and then some of them suggest that students like you will have to pay more so we can bring down the deficit. think about that -- these are the same folks who ran up the deficit for the last decade. they voted to keep giving billions of dollars in taxpayer subsidies to big oil companies who are raking in big profits -- how they voted to let millionaires and billionaires pay less taxes than middle-class workers -- they voted to give folks like me, the wealthiest americans, a tax cut of at least $150,000 and that tax cut would be paid for by cutting things like education and job-training programs that give students and workers and job training opportunities. the that make any sense? does that sound like they are really concerned with the deficit?

why do we want to maintain tax cuts for the wealthiest americans -- wealthy americans who do not even want them? i wanted one back when i was your age. i do not need help now. [applause] i do not need that extra $1,000 or $2,000 like you do. we need to make sure everybody pays their fair share. how can we continue to subsidize the oil industry who is making record project -- profits instead of investing in things like clean energy that will help shape our future? why do we want to jack up -- do we want to jack up interest rates on millions of students or keep investing in things like education, science, a strong military, and care for our veterans -- because we cannot have it both ways. we cannot do all things on the

cheap. one thing i want to be clear about because when i talk like this, sometimes the other side gets all hot and bothered and says "he is engaging in class warfare." this is not class warfare. we want all americans to succeed. i want all of you to be rich. i want all of you to be successful. we aspire to it. that is what americans do -- we work, we help, we study, and we take risks to succeed and we do not expect a handout. but we also understand we are in this thing together and america is not just about a few people doing well -- it is everybody having a chance to do well. that is what the american dream is all about. [applause] you look at this auditorium -- everybody is here. you are here because somebody

made a commitment to you. first, your parents, but it was not just for parents. it was the fault the decided, you know what, we are going to set up a public university. it is the folks who made the decision early on in this republic that said all men are created equal. everybody is endowed by their creator with certain inalienable rights. those were commitments made by previous generations apart future generations. -- for future generations. somebody here had a parent or a grandparent who said i cannot go to college, but some day my child can. maybe i cannot start my own business, but i can picture my daughter starting her on business. maybe i am and emmer greg, but i believe this is a place -- immigrant, but i believe this is

a place where no matter where you come from, no matter what your last name is, you can succeed. [applause] that is what we believe -- you and me, all of us. we are only here because someone somewhere had a responsibility, not to adjust themselves, but to the future. now it is our turn to be responsible and keep the promise of life. that is why i need your help. i am asking anybody here, anybody watching, anybody following online -- send your member of congress a message. tell him you are not. to set your sights lower or settle for something less. call them, e-mail them, right on their facebook page, tweet --

[laughter] we have a hashtag -- do not double my rate. do not double my rate. at the university of virginia university of colorado yesterday, they got it trending worldwide. we have to keep the heat on congress until this gets done and i need your help to do it. i need you to be heard, i need you to be counted. now is not the time to double interest rates on student loans. now it's not the time to double interest rates, it is time to double down on that investment to build a strong and secure middle-class and build an america that is built to last. if we work together for the common purpose, i guarantee we will meet our challenges and rise to this moment.

the reason i know that is because i believe in you. i believe in you. it is because of you that we will remind everybody why it is this is the greatest nation on earth. thank you, iowa. god bless you. god bless the united states of america. [applause] ♪ [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> the supreme court heard arguments today on whether arizona could have an immigration law. we'll have an update next on c-

span. then, florida senator marker rubio on u.s. foreign policy. after that, a news conference with federal reserve chairman ben bernanke. later, news corp. chairman and ceo rupert murdoch testifies at the british media investigation. >> you are still here. that is good. [laughter] i could not remember where we landed on that. quite this weekend on c-span, the 98 annual white house correspondents' dinner. president obama and late night talk-show host, jimmy kimmel. coverage starts with the red carpet arrival light at 6:30. watch the entire dinner only on c-span. it can also synch up your experience on line at c-span's

dinner club. in the celebrity guest list -- guest list, highlights of past dinners at c-span.org/whcd. the white house correspondents' dinner live saturday at 6:30 p.m. eastern on c-span. arizona governor, jan brewer, says she is encouraged by the supreme court oral arguments on the constitutionality of arizona's immigration law. governor rand paul comment on spoke to reporters shortly after the supreme court -- the bettegr brewer and paul clement spoke to reporters shortly after the supreme court heard arguments. >

>> governor, you have to be encouraged. >> i am very encouraged. the hearing went very well. i feel very confident. -- we will get a favorable ruling in late june. i was very impressed with the fact that they gave us extra time, something that is very unusual. it shows how significant this ruling will be, not just for the state of arizona, but the united states of america. i think the questions and the responses as far as several rights, arizona's sovereignty, that we do have a responsibility to do what they can -- comments

were made that arizona has the right, that i was in short as governor that i have the right to protect the citizens of arizona. >> what does this blot do for arizona? >> -- what does this a lot do for arizona? >> it basically mirrors federal law. the question is can law- enforcement be part of that? we all know that law enforcement on numerous occasions are with the federal government on lots of different laws. drug laws, robbery. all we are asking is that they work collectively with us to

enforce the laws. ule of law.in the role o part of the questioning was why was the goat -- what with the federal government not wanting to enforce the law. i thought that was very interesting. do they selectively want to take a portion of the law that they want to enforce? i think that we will succeed. i am looking forward to june. thank you. [unintelligible] >> will there be cooperation in arizona?

>> i would soon -- assume there will be incarcerations because they have broken the law. some of the federal and administration discussed the fact of illegals in arizona. >> the bill you signed as a policy of attrition. [unintelligible] >> after breaking the law, there is that possibility, i would assume. >> will president obama and at his justice department were with you? >> i did not hear the first part of your question do you want to

repeat it? >> [unintelligible] in order not to deal with the problem of the arizona law, but to shore up the appeal to latino voters. >> this is an election year. i believe it was staged at the time. they are playing to the latino community and trying to use that "scare card" to generate support for the election. >> [unintelligible] someone said you signed the bill to help your election. >> i signed the bill after

reading it and amending it as it went through the legislature to make sure it absolutely did what we wanted it to do -- addressed the terrible situation that arizona was facing, making sure it would be -- making sure and knowing it would be a lightning rod in some arenas and that the race card would be thrown out there. we amended the law to make sure it would not happen. exactly what we thought was -- would happen has been exacerbated through the media. we needed protections for the citizens of arizona and what arizona was experiencing as far as education, health care, and incarceration. >> let me ask you the question asked by charles schumer yesterday. >> i want to take this opportunity to recognize our

council -- paul clement and his staff. they have been absolutely stellar. they have worked hard and diligent. i know that with the council that we have, they have done the very best job they could do for the people of arizona in an effort to support the rule of law. quack's mr. comment? -- >> mr. clement. >> we were gratified by the justices giving full consideration of this case. so thorough in fact, it took both attorneys a little longer than scheduled. i would say probably a lawyer's perspective, this is about issues of federalism, in particular, the focus has been

of the arizona law, in some respects, the federal statutes are just as important as arizona statute. what you saw here was a real understanding of the justice's part that much of what arizona has done is accept the invitation of federal statutes themselves and putting a premium on communication between state and local law enforcement and federal officials. although a lot of the focus has been on arizona, i think the justices were equally focused on what congress has done. the federal government has to show there is a conflict between what the federal government has done and the arizona approach has done. it was a great working relationship, starting at the beginning, trying to get the court interested in this case

after the ninth circuit decided it. we were gratified the court accepted this case. >> [unintelligible] >> i thought it was very encouraging that all of the justices barely understood the way these various laws operate. they understood the issues in this case and what was not at issue very early. the chief justice started things off by making clear this was not a case about profiling or a case about the fourth amendment, it is a case about the preemption and the relationship between the federal law and the state law. one thing that is a misconception that a lot of people have, state law does not relate authorized officers to do

something they cannot do otherwise. it simply makes it systematic and helps in overriding some local policies that, contrary to federal statutes, prohibited officers from communicating with the federal government. i think that is what makes the federal government's argument difficult. they have to argue that this interferes with their enforcement posture. of course, as a number of justices pointed out, they retain the ultimate decision about who to prosecute federally and who to remove it from this country. the principle or the arizona law that was discussed today really just with the federal government in the position to know who they have in the country and to do what they have to according to federal law. >> [unintelligible] >> there was an issue brought

up. i think a lot of the justices feel that was not something they could take into account. i think, in that sense, the justices, or the most part, work on the specific issues between the interaction of the federal statute and state law. >> [unintelligible] >> over here. >> i am an attorney with the american civil liberties union. we are an amicus in this case. we and another coalition of civil-rights organizations filed action against sb1070 even before the department of justice did. there are three telling things

about today's arguments. [unintelligible] wait and we will continue in a minute. there are three telling things about today's arguments. several justices expressed serious concerns about civil liberties attached to sb1070. as a result, the state of arizona has had to narrow its position substantially and is now defending sb1070 as a provision for notification to the federal government, but that is not what sb1070 does and that is clear on the face of the statue. as it became clear in the course of today's argument, the justices are concerned about a system of mass-incarceration that will catch u.s. citizens and immigrants lawfully in the

united states. it became clear today in the arguments that there is no federal system that would clear the united states citizens that are stop during a traffic violation and could be held on the side of the road for an hour or more while they are asked to prove they are in their own country. i think the court will ultimately realize that and strike down this law. i am the director of the aclu immigrant rights project. quite good afternoon. i am the executive director of the national immigration law center, also amicus in this case with the aclu and a broad range of civil-rights organizations. we filed against arizona sb1070. we are also arguing that it violates the first and fourth amendment claims of equal protection and due process

claims. these claims were not before the supreme court today, however, it was very clear the justices were concerned about the impact this would have on u.s. citizens, whether, in fact, the databases would not be able to clear a u.s. citizen and they would be detained. the justices were very concerned about the impact this would have on a citizen from new mexico driving through arizona and the impact on that individual. they understood the complexities of what it means for a person who is brown to go outside in arizona without an id and whether that person would also be stopped and detained. we are very confident that the decision that ultimately will come out from the supreme court will, hopefully, be a narrowly- focused decision and will allow us to go back to court and continue litigating our case and, eventually, sb1070 will be

struck down as unconstitutional because it is an un-american statute. it is a statute that is resulting today in racial profiling. thank you. >> i am the secretary of state of kansas. i think what you saw today was the result of a very bad decision by the justice department. when the decision was made to suit arizona part a statute that intends to help the federal government enforce federal law and mirrors of the federal law, the federal government did an unprecedented thing. never before has a department of justice sued a state are trying to assist the federal government. never before. in making that ill-fitted decision, the justice department ran into the wall you saw today.

he was asked by the justices can you give me an example of where the federal government can preempt a state merely by refusing to enforce federal law or by exercising prosecutor to real discussion -- prosecutorial discretion? the justice department's answers today were very inadequate to the questions asked. hopefully there will fall back to their last last-ditch argument that if the government of new mexico did not like this law, that is cause for it to be pre-empted. the justice department took an action they never should have taken. when we drafted this law, which drafted it so it mirror precisely the terms of a federal law. that is important. pre-emption asked if there is a conflict between federal law and state law. the state law uses the exact

praises of federal law and merely mirrors federal law. there is no way the rest of the provisions of the errors of law -- of the areas of law -- it was a good day for arizona. it was a good day for the u.s. constitution and a very bad day for the administration. >> thank you. first of all, i want to applaud -- team arizona, led by our quarterback, jan brewer. this shows a team effort in regard to identify the problem and coming up with a solution. what we have to look at is we are tired of the fear tactic techniques. more than two out of every three americans actually endorse arizona's immigration law. we saw that today. we also see bad behavior from

the department of justice. i hope america overseas and hold them accountable for all of that. today was a good day for arizona and a good day for the constitution. i would like to introduce two of my colleagues. >> having actually been in the state legislature, this is not a new battle par arizona. what is new is the absurdity of many of those opposing it and what they are willing to say. just a couple of moments ago, you have someone in opposition standing behind these microphones claiming to be a lawyer literally making up a scenario that could not happen under this law. it is one of my great frustrations that as you watch the political theater, desperately hoping the court looked at the facts and the

reality that arizona is following the very lot given to it by congress. i believe the court will uphold arizona and, therefore, a poll the constitution and the citizen's rights of arizona. here is my friend, ben quayle. >> i know the supreme court will read the law before passing judgment. as we saw in the beginning of this process, governor eric holder came out against it. secretary napolitano came out against it. when asked if they actually read the law, they said no. there is been a lot of misinformation put forth on this law. it merely allows a state and local authorities to enforce federal law. the federal government in this administration should be embracing that cooperation. we should all be working in tandem to enforce federal law and that is what this law allows us to do. i believe the supreme court will

uphold the law and by that the additional. thank you very much. >> 1070 is a quantification of states' rights and the u.s. constitution. i file this brief in support of 1070. i thought the justice is clearly had a handle on the issues and clearly understood that the obama justice administration was overreaching. arizona has a direct responsibility to its citizens to enforce the law with the pro- government likes it or not and i think they made that clear. >> [unintelligible] >> even justice sotomayor made

it clear they thought the justice department was overreaching. some of the stories they used were very clever, i thought. again, i was very gratified i thought it was a clear victory. i think we will win a minimum 5- 3. it is not true. it never was true. they know that. that is why they did not raise it. thank you. >> or i am the president of the judicial watch. judicial watch is a public institution.

the second brief was signed by state legislatures of 20 states in support of sb1070. it is clear that the court hearing went very well. it looks like the majority of the court looked at the key provisions of sb1070. the obama administration has run away from its earlier rhetoric suggesting this was about racial profiling. it is clear to me that this was a political lawsuit. it conflicts with their political priorities and what it to be thrown out by the court, but that is not the way our constitution works, that is not the way our the federal system works. the court was clear and they will role in our favor on sb1070. thank you.

>> the supreme court will decide arizona's immigration cases later in the term. he could hear the oral arguments friday at 8:00 p.m. eastern here on c-span. for more information, go to c- span.org. now, florida senator marco rubio calls far leadership globally. he spoke of the brookings institution. senator rubio was introduced by connecticut senator, joe lieberman, at this one our event. >> good afternoon to all of you. it is my great pleasure to enter -- welcome all of you to brookings today and a particular welcome to all of us who will be

viewing this event on our web cast. we have a lot of other media here as well, which is a great complement to our two guests of honor. we are especially pleased to have five distinguished members of the diplomatic corps here today as well as for brookings trustees. it is always an honor to have a member of the senate come down from the hill to think-tank wrote. it is a double honor we get two senators. the fact that they represent different parties testifies to their bipartisanship, which is a rare, if not endangered commodity in this city today, one that we here in brookings do our best to foster and protect. senator marco rubio is a senate -- a member of the senate foreign relations committee, the

committee on intelligence, and has shown himself to be a vigorous advocate of u.s. engagement and leadership in the world. from that perspective, he is going to be talking to us today about american foreign policy and the challenges facing american leadership. he will be introduced by joe lieberman, who is a long- standing friend of this institution and i might add, a very good friend to a number of us here today. joe, we will miss you when you leave the senate, but i have no doubt you will be a forceful voice in the national and the international arena. when senator rubio finishes his remarks, marvin is going to moderate a discussion here on the podium and then engage as many members of the audience as he can for the remainder of the program.

joe, over to you. [applause] >> thank you. thank you very much. thanks to brookings. a special thanks to bob kagan for orchestrating this event today. i am honored to have been asked to introduce senator marco rubio, a rising star in the next generation of america's foreign-policy leaders. he came to the senate at a moment in our history when america was looking inward, focusing on our economic woes. it would have been very easy for him in the political climate to have given attention only to domestic issues. i would guess that many people advised him to do exactly that, including probably a media consultant or two. but instead, he has served on

the foreign intelligence and -- committees and has devoted time and energy to farm policy and national security. he has not done so because there are votes to be gained, but because of his belief in the importance of american leadership in the world and his understanding of how much that leadership determines our security and well-being here at home. his foreign policy is principled, patriotic, and practical. it comes from his dedicated study of history and contemporary challenges. his foreign-policy, as i have come to know, puts him in a

proud, bipartisan tradition that links together our greatest republican presidents, like ronald reagan, and our greatest democratic presidents, like harry s. truman it recognizes that america is defined, not by the land under our feet or even the blood in our veins, but by our founding values, first among them being of freedom and equality of opportunity. his promotion and protection will always be our first national purpose. it is a foreign policy tradition that is bipartisan and idealistic and recognizes that there is evil in the world, that we should not be afraid to call it by its name. we have enemies that cannot be negotiated into peace, but must

be confronted with our strength. it is a bipartisan foreign policy tradition that recognizes that the survival of liberty and prosperity in our country ultimately depends on the expansion of liberty and prosperity throughout the world. in word and deed, marco rubio has been a colleague of freedom fighters and dissidents around the world. you can regularly find him on the floor of the senate speaking out for those from whom the dictators seek to silence. at a moment when america faces many serious challenges, both here at home and throughout the world, and when it has become fashionable to suggest that our best days are behind us and we ought to pull back, senator

rubio brings to the public arena a contagious personal optimism and a abiding and patriotic faith in america's destiny. ladies and gentlemen, it is my pleasure to introduce to you senator marco rubio of a florida. [applause] >> thank you barry much. one of the best things about working in the senate is the opportunity to learn and -- learned from my colleagues. in my brief time in the senate, i have gotten to know lieberman. he represents a view of america's role in the world and a position -- it is evident that joe lieberman is a statesman. he takes positions on every

important national issue because he believes the best serve our country's interest and values. thank you, joe, preproduction. i am a privileged to serve it with you. i want to thank brookings for this opportunity. i wanted to contribute a few thoughts and concern over america's role of around the globe and the 21st century. i wanted to share with you my observations of someone who finds there -- themselves in foreign policy. until very recently, the general perception was that american conservatism belize in robust and muscular foreign policy. that was the hallmark of the foreign policies of both private bush and president reagan. when i arrived in india -- in the senate last year, i found some of the traditional sides had shifted. on the one hand, i felt liberal

democrats and conservative republicans working together to abdicate our withdrawal from afghanistan or staying out of libya. on the other hand, i found myself partnering with democrats like senator casey on a more forceful foreign policy. the resolution i co-authored with senator casey on syria and the resolution i co-sponsored with senator mendez condemning fraudulent votes in nicaragua were held up by republicans. today in the u.s. senate on foreign-policy, the further you move to the right, the likelier you are to wind up on the left. i found this to be true not just in the senate, but back home as well. many of my supporters were highly critical of my decision to call for a more active u.s. role in syria. the easiest thing for me to do today is to give a speech on my disagreements with this administration on foreign

policy, and i do have many, but i want to address another trend in our foreign policy, one that increasingly says it is time to focus less on the world and more on ourselves. i always begin by reminding people of how good a strong and engaged america has been pre- world. in making that argument, i have been relying heavily on bob kagan's book. he did not pay me to say that. he begins his book with a peaceful exercise. he asked readers to imagine what the world order -- what world order might have existed since world war ii? could we say for certain it would look anything like america's vision of an increasingly open international system? catastrophic conflicts between great powers who avoided democracy and free-market capitalism tourists.

at prosperity spread wider and billions of people were removed from poverty. what would have happened if after the whirl america minded its own business and let the world to sort out their affairs without our leadership? almost surely not. as bob argued, every world order in history has reflected the interests and beliefs of the strongest power just as this world order largely reflects hours. of course, many of these things were not achieved by us on our own. they were not achieved because we succeed in all of our international endeavors. there were not achieved -- we have the will and the means to defend its norms and its institutions and the security of our partners. assist other people, phasedown

challenges, keep trade routes open, and support the expansion of free-market capitalism. we did it without cutting other country's territories, seizing their assets, or robbing them of their opportunities. the purpose of the institutions we established, from the united nations to the world bank, it was to spread peace, not too narrow american interests. other nations consented to our leadership because they saw the economic and political values of the american world view and i wanted the same for themselves. they followed us because they believed in our way -- the american way, the principles of free people and free markets. as bob pointed out, we have never really sought this world. despite our worries and

occasional resentment, we are proud of it and we should be. bob's book highlights a number of packs worth repeating about the post-world war ii america. global gdp has risen 4% annually since the end of the it -- world war ii -- four times faster than the average of the past century. 4 billion people, mostly outside of europe and north america, have been lifted out of poverty at that time. the number of democracies have plummeted nearly 10-fold. we have had the longest period of peace between the great powers ever. before anyone accuses me of claiming that america has ushered in the biblical promise of a new heaven and new earth, let's remember that the world america made better is not perfect, but it is more peaceful, prosperous than any other age in recorded history this is the world america made.

but what is the role for american now? is now finally the time for us to mind our own business? is now the time for us to allow others to lead? is now the time for us to play the role of peaceful partner? i would start by reminding people that what happens all over the world is our business. every aspect of our lives is impacted by global events. the security of our cities is connected to the small hamlets in afghanistan, pakistan, yemen, somalia. our cost of living, the safety of our food, the value of things we make and sell are a few examples of the everyday aspects of our lives that are directly related to events abroad and make it impossible for us to focus only on our issues at home. the next question is why does someone else not lead for a change? why do we always have to take care of the problems of the world? i always begin my answer to that

question with a question of my own. if we start doing less, who is going to do more? what a world order with china as the leading power be as benignly disposed to the political and economic aspirations of other nations as we are? we must deal with the china we have today. a china with relationships like north korea and iran. for now, it would be foolish to be confident in the idea that china can be counted on to defend and support global,

economic, and political freedom or to take up the cause of human rights. by the way, the rest of the world has figured that out and they would prefer not to take that risk. the question is there is no one else to hand off to. on the most difficult trans s -- transnational challenges of our time, who will lead if we do not? the answer is that no other nation or organization on earth is willing or able to do so. finally, i will be asked if we have to lead, can we partner with somebody else? should we not rely on other nations to carry more of the burden? after all, we know they resent us. in this century, america should

work with our cable allies and find solutions to global problems. not because america has gotten weaker, but our partners have grown stronger. it is worth pointing out this is not a new idea for us. our greatest successes have always occurred in partnership with other like-minded nations. america has acted unilaterally in the past. but our preferred option since the u.s. became a rebel leader has been to work with others to achieve our goals. yes, global problems do require international coalitions. on that point, this administration is correct. coalitions need to be instigated and lead. more often than not, because of the be instigated and led by the united states. i believe that is what this administration sometimes fails

to understand. there are more countries able to join the effort to meet the global challenges of our time, but experience has proven that american leadership is almost always indispensable to its success. you can see this in the actions of the world trade organization or the un security council. when american influence is diminished by the one nation one-vote formula of the u.n. general assembly or the un human rights council, we see it absurd and often appalling results. we cannot always rely on the u.n. security council to achieve consensus on major threats to international peace and security.

as we've seen on north korea, syria, and iran, china and russia will not join the consensus. they do not perceive the problem as a threat to their national interest. instead, they exercise their veto or threat of a veto to thwart a timely response. the security council remains a valuable form, but not an indispensable one. we cannot walk away from a problem because some members of the security council refused to act. in those instances where the veto power of either china or russia impede the world's ability to deal with a significant threat, it is the united states that will have to organize and lead coalitions with or without security council resolutions. this concept is neither novel nor partisan. president clinton enacted exactly in this way in kosovo. everywhere we look, we are

presented with opportunities for american leadership to help shape a better world. we have to view these opportunities in the context of the fact that in every region of the world, other countries looked at emerging powers in their midst and look at the u.s. to counterbalance them. in some instances, if china chooses to join the international order, there is much to be hopeful for. there is no need for optimism about dominance -- iranian dominance in the middle east. whether bringing an end to the bloodshed in syria or helping egypt overcome economic hardships and move towards the establishment of a true democracy or addressing the

threat posed by a nuclear iran, america should not try to solve these problems alone, but neither should these challenges be addressed without strong and creative american leadership. no other nation has the influence, relationships, or the reputation for seeking lasting solutions, the intractable problems than the united states has. iran's nuclear ambitions are more than just weapons. iran was to become the dominant power in the middle east. given their history of human- rights abuses and sectarian conflict and sponsorship of terrorism as a tool of statecraft, the world must never allow that to happen. fortunately, preventing a dominant iran is the goal we share with virtually every other nation in the region. certainly, we welcome russia and china's cooperation in facing this challenge. the prospect of a nuclear capable iran is so unacceptable that we must be prepared to act

with or without them. we are the host of wheeling -- we have a host of willing partners to share our concerns and are relying on our leadership to compel iran to abandon its ambition. preferably, we can succeed through coercive means short of military force. we should be open to negotiations, but remember they should not be deemed a success when the only lead to further negotiations. stronger pressure should not be postponed and the expectation of our forbearance will encourage iran to act in good faith. nothing in our experience with iran suggest they considered such gestures as anything other than a lack of resolve on our part. ultimately, we must remember that their ambitions so far have come with a high tolerance to pain. even as we work to the united nations and the international community on sanctions and negotiations, we should operate on a dual-track. we should also be preparing our

allies and the world for the uncomfortable reality that, unfortunately, if all else fails, preventing a nuclear iran may tragically require military solutions. the goal of preventing a dominant iran is so important that every regional policy we adopt should be crafted with that in mind. the current situation in syria is an example we should be seeking to help the people of syria bring assad down. i noticed that some members of the foreign relations committee are so concerned about the challenges of a post-addad syria that they abt not noticed the advantage of it -- that they have not noticed the advantages. hezbollah is iran's most important ally, along with their

weapons suppliers. the prospect for a freer lemond would be mute. secondly, the security of our allies, the strongest and most enduring democracy in the region, israel, with whom we share value and affection would improve as well. so with the prospects for peace between israel and its arab neighbors. the nations in the region see syria as a test of our continued willingness to lead in the middle east. if we prove unwilling to provide leadership, they will conclude we are no longer a reliable partner and will take matters into their own hands. that means a regional arms race, the constant threat of armed conflict, and crippling fuel prices here at home. the most powerful and influential nation in the world cannot at smaller -- cannot ask smaller, more vulnerable nations to take risks while we stand on the sidelines. we have to lead because the

rewards of effective leadership are so great. forming and leading an -- a coalition with turkey and other nations by creating a safe haven will not only weaken iran, it will ultimately increase our ability to influence the political environment of a post-addad syria. it will certainly present challenges. newly enfranchised societies are electing leaders whose views and purposes oppose and even offend hours. but in the long term, because governments that room but -- run by consents of egypt -- consensus of the government must be to the demands of their people. they are less likely to engage in costly confrontations that harm their economy and deprive the people of the opportunity to

improve their circumstances. expansion and success of political and economic freedoms are critical to our interest in every region in the world and nowhere more so than in our own hemisphere. there is no coincidence that the rise of economic prosperity in the western hemisphere is directly related with the democratic gains of the previous decades. mexico, peru, and colombia have weathered the global economic downturn and are in a stronger position than ever. our goal for our region should be straightforward -- a coalition of neighboring nations that trade freely and live peacefully -- peacefully with one another. there are two other challenges. the first is venezuela who are over anti-american. they make a lot of noise and we cannot ignore their democratic abuses and the blowing --

growing closeness to iran, but our second challenge is a more subtle one -- the effort of some nations to replace our influence with their influence and to use protectionism and unfair practices to pursue -- to pursue that aim. the antidote is to greengage energetically in the region we must be a clear and consistent advocate for freedom. to be free as not limited to elections -- it is a way of government. venezuela, live -- bolivia, and ecuador on a metal freedoms are minimized. the jig fundamental freedoms are minimize. we need to commit to being a regional partner. both mexico and colombia need our continued commitment to win their respective awards against criminal organizations. we must make it clear that we will not tolerate iran exporting of violence and terrorism to our

hemisphere. third, we must reject protectionism and embraced a free-trade area in the americas. the recently approved free trade agreement with panama and colombia was a good for step. fourth, we should move aggressively to form a strong energy partnership with canada, mexico, brazil, and colombia. a stable western hemisphere displacing and unfavorable -- an unstable middle east as a center for the world's energy production will create countless jobs for america and energy security for the world. in asia, the question of whether china's rise will be peaceful and respectful of their natures is one of our long-term challenges. we must make it abundantly clear that we are firmly committed to our defense agreements and firmly committed to our allies for the freedom of navigation on

our pcs. the growing strategic importance of asia you s european cooperation -- u.s. european corp., we all have a common interest in seeing china evolved in a peaceful and democratic direction. the united states and east asia represent 71% of the world's economy. that is a lot of leverage. in addition this partnership is critical to a more realistic approach to russia.

i know some disagree and certainly the president would, but i feel like we have gotten precious little from russia. politics --mestic to act in ways that makes it harder to integrate in the free national order. vladimir putin may talk tough but he knows he is weak. everywhere he looks he sees threats to his rule. he uses a state-owned media to preach paranoia and anti- western sentiments. he faces a rising china to the east and house style islamic forces to the south. -- hostile islamic forces to the south. we need to reenergize and lead a united coalition with european

nations to tackle issues ranging from missile defense to the continued enlargement of nato. furthermore, we are successful in forming a western coalition that takes advantage of the shale gas revolution. a reenergize u.s. coalition can help empower those forces within russia looking to and cora -- corruption. if that happens we will be closer than ever to the bipartisan america mission endorsed by the clinton administration and the bush administration's of a europe whole and free. faced with historic deficits endangers national debt there has been talk of reducing our foreign aid budget. these international coalitions, we have the opportunity to bleeder not just military ones.

they can be humanitarian ones. -- opportunity to lead may not be just military ones. when done so effectively, the partnership with a public sector, it is a way to export not only our values and example but to advance our security and economic interests. one of the programs i am proudest of is the program that began under president george bush and his continued under president obama. that is the combat aids in africa. millions of human beings are alive because the ad states and others in the global community are paying for their antiviral communication.

by 2015, the world could see the beginning of the end of aids, something that was unthinkable a few years ago. we need to continue this kind of foreign aid investment and malaria control and vaccine programs so that we can make similar strides in preventing hundred and establishing a healthy global community. this is not intended to be a comprehensive analysis of our challenges around the world. we could dedicate entire speeches to the emergence of states in africa. it was not to catalog our interests in every corner of the planet. the purpose was to argue the world is a better place because of america's engagement in it. it will continue to get better if we only continue to engage. i disagree with the way the current administration has chosen to engage.

there are virtually no global problems that can be solved without us. in confronting the challenges of our time, there are more nations than ever capable of contributing there is still only one nation capable of leading. i disagree with voices in my own party who argue that we should not engage at all. to warn we should heed the words of john quincy adams not to go abroad in search of monsters to destroy. i disagree because all of a rock -- all around us we see the human face of america's influence that begins now with our government and our feet -- our people. they never would have been able to connect with each other if america had not invented twitter. the atrocities of joseph kony would be unknown but millions of people doubt about it because an american made a film and

distributed it on another american innovation, youtube. even in our military engagements, a lasting impact. our navy protects the freedom of the seas allowing the increasing flow of goods between nations. long after the last soldier has left afghanistan, god willing there will be a strong and productive afghan woman because today, they are the first in their generation to attend school thanks to the generosity of the american people. we do these things because we are a compassionate people. we also do it because it is in our national interest. perhaps more than any nation on earth we understand a world that is freer, more just, more peaceful and prosperous poses less of it that -- threat.

this is a time of uncertainty when many people wonder if america is in a time of decline. there have been other times when we fell less than confident about the future. we need to look no further than the decade of my birth for an example. we experience setbacks against communism and asia, the collapse in government, stagflation, high interest rates, soviet expansion, the hostage crisis in iran, and disco music. [laughter] americans were worried something had permanently changed for our country. we were not sure our standard of living would improve generation after generation. then as now serious school of thought emerged to confirm these worries. we had a nice run but nothing lasts forever, the argument

went. our resources are to depleted. our economy too dependent on dying industries. our rivals too potent for us to keep pace with, much less stay ahead of. the most important responsibility of public officials is to manage our decline intelligently and to mitigate the consequences at home and abroad. we know now that is not how it turned out. by the end of the next decade, few were speculating about what the world would be like without america oppose the leadership because we were once again in a unique moment when american power and influence seemed virtually unchallenged. now we are worried again. that is understandable. the pace of change in the world so fast. the challenges we face are so serious many are worried the cannot sustain our pace of life at home. the financial crisis, the steep

drop in the value of our homes, the deep recession and the slow recovery, high unemployment, stagnant wages, record deficit, the lack of confidence in our government to solve problems, soaring energy prices, two long wars, and the rapid rise of china as an economic competitor. there are plenty of reasons to worry. and yet, with all of these problems, there is absolutely no reason why america cannot remain a global superpower in the new century as well. we had a huge head start in dealing with the challenges of transforming. we have the advantage of concentrated more of our energy, resources on figuring out the future. our continued power as possible but it is not self perpetuating. it will require us to do what every generation of americans

before us have begun. -- have done. it may not seem that way if you follow the daily news coming in from a run the world, but this new century is a time of great promise. it is not the promise of a perfect world, not one without injustice. it is the promise of a better world. better than the one we have today. better than the one we have ever known. a world where democratically elected leaders govern responsibly. a world where selling women or children is not acceptable anywhere. starvation is no longer part of our future. a world of extraordinary an ovation. the generations born since the start of the world wide web are the most skilled collaborators anywhere. now anybody can talk to anyone anywhere at any time.

they can talk to each other and come up with new ideas that are unimaginable to us today. above all else, the 21st century provides us the opportunity for more freedom. a world where more people are free to grow their economies, free to pursue their dreams, free to become prosperous. i left my last page of the speech. does anybody have my last page? did i leave it with you? above all else the 21st century provides as the opportunities for more freedom the world where more people are free, free to grow their economies, free to pursue their dreams, free to become more prosperous. this is the promise of the century. it will not happen if we are not engaged. it will not happen if we do not lead. why does it have to start with us, some say. why do we have to do it? we find our answer in the words

of and not american. this is why i needed this page. in an address to congress, tony blair said, i know it is hard on america. in some small corner of this vast country out in nevada or idaho or these places i have never been to bat always wanted to go, i know there is a guy getting on with his life perfectly happy minding his own business saying to you, the political leaders of this country, why me and why us? by america? the only answer is because destiny put you in this place in history in this moment in this time and the task is yours to do. and so it is. this century is a time of challenge, but it is also a time of tremendous promise. this is the world american made. it is freer and more prosperous than it has ever been.

it can be even better. as americans we cannot make that happen our cells. the world cannot make it happen without us. thank you very much. -- as americans we cannot make that happen ourselves. [applause] >> thank you very much. this program is being web cast. i want to repeat that again. if you want to reach us by twitter -- we do not have a great deal of time. i know that you are both rushed for your time. you are rush to get back. senator rubio, the start by talking about your longtime passion for foreign policy and clearly in the speech you have demonstrated. you have made this point about

the continued role of a stronger america. how concerned are you, because this also comes through in your talk, about the rise of new isolationism, perhaps sponsored by a number of people in your own party. >> i am not sure this antlered -- inward looking tendency is new. it has always been the a tendency of america to not want to be engaged in a world of we do not have to. we do not enjoy getting engaged to run the world and telling people what to do. we have been so because history has called upon us to do it. that combined with some of the domestic issues we are facing today and the challenges i have outlined lead to the tendency of saying, maybe it is time to look inward once again. it is our job to remind people there is no such thing as just an american problem. every aspect of our lives is

impacted by things going on around the world. i think that has always been true. i think that is why it is critical for us to explain to people that everything they will do today from the price of the food they will lead to the quality of the air they will breed is related to decisions being made overseas. >> let me be specific and asked about afghanistan, which is a subject he barely touched on. if you take a look at the latest polling data, it is clear that more and more americans are getting fed up with the continued american involvement in afghanistan. are you confident that the afghan armed forces will be able to pick up security for themselves in a time frame that is acceptable to the united states? what's the will partially depend on us and will largely depend on them. partially it will depend on the commitment we make to ensuring that comes about.

there has been tremendous progress in some of their forces. there is great reason for optimism there. as far as the rank-and-file of their military there is more concerned. part of the concern for the instability about its future is because people are not clear what our long-term commitment is. if you are in the region if you think the americans and nato will be gone in a few years, the start hedging bets and thinking, it might not be smart for me to be too cooperative because the people who will be running this in a few years are going to make us pay the price. this long-term agreement that hopefully the details will be announced soon, hopefully it will give certainty to the role that the isaf countries will play in that region. >> you are saving our remaining in afghanistan is more important than the desire of the american people to get out? what's the desire of the

american people is a reflection we have lost lives and treasure there. people are reflecting that. there is a natural fatigue. it is critical once again -- i do not believe the time frame is an indefinite one but i think it is critical for policymakers to clearly explain and persuasively explain to the american people what our engagement is so important. not only does it just honor the sacrifice and work that has already been done but it is important on a number of fronts. in addition to having a functional afghanistan that is no longer a place where future attacks can be coordinated from, our presence in a strong and stable afghanistan will provide as many more options to deal with increasing uncertainty and -- in pakistan. i do not think it will become canada, but i think it has the opportunity to create for itself

a functional nation state. again, a lot of that will be dependent upon our commitment to helping them get there. >> he spoke about the importance of american leadership, especially in the middle east. let me ask you and try to bring in senator lieberman as well. you talk about the u.s. hoping to create a safe haven, providing food and medicine, communications equipment, and a new ad, potentially weapons. the word potentially does not seem to be a clear definition of american leadership. what do you mean "potentially?" >> first of all, we have to be sure that whoever it is that ultimately we equip them, we understand the nature of which they are, their ability to protect the weapons are falling into the wrong hands. they have to show us some structural capacity. you cannot just give it over to a force that is largely disorganized income -- the

weapons can fall into the wrong hands in a global marketplace. we need to see some progress in terms of the development. >> how long the? >> it all depends on how long it takes for them to organize. >> where is american leadership? >> it is helping them get organized. one of the criticisms i hear is that we are not well coordinated, you may have -- you had a chance to visit and you may want to comment, is something we have to help them with. this is something that has brought up from the grass roots. have to create that capacity before you make a decision might weapons. it does not have to be the united states. there are other nations that would be willing to step into that void and help along with the effort. >> you have spoken about support of the use of american power in syria. >> the is correct. >> what about its on the ground.

you go that far? >> no, i do not. there is no need because there is very broad willingness among the serious opposition to take the fight to our side. i admire marco for how explicit he has been about syria and how we are called on to do something there. this is a classic exhibit -- an illustration of what senator rubio was talking about. almost everybody in the region except iran believes assad's slaughter of his own people has to stop. and also if he falls of will be a devastating body blow to iran. almost everyone else in the region wants to see it happen. nobody else in the region will assert any leadership unless we do. that is what they told me and

john mccain when we were there. i agree with what senator rubio said. at some point, we have to work to get the opposition better organized. they have come a long way in a year having grown up in a country where assad did not allow any opposition to take place. at some point we have to simply say, we are going to help them and we are going to give them weapons to defend themselves. that will make them stronger and more organized. >> we are going to give them -- the u.s.? >> we and the rest of our allies. no boots on the ground. frankly, our direct conversations with the political and military leaders of the syrian opposition, really what they ask for -- effectively all they ask for is weapons. give us the weapons to defend ourselves. we will not give up but we will not be able to bring down assad

unless the world helps us. >> to talk about a link between syria and iran. i want to pick up a phrase he said. if all else fails preventing a nuclear iran may require a military solution. do you have in mind the use of american military power to bring down that nuclear iran option? >> i am always very cautious -- i very respect -- respectful about the road the president has as commander in chief. we would hope negotiations would work. we do not have a good track record with iran, but we hope the sanctions would either discourage them from continuing or empower some voices within the regime that are arguing they should not go this far. was to try everything we can to avoid that. there is a real -- we have to come to the conclusion that an iran with nuclear weapons is an unimaginable thing.

options should be off the table. the president has said as much in the comments he made. we are the most powerful military force had entered the world and it is difficult to imagine a successful engagement that does not involve the u.s.. while that should be discussed, we are hopeful a negotiation will work. buy bigger concern is the reliance on negotiations would lead us to somehow postponed sanctions or walk away from some of the other things we are working on. >> one final question because i know you are anxious to get back to work. >> not really, but -- [laughter] >> one country which you spoke very warmly about this is real. people talk about the response -- the possibility of israel taking military action against iran, perhaps even this year. would you as a great supporter of israel back them if they had

that kind of operation. >> the leaders there have the same obligation as any country which is to provide for the national security of their own people. i am not in a position to dictate to them when they should or should not do. i think that the clear and more concise and more personable the american position is on this issue, the less likely they may be to do something like that in the short term. i think we need to be very clear. while we would prefer for negotiations to work and for sanctions to convince them, it may require, tragically as i use the word because it wants to avoid armed conflict, the notion that iran would have made it clear capability is so horrifying that no option should be off the table. >> we have time 40 dead questions. i see about 20 hands immediately. -- for two questions.

i see about 20 hands immediately. >> hello. thank you for your remarks. i end derek mitchell and i write the initial report. two things struck me. you cite the book on obama's table also. it seems to me that on the fundamental issues there is not a lot of space between your vision and the vision, for example, that president obama is talking about. my question is, after having been here for a couple of years and looking at this, do you get the feeling that the distance between your vision for example and the president's vision is on the fundamentals or is it at the margins? is it a reflection of the notion

that they govern has to choose? >> let me take the second question as well. in the middle, please. >> he spoke about the western hemisphere. he omitted talking about haiti. i know it was an issue that is close to you. i hope you can talk about your hopes for haiti in our future engagement. >> the second one i will take first because i visited haiti in january. i am hopeful that the situation there will continue to improve. they have some structural issues and that country. they had the prime minister that has now been forced to resign. the president has been ill. there have been rumors floating around about what the future of the government may have. right now that country has a

deep ngo presence in the country. the country sometimes feels threatened by it. the most important issue in haiti apart from the immediately after -- the immediate aftermath of the earthquake is long-term prosperity and how you establish that. they're starting from scratch on everything from their education and transportation systems. there is an industrial park that the clinton initiative has been involved in. hopefully they will create jobs and trade the fundamentals for any economy. the other fundamental challenge haiti has is property rights. who owns title to well land. it is hard to do business there. hopefully we can provide some technical support in terms of creating registry where people can register property rights in feel safer about investing in the country.

ultimately it is education. it is such a strong societal values. even the poorest families in haiti, their kids get to go to school dressed in the most impeccable uniforms because it is a reflection of how they the value education. if we can empower the new generation of children in haiti to have a knowledge base where they can be employable in skills and trades and we combine that with the return of some of the idea spread that has been trained in the united states and florida, maybe you can see a little bit of a re-emergence there and a little bit of progress. so far it has been slow coming for a country that has not had a golden age. on the first question about the differences and policy, i try to keep a non-partisan as possible. i think it weakens our hand in the world. maybe it is because i am do here but it has been my perception when you deal with foreign countries and you deal with

foreign relations, the nation as a whole has a stronger hand if our divisions are not partisan or certainly, you know, irresponsibly stated. with that being said, i think there might be a fundamental difference of opinion. it is not that we should be engaged but rather how we are engaged. i think the president's administration has had an over reliance on global institutions whether it is the security council or the united nations or someone to take a lead on these initiatives. we did engage in libya and pretty significantly on the front for the first 72 hours and then we backed off and allow our allies to do the work. ultimately it turned out fine. my argument is not a did not work out, but if the u.s. said the board and gauge the job would have been done sooner. that would have meant the following. less militias running around that you have right now which would have been much easier to get a central government formed.

you would have less destruction to the infrastructure. you would have less injuries and death which is counterproductive to the society. and we would have more influence on the outcome. i visited libya probably about one month after the fall of gaddafi and i was taken aback by the amount to a pro american graffiti on the walls and people who would come up to us and said, thank you president obama, thank you united states for what you did for us. a clear recognition that the u.s. had been engaged in the effort. if we would have an even more i think we would have more influence on the way it will turn out. this to have a bunch of challenges. there were going to have a bunch of challenges the matter what the nature of their involvement would be. if we had taken a stronger involvement the engagement would have been shorter, cheaper, and more effective. that is an example of where i would disagree tactically on the

direction the president has taken. even in syria i think they are waiting for american leadership. you need the center of gravity to instigate the coalition and move it forward with a defined plan. without the absence of american power and american leadership, it is hard to do that. that is the case would make to the administration. >> i wish we had much more time to continue this discussion. we are very very pleased you did the speech here at brookings. we are so pleased senator lieberman could be here as well. >> i am glad you found my page. >> if you would be seated until the senators leave, that would be much appreciated. thank you very much. [applause] [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute]

>> federal reserve chairman been bernanke said the u.s. economy is growing moderately but left out the possibility that the fed could take more action to stimulate growth this year. that is next on c-span. rupert murdoch told a media ethics committee that he never asked favors from any british prime minister to bolster his business interests. that is coming up later. on tomorrow morning's washington journal, a discussion of the 2013 defense budget and threats to the united states with buck mckeon. we hear from congressman joe courtney from colorado. later a look at one of the student camp first prize winners on the topic of intellectual property. washington journal takes your calls and e-mails every morning

starting at 7:00 eastern on c- span. in >> i have seen to have earned a certain place where people will listen to me and i have always cared about the country. "the greatest generation," give me a platform that was completely unanticipated. i ought to not squander that. i ought to step up not just as a citizen and as a journalist but as a husband and a grandfather. if i see these things i ought to write about them and try to start this dialogue about where we need to get to next. >> tom brokaw urges americans to redefine the american dream. your questions for the former anger and managing editor of nbc nightly news. he has written about the greatest generation, the 1960's,

and today. >> now, federal reserve chairman ben bernanke talks to reporters at the conclusion of the fed's two day policy meeting in washington. this is 15 minutes. -- 50 minutes. >> good afternoon. before we get to questions, i will summarize's today policy action and then i will place the committee pose a policy decision in the context of our economic policy -- committee's decision in the context of our economic outlook. the committee is maintaining the

highly accommodative policies that we initiated at previous meetings. we decided to keep the target range at the zero to 0.4%. our program to extend the average maturity of the security holdings announced in september will continue as scheduled. each of these policy actions is intended to paul -- foster conditions that support the economic recovery in the context of price stability. in conjunction with today's meetings, the five board members of the 12th fed president submitted their economic projections and policy assessment for the years 2012 through 2014 and over the long run. these projections serve as important inputs into the committee's deliberations. and coming information suggests

that the economy has been expanding moderately. both participants think it will remain moderate and then to pick up gradually. among other factors and notwithstanding signs of improvement, the ongoing weakness of the housing sector still represents a head wind for recovery. strains in global markets, although less pronounced than last fall, continued to pose significant risks. the unemployment rate having fallen eight percentage points since august. however, at 8.2% the unemployment rate remains elevated. looking ahead the committee anticipates it will decline gradually over the next several years, reflecting the moderate pace of economic growth. specifically participants projections to the unemployment rate in the fourth quarter this year have a tendency of 7.8% to 8.4% decline in the fourth

quarter of 2014. for comparison, a participant estimates of the normal run of unemployment have a tendency of 5.2% to 6.0%. inflation has picked up somewhat reflecting higher gasoline prices. however, as has been the case for other swings in oil prices, the committee as -- the committee expects that affect to be temporary. consequently we anticipate inflation will subsequently run at or below to committee pose a longer run goal of two -- 2%. the economic projections submitted by participants are conditioned on their individual assessments to the appropriate path of monetary policy.

as you can see from the chart, committee participants have a range of views about when the original increase is likely to be appropriated. following a careful discussion of those views that today's meeting, they maintain their collective judgment that economic conditions will likely warrant exceptionally low levels for the federal funds rate at least through late 2014. a highly accommodative stance of monetary policy is warranted in light of persistence of the factors restraining the pace of the recovery and the ongoing risk of the economic outlook. finally, the committee took note of the decisions following the balance sheet today. we remain prepared to adjust our security holdings as appropriate to promote a stronger recovery in the context of price stability. thank you and i would be glad to take your questions. >> thank you.

some of your critics -- i am sure you will not be surprised -- think you're being too cautious. i dare you just talked about the balance sheet. is the committee getting closer to qe3 that the last meeting? >> first, the committee has been the bold and aggressive in terms of easing monetary policy. we have maintained the federal funds rate close to zero since late 2008. we have had two brownson quantitative easing. we have a maturity extension program that is ongoing. we have offered guidance of the federal funds rate that goes into late 2014. we have been very accommodative. we remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target. in particular, we will continue

to assess looking at the economic outlook and a risk, whether or not unemployment is making sufficient progress towards its longer run normal level. whether inflation is remaining close to target. if appropriate, we remain entirely prepared to take additional actions if necessary to achieve our objectives. those tools remain on the table. we will not hesitate to use them should the economy require the additional support. >> the fed has been forecasting for some time that inflation would fall to 2% or below. the latest measures of inflation suggest that corp. pcs and the higher end of that range in many

other measures are above 2%. i know that in your forecast today that the upper end of your forecast all the way through 2014 have increased. do you see a risk that the this inflationary forces might not be a strong as the fed had been projecting for some time? >> i would just say first that our projections still have inflation very close to our 2% target. as you point out, core inflation and other measures of underlying inflation have been a little stronger than expected. i would say first that some of the movement and the first quarter seems to have come from transitory sources like nonmarket components. the fundamentals of inflation, in particular inflation expectations, the amount of slack in the economy, the commodity price behavior which is been relatively well controlled in recent months, all

of these things suggest inflation will stay close to or perhaps a little bit below our 2% target. as i mentioned in the opening remarks and as we said in our briefing, the recent rise in gasoline prices has created a temporary bulge in headline inflation and overall inflation we expect that to pass through the system. assuming no new shocks in the oil sector, inflation on to moderate to about 2% later this year. >> [unintelligible] >> again, this represents 17 distinctive use. i would guess that the reason is the data had come in a little bit firmer. core inflation was a little bit stronger than expected. the differences are not particularly large. >> we know that the committee

foresees rates staying low until 2014. what is your personal view on the timing of the first rate hike? second, did you see the committee as having an easing bias of the moment or is a neutral? >> i am very comfortable with the consensus view that we annunciated today. i think the committee broadly as comfortable with a 9-1 vote of this guidance. again, that represents a very accommodative stance policy. our intention is maintained highly accommodative stance and policy for the foreseeable future and we remain able and willing to take further action if necessary. at the same time, i think it is noting -- i think it is worth noting that the forward guidance on the federal funds rate is conditional on the data. if the data were to come in much stronger than expected, we would adjust the guidance appropriately.

it is not conditional. it does depend on how the outlook calls. should the outlooks strengthen notably, we would have to respond to that. >> what would we need to see to see qe3 take place? >> the committee estimate as assessments. we have been working to try to provide more explicit guidance, quantitative guidance about our policy reaction function. so far, we have not really done that. i can only said qualitatively that the committee will continue to look at the evolution of the outlook, try to assess whether unemployment is making sufficient progress toward our objectives, and a particular whether the recovery is still continuing. we remain prepared to use tools to support the recovery and to help make sure unemployment continues its downward path towards longer run normal

levels. >> mr. chairman, according to the latest forecast, 10 members of the sea 1% or higher fed funds rate in 2014. seven of them see a 2% or higher fed funds rate. under those conditions, how can the guidance in the statement that you'll -- that rates will remain low 30,004 be justified? is there a point with the descendants gets to a point where one or the other is no longer tenable? what's there is a range of views as to have noted. >> there is a range of uses to have noted. this is put into a committee process. it is in the community -- the committee meeting where we debate not only the possible outcomes but also the risks, the uncertainties, all of the things

that inform our collective judgment. as i said, the committee had no difficulty coming to a consensus that the guidance that we gave is still appropriate. again, if there is a substantial change in the economic outlook in the direction, then the guidance would change appropriately. for now, i think the committee is comfortable with the consensus statement that we put out. >> are you worried about creating confusion in the market between the guidance and the individual forecast? >> again, the individual projections are and puts -- input into the committee decision. the decision is the critical element in that respect. we are continuing to work to become more transparent. we have a variety of things we are looking at. you will have to stay tuned for that. again, the committee was quite comfortable with the consensus that we have reported today.

>> unemployment is too high. you said you expected to remain too high for years to come. inflation is under control. the you expected to remain under control? the city have additional tools available for you to use your not using them right now. under the circumstances it is hard for people to understand why you are not using the tools right now. could you edged -- could you address with your current use are inconsistent with the views held as an academic? >> let me tackle the second part first. there is a view circulating that the views i expressed about 15 years ago on the bank of japan are somehow inconsistent with our current policies. that is absolutely incorrect. my views today are completely consistent with the views that i held at the time.

i made two pointed that time to the bank of japan. the first was that i believe they determine central bank should and could work to eliminate deflationary, falling prices. the second point that i made was that when short-term interest rates hit zero, the tools of a central bank are not exhausted. there are other things that the central bank can do to create additional accommodation. looking at the current situation in the united states, we are not in deflationary. when that became a modest risk in late 2010, we used additional balance sheet tools to return inflation close to the 2% target. likewise we have been aggressive and creative in using on federal funds rate centered tools to achieve additional accommodation for the u.s. economy. the very critical difference between the japanese situation 15 years ago and the u.s.

situation today is that japan was in deflationary. clearly when you are in deflationary and in recession than both sides of your mandate are demanding additional accommodation. in this case, we are not in deflationary. we have an inflation rate that is close to our objective. why do we not do more? i will reiterate we are doing a great deal. you know all the things we have done. i guess the question is, does it make sense to actively seek a higher inflation rate in order to achieve a slightly increased pace of reduction in the unemployment rate. the view of the committee is that would be very reckless.

we at the federal reserve have spent 30 years building up credibility for low and stable inflation which has proved extremely valuable and that we have been able to take strong accommodative actions in the last four or five years to support the economy without leading to a destabilization of inflation. to risk that asset for what i think would be quite tentative and perhaps doubtful gains on the real side would be a an unwise thing to do. >> given your warnings to lawmakers about the looming fiscal cliff, do you think the fed has to take into account when congress chooses to take action? if they waited until january would you feel obligated to take in the potential economic

blow into account? >> well, i think you will have to take fiscal policy into account to some extent. i think his zero important to say that no action were to be taken by the fiscal authorities, the size of the fiscal cliff is such that i think there is no chance the federal reserve could have any ability to offset that the fact on the economy. as i have said many times before, it is imperative for congress to give us a fiscal policy that achieves two principal objectives. the first is, of course to achieve fiscal sustainability over the longer-term. that is critical and something that needs to be addressed. at the same time i think that can be done in a way that does not endanger the short-term recovery of the economy. i am concerned that a fall of the tax increases and spending cuts that are associated with

the current law that would take place if any action were to occur on january 1, that would be a significant risks to the -- risk to the recovery. i am hoping congress will take action that will address both requirements of the fiscal policy. >> mr. chairman, and today posies they been you said you expect the economy to pick up gradually. in the forecast with that today we see the forecast for 2013 and and 2014, the growth forecast is downgraded. what caused the to downgrade your forecast for 2013 and 2014 when you see a pick up after a coming quarter? >> these are the views of participants, the 17 participants. so the basic feature that is

described in our statement, which is growth seems likely to pick up over time is still obviously in our projections. the 2013 numbers are stronger than the 2012 numbers and the 2014 numbers are stronger than the 2013 numbers. the reason for the expected pick-up over time is first a very accommodative monetary policy that continues to provide support for the recovery. in addition, some of the head winds that have been affecting our recovery such as the housing market, financial stresses, and credit tightness, some of those things we hope will be left in overtime and allow the economy to grow more quickly and approach more quickly its longer run full employment level. the reason i do not know exactly why there has been a slight downgrade in years for the out, i expect the fiscal issues may be part of that.

>> he made the inflation target some of a ceiling. can you explain why going over four percentage points above would hurt the fed does the credibility and what that would do on the unemployment side if he were to do that? >> it is not a ceiling. is a objective and we have to bring inflation close to 2%. if inflation were to jump for whatever reason, and we obviously do not have -- we would try to return inflation to 2% at a pace that takes into account the unemployment. the risk of higher inflation, you say 2.5%, well, 2.5%

expected change my involve the distribution outcome, some of which might be much higher than 2.5%. the concern we have is that if inflation were to run well above 2% for a contracted. ,-- contracted period, they might become eroded. i would cite to you as an example, if you look at the vice chair's speech that should give a couple of weeks ago where she described a number of ways of looking at the late 2014 guidance, she showed there some so-called optimal policy rules that come from trying to get the best possible outcomes from our

quantitative models. what you see if you look at that is the best possible outcomes assuming perfect foresight still involve inflation staying quite close to 2%. there is no presumption even our models that you need inflation well above target to make progress on unemployment. >> those of us trying to make a living out of parsing the statements noted in the section of strains in global financial markets the committee said this time around strains continued to oppose risks to the economic outlook. in january they said the strains were easing. what are we to read into this apparent change? what is your assessment of the situation in europe with a debt

crisis? >> it is supposed to be a factual description of what is happening in the environment. in january the financial markets had calmed considerably reflecting a number of steps in europe including notably, the two large long-term refinancing operations. in recent weeks we have seen more market stress arising from concerns about the fiscal positions of spain and italy. we have seen more volatility in our own markets related to that. we are simply taking note of the fact that a portion of the improvement we saw late last year and early this year in the european financial markets and in our own financial markets have been reversed recently. nothing more intended and that. -- intended than that. i had the opportunity over the weekend to speak with many of my

european and international colleagues because we had the g- 20 and imf meetings here in washington. i had plenty of opportunity to discuss the european situation. it is true they have made substantial progress overall i include not only the two ltro operations but also the greek that deal, the work on the fiscal compaq's, and recently the setting up of a larger financial firewall used to avoid contagion should another country face serious financial distress. progress has been made. obviously, judging by market conditions, there is still more work to be done. we are counting on our european colleagues to continue to follow through their commitments and to put a very strong effort into addressing what remain significant problems and concerns in europe. >> two questions.

first, a follow up on steve. -- steve's. about interest rates. rates will still be close to zero at the end of 2014. given that you said the committee is not entirely happy with the language in the statement, what information can we take from the forecasts when they change like that? if he were to decide that you wanted to do more to support the economy as some point, could you read as through the feasible options to do that? >> if you compare this set of forecasts with january you will see that a few members have pulled in their expected date. let me just reiterate that once again, these are just and puts into a decision process.

they represent individual estimates. " admittedly as many of the participants said around the table, these are uncertain from an individual. of you. as we discussed the range of considerations including the fact that we remain uncertain about how the economy is going to evolve, i talked about for example the so called puzzle about whether or not unemployment will continue to fall quickly or if it will level situation that we just discussed, there was a quite reasonable case for maintaining the guidance in late 2014. there was a great deal of comfort among the participants and members with maintaining this guide.

it looks like to big to fail is the next debt. step. >> i believe too big to dale was a cause of the financial crisis. we are doing all we can to eliminate it. a situation where a failing firm s bailed out because it's collapse would have such this in the rest of the system. we are making some progress. we are increasing the

regulatory oversight of large financial institutions including the basel 3 rules, particularly for systemically important banks, more liquidity requirements. many are embedded in the role we put out. rule put out. we are making sure it is stronger. we're watching a much more .arefully pic the circumstance where a large firm does come to the brink of failure, they must be allowed to fail. we must be allowed a. in that respect, one of the rules we have gotten from dodd/frank, does the federal

reserve is working with the fdic to apply the bank resolution tools on domestic banks to complex firms. the international aspect made much more challenging. i think we're making progress there. we have put out rules that would require large financial firms to point out how they would be disassembled. we have continued to talk with colleagues about how we would cooperate if it had to be put into receivership. part of the reason there has been some downgrade for some u.s. financial institutions is the judgment of the ratings

agencies that they support. it is less than the past. what we will need to have is a situation where large firms are both making judgments about their size on the economic if there is thet b year it can be done without highly adverse consequences. that is our objective. that is the way to end. >> you have them working hard to improve this. what is your assessment? >> i think that is part of the courage to say. i think we're making progress.

it think it was an important step to make clear what our objection was. that was important. we have taken a number of steps to improve communication including these press conferences also by expanding our protections and by continued work doing testimony of speeches. as you know, i recently did some classes. we are doing our best with two objectives. one is to help make the fed more understandable to the average person. many people do not understand. to be good citizens, they need

to understand something about what the fed does. also to communicate to markets so markets can better appreciate what the plans are. i think the evidence is that there is a better understanding of the fed's policies. we have seen less volatility in interest rates. i want to emphasize that this is an ongoing task appeared will continue to look for ways to make ourselves more understandable and transparent. >> assuming you're not

constrained, what with the federal funds rate be taxed do you believe your at the equivalent degree using conventional tools? could you put some numbers on the exception low federal funds rate? >> for the exact reading for the federal funds rate would depend a lot on which particular role you use. it probably would be negative. we're trying to compensate for that with the use of non standard tools including the balance sheet. we see monetary policy as being approximately in the right place. based on the analysis we have been doing, it does not mean we

may not take further action. we're prepared to take further action. for the time being, it appears where more less in the right place. -- we are more or less in the right place. one of the reasons that language is sometimes a bigger than you would like this because we try to get a consensus of 10 people. it mean something close to where we are now. >> there has been a discussion about calling for the banks to monitor it. talked-about the need to

eliminate to big to fail. -- you talked about the nea to eliminate too big to fail. is there an argument to be made for baking of the banks? what is a litmus test that will allow us to know that we can achieve it through dodd/frank? >> there may be circumstances where there may be financial institutions. it is artificially large. in that context, i would consider breaking it up. it is sending regulators should look at. a more market responsive way to address this problem is to eliminate the incentive of too big to fail.

that is through tougher advisory oversight, there higher capital requirements, through restrictions, it take away the benefits or force firms to internalize the cost of the large and complex. we can safely unwind a failing firm. the mean no longer have to big to fail. the test would be that the financial markets that lending to large firms based their bond spreads solely on the risk taking models of the firms and not on the fact that there is

some anticipation of a government bailout. market indicators will help us see our progress toward and into big to fail. -- toward ending too big to fail. >> it is good to see. there has been some concern on what would happen to bond yields of operation twist. there's speculation on what the fed may do to keep downward pressure. do you feel the need to not disappoint market expectations? >> the purpose of monetary policy is to achieve our price stability.

it is not to disappoint investors. there is some disagreement about exactly how balance sheet actions affect treasury yields and other asset prices. i think the evidence is pretty good. it is the quantity of securities held by the fed at a given time rather than the flow of new purchases. this is correct, then at such time that our purchase has come to an end there should be relatively minimal affects.

we have launched the program and allowed it to come to an inch. we will continue to monitor the situation. if we believe that financial conditions are not consistent with our objectives, we will work to fix that. our expectation is that what ever a point the purchases and that financial markets being forward-looking will have anticipated that. >> thank you. my question is about your comment about japan and the u.s.. are you confident long-term

stabilization like we have in japan? and that is the case, will the response make a difference? does any other factors make a different? >> i think i will dropdraw to distinctions. the first is very important. we acted preemptively to avoid inflation. of course japan have a much bigger bubble and shock when the bubble collapsed. we did avoid the deflation.

the other thing which we have that weentlreasonably well is managed fairly quickly to make sure that our banks were recapitalized and we are recognizing their bad assets. i think the stress test week conducted last month is good evidence that the banking system is incredibly stronger and needs don'tch more resilience and -- much more resilient than it was a few years ago. we will avoid some of the problems that japan has faced. i think it is always better to be humble than to avoid the comments. we need to contain strong monetary policy support.

>> i wanted to ask you about the labor force participation rate. it is the lowest level since the early a.d.'s. can talk about why people like dropping out of the market? is like a pop a second question. -- i would like to pop a second question. you said you should do something about puncturing the bubble before a get out of control. can you respond to that? >> i am declaring victory.

as for the bond bubble, interest rates are low for a lot of reasons. they include monetary policy and a weak economy. interest rates will rise at some point. that is important for holders of long-term securities to manage their risks and pay attention to that. all that being said, they are good reasons to continue. we have a very good discussion

at the meeting. it is an important issue trying to assess how much the change of employment is doctoral and so on. there is a downward trends and participation of the united states. it comes first of the fact that we're no longer getting increase participation of women. as the society ages and for other reasons, melt the dissipation has been declining over time. there is a downward trend that we have to take into account. the participants at the meeting suggested that a good bit of the decline in participation that we have seen does represent cyclical factors. much is young people who

presumably are not out of the labor force indefinitely, but given the weak job market they are going to school rather than working. one possibility and one reason why the unemployment rate may not fall as quickly going forward is that as the labor market strengthens, they will come back looking for work. it will be a good thing. we will just have to see. i have to agree with the argument that is a living apart of decline over and above the representingnds is you cyclical factors. >> can you give us your assessment of the impact of the

mild winter weather on job growth and that going forward? you said last month that some of the recent job gains reflected a catch up from outside. what kind of job growth can expect? >> the weather issue reflects how difficult it can be to make a real-time assessment. the weather has affected a number of things. it made january and february artificially strong and march artificially week. it probably affected construction. there are a number of things that were probably affected.

we are doing our best to try to adjust for that. we're also looking at some of the seasonality issues that have risen because of the unusually large recession now could 2008 and 2009. that makes the data harder to interpret. dismiss the hypothesis that the increase in employment we have seen in the past 56 months might to some extent be greater than we expect going forward. it represented a one time catch- up and doing the very sharp layoffs in 2008 and 2009. we will have to see going forward. if it is correct, job gains of be somewhat left than the 250,000 a month we have seen recently.

we do not know yet. i would not draw too much conclusion from the march report. because of weather and other factors, we cannot take a conclusive result from that. we will continue to be watching the labor market. that is very important. if unemployment looks like it is the longer making progress, that will be consideration. >> what are the employment protections you have made? >> we need something. estimates differ. we need fewer jobs to keep unemployment insistence or stable than in the past. more like 100,000 a month for stability. i do not have an exact answer. this is a rough estimate.

individuals may have different views. that is not a forecast. i have made a hypothesis. the possibility exists that this recovery will generate a circle with greater hiring which in turn generates more spending. which way that goes is going to be very important. it is determinant of our response. >> thank you for the time. first up on the projections, in your bid for transparency, would you consider you and your colleagues actually attaching your name to the protections here said that markets get a better sense of exactly what your thinking in the future?

as you consider where you are, all you have been through a financial crisis, what is the right now that most frustrates you? >> these things are not all the same. our subcommittee is looking for ways to improve transparency. this particular suggestion is on the table as are other ways to make this more useful. it is a work in progress. the most frustrating aspect of the recovery has been that it is quite slow. here are almost three years from the expansion and unemployment is over eight%. we are looking in hoping that as

the headwinds lift and as financial stresses he is and housing improves -- ease and housing improves, we will get more liquidity. it has been a very long slog. that'll be the single most concerning thing. there are many issues like statistical issues. within the province of the federal reserve, it to be the face of improvement in the labor market. >> thank you. >> next on c-span, rupert murdoch testified at a british media investigation hearing. then we will hear from supporters and opponents of

arizonas immigration law at the supreme court. later remarks from marco rubio on policy priorities. >> you guys are still here. that is good. i cannot remember where we landed on that. >> the 98 annual white house correspondents dinner. a foreign audience of celebrities and the press corps. watch the entire dinner only on c-span. we can also sync up your experience online at c-span's dinner chub.

the white house correspondents' dinner alive saturday at 6:30 p.m. eastern on c-span. >> rupert murdoch testifies about his company's commercial interest and politicians over the years. yesterday his son appeared before the same panel. this was traded to investigate the relationship between the media and politicians and the look into corruption allegations. >> on monday afternoon, i said this. i understand the very real public interest in the issues that will be ventilated by the evidence. i also recognize the freedom

that permits what is said to be discussed in the subject of comments in whatever way is fitts. i will be interested in how it is covered. i shall approach the relationship between the press and politicians from an entirely non-partisan perspective, which i have no doubt is the reason i was given this agreement. i would hope this approach will be made clear. when i said those words, some of the evidence that i anticipated we will hear itincluded that which we did here. in light of the reaction and considerable commentary last night, it is appropriate for me to say a little more. i understand entirely the

reason was some of the reaction yesterday. i am acutely aware that documents such as these cannot always be taken at face value and can frequently bear more than one interpretation. i am not taking sides or expressing an opinion. i am prepared to say that it is very important to hear every side of the story for drawing conclusions. we will hear all the yoand relevant information. when i report i will make the findings that are necessary to fulfil the terms of reference that the prime minister said for me.

allows them to see. when this is concluded, there will be opportunities for considerations to be given for any further investigation. >> the witness today he is mr. rupert murdoch. i am very conscious that the material which mr. murdock provide is different. having regards to the experience we have seen with some witnesses it'll be very helpful if you're moving from bundle to bundle.

>> the evidence shows show the truth, and the whole church, and nothing but the truth. -- the truth, the whole truth, and nothing but the truth. >> i believe you'll stay your witness statement. it is signed and dated the 12th of april this year. are you content with the requirement? >> i am. i am very grateful with the care you have taken in the preparation of your evidence. i wanted to record that. >> thank you. >> you are the chairman and executive officer of news corp.

there is a total revenue of $34 billion. for our purposes if we could mean more parochial, 8% and news corp revenues have generated in the ninth to condemn 60% by news international. anyone can watch this in due course. would it be fair to say that it should be ok for 60 years? >> i suppose so. with a varying intensity. you say the e welcome this inquiry. the have not forgiven mr.

cameron to set it up. is that true? >> did i say that? >> you have said in your witness statement. i am putting to you rumors. >> untruth. >> why you say there is a need for this inquiry? >> the need is fairly obvious. i would say there and many other abuses. the state and media in this country is absolutely vital. i welcome the opportunity.

>> you use the term of uses. it is your understanding that abuses of phone hacking are limited to phone hacking? we will come back to that. let's go back to your business philosophy. use a three main points. you have an instinct for acquiring businesses which you believe will be successful. more importantly, if you have a long-term perspective. you have a deep flair for the possibility of acknowledging. have i got that right? >> i would a slight amendments. all my interests have been

confided to the media. long-term you're absolutely right. just about everything i have done in terms of company. sometimes i have been right. sometimes i have been wrong. >> can i ask you briefly about your political philosophy? would it be fair to say that you always have been a great admirer of what she has done? >> yes. i became that after she was elected. i remain a great admirer. >> your support is crystallized

in your mind for that election. with that the right? >> i think it is all the same. we had just come through the most terrible winter of discontent. i think we all want a change. >> can i put one quote from you, an interview by "time" magazine. what does libertarian mean?

i am not saying they should be taken to the absolute limit. >> that are unnecessary rules. >> some recent tweets show a hostile rebuapproach to white winkers. -- right wingers. >> you should not take those seriously. i think i was saying the extremists on both sides are piling it on me. >> you referred to your feeling that there is a lot of mythology about you would need to be default? >> yes. -- debunked?

>> yes. >> we are going to focus on the political issues first. then i will go to the issue of phone hacking. then we will look at some broader questions. >> thank you. >> the acquisition of the sunday times which is a separate in vignette in the case, if you bid for those papers. >> yes. >> at that stage, you having acquired this, you have slightly

over 30% of the u.k. market. >> in must've been a more 7 success than i thought. >> the deadline that was going to take place was march 1981. for mr.f background john was the statute to refer the case to the murders. i would like you to please look

at that. >> we would have to prove that he said that. >> the fair trading act says that. can we look at these evidence fa? they noted this on the fifth of january. this is the record of the point of this with rupert murdoch.

in line with your wishes, it has not gone there long term. do you understand there that? >> it was published by harpercollins. you previously had no recollection whatsoever of this lunch. >> i still do not to be honest. i totally accept his detailed minutes which sounds to me to be correct. you describe anhis i

intimate occasion with people there. the meeting was at your request. you see that? >> ps. yes. >> you told the committee that u.s. politicians would leave you alone. you were referring to this meeting. >> this was from the chief executive of the country, and likely a of a change of ownership. i thought it was quite appropriate. >> they knew that was probable.

he might have closed it. there seem to be to purposes. one was to brief mrs. thatcher. one was about the developing administration. do you see that? >> there were gossiping about american politics. >> the president elect in view of all on the same page

politically. you?weren't >> i guess that is fair. it is demonstrating how very much you were one of us. was that part of your purpose ta? >> no. . >> it was part to the meeting. that is why you requested it.

>> the main purpose of the visit was to brief the prime minister on his bed at the time since paper. then you explain to her what your bid amounted suit in financial terms. the new treated her to some speculation. is that fair? -- then you treated her to some speculation. is that there? >> that was pure speculation. >> why was it important to you that they understand the quality? >> as i said, i thought was

perfectly right that she should know what was at stake. she did know. >> why you think you were the right man to acquire this? you have the quality to take a forward. you have the will to crush the unions. >> i did not have the will to crush the unions. i may have had the desire. it took several years.

>> are be in agreement? -- are we in agreement that > > ? >> yes. >> you explained to mrs. thatcher that 50 million of the resources could be at risk. do you remember saying that that's correct i do not remember saying that. it is a gross underestimate. >> you talked about the financial position of the times but you did not mention the financial position of the sunday times.

>was it your view that the sundy times was not economically sound? >> i did not know. they certainly had a great position. it is economics. it's a staff. it resulted in a big net loss. >> if you look at the sunday times separately, whatever had advised that they would make this. a profitt contribute a

tax yes. >> the assignment is to thank him for keeping her posted. he did no more than wish him well in his bed for the need for much improved arrangements. >> you were wising that no express favor is were there. -- favors were there. >> and non asked. >> you would not have done that directly? >> i hope not. i never asked the prime minister for anything.

>> you see her. you seek to demonstrate to her that you are precisely on the same page. the understanding was that the extent is that she would. is that not fair? >> i did not expect any help from her. nor did i asked for any. >> were you concerned that you might not acquire the company? >> it was quite easy. >> it did not worry me in the least. i hope he will be put on the web along with this. it is all well. you think your for her lunch.

>> i was little slow in writing. and then another document shows that this was a favorite. because of your youth and various other factors. do you recall that? >> i is seen that. >> -- i have seen that. >> the attached seven of the bundle in front of you. -- the attached 7 in the bonds on fronted you.

do you have that? >> yes. can you maintain the independence and authority of this appointment? do you except that the -- >> if i may interrupt you. he put these two together. i did undertake to expand the independent directors from four to six. >> you did. this itself is an indication of the power of investing this.

crack>> they headed out. it is their response ability to step in. particularly his response ability to many shareholders. >> i will just read this out. we cannot emphasize too strongly that there is a reference to the commission that this

proposal lapses because conditions cannot be met. is this your understanding? >> yes. >> if there were a reference in the allotted to proceed, you'd have to renegotiate it. -- and allow it to proceed comedy would have to renegotiated? >> i told them i did not mind in the least. it went on a long time. the paper but a lot more money. -- bled a lot more money. >> that is a fair summary. we're taking this in stages.

we're going to cover this. the minute of the meeting is attached 66 of this bundle. this is an important document. you are company by your counsel. >> at the time he is the chairman of the company in my life long friend. he said the report was referred to it and was totally misleading. he said he is merely responding

to the deadline. they manage to do this. he was prepared to cooperate. he did point out that this would create problems for himself. there was loss of advertising revenue at and make this even greater. a fair interpretation of that is a you're not placing any there. would you agree? >> but it is correct -- if it is right, and then you are correct. >> he was reminded to refer to there for political reasons.

he felt that such an act would diffuse any criticism. did he communicate that to you? >> i do not remember. >> you assure the would not withdraw the bid if he agreed to extend the deadline. >> that is correct. >> we cannot know what conversation if any he had with mrs. thatcher between that point in time and the cabinet meeting which took place later that afternoon.

this is a general rule. there must be a reference. the times was not economic.

this has summarized the meeting we had just seen. we can see why it was decided. this has summarized it here. this is a discussion he had with you. the real reason they decided not to refer to as on the right- hand side. it is unlikely that they would have refused to extend their

deadline. there is an advantage to be gained from incredible risks and making it. no suitable one has made a bid. those are not a reference for many are concerned of great authority. to be undertaken. there is an torii from which mr. murdoch has been given. one view might be the cabinet decision was on the basis --

with in making the reference may increase undertain -- uncertainty. but

and so they became embittered. >> there is a debate in the house of commons which is the

following day. there was a great deal of concern expressed eloquently. the minster. they were making the point that if you look to the sunday times, it was a going concern. it was quite artificial. they refused to look at future performance. the would-be interested in a long-term perspective. you were looking carefully at what the predictions were for

future years and you were looking at the measures. great admirer of "the sunday times." i did not know the internal -- of thompson's. >> when he said to parliament, i do not know that i was taking a view on future prospects, that was a separate letter to mr. smith. if you heard that, you would have laughed in north bay, would you not, mr. murdoch? if you are operated the other way around. you -- that is what a shrewd businessman does, would you not

agree? >> yes, i was looking at the newspapers together. >> commercially, that would be wise but legally, one had to look at them separately. >> no. it was one company. >> he made clear to parliament that he was looking at each of them separately. that was clear from the left- hand column. that is not necessary -- i could see your position. whatever the legal analysis, you would look at them as one unit. is that right? graphics yes. -- >> yes. >> they said something about you. if you look at page 01606, on the right-hand side, the 01606.

on the right-hand side. he said in the middle of the right hand column, that is an isolated example. one could give numerous examples of the australian council brought in allegations by papers in their political reporting. powers.g his newspapers' i read the australian papers every day for the best part of two years when i was writing a book on australia. 1606. the 01606. he said he was profoundly

unhappy. >> certainly not. >> there were resignations. >> we had some people because in 1975, i believe, the queen through the governor general dismissed the australian government. and we took the attitude in the australian newspaper that he was within his rights. and that caused a lot of upset. it was outrageous that the queen or the governor general should do that.

the government had -- the senate could not get through. >> what about the australian press council upholding allegations of bias by a board of papers in their political reporting? and pushing -- using your newspaper powers. >> i take a strong pride in the fact we have never pushed our commercial interests in our newspapers. >> [unintelligible] the extent to which you need to look at the page, we can provide you with the extra we have got. it is half five.

his analysis of view -- you, this is a preface to the july 2011 eidition -- whicedition whh was written in july. the last paragraph. news.rupert murdoch's >> you switched to this select committee? >> he wrote this after july 19 last year which is when you gave evidence to the select committee. do you follow me? >> no. book?wrotite from his >> this is an updated

preference. his contemporary reflections on what happened before the full select committee. he is saying how much rupert murdoch knew and when he knew it may not be pinned down. the exercise -- labour defined as care classic -- charismatic authority. do you feel he has got a point there? >> no. i was going to say when you laid out my three principles of government, i was going to add that we have a large company and i do run the company with a great deal of decentralization. >> this issue of aura,

charisma. it is an analogy. a lot of people have come up with this. we have two so far, but we will find more as we proceed. do you think it has any validity at all? it may not be a bad thing at all. it may be part of your success. this is how you operate. >> i set an example of ethical behavior and medical clear that i expect -- made it quite clear they expect it. -- i expect it. do i have an aura or charisma? i don't think so. >> could we try it this way, mr.

murdoch? you have been on the stage, on the world stage of the press for many years. you have seen many editors come and go. your press interests have extended. it would not be at all surprising, what it, -- would it, if those who worked for you recognize that you have an appreciation of events, that it would be important for them to understand, and that they should therefore take a different line, only with caution because of their respect for your views? >> we -- i read it as being -- i

invite you [unintelligible] >> i was not seeking to suggested had a big turnover. in 40 or 50 years, over many papers you have been responsible for and you have owned, you have seen many editors. >> yes. >> page 144, he is quoting from the thompson assessment of your bid. the pros and cons of the [inaudible] as they were described. your qualities -- reservations, page 144. it is the next page. no, no. your fingers are on that page.

thank you. in smaller print, paragraph one. >> he has had some deteriorating effect on the standard of the daily tabloid press. do you feel that is a fair observation? >> absolutely not. >> without attributing cause and effect monday you think that between 1968 through 1981, they standards have deteriorated? >> no. >> this is completely wrong, is it? >> it is a matter of opinion but i think is wrong. >> do you think the standards have improved? >> we have expanded to a new young public.

i thought this was to go against [unintelligible] which is putting down the contribution. there was an opportunity here. >> we're looking at standards here. this is -- is it your view that the standards that the tabloid press have steadily improved? >> i think "the sun" is a better paper than it is today. i could not say the same of my contemporaries, but we will not go into that. >> the other reservation expressed here, he undoubtedly has been deeply and often involved in the editorial function. we're looking here at the period

from 1968 through 1991. would that be a fair observation? >> 1968, i did not have enough to do with "the world." that was my fault. again, [unintelligible] in 1973 or 1974, [unintelligible] where we did very badly. we took our eye off. it was not a continuous

event. >> your main objective -- >> basically, it was -- [inaudible] who was editor, he was a very brilliant journalist. >> what was your main objective, to improve the commercial appeal of these papers? you are not concerned with the ethical side of its project, would that be a fair observation? >> no. it was always to tell the truth. certainly to interest the public, to get their attention but always to tell the truth. >> the touchdowns are truthfulness and that which is interesting to the public, is that it? >> yes. i have great respect for the british public.

and i tried to carry it through. >> the public or the market, they're the best arbiters of what should be in and outside newspapers, is that fair? >> yes, i think so, absolutely. >> i am sure [unintelligible] to put many points arising from this book but there's not time. there is one point i should quote because it is relevant to the terms of reference. page 534.

when you look at the last six lines, he said this. in my years as editor of the times, he put his point of view very simply to the home editor of "the times," when he summoned him to his office. this is before march, 1983. you apparently said this. i give instructions to my editors around the world, why should i in london? do you herber say that? >> no. i know what he told me. you are facing an intervention of the staff against mr. evans. >> the anonymous editor in terms of your witness statement, when you have to --

>> you are facing an insurrection of "the *." >> in your witness statement, you cannot identify the editor. but you refer to an anonymous editor. you have to let go because there was an effect. were you intending to refer to how that happens? >> it was indeed. >> it is not the mission, you did not get his name in the witness' statement. >> it is the only editor that we have ever asked to leave. >> is that the reason for getting rid of him? it was a brilliantly -- successful editor for over a decade. >> i would say so. he had a great assistancts for

his page who ran the inside team and did all the great work and never got the credit for it. never mind. the sunday times was fine. >> according to mr. emery, you also said this in relation to the undertakings you gave to that secretary of state. they're not worth the paper they're written on. did you say that? >> no. >> did you think that? >> no. surely not. it was an act of parliament. >> howard evans was replaced by charles douglas hume. >> the long serving deputy. >> th

the paper was returned to the tory fold. >> i remember talking to mr. evans about policy once when he came to me, shut the door behind him, and said, "looked, tell me what you want to say. what do you want me to say, it will not leave this room but i will do it." all i would say to you is please be consistent. that is -- do not change sides day-by-day. on the issues. >> according to the book, "press gang," you said you were one of

the main powers behind the thatcher throne. is that real or not? >> that does not sound like mr. douglas. he was a very modest individual. i do not know. >> where are you [unintelligible] -- >> not the times, the sun. look at the sun if you want to judge my paper. >> you personally were not one of the main powers behind the thatcher throne. >> no. >> did you consult with her regularly on important matters of politics? >> certainly not. >> on the issue of editorial

control, you gave insight into the meeting you had with mr. evans when he was at the register. you were interviewed in the context of the house of lords report on communications. in september 20 -- 2007. one point to you, maybe two. appendix.49 of the mr. murdoch did not disguise the

fact that he is a hands-on economically and editorially. he said a lot it prevents him from instructing the editors of the times and the sunday times. he often asks, what are you doing? those nominations are subject to the approval of the board. it was not protected. he distinguishes between "the times" and "the sunday times." "news of the world," he explained he is a traditional proprietor. he exercises control on major issues, like which parties. have your interlocutors

faithfully recorded what you told them? >> i never gave instructions to the editor of 'the times" or the "sunday times." sometimes when i was available, i would call and say what is the news today out of idle curiosity. i would say that was a damn fine paper you have this week. >> the big point is the last sentence. which in relationship and -- to "news of the world," [unintelligible] have they got it right? >> page 51?

>> last sentence on 50. >> yes. these are political issues. they're not managerial issues. >> i am a curious person who is interested in the great issues of the day. i'm not good at holding my tongue. thatu did say you're sorry you did not intervene in relation to "news of the world".

>> i did not say it was my -- not my responsibility. >> did you have any role in relation to the publication of "the hitler diaries" in 1983? >> i am sorry to say, yes. >> is it fair to say that laura ord daker was expressing doubts over the authenticity of the diaries, and you overruled him? >> that is a very small part of the story. when the editor told me very excited the that they had bought the rights from a very

reputable german publisher, he got him to go to switzerland to examine those diaries and lord daker spent some hours and thought there were genuine. people were debating it. he did have doubts. the majority thought we should go ahead. i take full responsibility, it was a major mistake in may, when i will have to live with for the rest of my life. >> this is -- we will take a break for a few minutes. >> thank you, sir.

>> ? we are still on the theme -- i think it would be fair to say before any appointment, he knew me pretty well. he would be aware of my views. social biz, council views, and political views. he also said he felt he did not now rebecca weighed -- wade's is before you appointed her -- before your pointer. -- you appointed her. for ten years, she makes the

point you had no influence at "the times" over editorial policy. she does say this. you have only to look at online forums today to say that the tabloids reflects rather than drives peoples and states. do you agree with her or not? >> no. i have to say that so much of that material is provided by paid relations agents working for those people. that it is our job to look

behind what we are being told. fed material by paid publicists to rectify the balance, as it were. if it is not an appropriate, -- interests of means to pry into the lives of celebrities? >> i did not say that. it is perfectly fair, i do not believe in using hacking, using private detectives, or whatever. it is reporters not doing their job. i think it is fair when people are -- how of themselves held up as iconic figures or great actors, that they be looked at.

sometimes, we just did an example of it with mr. simon cowell. no, i think people are very big in the lives of ordinary people. big television stars come out big film stars -- television stars, big film stars. people in public position with public responsibilities and -- i don't they they are entitled to the same privacy as the ordinary man in tehe street.

if we are going to have made transparent democracy, a transparent society, but everything out in the open. >> [unintelligible] and cheap titillation. i think that is an overstatement. >> i am not saying we are free or our competitors are, but we are not. [unintelligible]

every day. which might say hasn't ever growing problem. -- has an ever growing problem. >> we might come back to that. >> it is a bigger subject. >> just a few points in the 1980's we need to bring up. >> before you leave the topic of privacy, you do not see a distinction between, for example, politicians and one might say newspaper proprietors, and one might even include judges, i would have to think about that. and those who hold themselves out or who are held out as exercising positions of influence. and on the other hand, somebody who is famous because there are

a good actor or because they are a film star or because they have written a book. you do not see the distinction between the two? they did not hold themselves out as influences on the public. is that they are rather good at what they do. >> i think people who hold great responsibility -- i really welcome -- welcomed, i was jealous of "the daily telegraph" buying the personal expense accounts which it admitted through statements of the members of parliament. i think "the sunday times" followed with members of the house of lords. and i thought that was a great public service, i have got to

say. i am disappointed that the editor of "the times" did not buy them when they were offered to him first. but -- and obviously, the [unintelligible] decided that was in the public interest and not [inaudible] i think "the telegraph"would not argue that was illegal. >> the question asked of you is whether there is a distinction. >> not by them.

themselves out as public figures. and they are certainly people of great responsibility. and sometimes [unintelligible] look behind the facade and you have to be prepared for that. >> maybe we can come back to that. >> ok.

would not0's, one expect it to have supported the labor party. do you address any of "the sun's" constant attacks on him? >> i [unintelligible] our party with the labour party then, would have supported the labour party in the election if it had a different policy. you remember there was the nationalization of everything in the country, means of production, etc. we are certainly against that.

and personal attacks, i would apologize, i do not remember them. he was the personification of the leadership of the labour party. and [unintelligible] attack his policies and sometimes the way he expressed himself. >> the [unintelligible] constitution.s that would be a reason to never supported the labour party. until 1979 -- >> that could mean -- yes. there was the failure of the heath government, and mr.

harold wilson. >> 1976, he was prime minister. >> we have very great relations with him and mr. wilson. pursuing -- forward, then. >> can i take you to polling day on june 11, 1987. this was reported by mr. woodrow wyatt. rupert turned up and sat near him. when can livingston -- ken living 10 appeared, --

livingston appeared, hrupert cried out, "that is me." >> that was the influence of alcohol. >> [unintelligible] well, an external observer might observe [inaudible] let's not get into that. we -- >> it was a stupid, lightheaded remark. >> one point which arises out of the merger of sky television and bsb. on the -- the broadcasting act

that was passed that year. do you recall that? >> no. >> it preserves the exemptions, if i can simplify, preserves the exemptions that non-domestic satellite services and sky was operating out of luxembourg. >> we were broadcasting on our luxembourg satellite. >> it was non-domestic. the act preserved the status quo, although there was plenty of opposition to it from the labour party. >> i take your word for it. i do not remember. >> do you remember a discussion on march 31, 1992, with mr.

wyatt? >> he might have been lord wyatt by then. >> is in his diaries -- it is in his diaries. >> this was at your flat, apparently, saturday, 31st of march. page 262 of volume 2. which is in the bundle, tab 15. the day of the anti-poll tax. that would enable you to located

in time to locate -- locate it in time. i invite you to look at page 265. halfway through that page. i was confident he would be all right. are you with me? it is on page 265 of volume 2. i told him i was fairly confident he would be all right when the bill came to the large spread this is the broadcasting bill. he was not backed by the government. he was keen on preserving their

position. that is the exemption. she knows how much she depends on your support. likewise, you depend on hers in this matter. did lord wyatt say that? or something like that? >> i have no memory of that. if i am right, he was writing this many years afterwards. i would not put too much word on lord wyatt's. >> he was dictating these memoirs. >> he was close to mrs. thatcher. i do not believe that mrs. thatcher had that much time on your hands, but never mind. >> the point he is making is mrs. thatcher defended on your support -- depended on your support and you depended on her support. because of your -- which was

just sky but became later, the merging with the two companies. >> i see what he's saying. i do not agree. >> ok. [inaudible] >> to 1990, the november of that year. >> editorials do not read by

very many people the much. -- that much. and there were a lot of different opinions being put. >> your company consistently, 36% of the newspaper market. you are the biggest player in 1990 and you are the biggest player now, aren't you? >> if you are talking about newspapers alone? >> yes. >> well, put it this way. [unintelligible] every day. people can stop by my newspapers any time. often do, i am afraid.

and it is only natural for politicians to reach out to editors, and sometimes proprietor's if they're available, to explain what they are doing and hoping that makes an impression and it gets through. without [inaudible] and [inaudible] several. as we have seen demonstrated the last few days. >> "the sunday times" endorsed -- against mrs.

tab 10, it may be a different

page in your version. might be 169. 209? at the bottom of the page, 209. in your version it might be page 169, confusingly. rupert found refreshing change from the usual labor. so far so good? >> i think i have said i do not remember the dinner but this sounds likely. it is possible. >> both the reveled in being self-styled rhetoric -- radicals.

>> blair indicated that media ownership rules would not be onerous under labour. did you say that? >> i have no memory of that. >> media ownership rules or not the labor -- owners under labor, and so it might be true. >> no. >> you do not think he said that? >> might have said that i do not think it was true. >> the labor policy -- labor party policy election was certainly not the policy that they had threatened to implement in 1992. reading on, rupert, at this newspaper said they were not wedded.

might you have said that? then he continues the union issue was not resolved. labor remains committed to giving workers the legal right to collective bargaining for union recognition. that was something you had in your mind in 1994, didn't you? labor party policy on unions? >> probably. it was a very large issue in this country. whether all of the workers or just the people present. >> according to the source, we

do not know who that was. he certainly says all of the right things might he have said that? >> i told you i do not know the dinner does not take place. the trip in july 1995, where mr. blair took 25 hours to speak at your invitation, and you

remember that? >> i remember it vividly. i think the prime minister was also there. >> i think mr. paul keating, who was the australian prime minister, was also there, wasn't he? >> yes. and the leader of the opposition from australia, mr. howard. >> yes. >> and i think some other interesting speakers, but yes. >> according to alastair campbell's diaries -- i don't think we need turn them up -- mr. keating said this: "you can do deals with him without ever saying a deal is done." do you think that's a fair observation? >> no. >> do you understand the point that mr. keating is making there? >> i understand what you're saying, yes, but that's not true. mr. keating is given to very extravagant language. i thought you were going to quote something much more extravagant. >> well, i was, but i wasn't going to -- >> i'm sorry.

>> it's the -- well, it's not necessary to quote everything. as you say, extravagant language i will edit out on this occasion. but what about this: "but the only thing he cares about is his business and the only language he respects is strength." is that a fair insight into you? >> certainly not. >> and then mr. keating also said, according to mr. campbell, that you "like to be associated with winners". this is mr. keating speaking: "if he thinks you're a winner, he'd prefer to be with you than against you." that's spot on, isn't it, mr. murdoch? >> no. i mean, i think we all like to back a winning racehorse or whatever. yes, you like to be on the winning side, but no, that was not a motivation. >> you gave a little speech, apparently, after mr. blair's speech, and his speech was a roaring success, according to everyone who was there, and we've heard some evidence about it.

>> yes, he had a standing ovation from everybody there. >> yes. you said this, apparently: "if our flirtation is ever consummated, tony, then i suspect we will end up making love like porcupines, very, very carefully." did you say that? >> i might have. [laughter] >> as you point out in your witness statement, the sun in 99remained non-committal, didn't -- in 1995 remained non- committal, didn't it? >> 995? yes. >> yes. and the endorsement only came late in the day, in march 99199, didn't it? >> i forget the dates, but i'll take your word for it, mr. jay. >> was it part of your strategy, mr. murdoch, that you, as it were, would wait as long as possible to endorse the

labour party, because that was the best way of extracting commercial advantages from them? >> certainly not. >> were you tracking labour party policy on media issues at this point? >> i don't think so. i wasn't even in the country, but no. >> weren't you asking your lieutenants who were in the country to do just that, because it would be a keen commercial interest to your companies to know what labour party's policy on media issues was likely to be, wouldn't it? >> what could they have done? >> pardon me, mr. murdoch? >> i said what could they have done? i don't think so. >> well, they could, if they were minded or of like mind to mr. kinnock's labour party, to have invited the monopolies and mergers commission, or its successor, to undertake an investigation into the issue of cross media ownership and concentration of media

ownership into your companies, couldn't they? >> they're welcome. >> it's obvious that's something you wouldn't want, would you? >> well, it would be a diversion, but that's fine. >> weren't you reassured when the 99labour manifesto did not contain any legislative proposals on media ownership, by which i mean concentration of media ownership and cross media ownership? >> i don't even remember noticing it. >> is that right, mr. murdoch? i mean, quite apart from whoever you supported, presumably as a businessman with very substantial interests in this country, you would be very

interested in what every party was saying in their manifestos that might impact upon the way in which you did business, wouldn't you? >> yes. yes, sir. but i wanted to make it quite clear that my commercial interests, such as they are, or whatever you want to describe them, never came into any consideration on where we stood on issues or political parties. >> can i refer you to an extract from the alastair campbell diaries, volume , page 634, entry for february 997. -- 1997/ it's going to be tab . tab 2.

>> yes. >> eight lines down -- >> saturday, february ? -- february the first? are we on the right page, page 633? >> 634, please, mr. murdoch, we're february. >> yes. >> the sentence beginning about eight lines down "tb and gb 34. >> eight winds down, do you have went to see murdoch, les hinton and irwin stelzer." and mr. campbell's footnote: "rupert murdoch's economic guru". was he that? >> no. he was a friend and someone i enjoyed talking to. he's a fine economist. >> okay.

"tb said gb had been fine, sounded more sceptic than usual on the single currency." that's a reference to a speech mr. brown had given? >> gb is gordon brown. >> of course. "tb's sense was that murdoch wanted to back us, but the senior people at the sun -- probably with trevor in the lead -- were telling him he must be mad." is that correct? >> i don't remember, it's possible. >> "tb said that he felt we got a fair crack on some issues, but not on europe. murdoch said he hated the idea of the single currency, full stop." might you have said that? >> most certainly. i had arguments for ten years with mr. blair about the subject. >> "but by and large tb felt it went okay. they agreed to differ on a few things, but his sense was murdoch was reassured on the economy, tax, et cetera, and had lost any kind of respect for major and the tories."

that's certainly true, isn't it? >> yes. >> "tb didn't like having to deal with them. he knew they were very right wing and only even thinking of backing us because they wanted to back winners and be in a better position to deal with us if we did win. but he felt there was something unpleasant about newspaper power and influence." i'm not going to ask you to comment on mr. blair's state of mind, as it were, because that wouldn't be fair, but didn't you sense in these discussions you were having with senior politicians before a general election that a sort of form of pirouette or negotiation was occurring and they wanted to know how far they had to go -- >> you're making sinister inferences. >> it's not sinister. >> i want to say, mr. jay, that i, in ten years of his power, never asked mr. blair for anything. nor indeed did i receive any favours. if you want to check that, i think you should call him.

>> i don't think that was my question, mr. murdoch. it was a more subtle question, that -- >> indeed it was. >> that the interchange between the sophisticated politician and the sophisticated newspaper proprietor would not be a hard- nosed commercial negotiation, how much to pay for something. it would be at a far higher and more subtle level. it would be each trying to work out how much to give and how much to press for. do you follow me? >> i'm afraid i don't have much subtlety about me. >> don't you, mr. murdoch? >> no. >> okay. but did you at least sense that this sort of encounter with mr. blair and mr. brown, so they were the two most powerful people in the then labour opposition just before a general election -- that they were very anxious to sound you out and see what your thinking was?

didn't you at least sense that? >> no, i think they probably wanted to convince me that they were the right people to be leading britain, and i'm sure they were doing that to every other press proprietor. >> so you didn't feel that they were sizing you up, trying to work out what you were thinking, what was necessary, from their perspective, they had to do to win your support? >> no. i think you must ask them that. >> okay. y.. campbell's diary entry fo entry for the this is a short one, so you probably don't need to turn it up. >> page 664? >> 664. >> oh. >> let me just read it to you.

it's probably not necessary to look at it, but you can, of course, if you wish to. >> i'm sorry. yes. >> "he spoke to irwin stelzer later who said murdoch was moving towards supporting us again. for commercial reasons, they would probably make clear who they were backing at the start of the campaign." might you have had that discussion with mr. stelzer? >> no. if he said that, he certainly had no right to. >> isn't that the sort of thing that you did discuss with mr. stelzer? >> no. i want to say -- i don't know how many times i have to state

to you, mr. jay, that i never talk commercial considerations. >> so mr. stelzer's got completely the wrong end of the stick then, hasn't he? >> yes. well -- >> no, he's not actually -- with respect, mr. murdoch, if one reads it carefully, he's not suggesting quite that. what he's saying is that mr. stelzer was, as it were, providing feedback, which sounds as though it's accurate, that you were moving towards supporting the labour party, and then he's making a slightly separate point, that actually they'd only make clear who they were backing at the start of the campaign. and that might be for commercial reasons connected with wanting to sell copies of your newspaper, neither more nor less.

>> that's possible. i thought mr. jay was putting more sinister motives on it. >> i'm not sure i was seeking to put a sinister motive. i think one possible interpretation might be the commercial reasons are to do with the long-term interests of your companies in the face of what government policy might be on media ownership. do you see the point? >> could you repeat that one? >> the commercial reasons are a reference to what government, future government policy might be on topics such as media ownership, which would affect the commercial interests of news international, wouldn't it? >> yes. >> in the run-up to the endorsement, the endorsement of

the sun of labour was on march 1 997. this is mr. neil's -- >> oh, we're still on page 664? >> no. >> oh, a different book? >> we're on mr. neil's full disclosure, tab 10. it's the edition preface, which is xxiv. >> yes. >> if you look five lines down from the top of xxiv, he says this, and this relates to what happened on march -- >> this is mr. neil? >> yes. "blair went the final mile for rupert in an article for the sun right at the start of the election campaign.

he flew the union flag and wrote in highly eurosceptical tones. rupert was delighted." were you delighted? >> i don't remember, but i would have been. "he flew the union flag and wrote in highly eurosceptical tones", yes. >> and then: "he saw no reason to delay his endorsement for labour any longer, especially since all the polls made blair overwhelming favourite to be the next prime minister anyway." and then the following day we have the endorsement. that endorsement was your decision, wasn't it, mr. murdoch? >> well, it certainly would have been with my approval. >> some would say, looking at this, you had extracted really as much as you could from mr. blair in terms of policy promises. he'd gone a considerable distance in your direction. you assessed he'd gone as far as he was ever going to go, so you endorsed him.

that is right, isn't it? >> i think so. i don't think it all followed in this way so logically, but yes. >> mr. neil's assessment -- it's right that i put this to you because it confirms something you said. he adds an additional point, xxv, he says: "i do not believe that there was an explicit deal between murdoch and blair in which the sun gave its support in return for promises that a labour government would leave rupert's british media empire alone." so you presumably would strongly agree with that, mr. murdoch? >> absolutely. >> but then he says: "but there was an implicit understanding, never openly talked about between the two men, but an understanding nevertheless." do you have a comment on that? >> that's not true.

i think that he -- if it was true, he certainly didn't keep to it, because he appointed ofcom with wide powers to interfere with us in every way. >> i think we'll have another five minutes. >> mr. murdoch, i've been asked by a core participant to put to you a short and straightforward point in relation to a piece mr. blair wrote in the times on march 1997, which was one month and one day before the election. are you with me chronologically? >> yes. >> he said this, and indeed i remember it quite clearly: "let

me state the position clearly so that no one is in any doubt. the essential elements of the trade union legislation of the 1 980s will remain." so he is saying that he's not going to dismantle the thatcher reforms, are you with me? >> yes. >> and he also said: "the changes that we do propose would leave british law the most restrictive on trade unions in the western world." so this must have been music to your ears, mustn't it? >> i don't think i read it, but yes. >> according to what you've disclosed of your meetings with leaders of the opposition, there was dinner with mr. blair that evening. t ev do you think you discussed that article and congratulated him for it? >> i doubt it. but it's possible.

>> labour party win the election 1 may 1997. can we move forward to march and a piece which appeared in la stampa on march. they claimed that the italian prime minister, who was then romano prodi, had taken a call from mr. blair in which they discussed your multimillion pound offer for mediaset, which was one of berlusconi's companies. >> multi-billion. >> did i say million? >> billion. >> and mr. prodi allegedly told mr. blair that he preferred an italian bidder. can we try and examine what truth, if any, there is behind that story? did you speak to mr. blair on march and ask him to speak to mr. prodi to say that he shouldn't interfere?

>> no. i may have spoken to him. i had my own access to mr. prodi. i had been with him already and talked about it, but mr. berlusconi had not only offered -- come to me with his company, he wanted to get rid of it, and we'd had negotiations, and i asked him what was his view, and he said, "well, i wish there was an italian bidder, i would have preferred that", but it was a friendly conversation. i don't say he agreed to anything. but i knew him slightly and i had my own access. i didn't need mr. blair to be calling him. i may well have spoken to mr. blair separately and said, "how do you think a british industry is going to get on in a country like italy?" >> but it stopped there?

you didn't ask mr. blair to phone mr. prodi up? >> no. >> you couldn't have said anything which gave mr. blair that impression, that you wanted him to intervene on your behalf? >> no, i never asked mr. blair for any favours. >> to be fair, what happened is that mr. blair, according to mr. campbell, said that he would think about it, but in the end the phone call came from prodi to mr. blair, rather than the other way round. that's page 33of mr. campbell's diaries. >> i wasn't privy to -- >> but you can't comment on that? >> -- any of that. >> may i ask you, mr. murdoch, to deal with another piece of evidence the inquiry received from lord patten, which was along the lines that he, lord patten, was writing a book about hong kong, because, of course, he was the last governor of hong kong, and harpercollins,

one of your companies, is the publisher. do you remember that? >> yes, i do indeed. >> according to lord patten, you learned that harpercollins were going to publish the book. this coincided with his always doomed attempts to extend his empire into china and effectively you pulled the book. is that right? >> half right. >> which bit is right and which is wrong? >> i did not have any influence or interest in china, not for lack of wanting or trying, but i had always taken the view that mr. patten was a bad governor of hong kong and had raised very false expectations and when i first heard of this book, i said, "i hope we don't do it", and when i heard that it was about to hit the streets, or very close, i did step in and say, "don't do it", which i wish to say now was one more

mistake of mine. it was clearly wrong. >> weren't you hoping to acquire commercial interest in china at that point? >> no. well, it's a huge market, we're always looking for opportunities there, but it's just too difficult. >> but in december, you were given permission by the chinese authorities to launch a cable tv channel in china, weren't you? >> there were endless negotiations and we finally got permission to do this, which turned out to be a mandarin channel in a small cantonese- speaking section of china. not so small, but it was cantonese. >> from that foothold, you've done quite well in china,

haven't you now? from that small foothold, you've advanced your commercial interests in china -- >> no. >> okay. >> we have thrown whatever we had there, which was losing money, i mean a million or two, into a joint venture, which we're in the minority with shanghai media. >> that's about a year or two old. >> i move forward to the election here. according to day 6- am leveson inquiry april 0 mr. campbell's diaries, volume 3, page 43-- >> i'm sorry, what year? >> this is a conversation or rather a diary entry for 30 october, volume 3, page 439. >> yes.

>> the entry reads, at the bottom of the page, very bottom of the page: "tb saw murdoch and irwin stelzer. he had asked them outright whether they were going to back us. murdoch said the tories were unelectable and that was that." is this a faithful account of what happened, mr. murdoch? >> i have no memory of it at all. i'm sorry, i can't help you. >> might you have said that the tories were unelectable? >> no, i don't think so. i don't think they were. >> by saying "unelectable", you

meant they were bound to lose, i think, which is -- >> if i said that -- you keep putting words into my mouth, mr. jay. >> i hope i don't and it's only what mr. campbell here is reporting you. >> yes but you're putting other words and i've told you i have no memory of any such conversation. i'm not saying it's wrong, it just might be a wrong interpretation of what was said. >> okay. it may be that mr. blair had got to know you quite well by now and did feel able to ask you outright whether you were going to back him. do you see that? >> i can't believe he was so

direct as that. i met mr. blair, if you look at the record, an average of two, maybe three times sometimes in a whole year. it's not as though, you know, there was a constant approach or daily text messages, as happened with some newspapers. we had no such relationship. they were usually taken up by -- i remember an afternoon at chequers where we spent the whole afternoon debating the euro. i remember what was said. and he didn't agree with me. i'm glad to see that i've turned out right, but that's another matter. >> to be fair to you, mr. murdoch, your great concern was that the united kingdom might enter the euro. that is right, isn't it? >> my feeling about it, if you want to debate the euro, was that it was a great abdication of power over our own affairs.

>> i'm not sure i do want to debate the euro, but what i do want just to establish, out of fairness to you, is that that was your concern, wasn't it: the united kingdom might enter the euro? >> yes, it was a purely intellectual point of view. >> the march gulf war, all the papers around the world which you owned backed the war, didn't they? >> i don't own it would include a lot o >> well, it would include a lot of little suburban papers, free sheets and things, which wouldn't have had a view, but yes, we did support the war, as did most papers, including even the new york times. >> some years after the event, it was discovered that there were three telephone calls

between you and mr. blair in march where the issue of the gulf war must have been discussed. do you follow me, mr. murdoch? >> well, it must have been on his mind at that time, it was such a big issue. i don't remember the calls. the th might even have been calling me for my birthday, but no, our position on the war had been declared very strongly in all our newspapers and the sun well before that date. >> to be clear, mr. murdoch, the discussion -- >> so he wouldn't have been calling me for support. >> the discussion could not have been about whether you were going to support him, because, as you rightly say, that support had already been given, so the discussion must have been about something else. else, the version of

>> mr. rawnsley's version, in a book called "the end of the party", page 60, was that you -- >> who is he? >> he's a political commentator. in a sense, it doesn't matter really what he says, it's really whether you agree with this point, that you and mr. blair were devising the best strategy for attacking president chirac. do you think that's what was discussed during these calls? >> i doubt it very much. >> why, mr. murdoch? >> hm? >> why? >> i don't think mr. blair would come to me for advice on a matter like that. >> but why not? because you had the sun -- >> well, why would he? i mean he's surely above talking to a press proprietor about his foreign relations with france.

it was well-known that the sun was pretty rude about the french from time to time. to time. >> the articles in the sun about this time describe president chirac as the french worm and a cheap car to put price before principle. does that have anything to do with you? >> now. >> the 2005 election, mr. murdoch, the last of blair's victories, did you make it a condition of support for the labour party that the government hold a referendum on the new e.u. constitution? >> now we did make any conditions but we certain express the opinions strongly

that the e.u. constitution should be put to the people. and i don't think we were looking at that. as it happened, it di depended on anonymity between all the countries and other countries, at least one, but voted against it. so the point was to have a referendum. >> in the end, as you rightly say, there was a referendum for the reasons you have given. but what is said in another book by mr. richards this time that mr. blair had -- held regular talks with seltzer including talks on that issue. and mr. stelzer would have been communicating your views, is that right or not? >> now. -- no. he had his own views. >> but in no sense was he communicating your views then to the prime minister?

>> no. you don't know whether he he was a wasn't. >> that's the point. speak it would be something you would talk to him about. >> if i've seen a lot of him -- >> that's the point. if you have already spoken very, very highly of them, that's the sort of thing you might very well have discussed with them. >> yes. yes, sir. >> my only point was that he was not there to carry a message from me. >> i understand. i'm sure doctor irwin stelter would have his own ideas on this and every other topic. but in one sense he would know you're thinking and should be able to discuss that with mr. blair, wouldn't he?

>> probably coming this. he was actually closer to mr. andrew neil then he was to me. >> mr. blair in 2007, did you have a view as to who should succeed him? >> i thought the matter was settled. >> according to mr. blair's biography and journey page 655, a couple sentences but then he says turn it up, mr. blair is the is no contest with leadership, he could've stirred for the murdoch papers, just wrote them off. do you remember doing that? >> no. that's quite untrue but i met him a couple times and i like him.

>> but you didn't write a -- >> i didn't know he was up for the job. or possible contender. >> your relations with mr. brown, until the 30th of september, 2009, which is when "the sun" as it were dropped in and support the conservatives were quite warm. >> my personal relationship with mr. brown was always warm. before he became prime minister and after. and i regret that after "the sun" came at him, not so true, although i only hope it can't be repeated. >> there may be a number of reasons why your personal relationship could, but one

obvious one perhaps was your common presbyterian upbringing, is that right? >> yes. >> can we see if we can possibly explain one thing you mention. we know that you stated checkers of the weekend of the sixth and seventh of october, 2007, or at least they are on one of those days. do you remember that? >> is that the pajama party weekend? [laughter] >> no. we are coming to the. that's the 14th of june, 2008. >> i do remember being once, at least but i think only once. >> at checkers as a guest of mr. and mrs. brown got and certain other people there that i remember. the first thing i met jk

rowling's, was a close friend, at least of mrs. brown. >> do you any discussion with mr. brown about whether there should be a snap election? >> no. >> were you aware of -- >> let me say i don't remember. >> there is evidence somewhere, i think him -- >> if any a politician why my opinion on those major matters, then had to read editorial from "the sun." >> mr. warmsley says the decision to call off the snap election was taken before the sixth of october. so if he is right you couldn't have discussed it with the browns. >> this as i did spent others

have suggested it, but we have heard your evidence on the topic, mr. murdoch. i'm not going to present at any further. can i move forward with mr. brown? june 2008, we can take just one month, the documents demonstrate that you at dinner with mr. brown on the sixth of june and your respective wives were present to do you accept that? >> yes. >> fourteenth of june was the famous slumber party where i don't believe you were present spent i think they were just a bunch of women. complaining about their husbands probably. >> fifteenth of june you have -- you were mr. brown's dinner guests with president bush, do you member that? >> yes. that was a large party spent

about 30 of 40 people there? >> yes. i'm sure there were other people there from the press. >> and then the 16th of june, mr. brown attends your annual party speakers yes, i think so. most people do. >> and were you involved in any way in the timing of the decision to support the party on 31st of september, 1989? >> no, i was not consulted as to the exact timing. we certainly had talks over a period. mrs. james, mrs. brooks, no doubt others that we felt this government was making a lot of mistakes and that we had a long period of labour rule. it was time for a change.

>> and you along with many others were working out that mr. brown would likely lose the next election? >> no. i didn't know. >> well, mr. murdoch, one can't know because no one can read the future. spank you are asking me -- >> your best guess, mr. murdoch, along with any others, and informed guess that mr. brown was going to lose, wasn't it? >> the election was a long way away. i had no idea. you know, as many people have said, a long time in politics -- [inaudible] >> can i just deal with one piece of evidence, the inquiry received from mr. mckinsey.

mr. mckinsey told us that mr. brown spoke to you on the phone. this was on or shortly after the 30th of september, 2009, and he, mr. brown, said to have brought -- [inaudible] for 20 minutes, is that true or not? >> i'm afraid, i'm very happy to think about the conversation, but mr. mckinsey might have talked to about it over dinner. i occasionally see him. that was a very colorful occasion. mr. brown did call me, and said rupert, do you know what's going on here? and i said, what do you mean? he said, well, "the sun" and what it's doing, how it came o

out. and i did, i'm not aware of, i was not warned of the exact timing. i'm not aware of what they're saying, i'm a long while away. but i'm sorry to tell you, gordon, we have come to the conclusion that we will support a change of government when there is an election. when there is another election. and he said, and i must stress, no voices were raised. we were talking more quietly than you and i are now. he said, well, your company has made, declared war on my government, and we have no alternative but to make war on your company. and i said i'm sorry about that, gordon. thank you for calling.

end of subject. >> how could mr. brown had declared war on your company? >> i don't know. i don't think he -- he frankly, he could have, i don't know. >> more commissions, god knows there's plenty of commissions around us now.

so that was it. later i think the hacker scandal broke, made totally outrageous statement, which he had to know was wrong. and when he called as a criminal organization. and because he said we had hacked into his personal medical records. when he knew very well how "the sun" had found out about his son, the condition of his son, which was very sad. a father in the hospital in a similar position call those, told us and said, there's some charity or research on this and so on, and mrs. brooks

immediately snatched it from the news alerts and said, let me handle this. and she called mrs. brown and said, look, this is going to be out, you should be careful. how would you like it handled? and one or several days later we published the story, and four or five days later mr. brown wrote a personal letter to mrs. brooks, thanking her for her sensitivity and the way she handled the story. i believe that letter is in the hands of the police. >> mr. murdoch, you had no knowledge of the involvement in the events you just described. you presume they're communicating, what mrs. brooks has told you, is that correct

of? >> on her handling of the story, and, indeed, i have since had, sometime ago, personal contract -- contact with mrs. brown, she was very friendly, and yes, that part of the story. i'm sure there's plenty of evidence that she took it out of the news list and said let me handle that, but other people were present. there were people in the newsroom who would have known that would have received the call from the hospital. i haven't seen the letter. but no doubt you will have a chance to do that.

>> may i go back just -- >> we are jumping some of your. >> it's fun, mr. murdoch, but can i go back to the declaration of war. could it be said that the way mr. brown might have carried out his threat, the way you interpreted it, was that you would bid for the remaining shares in bskyb, mr. brown might place obstacles in your way? >> never thought about it. we taken advice on that. it's something that goes on i guess every day. somewhere in the markets in the world, controlling shareholders, the outside shareholders. it's not a matter for regulation. in most countries, or any

country i am aware of. it was turned into a political issue in this country by our newspaper enemies, or i should say competitors. but it's possible of course for the minister to step in. i presume in any market move. to ofcom or the competition commission, or whatever, but we never thought of that. i mean, i'm being quite honest with you, that we be held up for a couple of months in europe but there was just nothing here. in fact, we were waved through in europe in two weeks.

>> can i just understand the chronology, mr. murdoch, that by the 30th of september, 2009, had there been keen in turn consideration with a news corp. regarding the acquisition of the remaining shares in bskyb -- >> there was certainly a desire there for a long time. i remember when mr. kerry returned to the company after many years. the first thing he said to me was, we should cleanup the situation at the sky, or bskyb. you know, we started this company and it was a long-standing ambition. with hindsight, i regret that i ever agreed to an