop and the fact that the planet has limited resources? >> that is a tough question. it goes to the heart. and in the back. >> i am with voice of america television. i do not know if there is a study of the potentially mixed crisis to produce energy, which is water. so far, all of our ways to produce energy concern massive amounts of water, and we are running all-out -- running out of clean water.

is there any steady given to this? >> i am an independent education consultant. you talk so eloquently about hoping one of the outcomes is to reestablish another millennium goal. there is a tendency in policy around development to add pendulum swings. if you add something, you start dropping things. we are just where 2015 and after has an opportunity for other things to succeed. how do you get the energy behind the other millennium goals to be sure that this edition becomes a catalyst for something that drives all of them to succeed in education. this administration is so supportive of girls and women, but it is supposed to drop by 50% funding for education as a trade-off in a food security.

could you talk about that? >> i will take one more. and then give you a moment to address. >> they are all huge questions. >> i saw somebody. yes. >> i am with strategy international. i wonder if there is some discussion in rio about revisiting a whole measure of gdp, and the goals of finding other indicators to measure progress. i worked on this at the oecd, which became part of the stiglitz commission. but i think it would be great if in a rio, the government's work to decide to adopt, or at least a timetable to get some key indicator measurement progress and get away from gdp being the

only key indicator in economic development. >> let's start with that question. it is a good question, and it goes back to the first question as well. the door is opening, in a very happy way i think, on people thinking about the new economic system and was working for us. we are undervaluing the environment, the gap between the rich and poor is growing. the whole litany. the system is not working. the u.n. just had a major conference last week sponsored by the government of bhutan. you were probably there. what do we mean by a gross have been as index? and does that relate -- happiness index? and does that relate to other things? there is a drumbeat going on. there was -- there will be an economic institute meeting starting in june.

can that be done at rio? no, but there will be a lot of side events related to this. and it will be part of a long- term discussion for the u.n. to pursue. the u.n. tends to be the keeper of the statistics, the keeper of the rules. we are the keeper of those roles, the u.n. is. and how those rules get changed and how we work on those is going to be very important. it is a wonderfully interesting challenge for those concerned about going back to the first question what is sustainability. how do we use those reefs -- resources? we have to dramatically change our ways. gross domestic product by itself does not help. we have been talking about that for 20 years. institutionally, that is beginning to change. i will stop at that.

the other questions are great. >> and that address also the planning question. >> let me try. they are really great questions. and of course, we are all trying collectively trying to find answers to these very difficult questions. if you look at the way gas projects are done, and how renewable energy products are done -- projects are done, the gas energy is well established. there are no barriers to developing those kinds of products -- projects. what needs to be done on the renewable energy side is to de- risk. costs are higher and it is not available at scale. what the world bank and other institutions are doing is to find a way in which renewable

energy investment can be de- risked. >> this was the point that tim was also making. >> yes. the private sector and the public sector have to come together to find leverage points, and so we can leverage technology and also finding. >> when you say de-risk, are you talking about 10 to 1 private to public money, five to one? what would be renewables? >> this is the level of funding that many countries put together to trigger more investment in renewable energy in developing countries. as of today, about $8 billion from the clean energy fund has been coming there.

but it has leverage about $26 billion. it is about 1 to 3 today. but we want to make it one to five. or one to attend. -- one to 10. we're working with other departments and other agencies and partners to find the right policy framework. and also to get financial institutions to go into these areas. otherwise, it will be a problem. food the security and access is extremely important. someone mentioned that the pressure on resources is growing drastically. therefore, we have to find ways in which these three issues have to be addressed together, because they influence each other. there is a lot going on between the nexus between energy and water. at the last point i wanted to make was about the natural

resources. how do you go about creating the right framework for the transparency in government for this industry? there's a lot of work going on in this area. we are all supporting it in order to bring some responsibility around the exploitation of natural resources. but it is very challenging thank you so much, tim and -- but it is very challenging. >> thank you so much, tim and vijay. now i would like jim to come up and introduce the next session. [applause] before nigel starts, let me put

in another plug for the report he did, which i think is available. it brings together some of the questions raised in the last session with some of the answers we hope for in this session. >> thank you, nancy. and thank you for your partnership in organizing these events and for the tremendous partnership for raising the profile of this in washington, and the many contributions your scholars made to that effort. it is a wonderful opportunity to be partnered with cdg. i especially want to thank my co-author on the report and the advisers. i want to give a special thanks to our friends at the embassy of denmark here in washington for their support for this work and their leadership on development issues, and climate issues more broadly, particularly in their

new, green government. we just heard wide -- why sustaining -- sustainable energy is important for everybody. and when they can read, study, and work even when it is dark. lack to access of energy is not the cause of poverty, but gaining energy access is vital to most solutions. sustainable development, in other words, requires sustainable energy. but the securing progress on sustainable energy for all this year presents both opportunities and challenging -- challenges. world leaders have come together to work on the use of goals of development justice. these events great opportunity for imagining and envisioning a new set of solutions, for developing a new political narrative and a new set of

expectations about what would -- what we, the world, and both private governments and others can do to develop this agenda. honest, these are challenging times. the lingering effects of the weak economy, the financial instability, the bureau crisis, high unemployment, slow economic growth, and harsh political environment in some countries, and elections in others make it particularly challenging times. little appetite exists in some donor nations, perhaps many, to ask taxpayers to fund a large scale global effort. at the same time, nations are struggling to make progress in climate change with a global agreement still years away, and likely to be in perfect when it is done. despite these challenges, the idea of achieving sustainable

energy for all is managing to inspire people in developing and developed countries, bringing them together developing nations are gaining interest in renewable energy and efficiency as strategies for development, not just climate solutions. in the developed world, the success of merging these concepts together is generating new interest and political running room for action. in short, it has the potential to refresh the international development and climate and energy debates in a real ways. and even though rio may not be itself this year what it was 20 years ago, at this moment, it offers tremendous opportunity for progress. while the possibility of -- that is treated by this new framing, and the summit itself, the cost is not small. the international agent -- energy agency estimates it around $40 billion a year, when compared to today's efforts of

about $9 billion a year. while many new technologies exist, and good work is underway, including at the world bank, many barriers exist to get into the scale. in this age of turmoil and austerity and in this part of the election season, what can be done? and what can the united states spas' adequate offer? the goal of our next session will be to answer this question. we have some policy recommendations in this regard to frame our discussion before are -- by introduce our speakers. let me run through our four principal recommendations. the pieces of the report is that the key contributions the u.s. can make will help to close the financing gap, but not primarily for new foreign aid. but rather, by demonstrating ways to marshal private capital. american policy makers need to see that 2.7 billion people

without access our potential customers. we need to replicate the success of mobile phones. between 2008-10, the number of cell phones used when from 215 million to 4 billion in 10 years. by and large, governments are not subsidizing this technology. they have found ways to work together with the port to profit both. apple evidence suggests that the approach that work -- ample evidence suggests that the approach that work for cell phones could work over the next two days -- a decade. in sub-saharan africa, mobile phone towers in rural areas are being used to generate the solar electricity to charge the cell phones being serviced by

the mobile phone towers. they also charge l.e.d. lights, which are becoming more affordable for the poor. they also charge batteries, which can run radios and refrigeration units and other generators, which are vital to escaping poverty. the u.s. has much to offer the globe in terms of creating the conditions to allow for this dramatic transformation. given the size of its venture capital investment community, the promise of our financial markets and our exchanges, america's traditional support for free trade and international economic business policy. here are the four recommendations in our report that are designed not only to meet this need of transforming issues by creating markets and empowering companies to be part of the solution, but also trying to thread the needle between the right and left in this capital about what is possible in the area of international policy. peirce, the u.s. should support global adoption of the concrete

goals that are part of the secretary-general's sustainable energy initiatives. they are targets against which to measure progress that can help catalyzed action and focus attention. second, the u.s. should join other countries in pledging that the international community will support nations to achieve these goals by ensuring the ability to implement the policies and programs needed to have success. it will result in $5 trillion in infrastructure by 2020. compared to that, the amount of funds needed to ensure that energy decisions work for the port and for the climate are modest, only about 1% of the total amount -- amount. sustainable action is within reach if policies are created that change incentives and decisions of private investors. the united states must insure

that those nations willing to put these policies in place, many of which who have political challenges because they involve things like energy pricing, have the support of the international community, and the technical assistance needed to identify the best proven global energy policies. third, the u.s. should announce its commitment to work with other nations to develop a deal flow elevator. it is a mechanism that is existing in an international institution probably, but would connect a portfolio of projects in key countries. according to the imf, long-term investors in the private sector hold a $60 trillion in assets. commercial banks hold another $72 trillion in assets. many of these private investors, including pension and sovereign well funds, are eager to invest in sustainable solutions. what is missing is not funds,

but rather, an abundance of investment-grade opportunities. a new deal flow mechanism designed to pool together smaller projects to make them larger scale, more liquid to manage risk would do a lot to marry capital to a home dealing with progress in sustainable energy. finally, the u.s. government should act swiftly to make sure that u.s. companies have every act -- every argentine to compete in these untapped -- every opportunity to compete in these untapped markets in developing countries. the investment import bank should be given a new set of tools, including the capacity to work more closely with their counterparts in donor countries, and the ability to incubate new business ideas to get them to market. like other services, these

actions could be supported by fees in a way that ends up making money for u.s. taxpayers. while low cost, and in some cases, revenue generators, these growth-oriented ideas would make a significant but manageable increase in u.s. foreign assistance. today's assistance represents 2% of foreign aid, which is 1% of the federal budget. these strategies would represent an affordable, but realistic contribution by the u.s. in this area and we urge the u.s. government to do that in the context of rio. we are incredibly fortunate to have with us two incredibly distinguished individuals to reflect on and provide their own perspective on auburn cities for u.s. leadership on sustainable energy for all, -- opportunities for u.s. leadership on sustainable energy for all.

carlos is the coordinator for international energy affairs, and the president's nominee to be the first assistant secretary of state for u.s. resources. previously served in the ukraine and as vice president of policy at the brookings institution. i have had the pleasure of working with him and several of those roles and no him to be a diplomat and scholar. -- and i know him to be a diplomat and scholar. william reilly is the chairman of the climate works foundation, and also the founding partner and supervisor in sustainable solutions around the world. he previously served at the epa under george h. w. bush. and in that capacity, led the delegation to the 1992 earth summit. more recently, he cochaired the president oil spill commission following the deepwater horizon disaster. as his record in a distinguished

public service demonstrates, bill reilly is foremost in the clean energy space. please join me in welcoming them. [applause] >> it is a pleasure to join you, nigel. it is an honor to be here. bill, thank you. thank you for the center for global development, and to nancy for being part of the session. and thank you to the danish government for the long involvement in that you have had on these issues. when nigel and i spoke a few weeks ago about participating in this session, one of the things i said is that i could talk quite a bit about sustainable energy for all, if nothing else,

because i have been matched up with this guy here. to have been spending a lot of time together and if you want to take that as a statement from the u.s. government that we are working for international cooperation with the united nations and the world bank on his issues, you are free to do so. i am not the person leading the 20. obviously, sustainable energy for all has a big role to play in the summit. i want to make clear those parameters. i would like to give a bit of context from the u.s. perspective. i think the first thing that is absolutely critical that happened here in the secretary- general's efforts to is that this was defined a capital investment to stimulate action

and kate -- and change, not as a systems development. the reason that is important is if you go back to the numbers neidl was just using. $40 billion a year in investment, every year through 2013, in order to be able to achieve universal energy access. if you define that as a government aid problem from the outset, you have failed. if you define that as a strategy to be able to leverage and create conditions for private investment to make it possible to expand energy access to markets where it has not gone in the past, then you can succeed. whether the figure is 1% or 3%, we debate that. but the $48 billion represents, i would say, 3% of the total private energy investment that goes into the infrastructure on an annual basis. the challenge is not to say that we need $48 billion a year.

the challenge is, how do you create and change the incentive structures so that you get more of that capital that would otherwise have been going to different types of projects, being able to make the decision that the risk and returns are sufficiently good and sufficiently dependable, you're going to make these investments in these types of actions? that is what sustainable energy is all about. how do you bring together government, donors, the international community, the host governments involved, the private sector, banks, pension funds, hedge funds, civil society, the kinds of organizations that can continue to be the monitoring groups behind this? how do we bring them together in order to create this value proposition. in the past, there have been efforts at coordination to try to achieve greater investment and energy access. the issue we have often found -- and this is fascinating, some of

the discussions that we had in the context of the u.n. and seen him here, -- tim here, you have been providing the substantive support that is so necessary in this effort. one of the things that came out of this discussion is that we had a dialogue about the private sector. when we started talking up commitment, the private sector turned off. from their perspective it was, you guys are talking about charity, and you are talking about the corporate social responsibility account. and we said, we do not want to go to the corporate social responsibility people. we want to talk to people who are responsible for making the series investments in the hundreds of millions of dollars and billions of dollars. how do we trigger the investments you would be willing to make? we came back to was sustainable

issues -- the issue of sustainable energy for all. it starts to bring together groups of doctors -- actors that can put on the table the kinds of actions that they can take on policies that might be advanced by individual governments, investments they can make on financing that civil society can play. then you start to say, where are the gaps? how do we fill the gaps? and how do you get to better performance? that is the challenge we face, how'd to live up to the value proposition. the way that we are thinking about it as a u.s. government is that we have to look at it on two tracks. one track, if you are serious about energy access, one track has to be on a country basis. in the end, it is countries that will set the policies. we have to think about it in at least two different ways.

there will be ongoing investments that will be critical, and you cannot ignore the ongoing investment. and what is the policy environment around those? what are the possibilities to invest? what kinds of financial ins -- instruments do you need? what kind of financial institutions? what kinds of businesses and civic groups to support that? and how do you build that around individual countries? it is not the u.n. or any other organization coming out and saying this is what sustainable energy is about. but some of the countries that want to be the leaders in this initiative are coming out and saying, hey, these are the actions that we will be taking ghana.n will you come in and be a partner with us as we take this further? and the other side of this is

what we do on a sectoral basis. last time we gave a talk together i talked about it and precluded him from saying something about his own initiative. the concept here is there are some issues that are not on the country specific, but cannibal or sectorial in nature. a good example -- but candy global or sectoral in nature. example is the global gas flaring reduction initiative. it has major world and gas companies involved. the point of this is to look at how they set standards on how they reduce the flaring of gas. and as a result, from those standards, how they create practices in the industry that can radically change and transform how this industry operates. if you can manage similar things

like that in gas flaring, and in building codes -- because most of the buildings that will exist in 2013 and in 2015 do not exist yet. or in mining issues that will be moving forward -- in 2030 henin 2050 do not exist yet. or in a lightning issues that will be moving forward. some of the ideas that nigel put on the table are very productive, but this is something we need to give real thought to. in the end, we have to do is give money to real projects. in particular, let's think about the small-scale projects. and what we think about those projects, you have to think about how you give investors assurance that they will be technically viable. how do you assure consistency? how you are sure that they can be serviced? how do you assure that they can repay the loans they get?

how do you make sure that the systems that give them loans have adequate capitalization? how do you ensure against the currency risk? that is the team that we have to follow. the challenge we are facing is how to develop the instruments in order to mitigate the risk and allow capital to flow. and how do we ensure the base is technically sound? i will leave you with the spot on the negative side and then come back to the positive. let's think about the mortgage crisis. one of the things that was great about fannie and freddie as they were able to secure mortgages and get hundreds of billions of dollars of capital into the market plowing, but it was based on a product that was not sound. if we cannot create a sound product at the bottom, we do not get the assurance that we want. what we need to do is get the capital, provide the mechanisms

to build the quality and sustain the quality, and as a result, be able to create the conditions that allowed tens of billions of dollars, $48 billion a year to be able to flow into increased energy access. it is something that we have to get done. rio will be a critical milestone to demonstrate how these different groups are stepping up. it is not the end and that is what we have to remember. we have to use rio to drive momentum, not as the end, but to keep us going. thanks very much. [applause] >> good morning. i want to begin by complimenting the center for global development and colonizers, and nancy and others for can mean this session and for the insightful questions that are asked. i hope the most of the cold have already been posed. -- the most difficult have

already been posed. i am reminded, listening to carlos, that one of the things that i have done in recent years was to negotiate for investors to purchase of an electric generating country -- company in texas, texas's largest. it was a $45 billion investment. it was a practical, profit- oriented investment, the kinds of numbers -- if you are talking about global private capital, the numbers are not daunting. if the incentive is correct, then policy can be very effective. i want to begin by going back to stockholm, the conference in -- on the environment in 1972. it was -- the u.s. delegation was headed by russell train. what came out of stockholm were two things, in my view.

one, the united nations environment program was created. and two, countries took stock of their environmental commitments and capabilities and established environment ministry. in virtually every country to establish an environment ministry or its equivalent, many at the cabinet level. moving forward to rio in 1992, where i headed the u.s. delegation, the expectations for it were much greater. one cannot but feel the sense of meeting fateh, of resignation, of lowered expectations going into read it -- into rio + 20. i think is probably a good idea to lower expectations for a conference, frankly. there are some specific things, however, and i went through them in a compelling way that can be achieved there and will advance the cause. perhaps, not as dramatically as

what was agreed to 20 years ago, but nevertheless, can effective ly get the world moving in a better direction. i have a number of indelible memories of rio. one of the most compelling was of flying back from a meeting that i had with the president and three of his ministers wear are laid out the terms in which i would support president bush attending the conference. the president there is indicated that 65 heads of state would drop -- were waiting to find out of president bush was coming and that would determine whether they would come. we were having an election year. it's a very important diplomat -- a very important diplomat from asia who had a very important role at that conference said that we should never have another international conference during an election

year in the u.s. [laughter] we are doing it again. but somehow, rio + 19 does not quite do it. a compelling memory i had was of flying back on prince charles plane. r and imet president calori have a memory of prince charles and princess diana as me if i wanted to watch "sleeping with the enemy" with her. that kind of blotted out a lot of the bad memories of the u.s. having to commit to terrible time tables or to sign the biodiversity convention. [laughter] what came out of rio 20 years ago was something that has gained prominence because the tea party has noticed it and they do not like it. they think it involves a

discussion of sovereignty in the u.s. is basically a litany of positive interventions and policies, which have guided countless ministries quietly, i think, but effectively are on the world in thinking about how to do environmental impact assessment, how to have greater transparency in their decision making, and a range of other good, common-sense principles. a statement of principles on forestry. we did not get a convention on forestry, which the u.s. and germany particularly drove to get, but we do have a platform. i am disappointed that rio + 20 will not address the forest issue or the oceans issue or the fresh water issue in ways that i think makes sense. that is something for the u.n. to do in the future. we also, of course, there global convention on climate change, which created a moral, if not a legal, obligation to return greenhouse gas emissions to the

1990's levels. a number of countries made very strong commitments at the time and have not succeeded at that. but we are now getting some help, particularly with the downturn in the economy, in reducing greenhouse gas emissions in the last few years, and improving the efficiency and intensity of our energy economies. we achieved some other things at rio 20 years ago, but probably the most important one was probably the degree of international focus on the issues. there were 165 heads of state in rio. i heard some charming conversations on the part of some of them. what is this biodiversity thing about? what does it mean? some presidents were paying more attention to their environment ministers in preparing for the press conference than they ever had before. we had at one end of the perspective, president bush, and

on the other hand, president castro. president bush was present for president castro's unmitigated attack on the economy and history of the united states. i was sitting with president bush and was wondering, what does one do when the speech is over? applied? what out? i just watched my boss. he applauded. and my first question was, how could you have applauded it was a blistering attack on you and your country. and he said, we were given six minutes. i did not think he could do it. [laughter] how you think we take this forward? well, there is a history. i chair the board of the climate works foundation. it is a substantial organization deploying about $180 million a year into three regional foundations and sixth best

practice institute's, best practice with respect to energy efficiency. the foundations are in china and in europe and the united states. we expect to have another presence in brazil by the end of the year. we also have best practiced institutes -- best-practice institutes, which focus on energy policies for appliances, for power, for industry, for agriculture, for land use. and for transportation, for urban development and autos and trucks. we promote policies that promote prosperity. we are in about eight countries. we ask nothing of any country that is not in its economic self-interest. we are talking about energy efficiency. and we have some of the best people in the world in those institute prevent one of the institute for -- the institute

for transportation and development work to in brazil to promote the conversion of a 10- lane traffic road serving 9 million people in that community to bus rapid transit, which now carries 800,000 people a day with drastically -- reductions in pollution and greenhouse gas emissions, and a more congenial way of life. that is one of the things we have worked closely with the chinese government and others to promote efficiency in appliances appeared in india for example, we have a new regional client -- climate foundation. i want to suggest that you reflect on the history of something that was done for food and agricultural research, seed research primarily, some years ago. in 1960, norman borlaug was an

instrumental scientist in the research in this area. he was funded by the rockefeller institute for 10 years. it was a great philanthropic commitment. the international institute for rice was created in the philippines. some six years later, the institute for maize and wheat was created in mexico and in 1972, the suggestion was made -- i think, by maurice strong, who had been the canadian representative in stockholm that they take home funding for what became a series of institute's designed to promote a policy development and productivity in all areas of the world. the u.n. secretary general of the world bank back then was robert mcnamara. he embraced this program.

there emerged something called the continental group on an approach to research. my idea is to create constitutive group on low emissions development. if that is done, climate works to substantial funding made by the world bank and international aid and development organizations. that is a very specific amendment -- commitment and expectation, and i think, a practical and necessary one that could be of enormous assistance in meeting the secretary- general's important goals of energy access for all, and significantly more efficiency and renewables. i will close with a remark from senator moynihan. he said, if i have learned one thing in my career is that

success of a culture, of a society -- but a society is about culture, not policy. but policy can transform culture, can change it for the better. and the two together have worked historic way to improve life vary considerably for all of us. thank you. [applause] >> thank you, bill and carlos, for those great remarks. we now have 15 or 20 minutes to hear from the audience. we have a microphone in the back. raise your hand. when the microphone comes to your caught -- comes to you, please identify yourself for the benefit of our audience. first question over here. >> i am from the austrian

business association. we have been talking about what government can do for policy. i am wondering what the business community can do better to promote these goals. >> a good question. we are going to do just as we did in our first session, which is to collect three or four questions. >> i am from the world resources institute in washington, d.c. mr. pascual spoke about the role of small projects in providing energy access in particular. it seems the initiative is focused on mobilizing the private sector, which i think is important. but i also see a mismatch with the size and scale of those projects and players. you gave some comments about how de-risking smaller projects can be done, but i would also like to hear about the particular role of small and medium organizations, particularly in the centralized -- uiin

decentralized rural communities. >> lisa friedman again. it was interesting to hear -- what specific commitments will the u.s. make in rio? >> thank you. >> let us take a couple of more questions about that. he is leading the energy issue and not coordinating all of the government. he has realistic expectations. other questions right here. >> sorry to ask another question. are we going to get a commitment on phasing out subsidies for cold tools -- coal fuels? enough already. this is stopping a level playing

field. >> i did not want to do this, but since two of my predecessors have asked -- i have a question about hydro. the hydro potential in africa is twice the energy needs in africa. it is not a new, unknown, risky technology like renewable. why don't we hear about hydro? >> great questions. i will try to go through them quickly, because on each of those we could have a seminar to talk about them. in effect, that is part of what we need to do. in terms of the commitments that are helpful -- can you not hear me? how about now? is that better? in terms of the kinds of things that the business community can do, one of the things that has been critical has been getting insights from the business community on standards and performance that you have been putting forward that are

absolutely key to integrating into a global dialogue, for countries to be able to pick up on these and integrate them. i mentioned the issue of building codes. we obviously have leed standards, which started in the united states and when global. johnson controls have been working on this. i need to learn more about the best practices groups and the climate work. here is an area that is fundamental. if you think about india and china, and the extent to which their energy use is building- based, residential-based, and if you look at the buildings will have in 2013 and 2015, which have not been built, if you can get codes developed with the private sector, and it is done in a way that can be financed, you can change the whole equation. you can change the

infrastructure equation we are going to be facing 20 or 30 years down the road. if you take similar approaches and look at the steel industry, for example, and come to an understanding of what measures they can propose for the reduction or increases of efficiency in that sector, i imagine these are the things you have been working on in climate works. it is related as well to the question of financing. let me jump to that question in a second. one of the big challenges that we have in finance -- it is easier to get money into large- scale projects. it is a lot easier to manage the political risk insurance. it is a lot easier to be able to work directly on the project, to be able to give people a sense, or investors a sense, of the financial or technical viability of those projects. it is easier to deal with

specific interests like guaranteeing the power purchase agreement. with small-scale projects, the challenge becomes multiplied. many different groups in this room, i suspect, and i know the world bank, can talk about specific projects, small-scale projects, that have been integrated with cell phone systems that allow pre-purchase mechanisms. on the basis of that, you have power which is sent to your small hut in a village. you have the ability to actually use wireless technology to read the papers. really interesting projects that are developing on this scale. the question is how you create that into a viable business model, because in the and you are going to have to figure out -- the international providers of that technology are not going to come into that little of a market. how do you create partnerships with local entities?

how you build capacity to be able to ensure you have the ability to service those projects and maintain them, overtime.ly sound, how'd you insure that bundles of projects are absolutely sound, so that if you bring them back into a financial intermediary you are not selling a product which is filled with junk, or half filled with junk, which can create a financial crisis later on. one of the challenges we are trying to work through is how do you work back through the system and take the kinds of financial instruments that may exist, and technical assistance to ensure technical viability. a.i.d. has a development credit authority that can provide partial guarantees between smaller-scale projects and intermediaries in-country

investors. that can be combined. in the broader financial community, opec can play an important role. in the past year, the have provided a billion dollars worth of renewable energy finance. that might get you large-scale projects. but we need to get more of that finance to intermediaries. that is the challenge we are working through. it is an ongoing challenge. next week at the clean energy conference, there will be a number of side sessions with a range of different potential financial partners. we are trying to work through this flow chart and figure out where we need the intervention and how we put them in place. in terms of the u.s. commitment, what you will see out of the u.s. commitment, particularly in energy in rio, concerns' lines i

am talking about now. i am not point to talk about the u.s. commitment right now. but think about it from this perspective. how can we mobilize technical systems that can be made available at those critical points of intervention, whether it is in small-scale projects, whether it is in some form of guarantees in the financing system, whether it is providing greater assurance of on-grid power, with utilities that are able to function, that have tariff rates that can compensate the technology? all of those things, we can work together, whether we are providing support to ngos on the ground that can create marketing networks. another important contribution we can make. all of those things will be packaged together. here is a note i will close on. i think that to be effective,

one of the things we have to do is to put them together in packages that actually work, rather than simply having statements of commitments that say we are going to do something, not understanding how the pieces fit together. i have not answered your question on hydro. there is a huge hydro potential in africa, especially in southern africa. still, there are some people that have a glint in their eye about building a dam and power in all of africa. this guy used to run -- was it the power sector? all of the energy sector for africa at the world bank. it is a topic maybe we can come back to, because i think there is a huge potential, especially with change happening in south africa, and being a bigger market that can be the demand focus that helps provide the financial security necessary for financing on hydro.

>> it seems you answered the questions you thought most relevant to you. if you could add to your remarks something about how you, having lived through the original rio, would advise this president to think about whether he should go, and to think about how to define the u.s. contribution in rio. you have a special window into that process, and the audience would benefit from your analysis of how that decision would be viewed by the white house. >> there is no question that if the president were to go to rio he will be attacked for ignoring the problems at home to go to an international park. he will not produce concrete achievements he can campaign on in the near term. that is in opposition to the first president bush. there is a lot of truth in that. it will become an issue in the campaign, i am sure, if he goes.

a lot of people will be disappointed if he did not go. the president said it was vital to me -- it was vital to the brazil-united states relationship. president bush said, "i promise we will do everything to not embarrass the president, to make this work," recognizing he is in the middle of the campaign. he has a constituency that will want him to continue to play a significant role, as he did at copenhagen, on the world stage, where environmental policies are discussed. on the question, coming back to the question of what businesses can do, i am reminded of a conversation i had with the president of mexico about their intervention in what is now the world trade organization, to try to prohibit the u.s., which was trying to basically banned tuna for sale in the united states if

it was not dolphin-safe, because of the way tuna were set upon. he immediately got the point. he said, "i will fix that." he went through the application. he said, "i do not want to see mexican tuna and able to carry the label in american supervisors -- unable to carry the label in american supermarkets that it is dolphin safe." there are non-governmental organizations that label. one of the most successful regulations in the united states is leed building certification. the major developer in california told me you cannot get lending for a significant building from a bank in california if it is not leed- certified. that tells you something.

i helped create the energy star program while i was at epa. in the beginning, these are only advisory. the had significant impact. if you look at you and the lever or walmart -- at unilever or walmart, they have made a commitment to sustainable fishing throughout their supply chain. the president of wal-mart took stock of fish supplies and found that if something was not done, there would not the fish to sell in five years. -- would not be fish to sell in five years. that has permeated the culture and affected consumer-facing companies in the developed world, and elsewhere as well. that is beginning to transform business culture. it is having, i think, an appreciable effect on purchases

of sustainable products, on organic harvesting and the like. >> we have a couple of minutes before our keynote addresses. i would like to take a couple more questions from the audience and give our speakers a chance to make closing remarks. >> my name is kathleen. i have heard a lot of emphasis from both the speakers about the multi-billion dollar commitment that will be required from the private sector in order to fund sustainable energy access for all. there seems to be a difference of emphasis between funding that will go to research and funding that will go to rollout of these initiatives. i would be interested in hearing about the appropriate balance between research of new technologies and expanding what exists. >> our final question, the gentleman right here.

>> i am an american university student. my question is what is the stance of the united states and the global community on biofuels and alternative energies that are more contribution -- more controversial. nuclear energy -- what is that role in the conference? >> if you can answer those questions and add any thoughts you intended to get to but did not have a chance yet. >> i will go really quick. in terms of the balance of public and private funds, there is no doubt public funds are necessary for research and development, feasibility studies, and technical assistance. how much of the $48 billion is necessary? i would have a hard time putting a specific number.

the question we need to keep asking is how to get results. if the result is to generate the investment necessary to specific projects, let us look backwards at the technical assistance and the private sector financing, and understand, related to those investments, how you get the best combination of capital. the key point we are trying to get at is we cannot make this just a public funding goal. it has to leverage private capital. biofuel, global biofuel energy partnership was created last year. in may of last year, there came together 24 recommendations, eight of them environmental, a social, and eight economic. -- eight social, and eight economic. i think it is a huge development. one thing that happened this past weekend is huge.

that is the summit of the americas. one of the things put forward was an initiative called connect 2022. it was advanced by colombia and supported by leaders throughout the world. it will begin an advanced process of creating regional electrical interconnections between different parts of the western hemisphere, to the point you can extend them. that may sound relatively boring, but if you look at this from the perspective of how you expand the access of renewable energy, you need bigger markets. you need bigger markets for hydro, wind, and solar. big countries like brazil need it. poor countries like nicaragua need it. if you look at the advance of technologies such as smart grid, we need to be able to make those connections. this gives us a new prospect for how we can advance efficiency

and renewable energy in the western hemisphere. it is something we should be very excited about. >> let me just say to get private investment into a number of areas -- i heard something carlos pascual about the policy of the united states, which is to open markets. the u.s. bangs on this at every international conference. it is a broken record, but it is true. i can think of the places where subsidies and constraints upon access to market has prevented efficient investment, for example in power, but also in water. there is free electricity for farmers to pull up water from a thousand feet down, causing the water table to drop, producing low value crops. these are counterproductive policies. there are barriers to entry in the creation of power facilities

in a number of developing countries. were they not there, much more accessible power would be provided by the private sector. these are opportunities that are out there. we can go country by country. we all have them, the united states included. they are there for the taking. they involve reform. but if we are seriously committed about making energy accessible to everyone, and increasing renewable, this is the way to do it. >> please join me in thanking our panelists. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> the u.s. house of representatives gaveled out for the week yesterday. they will reconvene tuesday. next week, a bill to improve information sharing between the government and business when it comes to cyber security.

also, a motion to go to conference with the senate for a highway program. the senate is back monday for more work on the violence against women act and overhauling the postal service. you can see the senate live on c-span 2. >> this weekend on "book tv," live coverage from the los angeles times festival of books. covered starts at 2:00 p.m. eastern saturday and sunday. biographers talk about clarence darrow, dwight eisenhower, and jfk. and call in with your questions for steven ross, author of "hollywood left and right." watch for a take on liberals in "because." at 5:00, a panel on surveillance and secrets. the entire schedule for the weekend is on line.

-- online. >> from the colonial area, prohibition, to today. drinking has always been part of the american landscape. the history of alcohol in america. watch the back story. there are tales of beer and spirits in america, part of american history tv this weekend. >> now a discussion on wage increases over the last few decades. we will also hear about the cost of health and insurance benefits, as well as gender differences among wage earners. this is about 40 minutes. host: it's time for the america by the numbers segment. we're gonna look at american wages. joining us, two guests, jodi

schneider with a bloomberg news. she is their tax and congress' editor. -- congress editor. we're also joined by philip doyle from the bureau of labor statistics. he serves as the existing commissioner. thank you for joining us. when the bureau of labor statistics looks at wages in the united states, what is the big picture? what are you trying to find it? guest: what has been happening in the trends in wages? are they going up? are they staying flat? what we have been looking at is a slowing in the rate of wage change. host: that is because of the recession? guest: we believe the recession is the big factor. people are not getting as big of a wage increase as the man have in the past. host: according to your research, you say wage increases have gone up about 1.5% per year. can give as a context?

-- can you give us context to that? guest: we are running at about that rate, the average across the economy. some get more, get less. prior to the recession, we were seeing increases before the recession around 2.5% hike and 3.5%, so things have really been slowing down. that is consistent with each of the recession began seen since 1990. -- each of the recessions we have seen since 1990. the rate prior to the recession, during the recession come and -- it drops during the recession and will not really recover. it will stay at a lower rate. host: will that stayed the same whether you are an executive or blue-collar? are there variations? guest: it looks at a variety of occupational groups and status, full-time verses part time. -- versus part-time. typically we see quite a bit of

difference among them, but the trend overall is the same. everyone is lower than they were. host: jodi schneider, looking at this from someone who looks at their wages every week. their wages are not going up. what can you say? guest: people do not necessarily see the average. their wages have not gone up. one thing that has happened is that there has been payroll tax cuts. the congress decided to do a temporary tax cut. they extended it through this year so the people are taking home, on average, $50 more per pay period and that is real money in their paychecks. that was added to the deficit. that was not offset when congress decided to extend it. it has that affect. that is the real issue in congress, when they do things to help people help more in their paychecks that they're often having to look at what that does for the long-term fiscal health of the country. host: 1 talk about increases, --

when we talk about increases, arctic talking about the standard increases for like a cost of living adjustment and things of that nature? guest: was also an issue parade -- that was also an issue in congress. social security benefits and other cost of living increases helps determine in the private sector what kinds of increases there are, as well. employers look at what the government is adding as a standard increase when they decide what to do with their own employee wages. host: 81 to ask questions, we -- if you want to ask questions, we have divided the lines regionally this morning treated to live in the eastern or central time zone -- 202-737- 0001. comment on that last part of

the information provided, lower wage increases. is it consistent with patterns in prior recession specs -- recessions? guest: prior to the recession, we tracked at a particular rate. uc wage rates dropping, and then recovering part of that dip, never all of it. each recession, the increase in wage rates has been slower going in, and still slower going out. >> we are in -- host: we are in a long recession. how does that factor? guest: this seems pretty deep. a drop of 1.5% is a substantial decline. we have not seen anything trekking up yet, but we are watching. we are releasing our next set of data next week. we have not seen numbers. host: what information are you

looking at? guest: there is a survey of business establishments and state and local government operations. we talked to 11,000 of them every quarter. we ask how much they paid in wages and a variety of benefits, so we can look at the total picture, what we call compensation. we track that same set of occupations from quarter to quarter, so that we are tracking a fixed market basket of occupations, and we are not seeing ships because more high- paid occupations came -- shifts because we have more high-paid occupations, quarter to quarter. host: the wages, starting in 2007, start dipping and flattening out. but the benefits rise substantially.

guest: >> benefit costs did start picking up. there are a variety of factors. benefit costs are in part -- if your wages go up, the cost of providing vacation coverage goes up. but the cost of health insurance is not tied to your wage rate. if health costs or retirement goes up, traditional pension plans are based on returns on investments made by the pension plan itself. if the market is not getting good returns, more money needs to be invested in order to pay the benefits of the retirees. that causes a spike in that area. host: the people you talk to -- how are benefits doing as far as how people depend on them? guest: that is a big issue. for many people, the cost of

their benefits has outpaced the part they are expected to contribute, particularly health care. that is something that obviously has been discussed and will continue to be discussed with health care law, and also in congress. one of the things the ways and means committee has been walking at is whether there should be changes to how retirement accounts are accounted for, and whether we are having too complex and equation for employers, in terms of being able to offer retirement benefits to their workers. host: our first call is from battleground, washington. caller: one subject that is not -- hello? one subject that is not normally thought of, when talking about wages and benefits, is the end of the cold war.

the soviet union represented an alternative social system. for all of its flaws, starting in the 30's, american businesses felt the need to compete for the loyalties of the working class. workers in this with the end of the cold war, business is no longer need to feel the need to compete for the loyalty of their workers and we're in the horrible predicament of defeating themselves because they no longer had any leverage your bargaining power with their employers. they're just another set of laborers. i was wondering if you could just talk about the decline in marxism as a source of bargaining power and leverage for the working class? if you have any comments, thanks. host: how does labor feel about itself and the power they hold in demanding more wages and things like that? what ground do they have to

stand on? host: yeah, think because private employers, it's a negotiation between the employer and the employee often carry the public sector -- often. but in terms of what your employer has to do in terms of wage increases they real yip don't have to do anything. and i think that's the frustration of many workers coming out of the recession. wages were held down and now many workers do not feel like they are participating in the recovery as much, but there's nothing compelling employers to have to share with their workers as they get better. one of the things that's starting to happen in companies and we've seen this in data is that workers have been staying with their companies much longer during the recession because they were afraid of losing their jobs. as things get better, people

will feel more free to move about. that causes employers to raise wages to keep their best workers. host: next caller from cedar rapids. caller: two questions. it's directed towards mr. doyle. the first one is, i know given the wage, decreases prior to the recession, but how does this particularly affect employment? you can tie this to the minimum wage too. when we see the minimum wage increase, we don't necessarily see a big change in employment or rather unemployment as a result of it. so if you can, can you elaborate with how wages and i guess with this particular topic happen to affect employment as a result and, yeah, that would be really my biggest question with regard to this particular topic. host: ok. caller, thanks.

guest: there is a very complex relationship between wages and employment. if we go into a recession and they decide to layoff the most recent workers not see an increase in wage rates because those newer workers are at the bottom of the wage scale. on the other hand, if the employers oofer incentives -- offer incentives for their employees to retire early and if we go into a recession and employers decide to lay off the most recently hired workers, they could see a temporary increase in wage rates because of the newer workers are perhaps at the bottom of the wage scale. they offer incentives to the older workers to retire early, then we may actually see a greater decline in the rate of increase in wages simply because the higher paid wage workers are no longer in the mix. it is really difficult to say that there is an equal relationship between changes in employment and changes in wage

rates. host: you talk about the changing cost of benefits. can you explain what we're looking at? guest: the measure about 18 separate benefits every quarter, the cost to the employer of providing these benefits. these are benefits like holidays, vacations, insurance benefits, life insurance, disability, retirement plans, workers compensation, social security, medicare, a whole range of these benefits. we track the change in the cost to the employer from quarter to quarter. most of these have been slowing down. some of them, because they are tied to wage as, like a vacation. vacation goes down when wages go down marce days the same. on the other hand, some benefits are different. the chart shows the cost of health care benefits as well. you can see that it traffic -- typically tracks at a faster rate of increase than all other benefits, recently they have been coming together. first is the cost of health insurance. how much are the employers required to pay to the carriers?

second, how they decide to share the cost with the employees. if the employee premium goes up, there may be a different cost. how many people are in the planet? -- in the plan? if they drop out of the plan, the cost of the employer drops and brings the lines closer. all those dynamics the one at the same time. host: to clarify when it comes to employer cost of compensation another chart shows wages making about 75% of that. what's the best way how folks should interpret this chart when it comes to other benefits? >> as we say 71% roughly of all cost to the employer of having a worker on the job are wages. the rest is broken up into those variety of benefits most of which are from out of the

control -- directly out of the employer. the cost of social security for example is there. that happens. the cost of social security, for example, is there. jodi mention the payroll tax cut. that did not happen on the employer side, so there was no change here. employers have a set of benefits that they can offer or not and that may lead to some other choices are as to which the benefits they want to offer to their employees. we see vast differences in the size of a company's and the type of workers. full-time workers are much more likely to receive benefits. that changes the dynamic. host: jodi schneider, off of twitter -- he said many companies could afford to keep up with the cost of living. they just don't. he adds 3% raises and 6% cost of living. guest: that's right. that is a negotiation. if companies feel they can get

workers at a certain spern taj and they can still have a fully employed workforce when unemployment is higher, obviously, you have greater chance doss that. they're not going to pay as much. what we see in workers is that post recession the wages tend tony: crease at a relatively slow rate and that's what we're seeing now. -- tend to increase at a relatively slow rate and that's what we're seeing now. and employees are having to cope with that. many of them dealt with that in the recession or just talk to the recession that there were not in a good. sheeting position. they're in a better negotiating position and we will start to see those wages increase. that has been the pattern after a recession. host: martin from monroe, new hampshire. good morning.

coirp good morning, i have a -- caller: i have a couple of things that i want to talk about, mostly about the interaction between government and the individual, the employer, the setting of wage and benefits. i would say that the total compensation of a working person is divided, like you had that pie chart up before. it is divided between your hourly wage and certain government programs. i just wonder, as a fiscal conservative, would be better for the american people to take out all of that money and they would be allowed to spend it on their own retirement, their own food, and all of that?

the other thing i wanted to talk about -- host: we will see if our guests want to respond to that. . host: are you talking about privatization of some of these things instead of relying on the employer? caller: i was talking more about personal responsibility as opposed to government responsibility in people's finances. host: ok. guest: the privatization of benefits is a big political issue. we have seen big discussion about privatization and social security, not in recent years, but both parties have tried to avoid that particular discussion. the terms of talking about medicare, medicaid, there has been a lot of discussion about that. paul ryan came up with a plan for medicare that ended up being a political firestorm for him.

a lot of democrats going to be using that. simpson bowles can up with all kinds of recommendations to what to do about the changes of the costs of entitlement plans. when you see the demographic numbers in the number of people using medicare and medicaid, it becomes a real issue. privatization is always a political gamble for lawmakers to talk about. when you have large numbers of people, they do not want to hear about any benefit cuts. there is an immediate political cost. host: next caller from kentucky. never mind.

california, nick. good morning. caller: good morning. i was wondering if a lot of the people, the guests you have on, have ever heard of the wto in these so-called free trade agreements? i heard it mentioned years ago that the reason the wages for the american people are being pushed it down is because of the world trade organization? free trade does nothing for the united states. we are freely giving these so-called third world countries are manufacturing stuff for free and then we still have to pay higher prices when it comes back.

we cannot compete with -- host: i dropped you. i apologize. to his point, there is a chart that looks at wages compared to industries. red line looks at goods. the blue line is services. they have crossed. why is that? guest: the have never been that far apart. there really is not much difference in the way that wages are tracking between the two sectors be it construction, manufacturing, retail, a trade, leisure services, and a whole host of other things. we do not see a great deal of difference these days between the two sectors. host: when it comes to looking at it from your perspective, jodi schneider, those that produce goods and services, are they experiencing the same as far as their wages going up or at least how much they are?

guest: i would think the political and other issues that are affecting the industry's are at this point on the same realm. host: virginia? caller: my statement is a little bit tangential and goes back to 1964 when they set up for the cola for the military which then get expanded to the federal system and then the social security system. it's been close to 40-something years and the difference is that the people at the bottom are only staying right at the bottom wrfment as the the top of the scale, there is

a substantial difference. that affect our national debt and the budgeting series and i think it carries over to the private industries also. i think this is where the item needs to be checked. cola should be changed to a block increase or a greater increase at the bottom versus at the top. any suggestions? guest: mr. doyle? -- host: mr. doyle? guest: the three segments, military, social security recipients, and federal employees are not included in this data. there is no direct influence from the cost of living systems. the other point may be that the cost of living system uses a similar price index that has been relatively flat these recent years. host: as far as variations go in occupations, what is happening?

guest: in some cases, the differences between managers and their employees, as you can see on the chart, but for the most part they are tracking closely. the blue line are the office employees, the clerical employees, which seems to be fairly constant. you see some variation with the management and financial employees and we attribute some of this change is due to incentive payments. some of them receive commissions. in good times, the commission's tend to be higher and the line will jump up a bit. when you have a recessionary period, there are not good commissions coming in and they drop below the blue line. host: jodi schneider, we're still not seeing money. guest: as the economy improves, we are seeing, depending on the industry, bonus payments, commission payments, those types of things coming back as well.

the expectation will be that this year we continue to see those types of things. host: from richmond, virginia, debra, good morning. debra seems to be gone. let's go to oregon. jim, good morning. caller: i just have a question about the government wages. let's compare the government wages versus the private sector wages. and see some of them graphs on the tv about the increase in government wages versus the american wages and benefits and packages for like the police department, the firemen, county workers, city workers, stuff like that. host: government versus public wages? guest: we include state and local government workers. we do not have any slides on

that here today, but question tell you that the rate of change there has slowed as well. it started a little bit later and, perhaps, not quite as much, but in recent quarters we have seen some fairly substantial declines. typically in september we see a big increase or whatever increase we're going to see in state and local wages because that's when the teacher contracts go into affect. the last two years, the increase has not been there. that line has been very, very low. host: butler, kentucky, good morning. caller: good morning. my question to you is the fact that we do not make anything anymore in this country. our jobs went from manufacturing to selling chinese goods. for the last 25 years, i have been fighting about nafta

because i felt it was a big decision-maker for the companies to be able to move their jobs to china and be able to get cheaper labor, pollute the air and water. i believe that right now if you go into a store and turn the product over that they're buying, they're going to find out that 97% of the merchandise sold in our stores today comes from a communist country, china. china, vietnam, unless your manufacturing things like blenders, microwaves, cameras, everything that we used to make is being made in china. we went from making things and making money to selling chinese goods. naturally, if you do not make them, the money will not be the the same. host: jodi schneider, in relation between trade policy and wages in the united states? guest: certainly. when lawmakers support trade

agreements, if we are just importing goods it does not help american wages. we want to be exporting goods and be able to reap the benefits of a trade balance. so i think that the cost -- what it costs to make goods and the ability to benefit from trade is one of the real issues. and wages is part of that one of the real issues that congress debates in terms of trade and continues to. >> there's a chart there that show as difference between the wages earned by union members and nonunion members. guest: this is the rate of change in those wages and there has not been a great deal of difference. the lines have been intertwining the last few years. the recession seems to have hit the unionized workers in a

little bit later and that is probably because of long-term contracts. the union sector has gotten very small. only 8% of the private sector is represented by a union. host: for those in unions, what are they experiencing? guest: it sometimes takes a bit to get to them because of the lag the with union contracts. we're still seeing this in consequence, the slower rate in pay increases and growth in paying out to benefits. often the union contracts are known for have a fairly comfortable benefit derangements, more so than a non-union jobs, and that has been a big negotiating points in negotiations for the labor contracts when they come up. that is what some of the numbers are reflecting in the

data. host: there is kevin from huntington, new york. caller: i worked a job part-time. one thing when i go up there on the front-end to collect my paycheck, depending whether your part-time or a full-time worker in that store that many times -- that you have a very, you know, a lot of -- i do see a lot of, what i call, wage disputes. -- within those wages, you know? you know, it's like saying -- because -- because your

department manager of head of that department, you know, you can get more and what certain other people who are like a part-timer. because i get, you know -- even though i do have a subsidied rent. host: so caller, your question about wages is? caller: well, it's pretty much that you have -- i think there is -- well, right now, my wages have gone down, in a way, because the company declared bankruptcy with in the time being.

so, it's like, so, like, what it is. i'm making $30 less this year than i was last year. host: we will leave it there. let's get another perspective from kalamazoo. barbara? caller: good morning. i would like to ask a question. earlier in the year, we heard all the debates about "shared sacrifice." i was always taught that if you're the leader of anything, you served in you have to be responsible by leading in whenever you were expecting by the younger, the middle class, the less educated, however you want to call it.

you would lead by example. ok. my main part of the question -- we are always after the people on medicaid, medicare, and i will not get started on that, but shared sacrifice always it's the $100,000 and under. i have never made that much, but why does the government not start with them? cap their wages. they can get a raise automatically because they do not have to vote on it. why did they not start touching the ceo's, the high wages in the government?

i'm a little confused on that. host: we will leave it there. response? guest: the caller is one we will be seeing more and more in the political campaigns as the election season gets under way. i think one of the economic fairness and tax fairness, they will both be big issues. obviously, the president is trying to make this an issue with the so-called buffet rule with a minimal tax rate with those making more than $1 million. there has been talk about people making more than $250,000 for married couples and individuals making more than $200,000. the bush tax cuts will expire at the end of this year and that will be a big point of discussion in terms of tax policy. in other kinds of ways, economic fairness is going to be an issue on the republican side. a bill just passed yesterday

that will give small businesses with fewer than 500 employees a tax break, a 20% tax deduction that won't go anywhere in the senat. it will get blocked by the democrats. but these are the issues the call ser talking about. it's hard to frame it because every situation is different, obviously. but i think economics and tax fairness, will become an even bigger issue in the campaign. it will find its way through legislation but this year and after the it election. -- after the election. host: philip doyle, what is the difference between the current dollar and the constant dollar when it comes to wage changes as seen by your chart here? guest: several have alluded to the prices that prices may be going up when wages are flat. in the data, we look at that and in the constant -- the current dollar, the red line is what we see wages doing. but then we deflate that rate of wage increase by what prices

are doing. and that shows when you take the increase in prices, we're seeing a decline in real wages is the constant. in 2009, there is very little inflation reported by the consumer price index. those wage increases that people got then really did mean an increase in the amount of money they had to spend. whereas the to go back to 2005-2006, the rate of the consumer price change was substantially higher. even the you have a wage increase, at the end the day you cannot buy anything extra. host: to go back where we started from, but are we looking at the rate increase in how much a person's wage changes of about 1.5%? is that what we're facing? guest: that is what we have been facing, and we track this quarter to quarter.

we not know what will happen with the release next week. similarly with the prices, they'll come up in the middle of the month and we'll see what happens there. host: jodi schneider, , back to this in to the strength of the economy as we currently see it. -- factor this in. guest: inflation plays a big role. one of the reasons that congress decided to do the payroll tax cut is to say we were giving a "real increase" that has nothing to do with inflation. that expires at the end of 2012 as well. it was a stimulus measure and will expire at the end of this year's of people would feel that actually had a big raise. consumer spending is a huge driver in the economy. if wages were just keeping up with inflation or not even, that people would not feel they had money to spend. the question is how does the

government continue, or do they continue, some people have more in their paychecks to spend? that will be a whole series of decisions being made with tax policy and fiscal policy. many of them starting in december. host: jodi schneider of bloomberg and newsand philip doyle from the bureau of labor statistics, thank you for your time today. >> thank you. national captioning institute] national cable satellite corp. 2012] >> at 5:00, a panel on surveillance and secrets with lawrie aws